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Monday, April 30, 2007
In this cartoon, there are three humble persons representing Asian, South American and African. They claim at the same time that they are very poor. And anther very rich man standing beside him says very ironically that it’s the effect of globalization. Since lots of countries in Asia, South America and Africa are developing countries, I think this cartoon is trying to say that globalization doesn’t really bring wealth to developing countries, or the wealth doesn’t distribute evenly in these countries to benefit poor people. Very obviously, it is an anti-globalization cartoon. But it is true that globalization doesn’t bring economic growth to the developing countries? Or it is true that the poor people in developing countries don’t really benefit from the wealth globalization brings to their countries? According to my opinion and some evidences I have found out from the internet, globalization brings very quick economical growth to lots of developing countries in East and South Asia which open their countries’ economy to the world, but a large number of countries in sub-Saharan Africa, Latin America and Middle east do not benefit from globalization since they don’t open to the world. And it is true that the wealth doesn’t distribute evenly in the developing countries benefit from globalization, resulting in the poor people become poorer and rich people become richer!
In recent decades, lots of developing countries have increased foreign trade, foreign direct investment, foreign acid and international borrowing. They have opened their countries’ economies to the world, trying to benefit as much as they can from global free trade liberation. And economic globalization really has raised the economic growth in these developing countries dramatically. Very significant examples would be China, India and lots of other countries in Asia-like Korea and Singapore. Those countries’ rapid economic growths in recent decades proof how beneficial financial globalization would be to developing countries. But lots of countries in Latin America, Middle East and sub-Sahara Africa don’t really benefit from globalization. This is because that most of the countries in these regions don’t really open their countries’ economy to the world. They only depend disproportionately on production and exports of traditional commodities. The deep-seated structural problems, weak policy frameworks and institutions, protection and home and aboard might be relevant reasons for them not to open to the world. According to a relevant source, from 1970 to 2000, the physical capital growth of china increases from 1.6% to 3.2% while the physical capital growth of 19 selected countries in Africa decrease from 1.3% to -0.1% and that of 9 selected countries in Middle East decrease from 2.1% to 0.3 %. From that, we can see the difference between opening economy to the world and not opening economy to the world. Nowadays as economic globalization is very “popular”, not joining the road of economic globalization would mean poor and backward while opening the economy to join this road would mean more chances to develop its economy.
Although lots of countries have enjoyed rapid economic growth from economic globalization, the wealth doesn’t distribute evenly in these countries, resulting in poor people becoming poorer! It is true that globalization may improve growth rate, increase productivity, enhance technological capability of the country, but it cannot redistribute wealth and income in favor of the poor! And in fact, it does the reverse-it redistributes the wealth and income in favor of the not so poor! Lots of the wealth going into the country is distributed among the rich ones, making them richer and richer. While the poor ones become poorer and poorer compare to those richer and richer people. As we know, one of the significance globalization brings to the developing countries’ economy is that more and more big and international companies are set up. Those people who have high occupations in international companies in their countries become richer and richer as their wages steadily increase through these years and they would manage to earn more money through personal businesses. While those labor workers are poorer and poorer as their wages which are their only incomes are forced to decrease further. The further increase in high occupations’ wages and further decrease in low occupations’ wages was mainly because that the high skilled workers in developing countries are very rare while there are large amounts of labor workers there. High competition for the labor jobs and high demand for skilled jobs result in poor become poorer and rich become richer. In many developing countries, the income inequality is very severe and increases even faster than that in developed countries. This cause large numbers of low-skilled workers in developing countries further deepen into poverty. So, globalization gives the developing countries which open to the world trade higher chance to develop faster, but the wealth it brings to the developing countries are not distributed in the favor of poor people, making them still poor! Minyun- Economic Expert
Globalised @ 9:39 AM
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