Global Market and Globalization
Global Market is a comprehensive term for the emergence of a global society in which economic, political, environmental, and cultural events in one part of the world quickly come to have significance for people in other parts of the world (Tabb, 2005 p.21-22). Globalization is the result of advances in communication, transportation, and information technologies. It describes the growing economic, political, technological, and cultural linkages that connect individuals, communities, businesses, and governments around the world.
Globalization also involves the growth of multinational corporations (businesses that have operations or investments in many countries) and transnational corporations (businesses that see themselves functioning in a global marketplace) (Vogel, 2005.p 45-46). The international institutions that oversee world trade and finance play an increasingly important role in this era of globalization.
My interest in it its application to a current issue related to employment for example, coffee beans grew on a plant in the mountains of Kenya (Vogel, 2005.p 45-46). Kenyan farm workers harvested the coffee “cherries” and then dried and hulled them to produce raw coffee beans for shipment to the warehouse of an importer in Virginia. From there they traveled to a plant in California, where workers roasted the beans and packed them for delivery to the café from which this woman bought them (World Trade Organization, 2004)
The banana that this woman purchased in her local supermarket grew on a tree in Ecuador. Ecuadorian workers harvested the banana as part of a bunch and packed it for shipment to a Los Angeles wholesale market. From there it was sent to the supermarket’s warehouse and finally to the supermarket itself.
This simple example of just one crop has passed through many processes and markets for it to end up in shelves of LA supermarket or café all over the world hence creating employment on the way to numerous people hence benefiting directly or indirectly through Global Market or Globalization (Global Business, 2005)
Hence promoting development to developing countries which are the main raw material produces in form of cash crops and other raw materials inform of mineral resources e.g. Copper, Gold, and Crude Oil etc. These exporting/producing countries benefits mostly with earning a foreign exchange which is very useful for the countries economic development like repayment of foreign debts and importation of finished goods like machinery and other equipments (Bodley, 2005 pp 23-27).
Even though Globalization provides the much needed employments and foreign exchange in so called third world or developing countries it has some major downfalls of which we have witnessed in recent times whenever there are the annul IMF, G-8 and World Trade Organization (WTO), meeting people protesting in the host countries (Tabb, 2005 p.21-22). Because Globalization initially was seen as if it was a way of elevating gross poverty in the developing world, Africa, Asia and Latin America. Many economists believed that lifting trade barriers and increasing the free movement of capital across borders would narrow the sharp income differences between rich and poor countries. This has generally not happened. Because due to the opened markets we have seen that there is a lot of proliferation in some local markets with some cheap goods which might be of low quality hence forcing some other more useful local industries to go under because no one is buying their goods hence laying off many more workers which means that they loose their livelihood. So these means while others are gaining many more are left in the life of destitute (World Trade Organization, 2004).
Despite some of these countries being the raw product producers they find themselves unable to send prices of their products but they are sent by the terms and requirements of the buys hence making them to abide to their terms and conditions with might be very stressful and humiliating.
Another very major shortcoming of Globalization is the Balance of Payments, which relationship between the amount of money a nation spends abroad and the income it receives from other nations. This is because the balance of payments is one reflection of a nation’s financial stability in the world market (Tabb, 2005 p.21-22). Many developing nations have found themselves laden with huge foreign debts due to unfavorable balance of trade hence these countries being forced to borrow from international financial lending bodies e.g. the World Bank and IMF to service their foreign debts. This situation makes these countries to be forever dependant of the developed nations for loans, grants and waivers of these foreign debts (Global Business, 2005).
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