Impact of Globalization on Economic Development

                                          Impact of Globalization on Economic Development

Pakistani people can enjoy McDonalds; their counterparts in the various parts of the worlds can get pleasure from Punjabi Bhangra. East benefits from the Western technology and west has access to the Asian products. Instantaneous communication and speedy transportation has really compressed time and space in the age of information and deterritorialization. The buzzword globalization refers to the same phenomenon. It refers to a process through which an increasingly free flow of ideas, people, goods, services, and capital leads to the integration of economies and societies. Major factors in the spread of globalization have been increased trade liberalization and advances in communication technology. However, how much is globalization globalized and how does it affect economic development, remains highly debateable among the scholars and the leaders, around the world.

The proponents of economic globalization believe that it will promote prosperity and growth through free trade and market economy. Whereas the opponents argue that it has increased income gap and poverty in the various parts of the world. Truth perhaps lies somewhere in the middle, globalization carries benefits and opportunities as well as risks and costs. Let us begin with the bright side of globalization.

Globalization has certainly benefited the developed countries of the world. America and other leading nations of Europe are the top beneficiaries of globalization. Since they are technologically advanced and equipped with strong financial and political institutions. Therefore they have been able to define the agenda and set the rules for the global economy. That’s why globalization is perceived by many as ‘Americanization’ or ‘Westernization’ of the world.

Nevertheless, globalization has brought about a remarkable change to certain developing nations, as well. It has strengthened their economies and stabilized their polities by increasing growth and decreasing poverty. This gives credence to the view that globalization offers opportunity to poor countries by providing multiple interactions with the wealthier nations. Asian tigers, China and India can be cited here as the examples.

However, the other side of the story seems different. Anti-globalists argue that globalization has made a large number of people in Africa, Latin America, Asia and Eastern Europe to suffer. These areas are mired in poverty and political instability. The growth rate of Africa is zero and that of Latin America minus two percent. So, for the poor countries globalization means intense capital flight, brain drain and dependence.  Consequently rich are becoming more rich and poor getting even poorer. Jimmy Carter, a former US president has portrayed in the following words:

Globalization as defined by the rich people like us, is a very nice thing…you are talking about internet, you are talking about cell phones, and you are talking about computers. This doesn’t affect two-third of the people of the world.

To conclude, globalization is shaping the forms of world economy and thus affecting economic development. However, the costs and benefits of complex and contested processes of globalization are unevenly distributed. For some, globalization offers exciting business opportunities and rapid growth of knowledge and innovation. But for many, particularly poor of the poor countries, globalization may mean further deepening of poverty and inequality.  The world leaders and the international institutions should develop a shared vision that reflects global social needs in order to make globalization beneficial for all the people.