Advantages of Globalization
Amartya Sen, the Nobel prize-winning economist, is quite right when he says that, "the culturally fearful often take a very fragile view of each culture and tend to underestimate our ability to learn from elsewhere without being overwhelmed by that experience."
Self-proclaimed opponents of globalization also argue that global integration is increasing poverty and inequality -- both within and between nations. Such critics propose "progressive solutions" including slowing down, controlling, and even reversing the globalization process. However, a closer look at the evidence shows that the anti-globalization case is based largely on false assertions. The wealth of evidence available shows that international trade and investment, when accompanied by other development policies, are powerful engines of economic growth. This research also shows that economic growth, on average, raises incomes for both the rich and the poor. It helps to lift the poorest in society out of absolute poverty and does not automatically increase inequality. More importantly, no country has managed to lift itself out of poverty without integrating into the global economy.
The countries that have experienced high and rising levels of poverty are more often than not, the developing countries that have been marginalised from the process of globalization. Think of North Korea or many countries in Africa. Such countries have insufficient levels of international trade and investment -- not too much. Whether poor countries are poor because they do not trade enough or because poverty stricken countries are prevented from engaging in the global economy, less globalization is generally associated with less development. Ernesto Zedillo, the former president of Mexico seems to have understood the power of globalization when he said, “In every case where a poor nation has significantly overcome its poverty, this has been achieved while engaging in production for export markets and opening itself to the influx of foreign goods, investment and technology -- that is, by participating in globalization."
One of the most common claims made against globalization is that it increases world poverty. Often this claim is supported with a statistic showing the high rates of poverty in a given developing country or one highlighting the meager incomes on which many people survive. Yet, poverty is not a new concept -- it did not emerge with the onset of this new phase of globalization. More importantly, the recent significant economic growth has raised incomes and reduced the number of people living in poverty. For example, rapid economic growth in Japan after World War II helped raise per capita income from $4,672 in 1960 (one third of the level in the United States) to $21,158 in 1990 (higher than many Western European countries and close to that of the United States).
( Bureau of Labor Statistics, Foreign Labor Statistics. On the web at www.stats.bls.gov/flshome.html)
Basically, globalization enabled the Japanese to go from rags to riches in a generation!
Similarly, average manufacturing wages in developing countries have increased from 10 percent of the U.S. level in 1960 to nearly 30 percent of the U.S. level in 1992, showing that average [next page]