What is globalisation?
There are many different definitions of globalisation, but most acknowledge economic integration – namely, the increase in international trade and investment – which has driven the movement of people, goods, capital and ideas across borders.
While there has always been a sharing of goods, services, knowledge and cultures between people and countries, improved technologies and the removal of trade restrictions have meant that the speed of exchange is much cheaper and faster.
Benefits and problems of globalisation
Globalisation provides both opportunities and challenges. Bigger markets can mean bigger profits and greater wealth, which can be used for investing in development and reducing poverty. Each country tries to make decisions and policies that position them to maximise the benefits of globalisation. However, trade barriers, weak domestic policies, institutions and infrastructure can restrict a country’s ability to do so.
The perceived effects of globalisation excite strong feelings, tempting people to regard it in black and white terms, when in fact globalisation is an extremely complex web of issues and interactions.
The following table presents ten opposing points of view often expressed about globalisation.
| ||Benefits of globalisation||Problems of globalisation |
|1||Trade liberalisation means the economies of richer countries have consistently grown much faster than those countries that try to protect themselves.||Trade liberalisation requires participating countries to undertake costly economic reform. While this will bring benefits in the long term the social costs for those affected can be high.|
|2||Countries which have had faster economic growth have then been able to improve living standards and reduce poverty.||Countries which have been unable to take advantage of globalisation are dropping further behind the richest countries. The gap between rich and poor and the number of people below the poverty line have both grown over the past two decades.|
|3||Improved health through the economic gains of globalisation has led to improved life expectancy.||Globalisation has increased travel, which hashelped spread diseases such as HIV/AIDS, SARS and avian flu, across borders. |
Globalisation has also increased the use of tobacco and fast foods, leading to associated adverse health and financial costs.
|4||Higher global income and reduced investment barriers have increased foreign direct investment in many countries, which in turn has accelerated growth.||The increasing interdependence of countries in a globalised world makes them more vulnerable to economic problems like the 2008 Global Financial Crisis.|
|5||Improved environmental awareness and accountability has contributed to positive environmental outcomes by encouraging the use of more efficient, less polluting technologies.||Global agricultural, forest, mining and fishing companies have exploited inadequate environmental codes and corrupt behaviour.|
|6||Increased interdependence and global institutions such as the United Nations, the World Trade Organization and World Bank, have bolstered peace, as countries are unlikely to enter into conflict with trading partners and poverty reduction helps reduce the breeding grounds for terrorism.||Spending by rich countries on agricultural protection against imported goods from developing countries has been estimated to be around five times what the rich countries provide in aid to developing countries.|
|7||Improved technology has dramatically reduced costs and has changed the way the world communicates, learns, conducts business and treats illnesses.||Technological improvements have allowed cheap imports of manufactured goods to occur, destroying traditional agricultural communities, and increasing unemployment and skills shortages.|
|8||Availability of information through the internet and social media has contributed to the toppling of undemocratic regimes and a growth in liberal democracies.||Modern communications have spread an awareness of the differences between countries, and increased the demand for migration to richer countries. In response, some richer countries have tightened the barriers against migrant workers, xenophobic fears have increased in some sections of the community, and people smugglers have exploited vulnerable people.|
|9||The voluntary adoption by global companies of workplace standards for their production facilities in developing countries has made an important contribution to international labour standards and poverty reduction.||Globalised competition can force a 'race to the bottom' in wage rates and labour standards. It can also foster a ’brain drain’ of skilled workers, where highly educated professionals, such as doctors, engineers and IT specialists migrate to developed countries to benefit from the higher wages, creating skilled labour shortages in their own countries.|
|10||International migration has led to greater recognition of diversity and respect for cultural identities, which is improving democracy and access to human rights.||Indigenous and national culture and languages can be eroded by the modern globalised culture.|