Globalisation refers to the increasing interconnectedness and interdependence among countries’ economies, populations and cultures. This can be attributed to factors that include cross-border trade, migration and technological advancements. This article shall explore the effects of a globalised world, solely focussing on its economic aspect. Does everyone benefit from globalisation? Does it lead to further polarisation between the wealthy and the underprivileged? To answer these questions is Perspectoverse’s Ishana Kandhari.
People have been trading with distant lands for millenia. The earliest accounts of long-distance trade can be traced back to 3000 BC, when seals and designs from the Indus Valley Civilization, located in modern-day Pakistan, were found in Mesopotamia, present-day Iraq. However, it was not until the 19th century that ‘global integration’, a fundamental component of globalisation, was introduced.
Global integration involves the reduction or removal of tariffs and increased policies for free trade. The primary objective of economic integration is to increase the trading of goods and services between countries, thereby aiding in economic development. The cost of production is lowered for the business, and the price of the goods is lessened for consumers. Today, globalisation is more widespread than ever before, due to travel and shipping becoming more accessible, faster, cheaper and safer, owing to advancements in technology. In the early days of trading, only royalty and nobility were able to afford imported goods, brought into their empires by merchants. Today, nearly all the products people use in their daily lives, including their mobile phones, are a result of globalisation.
The foremost aim of corporations is to make profit. These large businesses are most likely to be created in developed nations such as the USA or European countries, due to their infrastructures in comparison with developing nations. However, minimum wages and living standards are usually higher in these countries. As a result, these large corporations look to take their production processes overseas to developing nations, where they are able to pay their workers lower wages, and consequently make greater profits.
From the workers’ perspective, this may be seen as beneficial as it is creating employment opportunities for them, without which they would be unable to survive. Globalisation has helped develop their economies. An example of this is the garment industry in Bangladesh. These have improved Bangladesh’s economy immensely. In 2001, Bangladesh’s merchandise exports amounted to 6.6 billion dollars, while in 2019, it was over 47 billion dollars. By 2019, Bangladesh's garment industry constituted 86% of this amount.
Yet, Bangladeshi sweatshops are known for their dismal, hazardous working conditions. Several workers are required to work 14-16 hour shifts, without hardly any breaks in between, in cramped, illy-ventilated workplaces. Often, the buildings that the factories are built in are structurally unstable or prone to catching fire. The 2013 Rana Plaza incident is one that can never be forgotten. On 24th April 2013, workers reached the Rana Plaza factory in Dhaka, which produced clothes for several famous multinational brands, to find huge, deep cracks in the building. They tried resisting going inside, but were forced to by their employers. A little while later, the entire building collapsed, causing 1132 confirmed deaths. Approximately 80% of Bangladesh’s garment factory workers are women. There have been thousands of reports of sexual harrassment, and women have reported that several companies do not even offer maternity leave to their employees. These multinational corporations are exploiting cheaper labour markets to make profits.
Globalisation also reinforces massive polarisation between the rich and the underprivileged. The large amounts of profits generated by the businesses, further enhance their already-developed country’s economy. On the other hand, the developing country’s progress is stagnated because their GDP per capita is low, strengthening the economic divide. By expanding overseas, the international corporations are taking larger market shares, leaving less room for smaller, local businesses.
Another drawback of globalisation is that it is highly unsustainable and detrimental to the environment. The back and forth transportation of raw materials and finished goods requires large amounts of fuel, which release greenhouse gases. The United Nations Environment Programme (UNEP) has reported that transport constitutes 25% of total greenhouse emissions. Proper infrastructure, such as roads and bridges, are also required for the safe transportation of these goods, which can lead to habitat loss. Today, when the irreversible effects of climate change are knocking at our doors, immediate action needs to be taken to prevent this.
In conclusion, globalisation has been useful in aiding countries’ economic progress and providing job opportunities to people. However, it is important to consider the adverse effects and that it is not an apt solution. Research is being done into finding an alternative that can bridge the massive economic gap, consider worker’s rights, be environment-friendly and sustainable, while also connecting the world and promoting economic development.
Written by Ishana Kandhari
Illustrated by Rishita Banerjee
Bibliography:
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