Gains and Risks of Globalization

Gains and Risks of Globalization

Introduction

The current world is interrelating, changing and integrating on a very fast pace and expanded character. In other words, it can be said that the applications of globalization are being experienced by all the sectors and sections of this world at an increasing rate. Every country, region, government, women and men are experiencing the process of globalization on the earth. The implications of globalization have their own pros and cons and an objective character (Levine, 2001, 688).

This paper will elaborate upon the subject of globalization. Guidia is a middle income country with an average per capita income of $4000 at market exchange rates. Its population of 60 million is 65% urban. The government hopes to diversify its export base which at the moment is primarily raw materials. Guidia has a small natural gas field and its first export processing zone specializing in textiles. An IMF/World Bank report has urged the government to engage more with globalization which it says will result in more trade, more foreign investment and more knowledge transfer and faster economic growth (Brakman, 2006, 21). The current paper will prepare a report evaluating the possible gains and risks of deeper globalization for Guidia before accepting the IMF/WB recommendations.

Globalization

The current era holds the concept of globalization to be very detailed and relevant in meaning. An American scholar Hilda Mcgrew described globalization as an expansion, resulting into the acceleration and deepening of the interrelations pertaining to all the capacities of an advanced life. It encompasses in it the integration of all countries and regions and forming it into a community and working for its broad progress in the contemporary world. The term 'globalization' can be simply assumed as a broad utilization for the purpose of elaborating upon various cultural, economic, political and social changes which have given the entire world its shape during the course of last 50 awkward and tough years (Sachs and Warner, 1995, 28). Due to this multifaceted and complex phenomenon, there is a broad range of effects and powers that are attached with the process of globalization. The proponent of globalization claims that it is both, an inevitable and a natural result of the technological progress, and tends to establish positive political and economic convergences. On the other hand, it is argued by the critics that, the process of globalization is antagonistic and hegemonic to the national and local economies.

The term 'globalization' was popularized by the journalist Thomas L. Friedman with the term "flat world". He presented an argument that the globalized outsourcing, trade, political forces, and supply-chaining have contributed a permanent change towards the present world, and these have resulted into both, better and worse (Lin, Zhuang, Yarcia and Lin, 2008, 119). According to him, the pace of globalization has been quickening with the passage of time and that its effects and impacts on the business practices and organization are growing continuously.

According to the economist Takis Fotopoulos, the context of "economic globalization" is the direction ...