Strengthening Developing Countries Through Globalization

Answer

Strengthening Developing Countries Through Globalization

The magnitude to the trend towards globalization is attributed to the revolution in communication and transport technology which has allowed nations to base their economic adoptions to the value of the economic environment in various countries. Today, individual countries all over the world are now convinced that globalization is the best approach for economic growth and development (Bourguignon 164)The principle of comparative advantage has further boosted this realization in the sense that countries that adopt free trade flourish as they export what they produce best and import the rest. While globalization becomes a key approach towards growth and development among developing nations, there are several challenges that inhibit fast growth in these countries. The quick change in technology and macroeconomic conditions are some of the key factors that slow down the potential of globalization to boost these poor nations. The lack of solid evidence justifying on the impacts of globalization in improving or deteriorating economics and conditions of developing nations is a key issue. Therefore, this paper aims at examining the actual beneficiaries and actual losers of globalization by analyzing the case of globalization in developing nations. As the paper argues, developing nations that adopt to flexible and consistent policies and possess well-governed institutions that embrace transparency prosper in globalization.

Debates on whether globalization helps the poorer countries is often narrowed down to theories from either antiglobalizers or the proglobalizers. While antiglobalizers claim that globalization makes the affluent wealthier while the poor poorer, proglobalizers proclaim that globalization does help the poor. While these two claims may be considered theoretically correct, the factual evidence is that this matter is more complex and rather complicated. Globalization happens to be one of the many factors that attribute to economic growth and development. According to Bourguignon, countries like china suggest that their “poverty trends is not only attributed to globalization but internal factors such as massive rural-to- urban migration and infrastructure development” (172). However, the reality is that globalization is a key factor in strengthening developing countries.

In developing nations, globalization is associated with a wide range of benefits that range from maximizing on production and utilization of the resources available through the help from foreign investors to exploiting their competitive advantages to the maximum. Further, participation in free trade has helped increase employment or both skilled and unskilled labor, and helped open their economies to the international trade. However, international trade is linked to several risks, especially on the fact that it exposes a nation’s economic structural weaknesses which becomes a competitive advantage to the rest.  Additionally, it is evident that nations who fail to participate in globalization run the risk of ragging behind in the global economy.

Bourguignon argues that globalization influence on “income inequality among nations is not a problem brought by the rich becoming richer but rather on the transition towards change” 169. Most developing nations lack the technology, expertise and the finances to keep up with the trends and adopt to changes. Hence, foreign investors come in as an aid to curb such limitations in exchange of permission to exploiting the available resources and benefit from them. From such perspectives, foreign investors are more of a boost rather than a control system. The issue on economic inequality comes in when these poor countries lack competent and reliable institutional systems to facilitate a quick adjustment and adoption to changes related to globalization.

Further, Kilic argues that globalization has less implication on poverty and income inequality in developing nations than failed political systems (9). In reality, poor political regimes limit a country’s extent to globalization as it discourages foreign investors and traders. Unstable politics are linked to long-term implications such as slow feast of green revolution, geographical segregation, and limited export products to rely on. A country that properly positions itself through appropriate policies is able to attract foreign capital in form of new investments and advanced technology, hence profiting most from globalization. Kilic confirms that credibility of economic policy is vital in adopting to globalization trends (9). Countries in possession of inconsistent policies are highly vulnerable to delays in economic growth and are likely to be passed by in both trade expansion and foreign capital flows for development. Hence, developing nations need to adopt to flexible and consistent policies and possess well-government institutions that embrace transparency to be able to prosper in globalization.

In conclusion, it is vital to recognize that globalization is not a “zero-sum” game where one country has to lose for the other to win. Globalization is more of a measure on how fast or smart a country can adopt to the trends and properly adjust to these changes. For a developing nation to succeed in globalization, the right policies and political insight is what it takes. Regardless, it is important for developing government to ensure that while embracing globalization it is fully aware of the possible risks and ensure that it provides sufficient protection for the susceptible sections of the society during transition to change.