Essay-- Ian

Topic：advantages and disadvantages of Economic Globalization. Who is winner? Developing country or developed country?


With the development of transportation and communication, the economic globalization impact social life more and more deeply. The process of economic globalization was begin at the 1980's, the world economy have accelerated the process of globalization in 1990s. Globalization is conducive to the rational allocation of global resources, on the other hand, it is conducive to scientific communication as well as promoting economic development in underdeveloped regions. However, economic globalization is a double-edged sword; to every country it is both an opportunity and a challenge. Especially for the developing countries, they will face fierce competition. The current urgent problems of economic globalization are to establish a fair and reasonable new economic order, as a result to ensure fair competition and effective. The influences of globalization for a country’s economy are manifold. Globalization has enhanced dependency and competition between economies in the world market. These are reflected in the global commodity trade and capital flows


In fact, economic globalization is initiated by the developed countries. The developed countries must be the biggest beneficiaries of economic globalization. They invest to building factories in developing countries, by using cheap local labor and natural resources to get high profits. At the same time, foreign capitals also do contributed to local economic development. The low-cost goods product in developing countries, exports to developed countries, it is a strong shock to local market. For example, Statistics and analyses prove that Sino-US trade has been trade surplus since 1993. But the global economy is still dominated by the capitalist of developed countries, which means that the rules must also be westernized. Thus, when these countries, governments, enterprises or other economic activities in different markets, they will not face conflict of rules, and the resulting uncertainty. They also can take advantage of effective means to deal with risks and uncertainties, reduce transaction costs.

Developing countries through economic liberalization, access to advanced technology, and management experience, capital and market. The Economic globalization has brought an unprecedented opportunity for developing countries. Economic globalization has brought opportunities to attract more foreign investment for developing countries, which will undoubtedly help resolve the shortage of funds. Second, the developed countries first of all transfer some labor-intensive industries and capital-intensive industries to developing countries, but also the transfers some technology-intensive industries; of course, there will be some high-tech transfer. Help developing countries to improve technology and equipment to promote the adjustment of industrial structure. For example, India opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral or ganisations. The new policy regime radically pushed forward in favour of amore open and market oriented economy.
Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included scrapping of the industrial licensing regime, reduction in the number of areas reserved for the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates and change over to market determined exchange rates. Over the years there has been a steady liberalisation of the current account transactions, more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of foreign investors in telecom, roads, ports, airports, insurance and other major sectors.

However, under the economic globalization, the financial globalization is promoting economic growth in developing countries, while bringing financial risks and economic shocks. It should be recalled that in due to pressure of the economic globalization and liberalization, Thailand prematurely carry out liberalization of financial markets, and removed all the self-protection barrier, resulting in a serious financial crisis, and then quickly developed into a the Asian financial crisis, has also led to the Russian financial crisis and the Brazilian financial crisis.

It can be seen from this that a globalizing economy, while making and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world. This constrained the policy option available to the government which implies loss of policy autonomy to some extent, in decision-making at the national level.

To sum up, Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. Foreign investment has both positive and negative effects. Secondly foreign investment has led to growing competition on a global basis. Finally, there is no doubt that in the process of economic globalization, the developing countries have contacted the world's advanced technologies and management methods, but this is obtained at the high price of their cheap labor and natural resources. In sort, there are no losers in globalization.

Reference:
http://economics.about.com/od/globalizationtrade/l/aaglobalization.htm
http://www.politicalaffairs.net/article/articleview/3987/
http://www.darkseptemberrain.com/ideas/advantages.htm
http://en.wikipedia.org/wiki/Economic_globalization
http://www.megaessays.com/viewpaper/4430.html
http://business.mapsofindia.com/globalization/impact.html