ECONOMIC GLOBALIZATION

Impact of Globalization on Strinidal Economy

Abstract

Globalization results in expansion of trade and human interaction through mutual dependence and material and services exchange between countries. This paper explores the gains and risks of globalization on Strinidal economy. Secondary research has been used to gain valuable insight about the statistics of different countries that are taking advantage from globalization. Notable gains that would benefit the Strinidal economy through globalization involve increase in foreign direct investment, enhance private capital flows, new economic sectors development, increase in exports, reduction in production cost, gains from specialized services. Notable risk of deeper globalization for Strinidal include contraction of monetary policies, increased inflation in economy followed by enhanced public debt burden, currency risk, and increase in local unemployment due to movement of local industries to low wage countries.

Table of Contents

Abstract1

Introduction3

Methodology3

Main Body4

1.Gains of Deeper Globalization on Strinidal Economy4

1.1 Foreign Direct Investment Gains4

1.2 Private Capital Flows5

1.3 Investment in New Sectors Development7

1.4 Increase in Exports8

1.5 Reduction in Production Costs9

2.Diversification in Industries9

3.Gains from Service Sector in Economic Development of Strinidal10

3.1 Gains from Specialized Service10

3.2 Globalization and Benefits from Expansion of Tourism11

4.Risks of Economic Globalization12

4.1 Increase in Public Debt12

4.2 Increase in Local People Unemployment13

4.3 Currency Fluctuation Risks13

Conclusion14

Recommendations14

References16

Impact of Globalization on Strinidal Economy

Introduction

Economic globalization is the creation of a global market that results in abolishing all trade barriers to allow free movement of capital: financial, commercial and productive. Globalization offers great opportunities to a country to achieve a truly global development. Under the influence of outward-oriented policies, the countries of East Asia, which were among the poorest in the world 40 years ago, turned into a vibrant and prosperous countries (Chang & Lee, 2010).  Adverse external events have compounded the difficulties for many of them, especially in African poor countries (Barlowe et al., 2009). This paper elaborates the role of economic globalization and evaluates the possible gains and risks of deeper globalisation for Strinidal before accepting the International Monetary Fund and World Bank recommendations.

Methodology

Descriptive research methodology has been adopted in this research to explore the fundamental impact of gains and risks of deeper globalisation for Strinidal. Secondary information has been used to assess the role of globalization in other countries, which makes the basis of analysis for Strinidal. Annual economic analysis reports of different countries have been used along with peer-reviewed journal articles to assess the role of globalization in economic growth, and benefits of comparative advantage in economy growth. Statistics about economic factors were obtained from the economic analysis reports of multiple countries obtained from Euro Monitor and Europa World Country Profile Reports.

Main Body

Gains of Deeper Globalization on Strinidal Economy

This section presents an analysis on gains of deeper globalization on Strinidal economy. Radovic (2009, p. 17) states: “Globalization refers to the expansion of global trade: whether cultural, political, economic or otherwise”. Globalization consists of the growing interdependence of economies and also contributes to the expansion of trade and human interaction (Shalmali, 2007). 

Strinidal is a poor country with an average per capita of $2000 at market exchange ...