Advantages And Dangers Of Globalization For Developing Countries

The 21st century is tremendously marked by increased inclination towards globalisation alternatively of nationalisation. This is applicable to most branchings of human activities, such as industry, trade and finance. Global policies that emphasise webs and solutions as against controls within national boundaries are influenced by liberalisation, improved engineering, elephantine springs in communicating and other environmental factors ; the incidence of which can be seen in economic interactions. Shenkar and Luo ( 2007:2 ) “ define globalisation as the acceleration and extension of mutuality of economic and concern activities across national boundaries. ”

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By and large, globalisation implies that activities and factors local to other parts of the universe have effects on other parts of the universe, as a consequence of integrating of national economic systems. While globalisation by and large bring forth more picks and cheaper monetary values via free trade, the consequence of free trade and incorporate national economic systems are accompanied by comparative advantages and dangers for developed, upcoming and developing economic systems. Such advantages arise from motives for globalisation, such as the mercantilist philosophy, Laissez-faire theory, comparative advantage theory, etc. , while the dangers are maps of modern political, economic, environmental, and societal kineticss, expressed in Human Skills and Technology-based Positions, merchandise Life-Cycle theoretical account, etc.


Harmonizing Sachs ( 1998 ) , globalisation presents the best opportunity for developing states to turn and develop economically. Globalization creates conditions conducive for planetary capitalist economy and democracy, while fuelling economic grow. Such advantages include but non limited to:

Increased Employment and better life criterions:

Globalization additions trade, which gives rise to increased fiscal flow that theoretically implies increased capital injection and redistribution. If such capitals are decently invested, it is bound to relieve poorness by making employment and inciting better life criterions.

Improved Wagess for Local Community:

Globalization promotes international trade through Multinational Enterprises ( MNE ) . Such organisations, while leveraging lower labor costs tend to better rewards, which creates greater motive for local work force when “ a globally unified compensation system for employees ” ( Shenkar and Luo, 2007:9 ) is maintained.

Increased Fiscal Flow:

Globalization reduces control over local economic systems. In acknowledgment of this consequence, the planetary community assume greater duties. For case the International Monetary Fund ( IMF ) , World Trade Organization ( WTO ) , and the World Bank are international organisations that streamline and facilitate fiscal, trade good, labor and information flow.

The IMF is known to hold provided last resort loans to developing states. In 1986, the IMF provided loans to Nigeria for industrial development. Such loans are normally accompanied by rigorous structural Adjustment programmes aimed at relieving liability and depression, by hiking the economic system.


Dangers of globalisation by and large draw from advantages of globalisation, since policies advantageous to one state may represent reverse to another. When we group developed and developing states, a form emerges that offers more advantages to developed states than developing 1s, such as:


Harmonizing to WTO, dumping involves selling merchandises at below the belt low monetary values. Globalization tends to increase trade good dumping in developing states where there may be unequal substructure and/or limited Know-how to expeditiously bring forth similar merchandises by local industries.

For case, China uses her abundant low cost labor and technological know-how to bring forth inexpensive goods such as playthings and dresss with which markets in developing states are flooded. This consequences in trade deformation. Shenkar and Luo ( 2007 ) notes that developing states such as Nigeria become “ digital mopes ” for cast-off and unserviceable computing machines and proctors, most of which are beyond fix.

Menace to Local Industries:

Globalization besides constitute menace to local industries of developing states. This is because most local industries in developing states lack the cognition, accomplishments and resources to bring forth merchandises that would vie with similar merchandises produced in developed states.

For case, Nigeria is fraught with chronic, epileptic power supply. Thus mills are forced to trust on power generating set, which would hold to be fuelled. Diesel and gasolene are non inexpensive, added to maintenance costs combine to reflect on trade good monetary values. Such disadvantages offset the advantage of low labor cost. This makes it highly hard for developing states to vie with their foreign opposite numbers in a planetary market.

Environmental Damage:

In Developed states there are normally rigorous ordinances on environmental pollution. This is normally as a consequence of greater consciousness and instruction. Globalization have made it easier for makers to relocate fabrication installations to developing states where there are extremely relaxed environmental Torahs and monitoring criterions. This consequences in debasement of local environment with attendant wellness issues for developing states.


Political Stability and Better Regulations:

Developing states should endeavor for political stableness and better ordinances. Such environment will guarantee transparence that will pull foreign investors from developed states. Such investings will assist draw developing states from poverty. Fisher and Cox ( 2006 ) notes that states with higher economic and political stableness, better ordinances and less corruptness rank high on the globalisation index.


Greater attending to instruction will place developing states with greater ability to shut the imitation slowdown, or even become pioneers. This will assist cut down export monopoly by developed states and the attendant engineering spreads, ( Hufbauer, 1966 ) .

Increased professional accomplishments and capable human resources can favourably place developing states in planetary trade and afford them greater chances to leverage advantages of globalisation. This agrees with Human Skills and Technology-Based Views, which added two new factors of production “ to the account of comparative advantage beginnings ” Shenkar and Luo, 2007:26 )


Duties: Developing states can understate the dangers of globalisation utilizing selected and carefully implemented Duty and Nontariff trade barriers. For case developing states can implement duty governments that protect local and approaching baby industries and promote such industries to develop, by bit by bit taking such barriers over specified clip. This will enable such industries to better equip and adjust themselves for international competition over clip.

Regulations: The execution of policies that will command, yet optimise the influx and escape of financess. For case hapless oil bring forthing states like Nigeria can go through Torahs that make it compulsory to repatriate financess received from petroleum all gross revenues back to Nigeria, remain for specified clip, before it is moved back the state of beginning of international investor. Developing states can besides modulate the sum of money that can come in or go forth the state in a peculiar twenty-four hours.

Multinational model: Developing states should prosecute international models that promote representation of developed and developing states, as against bing industrialized-nations-only theoretical account, to advance the involvements of developing states.


From the above, we see that while globalisation has far making advantages for developing states, it is besides a beginning of certain dangers. However, carefully crafted policies would enable developing states to avoid associated dangers while leveraging and maximising attendant chances associated with globalisation.


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