Globalization: Countries Essay

2600 Words Mar 24th, 2005 11 Pages

There are a few important questions that need to be asked when discussing globalization and the effects it has on the world.
1. How can the developing countries, especially the poorest, be helped to catch up?
2. Does globalization aggravate inequality or can it help to reduce poverty?
3. Are countries that integrate with the global economy inevitably vulnerable to instability?

Let's first start off with a definition…

What is globalization?

The term "globalization" has acquired considerable emotive force. Some view it as a process that is beneficial, a key to future world economic development and also inevitable and irreversible. Others regard it with hostility, even fear, believing that it increases
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The gaps between rich and poor countries, and rich and poor people within countries, have grown. "The richest quarter of the world's population saw its per capita GDP increase nearly six-fold during the century, while the poorest quarter experienced less than a three-fold increase."

The Pros and Cons of Globalization:

-- Productivity grows more quickly when countries produce goods and services in which they have a comparative advantage. Living standards can go up faster.

-- Global competition and cheap imports keep a lid on prices, so inflation is less likely to derail economic growth.

-- An open economy spurs innovation with fresh ideas from abroad.

-- Export jobs often pay more than other jobs.

-- Unfettered capital flows give the U.S. access to foreign investment and keep interest rates low.


-- Millions of Americans have lost jobs due to imports or production shifts abroad. Most find new jobs--that pay less.

-- Millions of others fear losing their jobs, especially at those companies operating under competitive pressure.

-- Workers face pay-cut demands from employers, which often threaten to export jobs.

-- Service and white-collar jobs are increasingly vulnerable to operations moving offshore.

-- U.S. employees can lose their comparative advantage when companies build advanced factories in low-wage countries, making them as

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