Over the last century, efforts have been made to bring various countries together. All these efforts have been applied in enabling human beings on the earth’s surface to come together in all aspects of life. These aspects of human life include social, political and economical aspects. Integration effort has been seen to bear fruits. In the current years, the world has been visualized as being a global village, where the interactions of the people in the world, has been of equivalent to the interaction in one village or locality. Almost all parts of the world are interconnected to the rest of the world in different ways. Barriers, which initially isolated countries, have been removed. In the recent times, higher levels of integration have been achieved. Initially, countries only integrated economically. This is now outdated. Other areas of human life have also been put in the circle of integration. This is commonly referred to as globalization (Ghauri 22).
Globalization is the process by which countries, economies, and regions have been integrated in a global network. Countries’ economies, cultures, and societies have been placed in the global networks of communication, trade, transportation, and immigration. In the past, globalization primarily used focus on the part of the world involving economy. Only factors of the economy were considered as an important part of the globalization. Foreign investment and international flow of capital and trade were held high in the globalization chart. The range of globalization has been broadened to bring in other activities and areas such as sports, media, socio–culture, technology, and politics. Biological factors such as environmental and climatic changes have also been regarded highly. Various factors have played important roles in making globalization a success. Effective communication across the world has been a major contributing factor. Costs of communication have reduced drastically, leading to enhanced communication. This has been facilitated by the growth of information technology since it has enhanced the communication process. Transportation network and immigration links has also been cited to be critical in globalization (Ghauri 22).
As indicated, globalization has various effects. It has played a major role in the current development in the world. One of the main areas that globalization has affected greatly is the environment. The environment encompasses living things and non-living things on the surface of the earth. It also comprises of the non-living things that have been put in their place by activities of human beings. Globalization has affected the environment both positively and negatively. This paper will examine both positive and negative contributions of globalization to economic, social, political, and biotic environment in the world.
Globalization has caused increased consumption of different products. This has led to increased production of goods and services in order to satisfy the global market. This has increased the stress on environment, which impacts the cycles of ecology. Globalization of trade and market has also led to increased transportation of finished goods and raw materials across the world. Fuels used in transportation of these goods have increased the levels of pollution to the environment. Transportation across the world has also resulted in other environmental predicaments such as the intrusion of landscape and noise pollution. Depletion of non-renewable energy sources such as gasoline has also brought environmental concerns. Aircraft transport, which is an important part of global transportation, usually emits gases, which results in depletion of the protective ozone layer. This has caused the greenhouse effect, which has brought about negative climatic changes. Plastic, a major pollutant, is an important part of manufacturing. Plastic is commonly used for preserving and packaging goods for export and since it is a non-biodegradable, it forms a large part of environment toxic pollutants (Labadi 15).
Globalization has led to industrialization. Industrial chemicals and wastes usually find their way into the water bodies and the soil. These harmful industrial products have caused the deaths of underwater organisms. In the year 2010, a container belonging to British Petroleum Company leaked out petroleum product in the Atlantic Ocean. According to Labadi (32), this led to the death of millions of underwater organisms in a stretch of seven miles. In the soil, chemicals and industrial effluents have led to outgrowth of noxious plants and weeds (Labadi 82). These plants and weeds usually cause damage to animals and plants by interfering with their genetic composition. In the end, this will cause plants and animals to have harmful side effects upon consumption. Demand for increased production for a global market has increased demand for factors of production. The demand for land, especially, has been on the rise. This has caused natural environmental encroachment. Forests have been cleared to pave way for agricultural activities and construction of firms and industries. For instance, land in India has been reclaimed from the sea in order to plant rice for the global market (Ehlers 44)…
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The development of the world economy and international relations becomes vulnerable to the overwhelming impact of globalisation which affects all countries, even though they conduct isolationist policies, such as North Korea, for instance. Moreover, once started, the process of globalisation is likely to be irrevocable. Globalisation is the process of the international economic, political and cultural integration of nations. The economic integration is the major driver of the process of globalisation. Even though many researchers (Dunning, 1998) insist that globalisation has a positive impact on the economic development of the world because the emergence of international trade stimulates the economic growth worldwide, but long-run effects of globalisation may be negative, especially for the poor nations which cannot compete with well-developed nations in the global market.
Background of globalisation
Globalisation has started as the increasing economic cooperation between nations at the regional level and steadily evolved into the global trend. The economic cooperation between countries was the result of the accumulation of capital by leading companies operating in the national market. The accumulation of capital made national markets inattractive for companies because they have saturated them and they needed further export of capital and international market expansion. In such a situation, the international market expansion prior to the globalisation era was not always profitable because of high costs of such expansion. The high costs of international market expansion and, therefore, international economic cooperation between nations, was the result of high fiscal barriers, which local governments introduced to support their domestic economies. The process of globalisation emerged after the beginning of the elimination of fiscal barriers to developer free trade between countries. The free trade implied the elimination of fiscal barriers that stimulated companies operating in different countries expand their business internationally. At the dawn of globalisation, there were interstate agreements involving two or three states, as was the case of the NAFTA signed by the US, Canada and Mexico, but soon such agreements involved multiple parties and, today, free trade agreements involve the majority of nations. At this point, it is worth mentioning the EU as one of the most advanced and integrated international community that united European nations and evolved from the economic union into the supranational political union which unites European countries, members of the EU.
Therefore, the process of globalisation involves the elimination of fiscal barriers and limitations on the movement of capital, goods, commodities, and human resources. The increasing economic cooperation between nations stimulated the development of multinational corporations which operated globally. The overwhelming majority of multinational corporations were based in well-developed countries. Multinational corporations in their turn encouraged governments to eliminate fiscal barriers and develop free trade further to facilitate their further international market expansion. At the same time such policy resulted to the consistent strengthening of the process of globalisation which has become the mainstream trend in the contemporary economic development of the world.
Effects of globalisation on developed nations
Globalisation has had a considerable impact on developed countries. In this regard, one of the effects of globalisation was the development of trade between well-developed nations mainly. In fact, the trade between developed nations comprises the larger share in the total world trade. Moreover, developed nations focus on the trade with each other rather than with under-developed nations which they tend to use as suppliers of natural resources, such as fossil fuels, for instance.
The economic cooperation is beneficial for developed nations because they have technology, capital and well-qualified human resources which are key factors contributing to the competitive advantage of companies in the global market (Martin & Van Gunten, 2002). Developed nations and companies based in developed countries use their technologies to enter new markets and take the dominant position in international markets. They often take the leading position in the global market as is the case of Microsoft, for instance, and develop their business successfully. More important, globalisation involving the free trade opened large opportunities for companies based in developed countries to purchase natural resources and other basic supplies from developing countries. As a result, companies based in developed countries have got an opportunity to decrease costs of production due to the elimination of fiscal barriers and low price of supplies from developing countries. Moreover, they accelerated the consumption of natural resources and other basic supplies from developing countries but purchasing raw materials mainly they sold high tech products to developing as well as developed countries which price was often tenfold higher than the price of raw materials the products were made of.
Foreign direct investment flow also tends to the investment of capital into developed countries mainly, while investments in developing countries turn out to be secondary. Therefore, developed countries prefer to invest into other developed countries because they believe such investments and reliable and safe. In addition, investors investing in developed countries can count on low risk of investment and stable level of income. Such investments are stable and profitable.
Even emerging economies are secondary targets for investors from developed countries. Instead, the US investors prefer to invest into the EU economy, while the EU investors prefer to invest into the US economy. At this point, it is worth mentioning the fact that the investments between developed countries contribute to their accelerated economic growth that allows them to outpace the rest of the world consistently. Developed nations apparently benefit from such mutual investments because they stimulate their economic growth. One of the reasons why investors from developed nations prefer investing in developed economies than in emerging and developing economies is the risk of such investments. In fact, they do not want to take a risk and invest into unstable countries.
Globalisation essay part 2