Globalization and Its Impacts On Developing Countries
Adam Smith on his famous work Wealth Of Nations wrote that, "The discovery of America and that of a passage to the East Indies by the Cape of Good Hope are the two greatest and the most important events recorded in the history of mankind."
He reasoned that- " Uniting in some measure, the most distant parts of the world, by enabling them to relieve one anther's wants, to increasing one anther's enjoyment and to encourage one anther's industries, their general tendency would seem beneficial.
However, later Smith himself recognized the depredation of imperialism and colonialism on many countries. John Maynard Keynes, in his essay National Self Sufficiency argued, "economic entanglements through trade and finance added to global destabilization - let good be homespun whenever it is reasonably and conveniently possible, and finance be national."
After the Great Depression, he changed his mind and championed for open trade.
Joseph Stieglitz, in his book Globalization and Its Discontents argues that the pro-globalization policies have the potential of doing a lot of good, if undertaken properly and they incorporate the characteristics of each individual country. Countries should embrace globalization on their own terms, taking into account their own history,culture, and traditions. However, if poorly designed—or if a cookie-cutter approach is followed—pro-globalization policies are likely to be costly. They will increase instability, make countries more vulnerable to external shocks, reduce growth, and increase poverty.
What is Globalization?
When used in an economic context, the United Nations defines globalization as the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour...although considerable barriers remain to the flow of labour...
Introduction
After the 1999 World Trade Organization (WTO) ministerial meeting collapsed amidst protests, rioting and tear gas in Seattle,it has become increasingly difficult for international economic organizations to meet without attracting a large crowd of protesters. These protesters are mainly from developed countries who represent labor organizations worried about jobs as a result of companies moving to the South, US and EU farmers who are anxious to defend their large subsidies, activists who vehemently denounce corporate capitalism or NGOs who are concerned about the negative environmental impacts of globalization. However, there are only a few people who represent the developing countries. Economists so far have failed to provide a convincing case whether globalization is beneficial or detrimental to the poor.
