Positive and Negative Effects of Globalization

Positive and Negative Effects of Globalization

In the end of 15th century, the word globalization has appeared (Kevin & Jeffery, Year Unknown, Internet). It presently has been using widely to illustrate when all countries become closer and closer in term of economy, travelling, environment, culture, technology, migration, and politic and so on. Based on Cambridge Dictionary defines globalization as “the increase of trade around the world and the availability of goods and services, gradually become similar in all parts of the world.”(Cambridge Advance Learner’s Dictionary, 2008) It is believed that globalization has resulted in both positive and negative effects on many countries, especially developing and less developed countries. This writing will focus on the positive and negative impacts caused by globalization, and in positive part of globalization will cover on economy and mass media, whereas negative slice will cover on the impact to economy and environment.

Globalization has led to the growth of economic competition and it has led one nation to become the largest economy in their region. Due to globalization, many large corporations have settled their business in other countries, commonly in developing countries, as the costs are lower than their home countries and the deregulated environment (FDI, WHO, 2013). These activities have been called Foreign Direct Investment (FDI). FDI can be defined that the investment from foreign investors in other countries that are different from the origin of investors by bringing the foreign funds to do the business (Economy watch, 2010, Internet). FDI has benefited to the invested countries by creating more job opportunities which is one important factor that can reduce the unemployment rate and boost the economy. An example to that is Brazil economy. In the last few years, Brazil has been ranged number two of integrated world economy by having a lot of Foreign Direct Investment; as a result of this, Brazil has become the largest economy in South America in 2011 (Gina Marie & Marie Therese, 2011, Internet).

Another positive effect of globalization is that it can contribute international news and events very quickly through mass media. In the past time before globalization, people lived in their country and could know any news just in their communities as the media was not fully contributed. Thanks to globalization, people around the world can now receive most updated world news every time through mass media such as the internet, television, radio, newspapers,   magazines … For instance, according to Time magazine, Ronaldo, a Brazilian soccer player, became a super star in the world in 1998 world cup as a lot of people around the globe had watched that competition. Based on the data from the International Telecommunication Union (ITU) in 1995 stated that about a thousand of people had 211 set of televisions at their home around the world (John, Paddy, Anne, 2009, 44). Moreover, people can change their living habit by watching other nation of TV programs like a program about life in New York can be watched by African (John, et al, 2009, 44).

However, globalization not only provides the economic benefits but it also gives big negative effects to the society, too. First, globalization can result in loss of job. It is true that FDI can create more job opportunities to the host country, but the original country of investors will face with job losing. As an example in United States, a study of Economic Policy Institute, Robert E. Scott has claimed that trading with China has caused United States lost 1,064,800 jobs in computer and electronic industry from 2001 to 2011 (Robert, Internet, 2011). It is not only jobs from the computer and electronic sector has been eliminated, but other sectors such as apparel and accessories, textile mills, fabricated metal product, furniture and fixtures, plastics and rubber products, motor vehicles and parts, and miscellaneous manufactured goods and so on have been experienced job losing, too (Robert, Internet, 2011). Another impact of globalization is that with globalization companies may face with loss of profit as the currency exchange rate is not stable. A company may get exchange rate risk if they trade across border because each country has different currency, and when they need to transfer money to each other, the bank will convert automatically to currency of country to be sent then the sender will accept that risk. For example, in mid-1970 to 1998, the Japanese currency depreciated from 111 yens to 147 yens per US dollar, which is why the Japanese companies got that problem even though they had specialized managers (John, et al, 2009, 47).

Environment is another element to be affected by globalization due to the revolution of industrialization. The revolution of changing habit from using human labor to machine labor has boosted the economy in industrialized countries, but it seriously pollutes their environment. Based on the 2000 Toxics Release Inventory of the U.S. Environmental Protection Agency stated that about 2000 factories have released nearly 3 billion kilograms of toxic chemical into the environment every year (Unknown author, Internet, 2013). Those substances can pollution water and air which has led to a serious health problem when human consumes the polluted water and breath the polluted air in (Unknown author, Internet, 1998-99). In addition, the environment can be threatened by non-smoked industry which is tourism. People begin to travel world around for tourism purpose because the air fee has been decreased. Unfortunately, tourism can cause environment in the country to be worse. Tourism can deplete natural resources. When the numbers of tourists keep rising, water and fresh water has been consumed more than local used, which can lead to water shortage and make more waste water, and it also can degrade land which contains ore and mineral resources to build hotel to serve tourists (Unknown author, Internet, 2001).