Impacts of Globalisation
Economic
Positive impacts :
1. Incomes and standard of living have improved.
Globalisation has resulted in TNCs investing in many countries. People in these countries can be able to work in jobs with higher income. They will thus benefit and be able to afford better goods and services. For example, Singapore’s average household income increased by five times between 1980 to 2005. Singaporeans can buy a variety of goods. This will lead to an improvement in the quality of life. When the TNCs pay taxes to government, it can use the money to invest in better healthcare and education services. This will further encourage investments into the country. Hence, standards of living will improve.
2. Talented people will be able to work and travel anywhere in the world.
With globalisation, highly skilled people are able to live and travel overseas. They can find work in places which need their skills. This is beneficial for the country that the talented person that settles in because the person can contribute to the local economy. His home country will also benefit when they send money back to support their families. This will enable the people in developing countries to raise their standards of living when these talented people overseas to work.
Negative impacts :
1. There is a growing income gap between the rich and poor.
Developing countries often face trade restrictions put up by the developed, richer countries. These barriers will slow down development in developing countries. Even if these developing countries develop, the workers are lowly-skilled and they will be unable to produce better quality goods that can fetch higher prices. These workers will be paid less and they will not be able to upgrade themselves. The rich in developed countres will continue to be richer because of better opportunities while the poor and less skilled workers will be the first to suffer and be retrenched during economic crisis.
2. There will be increased competition among countries for investments from TNC. Countries that are able to provide more incentives to foreign investors will be more successful in attracting the TNCs. These countries are usually more developed and more stable. For example, Singapore offers TNCs lower corporate taxes as compared to other economies like Hong Kong to attract investments. As a result, countries which are unable to offer attractive incentives will suffer and these countries are likely to be the poorer, less developed countries.
3. Some developing countries have poor working conditions.
TNCs have set up ‘sweatshops’ in these countries. These sweatshops often have unsafe working conditions. The workers are paid less than US$2 a day and may suffer physical or mental abuse. They may have to work long hours and the TNCs will sometimes employ children to work. This will result in the people in these developing countries becoming poorer and are unable to raise their standard of living.
Social
Postive impacts :
1. There is more awareness of other cultures and events when people from different place mix together.
People can experience food and other products that is not available in their countries. With internet, people are also more aware of events in places faraway from their countries. For example, people in the US were immediately aware of the tsunami in Southeast Asia and were able to offer help quickly. This awareness will promote more interaction and understanding among different people from different countries, which will promote more peace in the world.
Negative impacts :
1. With globalisation, there may be a loss of local cultures.
Globalisation has led to the spread of American cultures across the globe. American companies like Starbucks and McDonald’s become dominant in the markets in other countries, crowding out local, smaller and more traditional shops and cultures. Thus, people may not be happy about the spread of these American cultures. They may believe that the US is forcing its beliefs and cultures on the rest of the world as the American culture becomes the homogenous culture in their countries.
Environment
Positive impacts :
1. The spread of globalisation will mean that information can be shared more easily and faster between countries.
Countries will be more aware of environmental issues and the impact of these issues immediately with the spread of media like the Internet and telecommunication. This will allow countries to come together to solve the environmental problems through platforms like the UN as they become aware that environmental problems cannot be contained within country. This enables countires to develop a greater understanding of the complexity of the environmental issues facing the world.
Negative impacts :
1. Large quantities of goods can be moved freely around the world by planes and ships.
While this promotes trade, the movement of goods will contribute to global warming as planes produce large quantities of greenhouse gases. This will lead to an increase in greenhouse gases which lead to an increase in global temperature. Global warming will result result in financial damage to low-lying countries like Singapore when ice-caps melt and sea-level rises.
2. Demand for paper or wood products from all over the world will result in deforestation of rainforests.
When the forests are cut and burnt down, large dust particles are produced and leads to poor air quality. While countries like Indonesia may experience economic growth from the timber industries, deforestation will lead to poor air quality in the country. The haze may even spread to other countries, resulting in even greater financial damage as Singapore and Malaysia may suffer losses in the tourism industry. The loss of forests will also mean that global warming will increase as there will be less tress to absorb carbon dioxide. This will in turn lead to irreversible damage to the world in the near future.
Coping it..
1. Singapore is able to promote continous learning among the workforce so that workers will have suitable skills to work in jobs in a globalised world. The Workforce Development Agency creates opportunities for workers by encouraging employees to go for skills upgrading. One example is the ‘Employability Skills Systems’ so that workers will be able to adapt to constantly changing work environment with their skills. This will reduce the chances of retrenchment during economic crisis. The workers will also be able to remain relevant in their jobs so that they can remain employed or even work in more highly paid jobs.
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