Globalisation & Developing Countries

Globalization & Developing Countries

Globalisation means socioeconomic and political integration at the global level. After World War II, in the 20th century, globalisation emerged as a new socio-economic phenomenon that turned our big world into a small village. The development and growth in infrastructure, communication, and technology fueled up the process of economic globalization among the countries, and the borders limitations among countries have shrieked. Globalization is crucial to the economic growth and development of underdeveloped countries. Globalization has brought certain advantages or developmental reforms such as economic progress, technological developments, political reforms, health systems reforms, and social reforms. It has changed or transformed the life of a common man in developing countries. On the other hand, as per critics, it has some detrimental effects too for developing countries. It has created environmental pollution, instability in commercial and financial sectors, and unequal distribution of income within and across the countries. As per the latest research on globalization, it’s claimed that Globalization in itself is neither good nor bad while its growth or beneficial or harmful effects depend on internal policies or economic structure of the developing countries. Hence it can be said that political stability, consistent economic policies, and development in human capital is crucial to gain benefits from globalization. As developing countries lack in all these parameters so they are not able to utilize this phenomenon to its fullest. We can see the pros and cons of globalization for developing countries in the following order;

???????????Impacts on Economy and Trade

???????????Impacts on Health and Educational Sector

???????????Cultural Effects

???????????Empirical evaluation of Globalization impact on developing countries

???????????Conclusion

1-???Impact on Economy and Trade

Before the advent of globalization, developing countries were not able to access the world markets for trade due to trade barriers. While it provides developing nations an access to the world markets and resolved the poverty problems in under developed countries. The level of economic growth and social reforms in some of the developing countries cannot be imagined without the globalization. Due to this less developed countries (LDC’s) have opened up their economies for world trade by eliminating trade tariffs. This initiative has raised the volume of their trade with the world and in turn, increased the per capita income and living standards. It also introduced some global institutions like World Bank, UNO, and International financial management institutes which enabled the developed countries to invest in developing countries and to address their poverty and low growth issues in the economy. For instance, globalization brought economic development in far eastern countries, China and India which led to a decrease the poverty at the world level. Globalization has also led to cordial relations among the developed and developing countries by making them dependent on one another. That is the most prominent advantage of globalization, it reduced the war tendencies among the countries. As developed nations are dependent on their raw material and human capital needs on developing countries and in turn developing nations are dependent on their counterpart for advanced technology, financial capital, and finished goods. So for their survival, they are bound to make their relations cordial at the world level. All these are the economic or trade-related benefits for LDC’s under globalization. On the contrary, there are some experts who claimed the disadvantages of globalization for developing world economies. According to them the pros of globalization is not equal and same for developed and developing nations of the world, as rich nations are getting richer and poor ones poorer with the passage of time. So it has led to the vast income gap between rich and poor within and across the countries. Furthermore, developed countries has established their production units in developing countries that generated environmental pollution. Due to the greater supply of labor in these countries, developed nations exploit their human and natural resources at their best, which is detrimental to the economic growth and social wellbeing of the natives of the developing world.

2- Impacts on Education and Health Sector

For economic growth and development, education and health play a pivotal role. Before the advent of globalization, these two sectors were in the depreciable condition in developing countries. Globalization has created new opportunities for the natives which require a high education and skill set, hence the education sector has experienced unprecedented growth. Due to growth in literacy rate, the health sector also improved and showed great development. Globalization brought economic growth and better living standards which in turn enhanced the life expectancies in developing countries. It enabled the developing nations to provide better health care services to the natives. Due to the assistance of global institutes like the World Bank and UNO, World Health Organization (WHO), and UNESCO, the government of developing countries are able to dedicate more money and device stable health and educational policies. According to a World Bank (2004) report, with the rise of globalization, life expectancy raised to three times more as compared to the average life expectancy a century ago. It also provided the solution to many deadly diseases like cancer, HIV/ADIS, swine flu, and birds' flu, earlier these diseases were considered deadly. Despite all these positive impacts discussed above, there are some cons of globalization too for these sectors. Globalization led to the frequent travel of people among the countries which transferred the new deadly diseases like coronavirus at global level, a threat to the human’s life too. In African countries, AIDS has reduced life expectancy to less than 33 years. Another prominent drawback of globalization is that it increased the leakages in form of human capital as skilled human force is shifting to developed nations for their better lives, which causes a great loss to the poor economies. Decreased in skilled manpower is further becoming a great challenge for these poor economies’ survival and growth.

3- Culture Effects

Globalization caused the integration at the cultural level too. ?It has many pros and cons to the native culture in developing countries. Local traditions, norms, and values have been greatly affected by globalization. Through the dominancy and proliferation of western culture, eastern culture or the developing nation’s culture became the imitation of western traditions and lost its charm and value with the passage of time. Globalization developed several new modes of fastest communication which enabled the developed countries to transfer their culture, norms, values, languages and dress styles, and living patterns to the developing world. Nowadays, the natives of developing countries speak up the foreign languages and forget their local languages, adopting new dress styles and learning new lifestyles. For example, now it’s become a normal custom to carry NIKE clothes, Adidas footwear, use of Apple iPhone, smart watches, eating junk food at MacDonald, KFC, and Domino's Pizza. Hence, many developing nations are now more concerned about globalization and becoming more and more adamant in preserving their local culture and traditions by adopting some restrictive policies in global trade.

Empirical evaluation of Globalization impact on developing countries

The impacts of globalization on different spheres of life have attracted the attention of the researcher over the past three decades. As in recent years the countries, specifically developing countries are opening their borders for free trade so they have some reservations about globalization and its detrimental impacts on their economic growth, poverty, environmental pollution, and rising cultural dominance. The Organization of Islamic Cooperation (OIC) can be taken as a subsample of the developing countries, these countries the new challenges and costs of globalization. The graphical representation given below shows the upward trend of globalization among several levels of income groups in OIC between the period of 1980 and 2008. As per the KOF index, high-income groups countries in OIC maintain a high income per capita index as compared to middle and low-income groups countries during this mentioned period.

·????????Conclusion

The net impact of globalization on the economic growth of developing countries is somewhat inconclusive as the research work suffered some econometric shortcomings. No empirical research has shown any systematic pros and cons for developing countries. From time to time, different researchers had brought forward their findings of the effects of globalization on the economic growth of developing nations but there is a conflict between theoretical and empirical findings, hence there is a need for a further extensive study in this arena. Theoretical research on economic growth brought a contradictory and inconclusive view on the relation between economic growth and globalization. According to some economic and socio-political experts, globalization is neither good nor bad in itself and its benefits and costs depend upon the internal political and economic structure of any country. They further described that globalization has shown some detrimental impacts on the economic growth of developing nations because of their internal political and economic instability. Developing countries like China, India, Pakistan, Bangladesh, Iraq, Syria, Jordon, Lebanon, and some African developing countries have been greatly affected by globalization positively and negatively. In its good aspects, we can say that several socio-economic reforms brought by globalization in these countries led to economic growth. Though globalization has many disadvantages for developing countries yet its benefits outweigh its costs and challenges. In order to harvest its benefits, it is crucial for developing countries to create political stability and socio-economic reforms within the country at first. Then they would be able to survive and grow economically in this era of globalization. ?