The following article “Challenges and Prospects of Globalization of Markets for Developing Countries“ is written by Zahid Khan, a student of Sir Syed Kazim Ali. Moreover, the article is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. Sir Kazim has uploaded his students’ solved past paper questions so other thousands of aspirants can understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
The world has changed socially, politically, and, above all, economically after the emergence of globalization. The countries have shifted the world order from unipolar to multipolar and geo-political to geo-economic. Undoubtedly, nations worldwide have totally focused on their economic growth rather than strategic and military. Thus, the concept of globalization of the market took place in the world’s economic order. Although the emergence of the global market of nations positively impacts the world economy, it has some challenges for developing countries worldwide. Among them, unfair economic exchange, vulnerable international economic forces, environmental degradation, high inflation, and violation of intellectual property rights are the most crucial challenges for smaller economies. Apart from that, it has some positive impacts on developing countries; therefore, they benefit from foreign direct investment, technology and knowledge, and social activism and advocacy. Nonetheless, the nations must take some positive steps to overcome challenges from the globalization of market. They must work on their economy, human capital, and education to participate in the race. In a nutshell, growing economies cannot compete socially, politically, and economically without new technical and economic policies in the globalized economic order.
However, understanding the concept of globalization of markets is imperative to know about the world economic order. The globalization of markets is the ability to produce, sell, and purchase goods and services in global markets in open competition with other nations. Moreover, scientific advancement and open trade agreements among nations have emerged as a global market where they can easily access the market and elevate their economy faster. Consequently, the world has become a global village where every nation is the economically of other countries.
Therefore, the relationship between globalization and the economy has played a significant role in the socio-political affairs of the world. Countries have become more interlinked throughout the exchange of goods and services across borders. As a result, it can open new markets and opportunities for businesses, which allows them to access a broader customer base. Moreover, the economic interdependence of nations reinforces them to connect strong bonds with each other. Therefore, the modern alliances among nations are not based on ideologies but on economic ties.
Unfortunately, the fruits of globalization of the market for developed nations carry some thorns for developing countries. Emerging economies face difficulty when some unexpected issue happens in the economic powers. Among them, one of the challenging issues is the unfair exchanges among larger and smaller economies worldwide. Undoubtedly, the larger economies have their say in the global market; therefore, they make economic laws according to their interests. As a result, the developing economies increase their imports more than exports. According to the European Commission, “The food supply chain is vulnerable to unfair trading practices due to the stark imbalance between small and large operators.” Thus, it is clear that the emergence of economic powers has marginalized weaker states. As a result, they never participate in the world economy and become weaker socially, politically, and economically.
Additionally, the globalized economic world has trapped developing countries in their financial problems. Hence, developing countries can only grow economically if they compete in the world market. Unfortunately, due to the lack of resources, developing nations cannot participate and thrive on the world economic forums. For instance, the Department of Economic & Social Affairs has mentioned that economic vulnerability is the risk of a country’s development hampered by these shocks and instabilities. Thus, the economic uplifting for developing states is difficult because of the economic powers’ control on the world trade in every area of life.
Moreover, due to the Industrial Revolution and the emergence of class struggle, the social gap between the upper and lower classes has created difficulty for people. Apart from that, with economic uplift, the environment has been destroyed, and its consequences have destroyed the developing countries rather than the developed ones. As a case in point by the European Environment Agency, “Communities with lower income levels are often more impacted by climate change and globalization.”Thus, the social gap and environmental consequences have marginalized growing nations nationally and internationally in all spheres of life.
Similarly, the globalization of the nation’s economy has created a high inflation rate due to overdependence on imports. The developing nations have overcome their exports and increased the imports from developed nations. Consequently, the inflation rate rises, and the countries’ currencies devalue in the international market. To illustrate, The World Bank has highlighted that inflation has increased in emerging and developing economies on the eve of COVID-19. So, it has become a challenging task for developing nations to get rid of the trap of high inflation rates. Consequently, the poor classes can never afford the essential commodities, due to which social evils increase daily in growing nations.
Last but not least, technological advancement in the developed world has badly impacted marginalized states around the globe. In fact, they violated intellectual property rights. Moreover, the developing nations use the technology of powerful countries because third-world countries never move towards new innovations. According to the United Nations Industrial Development Organization, “Technologically advanced countries have more substantial intellectual property rights than less advanced countries.” Therefore, the human capital and labour force in developing worlds have been reduced due to the technology and automatization in the industries. In a nutshell, growing nations will never overcome their economic problems due to the control of economic powers on the world economy.
Apart from the challenges, the developing nations also reap the fruits of globalization of markets. They have an excellent opportunity for easy access to the world market quickly. Apart from that, Foreign Direct Investment (FDI) supports the countries’ economic growth. The developed nations invest in the economic development of the developing nations; consequently, both nations get equal benefits. Evidently, FDI to the Middle East and North African region has provided substantial capital and support for national development projects in MENA countries – the research conducted by The Islamic Corporation for the Insurance of Investment and Export Credit. Thus, the world’s globalized economy has elevated developing states’ economies.
Another essential financial and technical reward of globalization of the economy is the transfer of technology and knowledge from developed to underdeveloped nations. Without any obstacles, developing countries have easy access to education and technology. Thus, they have equal educational and learning opportunities worldwide and can overcome social and economic problems. For example, transferring knowledge and technology allows countries to utilize the expertise and resources required to produce COVID-19 vaccines. Therefore, the availability of knowledge and technology can provide information and ease and a platform to resolve domestic and international problems.
Additionally, the global integration of nations has provided a plus point of social activism through social media. It has connected people socially and politically. Thus, they can transparent social evils and try to overcome them. According to the Council of Europe Portal, “Non-governmental organizations protect knowledge of and respect for human rights worldwide.” In short, the interconnectedness and dependence of nations in all aspects of life can eliminate the social evils from society and make the world a calm and peaceful place for living.
Nonetheless, the growing challenges for underdeveloped economies due to the global expansion of markets have badly affected the whole world. Hence, it is the high time for the developing nations to overcome the consequences. First, they need to strengthen their economic growth through exports and industrialization. The increase in exports and decrease in imports can make them economically independent. As a result, they will capture the global market and easily compete with the world economic powers. In short, developing states can easily overcome social and political problems by resolving the economic challenges in the world market.
Moreover, growing states can enhance their human capital by boosting their economic power. The marginalized states have more assertive and talented human capital than the developed nations; thus, they can elevate the countries economically and provide the labour force to other nations. Without any doubt, for economic growth, working on human capital is one of the essential paths that can lead nations towards peace and prosperity. Moreover, substantial human capital and its importance in a country can make it strong and elevate the social evils from society. All in all, human capital is the key to uplifting a nation’s economy.
Apart from physical strength, the nations must be strong intellectually and technologically. A country with a high literacy rate and education rate can lead the whole world. Thus, developing nations need to progress in research and innovation. New inventions and research can make them strong and independent in the world’s economic market. Moreover, innovative countries will never be affected with the emergence of global issues. Thus, with economic and technological advancement, they can create more opportunities and economic ease for other countries; as a result, they can lead the world.
Critically, market globalization has connected the whole world socially, politically, and economically. Although it has the potential to bring economic equality across the globe, on the other hand, it has brought some challenges for emerging economies. Thus, developing nations need to integrate economically and make economic policies for participation in the world economy. As a result, they will never be utilized by the great economic powers. In short, for economic growth, a nation must participate in the global market and capture the place where it can never be devalued.
To sum up, the globalization of the market is the economic connection of the nations, worldwide. In the modern world, the financial and global collaboration relationships are well-connected in the modern world. However, the benefits of the international economic order are only confined to the developed nations. On the other hand, developing states have been facing some challenges, such as unfair economic exchange, vulnerable economic forces, social gaps, and economic degradation. Along with the rising consequences, the growing economies reap the fruits of FDI, technology, and social activism. For this, the countries need to grow the economic, intellectual, and human capital. As a result, the developing states can be the stronger nations of the world if they properly follow the global economic trade formula; moreover, they can be part of world peace and prosperity.
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