PROS AND CONS OF GLOBALIZATION

Globalization refers to the interaction of one economy with all the other economies of the world. This interaction can be in terms of financial transactions, trade, politics,education, production etc. Globalization picked up steam with the invention of newer and newer technologies in the world of transportation and communication. Thus, it can be seen that though globalization is traced back to ancient times by historians, it truly began at the end of the 19th and beginning of the 20th century. The term Globalization, in its newest form, has four major parameters:
Free flow of goods and services between countries due to the reduction in trade barriers.
Creation of an environment for flow of capital and investment among countries.
Free flow of technology from one country to another.
Free movement of labor among countries.
True globalization is attainable only if all four components are present. However, globalization has some advantages and some disadvantages. Some of these advantages and disadvantages are:
Advantages:
· Increase in employment opportunities: As globalization increases, more and more companies are setting up businesses in other countries. This in turn increases the employment opportunities that people atone place have. People can get better jobs without having to move to other countries in search of better jobs. Today, many multinational companies such as Microsoft, Google and Toyota etc. have their offices in India and many Indians work for these companies in India. Without globalization, Indian people would not have had the opportunity to work for such companies in India.
· Education: With the increase in globalization, it has become easier for people to move across borders to different parts of the world to acquire better education. This has resulted in an integration of cultures. People from underdeveloped and developing countries often move to developed countries to get better education. More and more Indian students are traveling to countries like the UK or the USA to pursue higher education. This has also opened their cultures towards the Indian culture to some extent.
· Increase in free trade: An increase in free trade has opened doors for investors in developed countries to invest their money in developing countries. Big companies from developed countries have the freedom to operate in developing countries. In the 2000s, Japanese and European companies such as Kawasaki and Siemens started producing high-speed trains in China. This helped Chinese firms in gaining knowledge about the production process and now Chinese companies such as China South Locomotive & Rolling Stock Corp. are producing high-speed trains on their own.
· Faster flow of Information: Information flows from one part of the world to the other immediately, resulting in the world being tied together. Vital information can be shared between individuals and corporations at a very fast rate. It has also facilitated in increasing the ease of transporting people and goods.
· Increase in quality of goods and services: As a result of globalization, people have access to the best quality of goods and services throughout the world. Companies have to strive to provide better quality goods and services to the consumer and the consumer has the liberty of choosing whichever product he thinks is best suited for his needs. This allows a person in America to wear clothes made in India and Mexico while watching a football match taking place in England on a TV made in China.
· Decrease in prices of goods and services: As the competition in the market has increased due to rapid globalization, producers have to price their products competitively in order to remain in the market. This has become a boon for the consumer as he can get better quality products at cheaper prices. An example is that of the car Ambassador in India. It was the only car available in India along with the Fiat before the liberalization of the Indian Economy. These cars were inefficient and expensive. Once the Indian economy was opened, other car companies started selling their cars in India at cheaper prices. This was a major benefit for the Indian consumer.
· Reduction in cultural barriers: As people move from one country to another, barriers between various cultures tend to decrease.This has resulted in tolerance and openness towards other cultures. This has also facilitated communication between different cultures and hence, nations. It has also led to a reduction in wars as we are today living in one of the most peaceful periods in the history of mankind.
Disadvantages:
·Environmental degradation: Developed countries can take advantage of underdeveloped countries’ weak regulatory laws in terms of environmental protection.
· Unfair working conditions: Many multinationals have been accused of social injustice by exploiting labor in underdeveloped countries in order to cut costs. Labor are provided unhealthy working conditions leading to health hazards. Many large companies have also been accused of using child labor in their factories in underdeveloped countries. Nike’s much publicized use of child labor along with poor working conditions and low wages in its factories in Indonesia is a well-documented example.
· Fall in employment growth rate: Though the promotion of the idea that the advances in technology and increase in productivity would create more jobs has been a cornerstone of globalization, it has been seen that in the past few years, such advances have led to a decrease in the employment growth rate in some developing economies. This can also be attributed to the fact that companies move their production facilities from one place to another in search of cheaper labor once the workers in the previous country start demanding better wages.
· Growing disparity among the rich and the poor: 86% of the world’s resources are said to be consumed by the richest 20% of the world population. This means that the poorer 80% only gets to consume 14% of the world’s resources. This is a direct result of globalization according to some activists who believe that globalization only serves the rich whereas the poor have to face its disadvantages.
· Small scale industries face extinction: Small scale industries which are indigenous to a particular place face extinction as they do not have the resources or the power that the multinational companies have. As a result, these small industries are unable to compete with bigger companies and go out of business. An example is the bamboo furniture making industry in India. The manufacturers work out of their homes and work hard to make furniture out of bamboo. These workers cannot compete with large companies selling cheap plastic furniture and as a result, their industry faces extinction.
· Rapid spread of deadly diseases: Deadly diseases such as AIDS or other communicable diseases can spread at very fast pace via travelers or due to other means as a direct consequence of globalization.

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