Positive and Negative Impacts of Globalization on Developing Countries

Positive and Negative Impacts of Globalization on Developing Countries

The following article is written by Sobia Sangrasi, 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.

Globalisation, the unbridled movement of information, technology, and products across borders, is a dynamic phenomenon in the contemporary world. Broadly considered an economic phenomenon, globalisation has visibly transformed each facet of life by and large. No nation is immune from its impacts, whether it be a developed or developing state. On the bright side, globalisation is playing a pivotal role in the development of developing countries by providing several opportunities, such as easing the way of doing business, accelerating the flow of technology, increasing trade opportunities, alleviating poverty, simplifying the way of eradicating environmental hazards, etc. For instance, China, a developing nation once struggling to have its say in international comity, has successfully challenged the American hegemony by actively participating in the era of globalisation. However, under all the seemingly positive effects of globalisation on the growth and prosperity of developing nations, there lies the enormity of challenges, like demolishing local industries, increasing migration of skilled labour and youth across nations, raising environmental hazards, and destroying the sovereignty of the nations, that can leave such nations at the verge of extinction. For instance, developing countries like Africa and some rural areas of China suffer from the highest poverty rates. In short, in order to reap maximum benefits from globalisation, which has become the need of time, developing countries need to learn how to swim in the river of globalisation by adopting balanced strategies.

“Globalisation will make our societies more creative and prosperous, but also more vulnerable.”           

 – Lord Robertson 

Literally, globalisation means the integration and cooperation of all nations in all spheres of life for the enhancement of common interests. Globalisation is a multidimensional process. Its impacts can extend to economics, politics, social and cultural aspects, etc. Multiple dimensions of the process are interrelated and reinforcing. In economic terms, globalisation has widened access to products and services and increased trade and foreign direct investment (FDI). In the same manner, the socio-cultural impacts of the process are even deeper, changing the concept of personal identity. Individuals are connecting throughout the world, adopting similar cultures. For this very purpose, global actors, such as global media corporations, non-governmental organisations (NGOs), and multinational companies (MNCs) have played an influential role. As a result of globalisation, the world is becoming more homogenised, and cultural differences are being eradicated, driven by the force of technological advancements. Thus, with regard to different fields, globalisation has been defined by multiple scholars. Globalisation, according to Holm and Sorensen, is the “intensification of economic, political, social, and cultural relations across the border.”

Considering the various dimensions of globalisation, it has impacted developing nations both positively and negatively. Initiating with merits, globalisation has provided nations with a large room to prosper by dwindling trade barriers and enhancing FDI. Liberalisation has allowed multiple national and international companies to trade in countries and create an environment of competence among companies, adding to the economic growth of states. Besides, steps taken by many developing nations to open up markets by removing tariffs and freeing up their markets have paved the way for developed nations to invest in such states, creating job opportunities for the masses. For instance, the Indian economy greatly benefited from globalisation. In the 1970s, the Indian annual growth rate was 3 per cent. However, in the 1980s, India’s average annual growth rate touched a margin of 5.9 per cent. Thus, globalisation not only aided India in raising its growth rate substantially but also improved its position globally. 

Similarly, remittances are the main source of skyrocketing the economy of a state. Globalisation has provided the path for augmenting remittances. Remittance inflows help boost countries’ balance of payment. For instance, in 2019, the Philippines’ remittances inflows of $34bn helped reduce the current account deficit by more than 10 per cent of GDP; in Pakistan, remittances averaged 3657.95 million USD from 2002 to 2023. Moreover, the advancement of science and technology has significantly reduced the cost of transportation and communication. The time-space compression effect of technological progress has declined the cost of international trade and investment, which makes it possible to organise and coordinate global production. For instance, Ford’s Lyman car is designed in Germany, its gearing system is formed in Korea, its pump is in the USA, and its engine is in Australia. It is the globalisation that has made this kind of production possible. Thus, economic globalisation has led to fruitful results, taking the state’s economy to the zenith.

In the same fashion, globalisation, by reducing trade barriers and uplifting the export sector of nations, has not only opened the door of opportunities for developed nations but also significantly reduced the poverty level of developing countries. The rapid expansion of foreign trade by developing nations generated demand for resources and energy; such emerging states started consuming 50 per cent of global energy production. This led them to increase their manufacturing and compete effectively in the world market. For instance, around 50 per cent of computers produced come from China. Thus, in the last two decades, India and China have started growing at a faster pace than already rich nations; the rapid development of both nations has caused world poverty to decline immensely. Further, globalisation has provided a wonderful platform for women to raise their voices against patriarchy and injustice by paving the way for them to know about their rights. It is assisting women to engage in different facets, including social, political, economic, cultural, and sports. Also, the constitution guarantees rights for women. A number of laws, such as the Prevention of Anti-women Practices ( 2011) in Pakistan and the Convention on Elimination of All Forms of Discrimination Against Women (1993) in India, have empowered women to work fearlessly. Ergo, by providing education and awareness, globalisation has led women to develop by leaps and bounds.

Additionally, globalisation has significantly contributed to the education and health sectors of developing nations. Health and education are basic objectives to improve any nation. Through substantial economic growth, developing states are able to invest in the education and health sectors. Through globalisation, several international organisations, like WHO, UNESCO, and NGOs, are trying to eradicate illiteracy and lethal diseases from the world. Hence, a number of countries have alleviated the illiteracy rate, including India, Bangladesh, Sri Lanka, etc, and the enormity of diseases, like AIDS, swine flu, Polio, and bird flu, have been reduced greatly. According to WHO, “With globalisation, more than 85 per cent of the world’s population can expect to live for at least sixty years, and this is actually twice as long as the average life expectancy 100 years ago”.

Politically globalisation has proven beneficial for the political structure of developing countries as well. Globalisation has suppressed authoritarian governments and allowed democratic forms of government to flourish across the world. Through globalisation, democracy has flourished worldwide, enabling each person to enjoy their rights to the fullest. For instance, despite the fact that Pakistan has been a democratic state since its inception, inept leadership, unnecessary military intervention, and corrupt practices have made it more of an authoritarian government. Globalisation, through media and technology, has made the public aware of their rights and power, thus enabling them to protest against authoritarian rulers and help flourish democratic norms. Similarly, the process has provided easier access to information regarding environmental hazards or health issues. For instance, many diseases, like AIDS, influenza, and Polio, have been eradicated. Currently, COVID-19, the deadliest virus, has been successfully exterminated due to globalisation. Easier access to information and the flow of goods and services have helped the masses to get rid of the deadliest impacts of the virus. Likewise, developing nations, owing to globalisation, are not left alone to fight with the menace of global warming, terrorism, extremism, and poverty. International organisations and countries are working mutually to eradicate such menaces from their roots.

“While globalisation will make the world smaller and more accessible, we must continue to appreciate its vibrant diversity.”                                                               

–   Jean Philippe Courtois

Moving forward, globalisation has played an active role in making the world a peaceful place to live in. With the aid of integration and the interconnectedness of nations, the process has created an atmosphere of peace and harmony. It was only possible with the help of globalisation that the cycle of world wars had ended. Over the past many years, a number of organisations have evolved, struggling hard to maintain peace and harmony. Among all, the United Nations is the most renowned one presently. For instance, the UN has worked hard to achieve peace and stability between Pakistan and India, Israel and Palestine, Ukraine and Russia. While the main agenda of the UN is to achieve peace between different nations, it is also working to achieve developmental goals for developing states. With members from 185 nations, the UN is a prime example of a diplomatic global village. Delegations from each country come to an agreement about rules and policies and tend to have fewer conflicts. As a result, globalisation has turned up the wave of the political culture of developing nations.

Nevertheless, globalisation is not always as glorious as it seems. A number of challenges are associated with globalisation. To begin with, the process has significantly destroyed the lock businesses of developing nations by creating an environment of competition worldwide. The low barrier in cross-border trade has cleared the path for Multinational Companies and MNCs to expand their resources and power. Due to this, local industries are suffering because they cannot meet what is considered to be international standards. Miserably, products produced by these local industries are unable to compete with products from foreign nations in terms of quality, price or marketing strategy. Correspondingly, by creating an environment of competition within and among nations, globalisation has caused the youth and skilled labour to move to developed nations in search of better employment. Due to this very fact, youth are compelled to work for developed nations to gain perks and privileges. For instance, the garment industry in Bangladesh employs four million people, but the average worker earns less in a month than a US worker earns in a day. It proved to be the death blow for industry and for the nation. Similarly, in search of better employment, more than 300 Pakistani nationals have been killed in the sinking of an overcrowded fishing trawler off the coast of Greece. Thus, globalisation is wreaking havoc on developing countries.

In addition, globalisation has raised the dependency of developing nations on international institutions. In spite of focussing on self-help and self-reliant methods, developing nations are heeding foreign aid and loans. The very method is proving to be lethal for such poor nations as high interest is hindering them from investing in public. Such dependency has taken a number of developing nations below the poverty line, such as Tanzania, sub-Saharan African countries, and Pakistan. For instance, Pakistan has gone to the IMF 23 times in 75 years, proving that developing nations are running their economies on such loans and aid. Pakistan’s external debt, according to the World Bank, has reached sixty-six million USD from 2002 to 2021. Hence, globalisation has left developing states on the verge of extinction.

Next to it, globalisation has adversely impacted the socio-cultural structure of the nations. Owing to important tools of globalisation, like TV, internet, and satellite, it is now easy to see what is happening worldwide, providing impetus for people to adopt Western culture. Consequently, developing countries have imitated the Western culture, leaving traditional values and customs at the dead end. People, connecting throughout the world are adopting the same culture. It is common to see teenagers wearing Nike T-shirts and Adidas footwear, using Apple iPads, listening to hip-hop music, and eating at KFC, McDonald’s, and Domino’s. Many developing countries are concerned regarding the rapid rise of globalisation as it is destroying their cultural and traditional values and norms. For instance, many Arab countries, including Syria, Lebanon, and Iraq, have been affected significantly as their cultural values have altered. They wear and behave like developed nations.

Correspondingly, globalisation has seriously impacted the health sector across the world. Due to increased trade and travel, a number of diseases, such as AIDS, Polio, Swine flu, and COVID-19, have found their path towards developing countries. This has influenced the life expectancy and living standards of such nations miserably. For instance, according to the World Bank report, “The AIDS crisis has reduced life expectancy in some parts of Africa to less than 33 years.” Moreover, at present, the emergence of COVID-19 puts the lives of the masses at stake globally. According to WHO, the deadliest virus has caused the demise of more than 6.86 million people worldwide. Ironically, such a massive disaster was the result of globalisation. On the same note, developing nations are suffering from dire environmental hazards owing to the rise of globalisation. The development of developing nations at a faster pace throughout the years has resulted in greater emissions of GHG. Owing to globalisation, emerging countries frequently put the environment at risk to make greater profits. The best example is China, which is constructing a new coal-fired power plant every week. Although coal is the cheapest and most abundant fossil fuel, it is most polluting as well. Ergo, China is often regarded as the world’s greatest source of CO2 emissions.

On political grounds, the most outweighing impact is overpowering transnational institutes, putting the nation’s sovereignty at stake. Such empowerment provides a path for international and transnational institutes to intervene in national affairs, violating the sovereignty of the nations as aptly stated by Woodward that “globalisation had 

diffused power away from states, empowering individuals 

and groups to play their roles in world politics, including wreaking 

destruction-that were once reserved for governments 

of states”. The aforementioned statement depicts the extent of transformation in world politics as a result of globalisation. For instance, America used the land of pure during the Afghan war and the war on terror, which significantly impacted the sovereignty of the nation. 

Besides, globalisation is giving rise to a conflict of ideologies. The world is still a diverse place, with different nations having different systems of governance, like communism, capitalism, and democracy. Developing countries are facing huge challenges from developed nations to submit to their ideologies depending on benefits and risks provided rather than their own will. Such a sorry state of developing nations is due to globalisation as it is working to make the rich richer and the poor poorer. As a result, developing nations have to live at the mercy of developed countries to make ends meet. For instance, the USA is incessantly working to implement her ideology across the world. In addition, the indulgence of international actors in national affairs has exterminated the distinction between domestic and foreign policies. Satirically, the nations have lost the ability to have a say in international matters. Thus, the nations are obliged to act according to the policies of global economy regulating bodies.

Critically, the transition is a natural phenomenon. Globalisation calls for modernisation of societies around the globe based on scientific and technological advancement. Societies are responding to the challenges of globalisation, either by modernisation based on scientific development or westernisation, imitating Western modernity specifically in cultural terms. Globalisation can work for all, be it a developed country or a developing nation. Emerging countries, with effective and adjustable policy measures, can curtail the cons of globalisation. Menaces like uneven development, poverty, environmental and health hazards, and westernisation can effectively be controlled by adopting balanced strategies.

In the powerful diagnosis, globalisation is one of the contemporary issues. No nation can survive in isolation. It consists of both costs and benefits; the effects of the process depend upon the Socio-Political and economic conditions of the nations. Developing countries, including India, China, Jordan, and Bangladesh, have significantly benefited from the process of globalisation by increasing FDI, technological advancement, alleviating illiteracy, supporting women’s empowerment, etc. On the other hand, the process also has numerous drawbacks, putting developing nations like Pakistan, Afghanistan, and African countries below the poverty line. Despite that, the negative impacts of globalisation can be minimised by constant adjustment and control measures. In short, globalisation can work for developing countries as well, provided that such nations start seriously considering the negative and positive impacts of globalisation and formulating policies accordingly.

“Globalisation is a great thing, but it needs a legal framework in which to blossom.”    

– Loretta Napoleoni

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