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Autor: anton 15 December 2010
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Globalization is spawning a rise in living standards
The main focus in this article is to illustrate how globalization has improved the lives of many in developing nations. Globalization in of its self is the trading of goods and services of a local economy into an integrated global economy. Technological advances have made this practice more feasible with in the last 50 years. The major milestones were the development of the internet and increased transportation technology. These two advances made the world coined â€œflatâ€ and set the stage for higher living standards.
Countries such as Asia and Latin America have really harnessed these technology advances. They have been exporting their products and services on to the world wide market at alarming rates. Due to increased productivity in there economy there overall score card â€œGDPâ€ gross domestic output per person has increased significantly. The higher the GDP, the better off the country and its people are theoretically supposed to be. Asia has seen the most significant jump in GDP in the last 50 years. On average its people have seen a 5 times greater GDP per person due to an ever expanding economy.
Globalization is the driving force behind increased GDP per person. Evidence has been studied linking that countries that tend to globalize faster have a directly proportionate increase of GDP of 5%. This study was conducted by David Dollar and Aart Kraay of the World Bank. They studied the countries between 1960 and 1990. The worlds two largest developing countries India and China make a perfect example. India increases its GDP per person from 2% to 5% by encouraging foreign trade and investment. It lowered its tariffs by more than half in one year to encourage this.
It also has been shown that foreign companies who operate in developing nations pay there employeeâ€™s higher salaries than domestic companies. The increase is typically 12%- 30% more. Foreign companies can afford to pay employees higher salaries because overall they are cutting their operating expense significantly by operating in a foreign country where taxes, wages etc are significantly cheaper.
Living standards can be calculated by literacy rate, life expectancy and school enrollment as well. Some believe that these truly measure how well peoples living standards are. The UN developed a study including all these variables and put them in an Index. Researchers then studied the comparison of these results with the GDPs of the seven largest emerging countries. The results showed that there is a direct relationship with the two. The countries with the highest GDP also had the highest Index ratings.
Increasing a countries average wage is thought to increase the poverty as well. Research has also proven this theory false. In India 16 states have seen dramatic average income levels rise. In all 16 states the poverty has shrunk. There is no conclusive evidence that higher average wages increases the poverty level.
Globalization has been proven to increase the standards of living in many developing nations. The Emerging economies have seen significant prosperity due to international trade that has trickled down to its citizens in the form of better education, living conditions and jobs.
Globalization in my opinion is the key to how this world must survive. It has the ability to stop wars, chisel away poverty and share all the unique products and services different cultures foster.
The internet has brought the ability for a small Moroccan leather shop to sale its merchandise to an infinite number of clients. Its potential for growth is virtually limitless. Globalization has allowed the world to experience the American Dream and given each person and country a fare shot at competing. As the ages roll on my belief is that each country will eventually have to begin specializing on the products and services they have the most utility in. Meaning, each country must export the products and services that they have an advantage in compared to other countries. Wither it is for geographical reasons, specialized work force etc, . For an example it makes sense that Saudi Arabia specializes in oil exporting. They have an abundant supply and a compatible work force. It would not make sense for them to export clothing. China would have the advantage due to its enormous work force. If each country could specialize in what they have an advantage in they would remain a constant force in the global economy. The countries would then have to trade for products and services that they do not have an advantage in producing. The overall global affect of this helps everyone. If each countries specializes the total number of good and services as a whole expands. This provides more goods at cheaper prices which ultimately puts more money back in the consumerâ€™s wallet. Or in another way, it raises the standards of living.
Globalization is a means to defuse war. The entrepreneurs of India are one of the most important factors in keeping peace with its rival Pakistan. The entrepreneurs diffused an uprising between the two nations when they went to the local government and expressed how they canâ€™t just shut down business for war. They expressed that they are part of the global economy now and that by shutting down for an extended period of time will cause irreversible consequences in the there countries economy. Globalization relies on each other to fulfill its duties. Besides religious believes many terrorist join terror organizations due to its wages paid and the lack of employment opportunities. Coca â€“Cola opened up a factory in Afghanistan and by doing so took former al quida soldiers and turned them into career men making an honest living. Call centers in India increased the average salary of young adults by 3 times. India is largely Hindu however they have the 2nd largest Muslim population in the world. Not one hi-jacker of 911 was from India. Could advanced Globalization by the cause? Giving developing countries an opportunity in business not only cuts cost for the companies it demotes the corruption and violence accompanied with most poverty torn nations.
Globalization allows for countries and cultures to share its products and services to the rest of the world. As I walk thru my house I have products from the entire globe. You no longer have to travel to remote locations to pick up unique items. Having products that I love from around the world personally strengthens my standard of living. I feel as though im a part of something larger that just American culture or what I like to refer as Californication. The thought of buying something from a foreign country, especially a developing nation brings a warm feeling inside my body knowing I did a small part in helping globalize the world. The spread of cultures through globalization allows for a melting pot of products and services. It allows us to connect with people from 1,000 of miles away and support economies from all over the globe.
Globalization is not harming poor countries. â€œInformation technology and international investment will not rid the world of poverty. But technology and investment can help reduce poverty, when they are combined with sound government policies and help from institutions like the World Bank and the International Monetary Fund. With responsible leadership and a healthy dose of imagination, globalization can help the poor achieve living standards that most citizens of industrialized countries take for granted.â€ The statement from above was written by a Harvard dean and I could not express my thoughts more perfectly. Globalization does play an advantage to the better off but it does not worsen the poor. Globalization simply offers the opportunity to increase the standards of living thru the advancements of technology and transportation. Most countries that remain poor do so because of fundamental errors. They have weak governments and economic polices and are plagued by corruption. Globalization is not the oppressor yet it is the avenue to economic prosperity in an expanding global market.
Some Americans claim that globalization has lessened the standard of living for middle waged workers in America. There is no doubt that some American jobs have felt the impact of globalization. In some cases it has put downward pressure on salaries due to the ease of off shoring for relatively unskilled labor. This to me means that Americans are just going to have to work harder and become master traders because there are millions of people across the global that are willing to take our jobs and take them for less pay. The flood of un desired jobs has already been put in place for the last 50 years or so. It is only a matter of time before higher skilled jobs begin to take place on foreign soil. The world is survival of the fittest there will always be a constant struggle for prosperity.
Globalization has already improved the living standards of many. Once everyone sees the opportunity it brings everyone will want to be a part of it. The global market will house everything that makes us different. The great irony is that everything that makes us unique will eventually makes us equal.
Dean, Edwin; Globalization is spawning a rise in living standards
New Labor Forum R. Pollin By Robert Pollin New Labor Forum 16(1): 120â€“123, Winter 2007 Copyright Â© Joseph S. Murphy Institute, CUNY ISSN: 1095-7960/07 print DOI:10.1080/1095760601113480
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