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TABLE OF CONTENT
Topic: .....................................................................................................................3
Introduction ..........................................................................................................3
Historical Development ........................................................................................5
Definition of Globalization ...................................................................................7
Globalization and Its Characteristics ................................................................ 10
Improved Technology in Transportation and Telecommunications ............................ ...................... 10
Movement of People and Capital ...................................................................................................... 10
Diffusion of Knowledge .................................................................................................................... 11
Non-Governmental Organizations (NGOs) and Multinational Corporations ........................... ........ 11
K ey players in the Globalization Process: ......................................................... 12
Is Globalization a Good Thing? ......................................................................... 13
The merits of globalization are discussed below. .............................................. 13
R apid Economic Development .......................................................................................................... 13
More of Investment ........................................................................................................................... 13
More of Employment ........................................................................................................................ 14
Increase Communication and Transportation Accessibilities ........................... ........................... ..... 15The Government becomes more efficient .......................................................................................... 16
New Inventions and Discoveries ....................................................................................................... 14
The Consumer Benefits ..................................................................................................................... 15
Cultural linkage ................................................................................................................................ 15
Strengthening of Democracy ............................................................................................................. 16
One World ......................................................................................................................................... 16
The demerits of globalization are discussed below: .......................................... 17
With the removal of trade barriers, structural unemployment may occur in the short term. ............. 17
Increased domestic economic instability from international trade cycles, as economies becomedependent on global markets. ............................................................................................................ 17
International markets are not a level playing field ............................................................................ 17
Cultural Failure ................................................................................................................................ 20
Social Disruption .............................................................................................................................. 19
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Spiritual Disruption .......................................................................................................................... 19
Gender Inequality ............................................................................................................................. 20
Pollution and other environmental problems .................................................................................... 19
Access to External Funds .................................................................................................................. 18
Pressure to increase protection during the Global Financial Crisis ............................ ...................... 18
Developing Countries and Globalization ........................................................... 21
Globalization and Guyana .................................................................................. 25
Discussion and Conclusion ................................................................................. 26
References ........................................................................................................... 28
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Topic:
Critically analyze the merits and demerits of globalization with specific emphases on developing
countries.
Introduction
G lobalization has integrated the product and financial markets of economies around the world
through the driving forces of trade and capital flows cross borders. One of the main debates on
globalization is the effect of growing economic integration on income distribution. The anti-
globalization movement argues that globalization is widening the gap between the haves and the
have-nots ( Mazur, 2000) . The pro-globalization position claims that the current wave of
globalization since the 1980s has actually promoted economic equality and reduced poverty
( Dollar and Kraay, 2002 ).
The world is more interdependent now than ever before .Multinational companies manufacture
products across many countries and sell to consumers across the globe. Money, technology and
raw materials have broken the International barriers. Not only products and finances, but also
ideas and cultures have breached the national boundaries.
Laws, economies and social movements have become international in nature and not only the
G lobalization of the Economy but also the G lobalization of Politics, Culture and Law is the order
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of the day. The formation of G eneral Agreement on Tariffs and Trade ( G ATT), International
Monetary Fund and the concept of free trade has boosted globalization.
Today, despite the perception of increasing globalization, the international financial system is far
from being perfectly integrated. There is evidence of persistent capital market segmentation,
home country bias, and correlation between domestic savings and investment. The recent
deregulation of financial systems, the technological advances in financial services, and the
increased diversity in the channels of globalization make a return to the past more costly and
therefore more difficult. Financial globalization is unlikely to be reversed, particularly for partially integrated economies, although the possibility of that happening still exists.
Some of the issues that will be dealt with in this paper are the definition of globalization,
examine and discuss the merits and demerits of globalization with focus on developing countries
and conclude with a few remarks on the impact globalization have on developing countries.
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Historical Development
G lobalization has been a historical process with fade and flows. During the Pre-World
War I period of 1870 to 1914, there was rapid integration of the economies in terms of trade
flows, movement of capital and migration of people. The growth of globalization was mainly
led by the technological forces in the fields of transport and communication. There were less
barriers to flow of trade and people across the geographical boundaries. Indeed there were no
passports and visa requirements and very few non-tariff barriers and restrictions on fund flows.
The pace of globalization, however, decelerated between the First and the Second World War.
The inter-war period witnessed the erection of various barriers to restrict free movement of
goods and services. Most economies thought that they could thrive better under high protective
walls. After World War II, all the leading countries resolved not to repeat the mistakes they had
committed previously by opting for isolation. Although after 1945, there was a drive to
increased integration; it took a long time to reach the Pre-World War I level. In terms of
percentage of exports and imports to total output, the US could reach the pre-World War level of
11 per cent only around 1970. Most of the developing countries which gained Independence
from the colonial rule in the immediate Post-World War II period followed an import
substitution industrialization regime. The Soviet bloc countries were also shielded from the
process of global economic integration. However, times have changed. In the last two decades,
the process of globalization has proceeded with greater vigor. The former Soviet bloc countries
are getting integrated with the global economy. More and more developing countries are turning
towards outward oriented policy of growth. Yet, studies point out that trade and capital markets
are no more globalized today than they were at the end of the 19 th century. Nevertheless, there
are more concerns about globalization now than before because of the nature and speed of
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transformation. What is striking in the current episode is not only the rapid pace but also the
enormous impact of new information technologies on market integration, efficiency and
industrial organization.
The animosity surrounding the debate on globalization requires that a holistic approach be
adopted when analyzing this issue. G lobalization is a prismatic phenomenon, which should be
looked at in all its manifestations and from different angles.
G lobalization has become an expression of common usage. While to some, it represents a
brave new world with no barriers, for some others, it spells doom and destruction. It is,
therefore, necessary to have a clear understanding of what globalization means and what it stands
for, if we have to deal with a phenomenon that is gathering momentum.
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Definition of Globalization
G lobalization is a term that has become very popular and used in many different contexts in the
literature. The definition of globalization should be distinguished from terms like
internationalization, regionalization and liberalization.
In most of the definition of globalization that is found in the literature, the process of
globalization is seen as the breakdown of borders between countries, governments, the economy
and communities. In the financial markets it is also the blurring of borders between different
markets.
(O Brien 1992) also links the definition of globalization to geographical borders. OBrien
distinguishes between national, international, offshore and global. He states that national
transactions take place between businesses in the same country. International activities are
activities that take place between different countries. International also means trade that does not
take place in a national country. Multinational describes activities that take place in more than
one country. Whereas global is a more advanced stage of integration that combines elements of
both international and multinational between countries. A truly global activity does not know any
internal borders. It also gives limited recognition because of the fact that the country is irrelevant
when it comes to global activities.
(Redding 1999) defines globalization as the increasing integration between the markets for
goods, services and capital. Reddings definition also links globalization to the breakdown of
borders.
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The United Nations defined globalization in a number of different ways. When used in an
economic context, it refers to the reduction and removal of barriers between national borders in
order to facilitate the flow of goods, capital, services and labor.
Tom G . Palmer of the Cato Institute defines globalization as "the diminution or elimination of
state-enforced restrictions on exchanges across borders and the increasingly integrated and
complex global system of production and exchange that has emerged as a result.
Thomas L. Friedman popularized the term "flat world", arguing that globalized trade,
outsourcing, supply-chaining, and political forces had permanently changed the world, for better
and worse. He asserted that the pace of globalization was quickening and that its impact on
business organization and practice would continue to grow.
Ben and Hall posit that G lobalization may be seen as a natural outgrowth of the economic
policies applied under the IMF/World Bank, sponsored economic stabilization and structural
adjustment programmes implemented during the economies of the developing countries towardsincreased integration into the global economy.
For purposes of simplicity, the term globalization means integration of economies and societies
through cross country flows of information, ideas, technologies, goods, services, capital, finance
and people. Cross border integration can have several dimensions cultural, social, political and
economic. In fact, some people fear cultural and social integration even more than economic
integration. The fear of cultural hegemony haunts many. Limiting ourselves to economic
integration, one can see this happen through the three channels of (a) trade in goods and services,
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(b) movement of capital and (c) flow of finance. Besides, there is also the channel through
movement of people.
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Globalization and Its Characteristics
G lobalization is the process of increased interconnectedness among countries most notably in the
areas of economics, politics, and culture. The idea of globalization may be simplified by
identifying several key characteristics:
Improved Technology in Transportation and Telecommunications
What makes the rest of this list possible is the increasing capacity for and efficiency of how
people and things move and communicate. In years past, people across the globe did not have the
ability to communicate and could not interact without difficulty. Nowadays, a phone, instant
message, fax, or video conference call can easily be used to connect people. Additionally,
anyone with the funds can book a plane flight and show up half way across the world in a matter
of hours.
Movement of People and Capital
A general increase in awareness, opportunity, and transportation technology has allowed for
people to move about the world in search of a new home, a new job, or to flee a place of danger.
Most migration takes place within or between developing countries, possibly because lower
standards of living and lower wages push individuals to places with a greater chance for
economic success. Additionally, capital is being moved globally with the ease of electronic
transference and a rise in perceived investment opportunities. Developing countries are a popular
place for investors to place their capital because of the enormous room for growth.
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Diffusion of Knowledge
The word diffusion simply means to spread out, and that is exactly what any new found
knowledge does. When a new invention or way of doing something pops up, it does not stay
secret for long. A good example of this is the appearance of automotive farming machines in
Southeast Asia, an area long home to manual agricultural labor.
Non-Governmental Organizations (NGOs) and Multinational Corporations
As global awareness of certain issues has risen, so too has the number of organizations that aim
to deal with them. So called non-governmental organizations bring together people unaffiliated
with the government and can be nationally or globally focused. Many international N G Os deal
with issues that do not pay attention to borders such as global climate change, energy use, or
child labor regulations.
As countries are connected to the rest of the world they immediately form market. As more and
more markets are opening up, business people from around the globe are coming together to
form multinational corporations in order to access these new markets. Another reason that
businesses are going global is that some jobs can be done by foreign workers for a much cheaper
cost than domestic workers.
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K ey players in the Globalization Process:
y Multinational Enterprises that carry out business across national boundaries.
y The World Trade Organization (WTO) through which international trade agreement are
negotiated and enforced.
y The World Bank and the International Monetary Fund (IMF) which are means to assist
the government in achieving development through the provisions of loans and technical
assistance; and
y National G overnment who together with these International Institution are instrumental in
determining the outcome of G lobalization.
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Is Globalization a Good Thing?
There was heated debate about the true effects of globalization and if it really is such a good
thing. G ood or bad, though, there isn't much argument as to whether or not it is happening. Let's
look at the merits and demerits of globalization, and you can decide for yourself whether or not it
is the best thing for our world.
The merits of globalization are discussed below.
Economic Factors
R apid Economic Development
G lobalization makes all persons sincere and active in their work. Being part of the game of
competition, they will try to produce more and sell more. The basic principle of globalization is
that each one will try to prove that he is better than others. As a result, economy will develop fast
and the economic development of the country will be expedited.
More of Investment
Free economy will attract more of investment. Rich and developed countries will invest their
capital and establish industries in poor and backward countries. As more money is poured in to
developing countries, there is a greater chance for the people in those countries to economically
succeed and increase their standard of living.
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More of Employment
More jobs will be created in developing countries. Individuals with skill and good education will
be able to find employment in different industries and factories; some of them may open their
own business.
Increase in the Efficiency of Domestic companies
The domestic companies, as a result of competition with multinational corporations, will be able
to increase their efficiency and successfully compete at the international level. G lobal
competition encourages creativity and innovation and keeps prices for commodities/services in
check.
Technological Factors
New Inventions and Discoveries
As a result of-globalization, there takes place marked change in the nature and character of man.
Man thinks of new ideas and searches for new paths. All this helps him make new inventions and
discoveries. In turn, this contributes to qualitative increase in knowledge and new products.
Developing countries are able to reap the benefits of current technology without undergoing
many of the growing pains associated with development of these technologies.
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Increase Communication and Transportation Accessibilities
Increased flow of communications allows vital information to be shared between individuals and
corporations around the world, results in greater ease and speed of transportation for goods and
people.
S ocial Factor
The Consumer Benefits
G lobalization weakens the monopoly business; as a result, the consumer has several choices in
the market. The producers are required to produce better things to attract consumers. Today
producer make products based on customers needs and wants.
Cultural Factor
Cultural linkage
As globalization breaks national barriers, it becomes easier for the culture of one country to
reach other countries. As a result of exchange of values and ideas among nations, a new culture
is likely to grown. The cultural division among borders has begun to weaken.
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Political Factor
Strengthening of Democracy
As a result of globalization, democracy will be strong and solid. Democracy mainly means
political freedom, and political freedom has little meaning if there is no economic freedom. As
globalization gives economic freedom to people, it helps them take active part in the democratic
process.
The Government becomes more efficient
In countries where bureaucracy is generally slow, cunning and corrupt. The decision-making is
unduly delayed. But, due to liberalization and globalization, the government is almost forced to
change its style of work, and become more active and competitive. G overnments are able to
better work together towards common goals now that there is an advantage in cooperation, an
improved ability to interact and coordinate, and a global awareness of issues.
One World
G lobalization is the right step towards the establishment of one world. It breaks national barriers
and binds all nations by the bond of friendship, cooperation and integration. In course of time, it
is hoped, there will be one people, one government, and one world. G lobalization will help
materialize the ideal- 'the whole mankind is one.'
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The demerits of globalization are discussed below:
Economic Factors
With the removal of trade barriers, structural unemployment may occur in the short term.
This can impact upon large numbers of workers, their families and local economies. Often it can
be difficult for these workers to find employment in growth industries and government assistance
is necessary. Increased flow of skilled and non-skilled jobs from developed to developing nations
as corporations seek out the cheapest labor. Outsourcing, while it provides jobs to a population in
one country, takes away those jobs from another country, leaving many without opportunities
Increased domestic economic instability from international trade cycles, as economies become
dependent on global markets.
This means that businesses, employees and consumers are more vulnerable to downturns in the
economies of trading partners, eg. Recession in the USA leads to decreased demand for exports,
leading to falling export incomes, lower G
DP, lower incomes, lower domestic demand and risingunemployment. As global market opens corporate influence of nation-states far exceeds that of
civil society organizations and average individuals which can result n mistrust between nations
and civil society.
International markets are not a level playing field
Countries with surplus products may dump them on world markets at below cost. Some efficient
industries may find it difficult to compete for long periods under such conditions. Further,
countries whose economies are largely agricultural face unfavorable terms of trade whereby their
export income is much smaller than the import payments they make for high value added
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imports, leading to large Cash Available for Debt Service and subsequently large foreign debt
levels.
Access to External Funds
Large Western-driven organizations such as the International Monetary Fund and the World
Bank make it easy for a developing country to obtain a loan. However, a Western-focus is often
applied to a non-Western situation, resulting in failed progress.
Pressure to increase protection during the Global Financial Crisis
During the global financial crisis and recession of 2008-2009, the impact of falling employmentmeant that protection pressures started to rise in many countries.
Technological Factors
Developing or new industries may find it difficult to become established in a competitive
environment
In developing countries where there are no short-term protection policies by governments,
according to the newborn industries argument. It is difficult to develop economies of scale in the
face of competition from large foreign Transnational Corporations. This can be applied to
newborn industries or developing economies.
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S ocial Factors
Social Disruption
G lobalization is extending the gap between the rich and poor communities and also between the
nations causing regional insecurity and a fear of exhaustion and extinction of resources and shift
of manpower from less developed to more developed geographical area. G rowing demands have
also made people to grow rich by adopting unfair means leading to dissolution of families and
communities, health and also in education. This has given rise to regional wars and international
terrorism, crippling and self-criticism (Ehrenfeld, 2003).
Spiritual Disruption
The world is becoming materialistic and hence humane of human sprits is lost causing loss of
environmental wisdom (Ehrenfeld, 2003).
Pollution and other environmental problems
Decreases in environmental integrity as polluting corporations take advantage of weak regulatory
rules in developing countries. Most companies fail to include these costs in the price of goods in
trying to compete with companies operating under weaker environmental legislation in some
countries. There may also be a greater chance of disease spreading worldwide, as well as
invasive species that could prove devastating in non-native ecosystems.
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Cultural Factors
Cultural Failure
Although different cultures from around the world are able to interact, they begin to meld, and
the contours and individuality of each begin to fade.
Gender Inequality
The most critical of the issues related to womens poverty is the many forms of violence against
women. One aspect of this deserves urgent attention is the trafficking of women and girls.
During the past decade, this form of trafficking has become an issue of growing concern in this
region, especially in developing countries. Women and girls who are victims of this international
trade are at an increased risk of further violence, as well as unwanted pregnancy and sexually
transmitted infection, including infection with the human immunodeficiency virus (HIV) which
cause the acquired immunodeficiency syndrome (AIDS).
Political Factors
The current leaders and businessmen of the developing world particularly in the socialist,
communist, dictatorial and poor countries protect their interest and are not keen on foreign
investment in their economies. However, protect inefficient government and public sector
employees
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They do not agree easily with globalization. They have a vested interest. Currently they need not
efficient, skilled and need not have to compete with the best in the World.
Developing Countries and Globalization
The developing countries are those countries who share a common colonial history. While many
of the developing countries have colonial histories they differ with respect to variation in the
length of times since they won independence from their colonizers e.g. most Latin American
countries won independence from their colonizers in the early 19 th century and most of Africa
after Second World War, their routes to independence vary thus producing different political
alliances and political forces and or outcomes.
A close relationship is noted with respect to former colonies and an inability of those countries to
develop economically, and thus to a great extent socially. The era of colonialism made Neo-
colonialism possible, where although counties have gained their formal independence they are
still economically dependent on their formal colonizers. A monetary criteria was expressed in
terms of gross national product per capita per annum to categories the developing countries that
was used by the World Bank thus most of these countries are poor by international standards of
the World Bank, the majority being low income or lower middle income categories.
Looking at the economic dimensions of globalization one can see that when it comes to receiving
income, trade agreements are one of the main sources but it doesnt really benefit the developing
countries. The trade agreements, such as (TRIPS) Trade Related Intellectual Property Rights,
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(TRIMS) Trade Related Investments Measures, the ( G ATS) G eneral Agreements on Tariffs in
Service and organization like the (WTO) World Trade Organization, further deprive developing
countries. G lobalization economically speaking entails the integration of world trade and
financial markets, but given that developing countries are not really catching up with the
advanced economies.
It is well known that countries opening up their economies to capital movements as the result of
liberalization processes can benefit from these movements. The most striking advantage in this
respect is that globalization enables capital to move from the developed countries, in which thereturn on capital is low, to developing countries in which the average return on capital is high.
Capital movements of this type increase world product, and can thereby increase overall welfare.
Developing countries as a group have become more integrated into the world economy in the
past twenty years as a result of the parallel processes of globalization and liberalization. There
were also important changes in the allocation of capital flows among developing country regions
that reinforced trends in trade. During the 1980s, Latin America and the Caribbean in particular
were starved for funds from the private sector, leading to an increased role for the multilateral
agencies. East and Southeast Asia, in contrast, continued to have access to private funds. In the
1990s, Latin America and the Caribbean regained access to private finance and Eastern Europe
also became an active borrower, sharing the expanding pie with East/Southeast Asia. Sub-
Saharan Africa and South Asia continued to draw primarily on official sources, but this resulted
in to low and declining shares of total resource flows.
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Other insights about the nature of globalization can be obtained by noting with whom developing
countries trade and from where investment comes. Based on data for the first half of the 1990s, a
clear distinction can be made (Stallings and Streeck, 1995). Asian developing countries mainly
traded among themselves, and with Japan, and a growing share of their investment also came
from within the region. In Latin America, in contrast, trade and investment were heavily
weighted toward the United States, especially in the northern tier of countries. In Africa and
Eastern Europe, there was a focus on Western Europe.
What we referred to as the "tetrahedron" meant that different developing regions were tied intothe global economy in different ways through their with main trading and investment partners.
Since the respective industrial countries featured different "models" of capitalism, this led to
somewhat different policies in the developing countries themselves. G rowth rates of the
industrial countries also differed. In the 1980s and early 1990s, these differences contributed to
the great economic dynamism in the Asian region, but the collapse of the Japanese economy
exacerbated the later problems of its Asian neighbors, and the high level of interaction within the
region propelled the contagion effect once the crisis there began in 1997. The lagging U.S.
economy, which had appeared to be a drag on Latin America in the 1980s and early
However, the advocates of globalization and Liberalization are finding it difficult to make good
their promise to deliver long-term growth or to provide higher standards of living for developing
countries. This point has been echoed by analysts, such as (Rodrik 1997), who argues that
insufficient attention has been given to the impact of globalization and trade liberalization on
wages and employment. This dissatisfaction of developing countries with their share in the
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benefits of globalization is becoming increasingly evident. At the turn of the century, there is
general concern that the Washington Consensus is not delivering on its promises and that the
developing world is not sharing in the benefits of globalization. This view was strongly
articulated at the Annual Meetings of the Inter-American Development Bank in Brazil in March
2002. Small countries are unable to influence the imperatives of present-day negotiations or
change the philosophy of the market. These demand that countries, regardless of size, embark on
programmes of liberalization to be taken seriously in negotiations with large countries or within
any economic bloc of which they are a part. Indeed, developing countries have found it is
impossible to be integrated into the international environment unless their economic andfinancial systems are liberalized. Liberalization has become a precursor to globalization, which is
a process with its own technologically driven momentum, so that liberalization too is being
propelled forward. However, this process, though inevitable, is fraught with hurdles for
developing countries and more especially for small countries.
In order to create better economic relations globally, international lending agencies must work
with developing countries to change how and where credit is concentrated as well as work
towards accelerating financial development in developing countries. There is a need for social
respect for all persons worldwide. The Economic Commission of Latin America and the
Caribbean suggests that in order to ensure such social respect, the United Nations should expand
its agenda to work more rigorously with international lending agencies. Despite their title,
international lending agencies tend to be nation-based. The ECLAC suggests that international
lending agencies should expand to be more inclusive of all nations and they propose that there is
a need for universal competitiveness. Key factors in achieving universal competition is the
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spread of knowledge at the State level through education, training and technological
advancements. Economist, Jagdish Bhagwati, also suggests that programs to help developing
countries adjust to the global economy would be beneficial for international economic relations.
Globalization and Guyana
G uyana is one of the most highly indebted nations. Yet, the theme of increasing poverty within
this poor nation is not a part of the narrative of the proponents of globalization when they preach
about its so-called benefits. As globalization intensifies, the gap between per capita incomes in
rich and poor countries has widened (Cutter et al., 2000). Moreover, there is not any strategy that
has yet emerged to help G uyana reap any benefits from globalization that is because
globalization is about profits for the globalizers. G uyana continues to succumb to the dictates of
the IMF and the World Bank.
In the guise of attempting to reclaim its debts, the World Bank and the IMF developed a
Structural Adjustment Program (SAP) by playing an increasingly important role in regulating the
economy of G uyana without pausing to consider the staggering adjustment cost in terms of
soaring unemployment and social distress facing the country.
In G uyana from the 1980s, the trade liberalization schemes imposed by the IMF and the World
Bank make sure that its forest and mining sectors are opened to exploitation by foreign investors.
A number of foreign investors acquired logging and mining concession rights to operates in
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G uyana under the terms of a IMF agreement. G uyana now offers multinationals companies a ten-
year exemption from all taxes.
By 1990,G
uyana moved toward a free market economy under the direct guidance of the IMF
and the World Bank, which provided for a three year Enhanced Structural Adjustment Facility
(ESAF). After the ESAF ended in December 1993, it was again extended. In September 1996,
the ESAF became the centerpiece of the IMF's strategy to help low income countries including
G uyana, where the IMF and the World Bank control the government economic direction.
Like many of these poor nations, G uyana has adopted the Investment Plan initiated by the World
Bank, which grants generous fiscal incentives to lure multinational corporations into the country.
G uyana's drive for foreign investments was based, almost solely, on the liquidation of its natural
resources namely its rainforest for commercial logging and mining.
Discussion and Conclusion
Based on the prospect of developing countries it can safely say that the demerits of globalization
overweight the merits of globalization. From the discussion of the merits and demerits of
globalization it is clear that countries and regions taking active part in the process of
globalization are in a more advantageous than countries trying to resist the process. It is also
clear that no quick fixes exist for development problems of developing countries. (Moore 2002)
indicates that 1.2 billion people in the world are living on less than a dollar and another 1.6
billion of the world population is living on between one and two dollars per day.
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It can also argue that the impact of globalization on developing and developed countries differed.
Although globalization has contributed to a significant increase in average economic growth, it
has showed that this was not spread evenly between less developed countries. The richest quarter
of the world population income grow six times while the poorest quarter income grows three
times. It can also debate that the process of globalization has led to high level of unemployment
in developing countries. (Brittan 1998) states that the demand for low skilled worker had
declined due to technology development and the international demand for workers with skill has
increased.
In conclusion, the developing countries face special risks that globalization and the market
reforms that reflect and reinforce their integration into the global economy, will worsen
inequality, at least in the short run, and raise the political costs of inequality and the social
tensions associated with it. The risks are likely to be greatest in the next decade or so, as they
undergo the difficult transition to more competitive, transparent and rule-based economic
systems with more widespread access to the assets, especially education, which ensure equal
access to market opportunities. During that transition, more emphasis on minimizing and
managing inequality, on making the market game as nearly as possible a fair one, would
minimize the real risks of a backlash. A backlash would be a shame, as in a bad twist, it would
undermine the benefits that more open and more globally integrated economies and polities can
deliver to all the people of the developing world. It is also argued that globalization offers a new
opportunity for knowledge dissemination, but this does not mean that all the nations and
institutions will equally benefit from it. On the contrary, it seems that the institutions that have
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managed to benefit most from globalization are those that already are at the core of scientific and
technological advance.
Other commentator has argued that there is a very serious case not against globalization, but
against the particular version of it imposed by the world's financial elites. The brand currently
ascendant needlessly widens gaps of wealth and poverty, erodes democracy, seeds instability,
and fails even in its own test of maximizing sustainable economic growth. The gap between rich
and poor countries has widened considerably.
In order to create better economic relations globally, international lending agencies must work
with developing countries to change how and where credit is concentrated as well as work
towards accelerating financial development in developing countries. There is a need for social
respect for all persons worldwide.
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