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In a narrow sense, globalization describes the increasing internationalization of production, distribution, and marketing of goods and services. In a broader sense, it refers to the expansion of global linkages, the organization of social life on a global scale, and the growth of a global consciousness, hence to the consolidation of the world society. It is a complex economic, political, cultural, and geographical process in which the mobility of capital, organizations, ideas and peoples has taken on an increasingly global or transnational form. Economic globalization refers to the process that advancing the integration of the world economy through trade and investment. Political globalization refers in part to an increasing trend toward multilateralism, in which the United Nations plays a key role and national non-governmental organizations (NGOs) act as watchdogs over governments. International NGOs increase their activities and influence over national economies and their states' decision-making. Cultural globalization refers to the worldwide cultural standardization. It is the process by which tastes and preferences of individuals become more similar across countries e.g. Hollywood movies, McDonald's or Sushi, etc. Geographical globalization refers to the trend of intensifying connections among people at widely varying spatial and temporal scales. The reduction in the barriers to real and virtual interaction among people, even between distant places, is due to the rapid increases in transportation and communication technologies. Globalization comprises three core elements: the expansion of markets; challenges to the state and institutions; and the rise of new social and political movements. The expansion of markets Technological improvement and government deregulation help establish the transnational networks in production, trade and finance. These networks are now expanding globally. In the goods and services market, advanced means of communication and new techniques of production help establish the production and trade networks among nations so that the quantity and the speed of goods and services trade across the globe increase. Also, in financial markets, globalization facilitated by new financial instruments permits a wider range of services to be bought and sold across the world economy. Both goods and services and financial markets have been expanding under globalization. The transformation of politics The second element of globalization is the challenges to the state and institutions. Because of the increase in political interactions among nations, political power and political activities will be widely spread across the border. The global issues like human rights, environmental protection will require states to coordinate policy-making at levels above the nation-state. Thus, the original political situation may be changed. The sates' political boundaries become much less important.
The emergence of new social and political movements Because of the advanced communication system and the media like internet, book and music, international ideas and values can easily be transferred across countries and develop a new global culture which may inspire some new social and political ideas as well as movements.
remain unexploited. When multinational enterprises invest their capital in the developing countries, their returns on investment are likely higher than those in the industrialized countries. Higher Living Standard An open economy, which encourages international trades and foreign investments, expands the choice set for consumers and brings in capital and technologies from abroad. Thus, with more choices and higher technologies, people's living standard is raised. Capital inflow to poor economies; increase total export of developed countries Due to the higher mobility of capital under globalization and higher return of investment in the developing countries, more foreign direct investment (FDI) will go to developing countries. Moreover, after making FDI, companies in developed countries export more intermediate goods to the developing countries (FDI-receiving countries) for further production process but export less finished goods for sales. If the rise in exports of intermediate goods outweighs the fall in exports of finished goods, total exports from the FDI-sending countries rise. Thus, FDI-sending countries will benefit. Cons Reduction in Economic Growth More liberalized trade may have negative impacts on jobs and economic growth when a country imports more than exports. This imbalance is most likely to happen to countries whose domestic industries were heavily protected before the liberalization. If these industries cannot survive under the intensified international competition, the countries will rely more on imports. Given the same exports, the net exports will decrease as well as the GDP and economic growth. Widening of Income Inequality The combined action of increased trade and capital flows under globalization is likely to raise the demand for and push up the wages of some relatively skilled labor in certain industries which have comparative advantages in a country. On the other hand, the demand for relatively unskilled labor falls, so as their wages. This widens the income inequality within the country. Job Losses Globalization results in competition among nations. That means domestic exports have to compete in the international market. Unfortunately, some domestic companies may fail to survive or relocate their production line to other countries with lower costs; hence, more people in the domestic country lose their jobs. Downward Pressure on Wages Free trade and FDI may take jobs from workers in the advanced industrial economies to cheaper workers in poor countries. Because of an increase in the idle labor in developed
countries, there is a downward pressure on overall wages. Meanwhile, although the poor workers in developing countries are drawn into jobs, most of them still have to work for long hours in shabbier premises and get very low pay. Supervision from international organization Multinational economic institutions, such as the World Trade Organization, the World Bank, and the International Monetary Fund, are seen as the monitors who render judgment on global trade practices. These organizations will intervene as some countries violate the trade agreement under free trade. Therefore, countries are now bounded by more global rules and regulations, which did not exist before free trade. Tax Avoidance and the Reductions of Social Protection Corporations are inclined to invest in a place with lower tax rate. With the trend of economic integration and globalization, if there is tax differential between countries, people or corporations most likely move to places with lower tax rates to make their investment. In order to attract the inflows of FDI, governments have to lower the tax rates for corporate income. Thus, globalization gives rise to tax competition which not only limits governments' controls on the tax system, but also reduces their tax revenues. In many nations, especially the developing one, corporate tax revenues are one of the major sources of state income. Tax avoidance and tax competition will cause inadequate revenues of governments to support the infrastructure development and limit the government's ability to provide social programs and safety nets. De-regulation Trade agreements require governments to remove many legislative or administrative regulations which may restrain free trade. Many barriers to free trade are removed despite the potential environmental, social or developmental effects of doing so. For example, Canada has for many years banned the production and the use of insecticide DDT within the country due to its negative environmental impact, but she cannot restrict any food with the use of this insecticide imported into Canada. Thus, trade agreements may defeat some national policy. Threatening Environment An upsurge of trades and investments in the natural resource industries such as forestry, mining, and petroleum development are threatening the health of the world forests, mountains, waters, and other sensitive ecosystems. According to a research conducted by the World Watch Institute, globalization threatens the planet and its inhabitants. For instance, the size of our forests is shrinking as the value of global trade in forest products climbs from $29 billion in 1961 to $139 billion in 1998; fisheries are collapsing as fish exports rise nearly fivefold in value since 1970; human health is also endangered with the usage of pesticide increasing nearly nine-folded since 1961. In addition, high-tech industries such as computers and electronics have also gone global in recent years, which have heavy environmental costs. It is because semiconductor manufacturing employs hundreds of chemicals which contain carcinogens that will harm human health.
governments to make choices between improving productive efficiency and providing social security when they decide how to spend their funds. Governments usually value the productive efficiency more. Hence, spending on public provision, especially for the elderly, may decrease. It is because the elderly have already left the workforce, public spending on them will not add to productive efficiency. Thus under globalization, governments tend to lower taxation to attract more labor and capital, and ignore the welfare of their elderly. Such competitive success will force other nations to pursue similar low-tax policies. As a result, public provision may dismantle gradually as globalization intensifies.
Encourages students to work in teams Under globalization, communication among nations and multinational enterprises increase. Employees need to work closely in teams. Therefore, students, the future workforce, should be encouraged to work in teams to develop interpersonal skills such as in-group dynamic, leadership and management. Not only should students learn to work in teams, but they should also learn to work in global networked virtual teams. This enhances team performance when using virtual tools to communicate, structure group dialogue and decision making, record rationales for choices, and facilitate collective activities.
Education In some developing countries, the poor drop out after primary school while the rich go on to higher education. Therefore, the government should move quickly in the direction of universal secondary education. So as to upgrade the labor force, increase the incomes of the great majority and thus making globalization becomes good for everyone. Labor Force The workers have the risk to be exploited by the companies e.g. longer working hours, poor working conditions. Government should pass regulations to protect workers from the greater power of employers and from labor market risks. The regulations should include a more socialized solution to unemployment risk by adopting contributory individual savings, unemployment benefits, etc. Social Security Facing the benefits and challenges of globalization, the national governments have to make choices whether to resist or accept the consequences of globalization. For example, Government may force down domestic wage level in order to maintain a competitive labor market to secure jobs or try to isolate the domestic economy by means of protection. Both methods can indeed help the country to have higher competitiveness which is very important to a country when it goes global. However, they are difficult to achieve and may lead to serious social consequence because of lower wage payment and falling living standard. If the national governments allow their countries to go global and get accept the potential advantages of globalization, they should concentrate on the development of technology and knowledge, both in education and industrial terms, in order to maintain the social interest of citizen. Meanwhile, governments should transfer the resources to generate a generous system of social welfare at the expense of employment. An important part of the role of national governments is to make global economy system work better and more acceptable. For example, through providing social capital and common goods to preserve the basic needs of society and reduce the destruction from advanced globalization. Besides, governments are the initiators of policies and regulations to promote environmental protection and health and safety standards. Governments have to set the rules governing the economic environment in an effort to restrain the excess of the market and discourage corruption. It is also important for governments to oversee the provision of constantly upgrade communications and other physical infrastructures so as to encourage investment. Although the decision-making capacity of governments under globalization is decreasing, their representative capacity remains significant. Governments have the principle mean of protecting national economic interests at international meetings of associations, such as World Trade Organization (WTO) or the International Monetary Fund (IMF). Overall, the losses in terms of economic sovereignty and the ability to
pursue macroeconomic policies are balanced by new responsibilities created by the onset of fully global capitalism.