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Paper Topic:

The Negative effects of Globalization on Third world countries

Globalization and Third World Countries : A New Hope That 's Hard to Cope

The trend of globalization has become one of the most critical factors that determine the path for changes that occur in many economies worldwide . It had triggered enormous changes in various sectors in society and had pressured everyone to ride the waves of change that globalization has brought about . These changes in the broader economic technological , political , and socio-cultural environment , often beyond the control of any Third World country can definitely have a detrimental effect on these poorer countries

p As a concept , McGrew (1992 ) captured the complexity of the current view of globalization in a concise and balanced way . He defined globalization as

The multiplicity of linkages and interconnections between the states and societies which make up the modern world system . It describes the process by which events , decisions , and activities in one part of the world can come to have significant consequences for individuals and communities in quite distant parts of the globe . Globalization has two distinct dimensions : scope (or stretching ) and intensity (or deepening On the one hand it defines a set of processes which embrace most of the globe or which operate worldwide the concept therefore has a spatial connotation . Politics and other social activities are becoming stretched across the globe . On the other hand it also implies an intensification in the levels of interaction , interconnectedness or interdependence between the states and societies which constitute the world community Accordingly , alongside the stretching goes a deepening of global processes (p . 23

However , Jubasz (2004 ) revealed that the most reliable data available demonstrated how economic globalization has caused the most dramatic increase in global inequality and poverty in modern history Globalization of trade had only benefited the countries with bigger economies to dominate over economically-challenged countries Furthermore , as Trade Representative Zoellick argued in the Washington Post that economic globalization allows fragile democracies ' to overcome poverty and create opportunity , policies seem to do more harm than good to Third World countries . If such policies are pursued the world could find itself in even worse circumstances in the future than those we find ourselves in today . Globalization seems to be capitalism in sheep 's clothing

Indeed , the policies of economic globalization such as free trade financial liberalization , deregulation , reduced government spending , and privatization had concentrated wealth at the top . It had tried to removed from Third World governments and communities the very tools needed to ensure equity and to protect workers , social services , the environment , and sustainable livelihoods . In this way , economic globalization and its institutions - including the International Monetary Fund (IMF , the World Bank , the World Trade Organization (WTO and the North American Free Trade Agreement (NAFTA , have created the most dramatic increase in global inequality - both within and between nations - in modern history and have increased global poverty

For example , the income gap between the fifth of the world 's people living in the richest countries and the fifth in the poorest doubled from 1960 to 1990 , from thirty to one to sixty to one . By 1998 it had jumped again , with the gap widening to an astonishing seventy-eight to one . Poverty trends have worsened as well there are 100 million more poor people in developing countries today than a decade ago . The assets of the three richest people on earth are greater than the combined Gross National Product of the forty-eight least developed countries . Even in the United States , where median earnings of workers more than doubled from 1947 to 1973 , the past two decades have seen median earnings fall by almost 15 percent , with the earnings for the poorest 20 percent of households falling the furthest behind . In fact , the only segment of the U .S . population that has experienced large wealth gains since 1983 is the richest 20 percent of households . The net worth of the top 1 percent of U .S . households now exceeds that of the bottom 90 percent (Jubasz 2004 . In this effect , the richer nations will be the wolves who will feast on the meat , while Third World nations will just have the scraps of the benefits of globalization

There seems to be nothing new to what Karl Marx , in his book Communist Manifesto , had envisioned about capitalism

Meantime the markets kept ever growing , the demand ever rising . Even manufacture no longer sufficed . Thereupon , steam and machinery revolutionised industrial production . The place of manufacture was taken by the giant , Modern Industry , the place of the industrial middle class , by industrial millionaires , the leaders of whole industrial armies , the modern bourgeois . Modern industry has established the world-market , for which the discovery of America paved the way . This market has given an immense development to commerce , to navigation , to communication by land . This development has , in its time , reacted on the extension of industry and in proportion as industry , commerce navigation railways extended , in the same proportion the bourgeoisie developed , increased its capital , and pushed into the background every class handed down from the Middle Ages . We see , therefore , how the modern bourgeoisie is itself the product of a long course of development , of a series of revolutions in the modes of production and of exchange (Marx , Engels Jones 2002 ,

. 14

In this passage , Marx had written in the late 1840 was obviously describing the industrial revolution and the early capitalism . He linked that class conflict would escalate to a revolutionary condition and would be characterized by a power shift . But , the class struggle in the industrial countries did not prosper . This was attributed to the fulfillment of some promises of classical liberalism leading to the greater welfare of human beings (Macdonald . In this sense , class conflicts and other social issues are being resolved under the premises and assumptions of bourgeois-liberal ' democratic rule

According to Seddon (14 July 2005 , the veteran Marxist historian Eric Hobsbawm evaluated that The Communist Manifesto contains a stunning prediction of the nature and effects of globalization Seddon contended that though Marx spawned some horrors , there are gentler tradition of democratic socialism which are lost and might have been attractive even to the intellectual middle class of even an old and stable democracy , such as the US and the UK

Thus , it was the Communist Manifesto that predicted the transformation of capitalism into globalization of economy , which have been the trend that drew all the countries in the world along its path of a new global economic that even China , one of the remaining bastion of communism , is now an active player (McDonald , 2002

According to Lobeda (2006 , the economic growth that globalization produced is a myth . As a Third World country 's gross domestic product (GDP ) treats the extraction of natural resources as income rather than as the depletion of an asset , it seems that Third World countries are at a losing end in this setup . For example , when a forest is cut down in the mountains of the Philippines , destroying sustenance for indigenous peoples , the deforestation registers as growth . GDP measurement fails to account for the costs borne by the larger society and future generations as a result of a business transaction . Water pollution , disease , injury due to workplace hazards , and toxic waste - of these are factored as costs when growth figures are calculated

Moreover , Lobeda (2006 ) argued that the growth theory also failed to take into account distribution of wealth and income . For instance economists point to a 22 .2 percent growth in average household worth in the United States from 1983 to 1998 . Yet the number of homeless people increased , more and more people were unable to obtain healthcare , and many citizens experienced severe economic insecurity and job loss . The growth indicators don 't spell out that the wealthiest one percent experienced skyrocketing increases in income , while middle- and lower-income families saw their incomes shrink . So while the average household wealth increased , the median household net worth decreased by 10 percent in the same period

In addition , the claim that continued growth will benefit all fails to recognize the earth 's natural limits . Free-market theory assumes that growth has no fixed limits , and that boundless economic expansion will bring all people to a state of prosperity as defined by Western middle-class standards . Yet , as many economists , scientists environmentalists , and ethicists now point out , the human economy is part of a much larger planetary economy of life (Speth , 2003 . That economy 's limits in both renewable and nonrenewable resources have been so pushed that unchecked growth now further destroys earth 's regenerative capacity

Finally , growth as measured by GDP is an inadequate and inaccurate measure of economic well-being because GDP attributes to a host country corporate profits which actually are returned to the company 's home country . For example , when a U .S .-based corporation makes a profit at its plant in Guatemala and returns much of that profit to the United States , it still registers as growth for Guatemala

Yes , globalization promotes growth . However , the claim that growth benefits all is exposed as false when we ask the crucial questions Growth for whom ? And growth at what cost ? With this , more than 150 years later , Marx continues to haunt the sensibility of the modern person . Though the world is immensely more complicated with the new world , including the existence of old culture and beliefs bringing to the fold ethnic and religious conflicts in some part of the globe like Middle East coinciding with modern industrial developments

Indeed , the present productive systems themselves have become increasingly multinational and automated . Post-industrial production systems are highly technologized , require little labor , and involve numerous steps , components , and processes which are scattered across a transnational web of technological specialization . Much of the shift represented the enormous growth of transportation and communication facilities . This development characterizes the process of the globalization of production . Whether a mature industry moves to a Third World country or becomes mechanized or automated , the results are same a loss of jobs in that industry . This has become evident in developed countries for over a decade . In the meantime , there have emerged new kinds of industries (chemicals , pharmaceuticals , electronics , computers etc , which are characterized by the following features : they are knowledge-based , highly technologized , multinational , and require only a small labor force

Fact is that there are still underdeveloped economies dividing the world into the rich and poor countries . Images of starving children in Africa coincide with lives in relative luxury . As long as perhaps there is that state of inequity , the philosophical constructs such that of Marx which tackles the nature such inequities would offer a glimmer of hope for change towards a better and humane world no matter how unattractive some of its prescription to attain an alternative political and economic

It might be that capitalism might yet to fulfill its promise of transforming backward economies but then again there is no clear-cut indication that these countries would take a straight route towards the liberal democratic model of Europe and the Americas . Through time maybe , in the distant future democracy would be as worldwide as McDonald 's and Coke but then again , the homogeneity might result to the basic classification of countries . Third World countries will always be dominated by the richer countries through globalization . If there will be no win-win policies that would be drafted to counteract the inequities of globalization , then it will remain to have negative impacts against Third World nations

Works Cited

Jubasz , Antonia "Globalization Is Making World Poverty Worse " In Balkin , K (ed , Poverty . San Diego : Greenhaven Press , 2004

Lobeda , Cyntia Moe . Globalization Is Harmful to Society . In L .I . Gerdes (ed , Globalization . San Diego : Greenhaven Press , 2006

Macdonald , Bradley J . Review of Marxism , Revisionism and Leninism Explication , Assessment , and Commentary by Richard F . Hamilton . Journal of Political Ecology , Volume 7 (2002

Marx , Karl , Engels , Friedrich and Jones , Gareth Stedman . The Communist Manifesto . NY : Penguin Classics , 2002

McGrew , A .G . Conceptualizing Global Politics . In A .G . McGrew , and

.G Lewis (eds , Global Politics : Globalization and the Nation-State Cambridge : Polity Press , 1992 .

. 1-28

Seddon , Mark . Kapital Gain . The Guardian , July 14 , 2005

Speth , James Gustave . Worlds Apart : Globalization and the Environment Washington , DC : Island Press , 2003 ...

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