Factors Promoting and Impeding Economic Globalisation

Factors Promoting and Impeding frugal Globalisation1.1 INTRODUCTIONGlobalisation has be gen sequencete a profound concept in social sciences it is hard to address the occurrent emergenceal issues without making any comment on orbicularization. Globalisation has deepen rapid changes and the progression towards the nurture. Further more(prenominal), sphericalisation connected people to one a nonher. For subject, in the previous era the valet de chambre is connecting to each other by mean of conventional method which is via mail, now, people derriere connect to each other via internet. Indeed, perceptiveness of globalisation need to be viewed from the four analytical dimensions. Namely, frugal, governmental, cultural and proficient globalisation (Kiefee and Steve, 2005).This see is more concern with the scotch globalization. Economic globalization is been expressed in what is kn knowledge as neo-liberal policy support by Washington Consensus. In fact, neo-lib eral policy advocates relaxation behavior of stinting, privatization, occupation liberalization and deregulation of national economy, which atomic number 18 in all part of the factors that promote scotch globalisation. Economic globalisation has been a major drive of current era of globalisation. Michael (2000) has claimed that mass and financial institution has been the major drive of economical globalisation (Michael, 2000). However, economic globalisation has been experience critiques which rush been led to impediment in its harvest-feast in near quarters of the valet de chambre.The development of economic globalisation cannot be doubted anymore. This development has increasingly growing throughout the years and increases the aims of economic interdependence, anyhow sharpens struggle between countries. Various actors play an important role in economic globalisation growth, namely International Monetary Fund (IMF), public Bank, and origination business Organisatio n. These organisations perform certain functions to keep economic globalisation works, for example they provides long term loans to create countries. The WTO act as the torso that manage to reduce revenueation in trade similitudes that last among country in the global economy relations.This essay exit provide answers to the following identified questions belowWhat factors promote economic growth?What has been the challenge to the growth of economic globalisation?What factors impede it?How can we make economic globalisation workable for all nations?To converse this, the next section of the essay would be devoted to literature review and theoretical framework.1.2 LITERATURE recap AND THEORETICAL FRAMEWORKResearch has been made previously that has discussed the reasons that led to economic globalisation and the reasons impede it as well.Toffler (1980), avert that globalisation is principal an core of innovation in engineering and that this emergence of technology concord communicate changes in ones lives, it has led to the more investment in detonator and capital mobility .for example the multinational moves their capital to where they hope to reap more profits.Stiglitz (2002) was of the panorama that to understand globalisation, one has to study the deuce-ace main institutions that govern it. He gave the name of these institutions as the World Bank, International Monetary Fund (IMF), and World Trade Organizations (WTO). Thus, Stieglitz exclamatory creation playing by International pecuniary Institutions in the running of present economic globalisation passage. Institutions, such as World Bank is acting as the independent body that provides loans to the developing countries for development process which in turn promote economic globalisation. Stiglitz (2002) verbalise globalization is nor good neither bad thing either. He potently enumerateed it to be more of division of gains between North and South where global North gain, charm South l oses. However, the recent development of some fresh industrialising countries, such as Taiwan and China is a critique to the in a higher place view.One of the renounced pro globalisation, and the professor of economics, in the person of Martin Wolf (2005) in his book wherefore globalisations works opined that globalisation is benefit for all. He cited the collateral outcome of China, Brazil, India, and Singapore and now South Africa, in their openness to the world market (Wolf, 2005). He said those countries in global south that to date to reap the benefit of globalisation need to open their markets to the outside world and that they should invest in kind-hearted capital skills.Neo-liberalism schemeThis theory evince the privatisation and liberalisation of the economy with reduction of trade barrier for the economy development which would benefit to all gentle kind. The invokes should only provide enabling purlieu for the business to thrive. That is the multinational ente rprise should be given absolve penetration to the investment and production without any government policies restriction. Harvey(2005) provides full illustration and commentary of neo liberalism theory of economic globalisation, according to Harvey(2005)Neoliberalism is in the first example a theory of political economic practices that proposes that human well-being can be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterises by strong private property rights, free markets and free trade. The role of the state is to create and preserve an institutional framework tolerate to such practices The state has to guarantee, for example the quality and integrity of moneyThe state interventions in markets once created must keep to a bargon nominalApplying this theory to the economic globalisation bureau that, the unrestricted free suit of goods and services, and most importantly in the present era of globalisation, is the movement of capital, go away lead to economic growth and development which is benefit to the whole world. However, this theory consent been criticised by Marxist school of perspective that those who own the delegacy of production all control the state, according to Marx and Engel (1848) every society is dissever into two antagonistic class the bourgeoisies and the working class, the haves and the haves-not, where the bourgeoisie control the agent of production, they also control the state policies to continues exploit and subjugate proletariat who have no access to the means of production. The lesson that we can learn from this school of thought (Marxist) is that the position of neoliberal that state have no business in business is a pure political fallacy. But we have go through those who argon well known business men and women who do not have interest politics in this present world. For example, Bill Gate, Carlos Slim, and many an(prenominal) others. This is not to say th at they do not indirect participate in politics. Despite the criticism of neoliberal theory, its still stand as major theory to explain economic globalisation growth and development.1.3 FACTORS THAT recruit ECONOMIC GLOBALISATIONThere argon certain factors that promote economic globalisation growth. Such as regional integrating, trade liberalisation, privatisation and deregulation and international direct investment, etc. Francis Fukuyama (1992) argues that the breakdown of national barriers through the creation of a single, integrated world market have facilitated mobility of capital, growth in hostile direct investment, and increases important of transnational business corporation (TNCs) (Fukuyama, 1992). Thus the primal role of multinational enterprises in the economic globalisation process cannot be rejected. These factors shall be discussed below.A. Regional IntegrationRegional integration could promote economic globalisation. Given the fact that states within the specific geographical region come together to trade between themselves and establish free trade regularize such as North-America Free Trade Agreement (NAFTA). John McCormick (1999) supported this view when he said that, regional integration is the practice that two or more countries sit together and had a meeting to discuss about the problem. They trying to overcome the economic crisis and promote the development of it. In most cases, this coming together of region may led to nerve of free trade zone between the states and promote economic of busy region the regional integration in europium immediately later the second world war have a profound warp on trade liberalisation and economic globalisation . This implies that imply that in that respect is link between regional integration and economic globalization.B.Trade liberalisationTrade liberalization is the free flow of trade between countries around the world. It emphasized the removal of the trade barriers such as tariffs and taxes on goods and services. Held and Mcgrew (2007) observed that the level of international trade have since increase significantly in relation to the national income. However they contend that this is more pronounced among the advanced modify country. Indeed the fallen of the trade barrier has led to the global constitution of economics transaction (Held and Mcgrew 2007).The activities of the transnational corporation owing to the trade liberalization has become more pronounced in the recent era of globalisation ,thus the power of the global finance has become central to economics globalisation(Held and Mcgrew 2007). This means that trade liberalization has been a positive development to the economic globalization. For example it is possible for multinationals to invest more in a country that have liberalised its economy. And thereby promote economic globalisation. outside Direct InvestmentForeign direct investment has become one of the factors that promote economic globalisation. m ultinational Corporation has taken economic globalization to a new level. match to UNCTAD (2001,as quoted in Held and Mcgrew 2007) Multinational corporation account for about 25 percent of the world production and about 70 per cent of the world trade ,while their sales are equivalent to almost half of the world gross domestic productThe result of this is that investment by the multinational corporations in the form of FDI has increase over the years and this must have led to a more interconnectedness of the world economy, which invariably promote economic globalisation.D.Privatization and DeregulationThese are the products of the Washington consensus, the capitalism ideology have led to the ideas of private ownership of means of production with the sole aims of profit maximization and capital accumulation, it was the popular opinion of the capitalist economist that the private ownership of the means of production will lead to unlimited happiness in the society. The collapse of th e Soviet articulation in Eastern part of the Europe saw to the more motion of the capitalism, thereby led to the adoption of the privatization and deregulation of most of the world steer economies. These ideas of privatization and government deregulation of the economy do have positive contact on economic globalization.These four factors and many other one that were not discuss fully here, such as ,resources and market ,research and development, technologies and the state political wills promotes the growth of economic globalization, however because of the growing number of sceptic of the globalization ,for example Joseph Stieglitz (2002) in his popular books Globalization and its discontents have exposed some of the injustices and ugly face of the globalisation, he was particularly of the opinion that the economic globalization was never aims to help the people of the developing world, that the three institutions that runs it (IMF,WORLD BANK and WTO) were all instrument of the exploitation in the hands of the elite states of the advanced veritable countries. The result of this is the growing number of the impediments to the growth of the economic globalization. I shall discuss this in the next section of this essay.1.4 FACTORS THAT IMPEDE ECONOMIC GLOBALISATION.There are uncountable factors that may impede the growth of economic globalizations the most critical conniption of it is the putting in place of the protectionism policies by state to protect her child industries. Others include tax, extremely regionalization, lack of technology, lack of political wills, lack of human and capital resources and many more. This essay shall discuses four of the above factorsHigh taxThe imposition of high tax by national governments has been described as one of the factors that can impede the growth and process of economic globalization. When a particular national government put in place a high corporate tax on investment ,in this present era of capital mobility ,t he investors would in turn move their capital to where they considerate relative advantage, so wise government should not put high tax on investment .Discussing on the hyper-globalisation thesis, hay (2013) seems to agree that government should runway tax in order to attract foreign investor, according to hay (2013) Any failure on the part of a state to render its corporate taxation levels competitive in comparative terms through tax cuts will result in a punitive disparagement in net revenue as a capital exercises its mobility to exit.What this means is that high tax is an anti-economic globalisation, it is against trade liberalisation policy.Extreme RegionalisationRegionalisation and globalisation are two sides of the same coin, while regional integration could promote economic globalisation, it can as well impede it. Hirst and Thompson (1996, as quoted in Hay 2013) observed that there is tendency toward regionalisation in the present era than globalisation. They submitted that the process of tridization is currently going on between the North America, East Asia and Europe owing to the series of inter-regional integration that is going on between these three regions. The outcome of which have being excluding most part of the world from economic globalisation process. The lesson that we are learning from this is to check on the regional integration objectives so as not to hinder economic globalisation, indeed regionalisation could be formed as a defence to unequal and imbalance reputation of economic globalisation. C.ProtectionismSome states might device a means of protect their local infants industries from been expose to the unfavourable competitions with foreign firms such states may consider certain goods and products that might want to come into her country as contra ban, or give a quota to such goods and products from the foreign firms. Although states might have their own reason for protecting their own national and local firms but it is mostly bel ief that any strategy of protectionism employed by any states is anti-economic globalisation.D. drop of technological SophisticationThe importance of technological innovation is crucial to the development of economic globalisation , the internet make it easier to transact business on a global level within a second, so and then lack of technology or lack improvement in technology would have severe impact on the economic globalisation. It is difficult to take to task about economic globalisation without looking at the technology that have made global financial system more conveniently and reliable.all(a) these abovementioned key points may impede the growth and process of economic globalisation.1.5 abridgment AND CONCLUSIONHaven explained what the globalisation is all about and especially haven been discussed those factors that may promote and impede economic globalisation. It is my opinion that those states whose action is being have been describe as a threat to economic globali sation have their own reasons for doing so. For instant, Stieglitz (2002) rightly observed that globalisation especially economic globalisation is characterised by unequal exchange in which the rich countries of global north gains at the expense of the global south. This could be reason why they are protecting their economy as a solution to the insentient and exploitative nature of economic globalisation.However I will go with the position of Martin Wolf (2005) that if the developing world could invest in human capital, technology and open up their economy to outside world, they stand a chance of reaping the benefit of globalisation. Therefore, they should invest in human capital and technology, while open their economy to the outside world. Also the developed countries should carry them (global south) on in the process of economic globalisation. Otherwise, they continue to exact influence on those factors that impede it, became they think they have nothing to gain from it consequ ently therefore, stopping it would not have any real impact on them since they are not benefiting from it.ReferencesFukuyama, F. (1992), The End of History and The Last Man. new(a) York Free put forwardHarvey, D. (2014). Neoliberalism, politics and society. Retrieved Nov 13, 2014, from http//www.slideshare.net/suehair/neoliberalism-politics-and-societyHarvey,D.(2005) A Brief History Of Neoliberalism. Oxford Oxford University Press.Hay, C. (2005) Globalisation Impact on State, in R, John.(ed) Global Political Economy, Oxford University Press.Held,D and Mcgrew,A. (2007) (eds) Globalization Theory Approaches and Controversies . Cambridge principle PressKiefer,L.,and Steve, C.(2005) Global Marketing Management Challenges and New Strategies.LondonOxford University PressMarx, K. and Engel.(1848)The communistic Manifesto. London Communist LeagueMcCormick, J. (1999) The European Union Politics and Policies. New York Westview PressStiglitz, J. (2002) Globalisation and Its Discontents. N ew York ww Norton and Company.Toffler A. (1980) Future Shock. London Pan make Ltd.Wolf, M. (2005) Why Globalisation works? Yale Yale University Press.