Globalization

Implications of Globalization on the International Business Environment and Its Impact on the Thailand

Implications of Globalization on the International Business Environment and Its Impact on the Thailand

Introduction

Some contend that globalization is a positive development as it will give increase to new commerce and more occupations in developing countries. Others state globalization is negative in that it will force poorer nations of the world to manage anything the large-scale developed nations tell them to do. Another viewpoint is that evolved nations, encompassing Canada, are the ones who may misplace out because they are engaged in outsourcing many of the constructing occupations that utilized to be finished by their own citizens. Thailand has quickly opened its economy in the past 20 years. It is became the largest FDI recipient developing country since 1993 and the trade is already contributing a large share in its GDP. Nevertheless, it seems that a consensus has been building up among Thai that Thailand has to open further to catch up the path of globalization and become a constructive and equal partner in the world market; but at the same time, Thailand has to think its path (strategies, game tactics, etc.) of opening up based on its own interests, its own calculation of costs and benefits, its own capability of dealing with risks and negative impacts, not based on the calls of multinationals, foreign powers, and other international interest groups. (O'Neill, pp. 16-27)

Benefits from Globalization

There is a long list of benefits of economic globalization for the developing countries:

The export-lead growth overcomes the limit of domestic purchasing power at early stage of development and pushes domestic producers to be exposed to international market competition and high standards.

Freer trade brings in needed equipment and technology to improve the production capacity; and increase the social welfare by importing lower price of high quality goods.

Foreign direct investment brings capital, technology, management know-how into the economy;

Foreign trade and Foreign direct investment also bring the competition into the economy, increase the pressures for reforms, force the domestic companies “following the international rules”, and make regulators start to play with more sophisticated players. Therefore, external opening promotes domestic reform. (Toppen, pp. 379-390)

Constrains to the developing countries

In today's world, it seems no need to teach the developing countries' people about how good the opening will be. Actually, the basic incentive for the developing countries to develop their economy and to reform their institutions is to join the global market and to be an equal partner in the global market. No opening, no catching up. Because no opening means you have nothing to catch up. And if you do not participate in the globalization, you will be simply marginalized.

The real question in today's world is why so many economies have not benefited much from the globalization but rather suffered continuously the poverty, social instability, financial turmoil and economic crisis? (Mussa, pp. 14-34)

Back to the history, most of former colonial territories, which enjoyed high (maybe highest) degree of freedom of commodity trade, ...