Globalisation

Globalisation considers being a very noticeable and important issue in the society, and it especially is an interchange between different countries’ economies. Globalisation involves many different aspects, such as cultures, economies, technologies, languages, values and so on. These different aspects are good methods to improve their positions in the world and help them to develop, and these are especially good to developed countries. Globalisation indeed brings a lot of advantages to some countries, such as promotes the development of economies. However, globalisation has some negative influences to developing countries, such as poverty.  The purpose of this essay will be talk about how the globalisation stimulates economic growth and poverty, and in-depth analyses these two problems.  To a certain extent, globalisation influences the economic growth, but it also affects and increases the poverty in the world at the same time.

Globalisation as a catalyst for economic globalisation, and can affect it in many different ways. Economic globalisation is an increasing trend of interdependence between different countries’ economies (Joshi 2009), and it reflects constantly expend and mutual integration of markets around the world (Frankel 2000). In other ways, the rapid development of science and technologies are the basis of the economic growth (Frankel 2000), and it promotes an economic interchange and trade between different countries.  The development of science and technologies is a very important factor to promote the economic growth. The cost of transportations and communications are reduced by the progress of science and technologies in the world, and it considered being a premise of international economic trade (Lee & Vivarelli 2006). The advancement of science and technologies made some useful transportations had been invented, such as trains, airplanes, boats, trunks and so on, and these transportations reduced the cost of transports to some extent. For example, when some goods need to be taking long distance transportation, boats can use ocean shipping to reduce the cost of transportation, but it maybe need to take a long time. In the same way, the invention of railways also led to the transport cost is cheaper than before (O’Rourke & Williamson 2000), however, railway just suitable for mainland and short transportations.  Science and technologies also promoted the economic exchange between different countries. The communication is much easier than the past, and the science and technologies make the communication become more convenient and cheaper. For instance, corporations can use computers and phones to contact with their clients, and they can place their orders online. The corporation also can share information to their subsidiary corporations, it can help them to improve their work efficiencies. Likewise, policies of different countries are another factor of economic increasing (Economic Down Under book1 chapter 7). The transformation of economic system is a crucial policy of economic growth, such as liberalisation of trade and liberalisation of investment (Economic Down Under book1 chapter 7). For example, Chinese government has less and less restrictions for international trade, so it lead to there is more freedom for exports and imports.  Developed countries and some of developing countries (such as China) pay attention on exports and income, and then the governments of these countries encourage establishing corporations and multinational corporations. The Chinese government also has encouraged some corporations to make trade with other countries.  In addition, China became a member of the World Trade Organisation in 2001(Economic Down Under book1 chapter 7).  It can help more and more China’s corporations look for more opportunities of international trade.  If a country wants to improve the economic strength, it has to adopt more liberal policies on international trade. The last factor that economic globalisation will be reached that is economic globalisation has shaped a production chain around the world (Lee & Vivarelli 2006).  A product could be disintegrated to different parts, they could be produced in different places, and it can reduce the cost of this product to some extent. Ford car is one of the most famous cars’ brands in the world, and it is a multinational corporation. Ford corporation in order to supply the needs of different countries, they have to batch production the parts of cars. For example, Some of Ford cars could be designed in Germany or the USA, but automobile parts could be produced in other different countries. The production chain helps corporations reduced the cost of productions. In other words, it can increase the profits, and so corporations can earn much more money. Globalisation promoted the connection between different countries, at the same time, globalisation also stimulated the economic growth between countries. However, the rapid development of economic globalisation has also brought some negative influences.  

Globalisation indeed stimulated the development of economic, but it is not all of countries can get positive effects. Globalisation and poverty are the two very important issues in today (Santarelli & Figini 2003). The influences of economic globalisation are different on different countries. Developed countries and a few of developing countries are usually can develop with the development of economic globalisation, but the most developing countries will become poverty by economic growth.

According to Santarelli and Figini (2003) state that because of globalisation presented poverty and inequality problem, so it is bed. As Santarlli and Figini (2003) stated, “Poverty is a multidimensional problem, which results from a combination of economic, political and environmental factors, and which comprises several different aspects.” Developed countries are the leaders and impellers, and they hold the initiative of economic development (Basu 2006).  Therefore, with the rapid development of economic globalisation, the gap of rich and poor presented increasing trend towards between developed countries and developing countries.  Income inequality is one of the causes of poverty in developing countries (MacDonald & Majeed 2010).  In order to determine whether the income is lower than normal, poverty line is a judgment standard of it (Santarelli & Finigi 2003). For example, the average income of some developing countries (especially some African countries) per day is less than 2 US dollars (Stanarelli & Figini 2003), but the income of them are not enough if they want to pay their cost of daily life. On the contrary, the income of them is so far above the poverty line in developed countries.  The reason of it is developed countries have more advanced technologies, more funds, more complete markets and economic structures (MacDonald & Majeed 2011). Just because of this, some multinational corporations, which from developed countries, established factories or choose some factories instead of them to produce their productions in developing countries. Developing countries have very cheap labour force, it can fundamentally reduce the cost of productions. For instance, Adidas and Nike are famous for produce shoes in the world, however, these two corporations’ shoes are produced in developing countries. So on shoes labels, the customers usually can see “made in China” or “made in Vietnam”. In China, the standard of work time is 8 hours per day, but in fact, the most worker in factories need to spend more than 8 hours to work. Therefore, as well as their income, there is far not in proportion between their income and labour that they paid. Education is another very important reason of poverty, and it also is an infinite loop (Macdonald & Majeed 2011). Some people of developing countries cannot receive high education as developed countries. One of the reasons of it is they do not have enough money to sent their children to school, and another reason is they do not have chances to receive education. For example, some African countries are one of the poorest countries in the world, they do not have money to development and educate, and they even do not have money for their daily life. Therefore, they have to receive some helps from other countries and try to help them get out of poverty. However, for some countries, the gap between these countries cannot be narrowed. Because of these countries do not have technologies and education to help them development, and the gap between these countries and developed countries can only bigger and bigger. Hence, they have to receive helps to maintain their daily life, such as use their labour to exchange fewer wages (MacDonald & Majeed 2011). Poverty and inequality problems are also gradually become one of the most important problems of globalisation.