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Forces behind globalization

The world today is a small village thanks to technological development that has brought people closer. Unlike a few decades ago, one can easily do business with people across different continents. It is easy to move goods and services from one part of the world to another. Communication is instant, at the press of a button one can talk or message a person located in a distant country. All these factors have brought what is referred to as globalization. Globalization can be defined as the spread of technology, jobs, products, and information across the world leading to integration of different societies. Globalization is the interdependency of countries in terms of trade and other activities (Singh, 2003).

Forces behind globalization

Improvements in communication/information technology have been effective in fostering globalization. For people to trade efficiently and effectively, they need to communicate in time. Communication is one pillar that holds people together and in the world of business, communication plays a vital role in ironing of deals. Due to faster communication, a person in the USA can sell a product to Europe or China within seconds. All one needs is internet or a mobile phone and communication starts. It does not matter the distance between them, they can negotiate and agree on price, and payment done and finally good shipped (Singh, 2003).

There have been tremendous improvement in the way goods and services are transported. Companies such as DHL, FedEx, and Nippon Express among many others have been powerful in promoting globalization. These companies make transportation of good easy, fast, reliable and timely. With good transportation system, people are trading more goods with each day. One can also be able to track the progress of goods being delivered because of incorporation of technology into the transport sector (UNCTAD, 2008).Forces behind globalization

Another factor that has contributed to globalization is trade liberalization.  Without trade liberalization, globalization would still be a dream. Countries have reduced and removed barriers to trade which has opened borders for trading. When factors that limit trade are removed or reduced, goods can move from one country to another faster. Therefore, more goods are traded and this boosts international trade as well as increasing the reliance of countries on international trade. There are numerous trade blocks formed by countries to foster trade among the member nations. For example, The North American Free Trade Agreement (NAFTA) is a trade block that encourages trade between US, Canada and Mexico.

Capital flow has promoted globalization. Countries have reduced political bureaucracy and red tape to promote globalization. When there is political stability and lack of corruptions, it creates a conducive environment for investment. People and companies are investing in different countries where they believe they will get the best returns from their investments. For example, companies based in the US are investing in mining industries in Africa and Asia. Cheap labor has also been a reason for capital flow, as people prefer to invest in countries where the production of goods and services is cheaper (Singh, 2003).Forces behind globalization

The immigration policies are nowadays less strict and people can move across borders. United States is very attractive for immigrants since they know it is a land of opportunities. People win green cards to work in the US. Other countries also have less rigorous immigration policies, which also help people to move from one country to another. For example, in Europe one can easily move from one country to another. Even working it is also very easy to work in another country provided one comes from a country in Europe that is a member of European Union. Various countries have formed trade blocks, which facilitates trade as well as immigration. People can therefore move from one country to another to work and in the process they carry their culture and also learn about the culture of their host nation.

Benefits of globalization

Globalization has been instrumental in promoting creativity and innovation. When people from different backgrounds or cultures come together, different ideas are born. When cultures mix, people are creative and innovative. They are better equipped to offer solutions to challenges that they face. America is such a country that was founded by people who came from different parts of the world (UNCTAD, 2008).

Another benefit of globalization is that it lowers the cost of goods and services. Globalization has increased competition among different countries and companies. The increase in competition has made companies to lower prices of goods and services that they offer. Moreover, companies are also looking for cheap labor in order to make good that are also cheaper and beat competition.Forces behind globalization

Globalization has also improved the standards of living in different countries. People can trade more and thus they make more money, which boost their income and subsequently their standards of living. Due to free trade, people are also able to access better goods, which are also cheaper. The global economy also grows from globalization making people to have more disposable income, which improves their purchasing power. When people’s purchasing power increases, they are able to buy better goes as well as in large quantities (UNCTAD, 2008).

Another benefit associated with globalization is that people are able to access foreign culture. Globalization brings people from different cultures together. Through interactions, they are able to learn more about foreign cultures and appreciate the uniqueness in them. This also brings peaceful co-existence among the people and makes the world more peaceful. It reduces hostility among people, which is usually associated with lack of information pertaining to other cultures (UNCTAD, 2008).

Tariffs and globalization

A tariff refers to duty that is paid for certain goods, which are imported or exported. Tariffs tend to limit free trade and as such slow the process of globalization (UNCTAD, 2008). When tariffs are over the roof, it discourages globalization since people cannot trade across borders due to the high costs involved. They are also designed to protect local industries and preserve jobs for the citizens. They also discourage dumping of good into a country ensuring that only quality goods cross the border. Example of tariffs is Trump tariffs, which are different taxes, or duties that have been imposed on assortment of imported products such as solar panels, washing machines, steel, and aluminum among others. Tariffs are effective in protecting infant industries from unfair competition.

Factors that contribute to prosperity of a nation-Forces behind globalization

Human resource plays an important role in determining the prosperity of a nation. Human resource is the best asset or capital that a country can have. High quality human resource such as a highly educated population ensures that a country has high productivity. The quantity of human resource also matters since it creates market for goods and services leading to economic growth of the country. China is highly populated and offers ready market for different goods thus encouraging market growth.

The natural resources of a country also determine its prosperity. Countries that are rich in natural resources tend to be prosperous. Natural resources are a good source of revenue for the country and they help n wealth creation. Countries with oil tend to be rich because of this important resource (Guscina, A., 2006).

Political factors also affect prosperity of a country. For a country to be prosperous, it needs to have political good will. There should be no corruption to make it easy to do business. A country can have a vast amount of natural resources such as Congo but due to political instability, corruption and poor leadership the country is categorized as being poor.

Technology also plays an important role in prosperity of a nation. When a country is using the latest technology, then it is destined to be prosperous. Technology makes it easy to produce more goods, which are also of high quality. Use of modern technology saves countries money since technology lowers the cost of production of different goods and services.Forces behind globalization

Capital formation such as machines, land, and buildings also boost economic development of a country. Capital formation is important in deciding the productivity of labor or human capital. Machines make production of goods and services faster and of better quality. Fertile land helps in production of crops (Guscina, A., 2006).

Globalization and income inequality-Forces behind globalization

Globalization has caused income inequality among countries. Today, there is a large gap between incomes of different countries. Developed countries tend to the main beneficiaries of globalization. They manufacturing industries and companies unlike developing countries, which are now starting to establish manufacturing companies. Therefore, it makes developing nations be depend on developed countries for various manufactured goods and services.

It also causes income inequality even within borders of a country. Those people that are better trained or are skilled earn more than unskilled workers do. Globalization has made it easy for skilled people to move from one country to another where their services are needed. This causes loss of jobs for the unskilled and hence leads to income inequality between the skilled and unskilled people (Guscina, A., 2006).

Globalization and poverty in developing countries-Forces behind globalization

Globalization has produced mixed results in terms of poverty alleviation in developing countries. There are areas where developing countries have gained from globalization and there are other areas where the developing countries have been on the receiving end. For instance, developing countries have been able to access better technology and goods without investing so much in research and development. They have been able to apply new ways of farming or producing goods by learning from developed countries (UNCTAD, 2008). They also have ready market for their crops since globalization has made it easy for them to export goods to other countries. Therefore, globalization has been useful in reducing poverty in developing countries. Globalization has made developing countries perfect for dumping by developed countries. This negatively affects their economy and increases poverty.

The Future of globalization-Forces behind globalization

Globalization will only grow stronger as countries continue to trade with each other at all-time high. Countries are specializing on what they produce at a low profit. Countries are specializing to only produce goods that they enjoy a comparative advantage when compared to other countries (Mir, U. R., Hassan, S. M., & Qadri, M. M., 2014). The future of globalization is bright and countries will continue to trade with each other. New trading blocs will be formed and new trading partners will keep emerging. The world will only continue to shrink and people and nations will only increasing trading and moving from one nation to another. Today people are immigrating from Africa to Europe and US.  This is a new way of promoting globalization.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Guscina, A. (2006). Effects of globalization on labor’s share in national income. International Monetary Fund.

Mir, U. R., Hassan, S. M., & Qadri, M. M. (2014). Understanding Globalization and its Future: An Analysis. Pakistan Journal of Social Sciences (PJSS), 34(2), 607-624.

Singh, R. (2003). Understanding globalization — its genesis, development and implications. India Quarterly: A Journal of International Affairs, 59(1-2), 181-196. doi: