And Korea, Poland and Slovakia. Corporations have the ability to move to locations where the tax rate is lowest. Thanks to the mismatch described in the last paragraph, the federal deficit in recent years has been far greater than the balance of payment deficit. Accusation of providing in-humane working condition and paying an unlivable wage a plagued many global companies such as Nike and retail giant Wal-mart. Globalization raises living standards and lowers prices. Another example of this improvement after the current globalization is Ethiopia. This will leave lesser scope of tapping the demographic potential of the country.
From this we can conclude that globalization is one of the most important factors of the new century, and that it will continue spreading and growing all around the world, reaching the most exotic places. If you think back to a time, say 15 years ago, you might recollect that 'foreign' goods were a rarity. You loose all of your primary income opportunity, This kills country's. A final disadvantage of globalization is the increase in wages for workers, which can hurt corporate profitability. Although global average per capita income rose strongly throughout the 20th century, the income gap between rich and poor countries has been widening for many decades.
The theory suggests that two countries capable of producing two commodities at different costs can benefit the most by exporting the good where the comparative advantage exists. The law of unintended consequences might produce some interesting results! Another pro would be that globalization has made living and utilizing products from various parts of the world incredibly easy. Globalization is a good thing. It does not mean the abolition of traditional values. The reality is, the question whether globalization is good or bad is not black and white.
Other countries may have a comparative advantage in mining certain natural resources—such as —and mishandle the revenue generated from those activities. To people in richer countries globalization brings lower cost goods from abroad, which leaves them with spending power to spare and a higher standard of living. Because of this, we are better off accepting the truth and, like we do best, moving forward. The author is a Forbes contributor. These efficient markets allow economies to grow, and in a global world, when one economy grows, it spurs growth in all the other economies that are connected to it.
There is mounting evidence that inequalities in global income and poverty are decreasing and that globalization has contributed to this turnaround. The good side of globalization is also about easy credit and rising leverage, as money flows easily across local and national boundaries, and creditors fail to distinguish between good and bad borrowers, boosting aggregate demand; setting the world economy into a virtuous cycle of income and employment growth; and easy credit and leverage fuel financial bubbles that feed into a euphoria that perpetuates the virtuous cycle. As could be expected, it shows that the world remains a tremendously unequal place. Gradually there is a world power that is being created instead of compartmentalized power sectors. The reason the problem is worse now is partly because oil supply is not growing very much, due to limits we are reaching, and partly because demand is exploding due to globalization. So now China is the Apple Capital of the World. The numbers confirm these intuitions.
It becomes easy to depend on imports and specialize in something like financial services or high-priced medical care—services that are not as oil-dependent. This process takes advantage of lower labor cost, natural resources or other services available in developing countries. What if we do not compare, say, Poland to Germany, or rich and poor in Poland, but each person in the world to all others? Now if there will be more good or bad factors, this will depend on how globalization is treated and controlled. There are two ways of looking at globalization. The remedy is to make the polluter pay.
There is cultural intermingling and each country is learning more about other cultures. The world has undergone two sets of oil price spikes. There are nations that are constantly losing their jobs as a lot of the work is now being outsourced to developing countries. Another point would be that there is a greater exchange in knowledge and that it is educating the range of knowledge around the globe. It does not mean the abolition of traditional values. Technology is the main reason of why we are noticing globalization.
Even if globalization is a term used already sometime, I am sorry not to be sure what it really means by now. The core benefit of globalization is the comparative advantage—that is, the ability of one country to produce goods or services at a lower opportunity cost than other countries. International trade, capital flows, , technological transfer and cultural exchanges are some of the typical manifestations of this process. If you speak Chinese and understand the business environment and culture, there is no need for a local partner the same is true in Japan, by the way. Even if the West drops its oil consumption greatly, the East has sufficient pent-up demand that it will make use of any oil that is made available to the market. Even a small business can benefit from the incredible production savings to be found overseas, and this along with the obvious fact that there are more people to sell to is why businesses actively and aggressively promote globalization.