Last Updated 10 Aug 2020

Globalization: opportunities and challenges

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Globalization is a process through which the world gradually comes closer tending to look like a global village. It could also be regarded as the integration of countries’ consciousness. In a global society, a problem affecting one nation becomes a problem to all those nations that are interdependent and interrelate. This research paper will analyze various definitions that have been used to define the term globalization. The paper will also identify challenges and opportunities that are associated with globalization.

This paper starts off with a brief introduction of what globalization denotes and then proceeds to discuss and analyze various definitions that have been used by various writers to refer to it. After this, the paper discusses the challenges and opportunities that are attributed to globalization. On the last page of this paper is a list of all the sources that have been consulted while conducting this research paper and are clearly formatted in accordance with APA formatting style.

Globalization can be termed as nations’ integration and cooperation towards stronger economies and increase in mutual benefits for all. It is also referred to as an increase in the rate of interdependence between nations be it in military alliances, trade or cultural imperialism. Globalization as it is defined by some writers means shrinking of the world or the integration of nations and what this means is that achievements and shortfalls of one nation affects others either directly or indirectly. A case in hand is of Iraq war which was a military confrontation between US and Iraq.

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benefits and risks of interdependence here.

The consequences of this war were many and affected even the parties that were not directly involved. For example, interruption of oil production led to the rise in oil prices due to oil shortage. To some modernization theorists like Karl Marx, globalization in search for new markets by European powers such as Portuguese led to the discovery of new trade routes especially a direct route to Far East, the discovery of the New World and finally this resulted to colonialism. Here the interests of the west came to affect other parties that were not directly involved.

(Bardhan, A. 2006) Globalization is not a new phenomenon as nations have been dependent on each other for long but what is of concern is the rate at which the process is taking place especially in terms of cultural interactions and influence, business expansion and increase in business expansion. Globalization has been defined differently by writes from different fields of study but the main idea is the same for example according to historians, globalization is an epoch that is denominated and characterized by capitalism.

To sociologists, it is the convergence of social tastes, preferences and acceptance of social diversity in matters affecting social values and lifestyles. To political scientists, globalization is a slow process through which independent nations lose their sovereignty whereas economists view it as the rise in global market. When a multi-displinary approach is taken, globalization is seen as a philosophy, phenomenon and a process that profoundly affects human beings in the key globalization facets like communication, transport, finance and trade.

(Leen, 2003) According to Monsod (2), “globalization is the widening and deepening of international flows of trade, finance and information in a single, integrated global market. ” Other writers define it as a process whereby the world shrinks in terms of distances, time shortens, borders cease something that makes the world to become like a small village where people interrelate and inter-depend. Shortening of time, disappearance of borders and shrinking of distances can be illustrated by the way communication and transport has become effective.

“Average ocean freight and port charges per ton fell by more than two thirds between 1920 and 1990, from US $95 (in 1990) to $29” (Monsod, 2) Travel time and cost has significantly gone down. Travel cost per individual passenger in the period between 1930 and 1990 fell by over 80 percent. In terms of time spent the same journey than in the past took four days to travel from New York to Manila now takes less than a day.

In terms of communication, the cost has also substantially gone down for example a three minute call from New York to London cost 245 US Dollars in 1930, in 1970 it cost 32 US Dollars and it reduced to three US Dollars in 1990 while at the moment the charge for the same call is 0. 10 US Dollars. (Leen, 2003) In terms of travel barriers, trade quotas and other physical barriers that were erected for example during the Cold War like Berlin wall and others that were social-political in nature such as color bars, apartheid and racial desegregation have since then been brought down.

As it was earlier mentioned, globalization process that is taking place is different from what was happening in the past in its character and this has brought new features such as new markets that are globally linked and that are open twenty four hours a day in a week. These markets also have products that have global brands such as Coca Cola products and portray a new feature known as e-commerce. There are also new actors in the global market for example World Trade Organizations, Multinational Companies, Policy Coordination Groups and Regional Blocs (Monsod, 2)

There are various challenges and opportunities that are associated with globalization forces. To some authors, globalization is un stoppable phenomenon that brings with it opportunities to those who are prepared to it while at the same time bringing threats to those that are ill prepared or not prepared at all. One of globalization merits is that trade liberalization wave brings with it new opportunities that fuels the future growth of the developing nations. The problem with these nations is that their national resources rests within the hands of a few individuals while at large those countries lack national capital.

This imbalance in capital resource is partly if not in full solved by multinationals and global markets that directly invest in these nations. These institutions provide these governments with revenues that they badly need to develop their country by financing government institutions. Capital markets and direct investments are a good source of job opportunities that indirectly leads to nation’s economic stability. Another opportunity that has been brought about by globalization is tourism. This has resulted due to increased movements of people around the world.

Tourism has greatly been favored by reduction in travel costs and invention of faster means of transport for example; journeys that would take many days take less than a day today. States cooperation is another thing that has led to the reduction of barriers that restricted free movements of people for example during the cold war, free movement of people from East Germany to West Germany was restricted until the Berlin wall was brought down. Tourism is one of the major sources of income to many developing nations.

Those nations that have managed to take charge of globalization forces have benefited in a big way as they have been able to generate a lot of revenues. Tourism has led to an increase in job opportunities due to emergence of hospitality institutions. “Movements of people have also increased. Tourism more than doubled in 1980 and 1996, from 260 million to 590 million travelers a year. Despite tighter restrictions, international migration continues to grow, and workers’ remittances amounted to US $58 billion in 1996” (Monsod, 3)

Another benefit of globalization is that it offers to the international investors who are in capital markets many investment opportunities something that leads to an increase in returns while at the same time promoting portfolio diversification. It is through globalization that resources are efficiently and effectively distributed world wide something that again leads to world growth (Qureshi, 1996). On the other hand, there are risks that are involved with globalization and have plunged countries that are unable to keep up with the pace of globalization into a very bad situation.

While some countries have successively managed to harness globalization forces to foster their economic progress, others have risked being left behind and marginalized and this occurs particularly in trade and investment. These forces are threatening to increase the gulf between nations that are able to take advantage of globalization and those that are unable. Inability to harness this force has therefore led to an imbalance in the distribution of benefits (Qureshi, 1996).

Countries that have managed to create investor confidence have benefited the most as multinationals and international capital markets cannot operate in countries where investors feel insecure. Another thing that leads to imbalance in development is poor distribution strategies which have led some countries to gain more than others. The amount that investors invests in one country is determined by a number of factors such as security of the country, market and the cost of investment something that makes developed nations to be more favored than the less developed nations (Monsod, 4)

According to Monsod (4), globalization leads to contagion or a situation where issues affecting one region become problematic to others for example the recent economic recession in America which affected many economies that were not directly involved irrespective or their locality. With globalization human insecurity grows, people lose their cultural identities, diseases increase and are spread faster and crime prevalence goes up. Many illegal businesses are now taking place such as international drug trafficking, proliferation of guns across borders and women international syndicates.

While it could be said that some cultures have helped to get rid of some retrogressive cultures, it has led to the homogenization of culture but with the risk of making people lose their cultural identities. Again diseases such as HIV/AIDS are spread from one corner of the world to the other faster than it was in the past because the world has now turned into a small global village (Monsod, 5) Globalization as per its definition has led to the integration if nations. Nations across the globe have come together to cooperate making the world to look like a small market where people can meet and interact.

With forces of globalization, many opportunities have emerged especially to those that are able to harness these forces and to those who are unable, many shortcomings have resulted. Indeed, in a global world all societies are inter-related and one country’s achievement or problem affects all other nations that interrelate with it either directly or indirectly. References: Bardhan, A. 2006. Globalization, Job Creation and Inequality: the Challenge and Opportunities on Both Sides of the off shoring Divide. University of California, Berkeley. Accessed from http://staff. haas. berkeley. edu/bardhan/offshoring/offshoring. pdf. Leen, Maura.

2003. Draft Paper for DSA conference on Globalization and Development: The challenges and opportunities for international civil society in Promoting ethical globalization. Accessed from http://www. devstud. org. uk/publications/papers/conf03/dsaconf03leen. pdf. Monsod, Solita. 2000. Globalization: Challenges and Opportunities University of the Philippines. Accessed from http://www. capwip. org/resources/womparlconf2000/downloads/monsod1. doc. Qureshi, Zia. 1996. Globalization: New Opportunities, Tough Challenges. Finance and Development. Available at http://www. imf. org/external/pubs/ft/fandd/1996/03/pdf/qureshi. pdf.

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