Essay on Globalization

The term globalization is frequently used in the media and in everyday speech. The Prime Minster, Gordon Brown has said that it is a fact and here to stay (Gordon Brown's speech to the CBI, November 2006). Explain why the Prime Minster would have made this comment.

"Globalization" is becoming the preferred term for describing the current times. It can be inferred that the process of connecting various economies and spreading technology, ideas, and cultures. Globalization has posed the more overt economic, social and also political benefits worldwide. Talking about globalization at the CBI annual conference 2006, the Prime Minster, Gordon Brown has said that it is a fact and here to stay. The real question not whether it exists or not, but whether it is well managed or badly managed, and today free trade, open markets and flexibility are preconditions of modern economic success across our global economy. But it is not only the pink color; there are advantages and disadvantages of globalization.

On the economic side, the business market in the world has no boundaries. The free trade among nations has been increased and made us wealthier. Goods and services produced in one part of the world are increasingly available in all parts of the world. Globalization has made international trade possible by facilitating the transport of products between various countries. Countries which aimed at export-led growth, such as Japan, Korea, and China, have benefited.

There are more goods and services with a better price for consumers to choose from because of efficiency and specialization. Each nation takes advantage of its absolute advantage and comparative advantage on their goods and services. For example, Vietnam exports rice, coffee, cashew, garments, crude oil, etc then import machine, medicament, car, etc.

As well as the free movement of goods, there has also been a dramatic increase in the flows of money (capital) around the world. The foreign direct investment (FDI) and foreign indirect investment (FII) from developed countries to developing countries grow sharply since investors see more opportunities for their business. The markets are more open and procedures are more simplified. This leads to more jobs created in cheaper labour countries and the living standard would be improved. This poses mutual economic benefits on both sides of the countries in trade. A multinational corporation from UK makes a direct foreign investment in Vietnam by building branches in that country and setting factories for production. The corporation receives cheap labor which generates greater profit and in turn, Vietnam will benefit from more jobs from factories and financial capital entering the country.

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