Question

Explain the positive and negative consequences of globalisation?

Answer 1

Instructions:

• We will approach this question in two steps. First, we will define globalization.
• Then we will learn about its positive and negative consequences.

Solution:
Globalization refers to the process of integration of world markets caused by the free flow of goods, capital, information and jobs across borders and cultures.

It describes the interdependence of nations around the world fostered due to free trade

Although globalization has led to increased economic development and has improved the standard of living in developing countries, it has also contributed to creating an unfair world with increased income disparities between the rich and the poor.

Let us learn more about the positive and negative consequences of development.

Positive Consequences of Development

• With the increasing dominance of multinational companies (MNCs), globalization has opened up more avenues of employment.
• With the intermixing of people and cultures, globalization has created a vibrant cultural diversity.
• With liberalization and opening up of international trade, industries have turned more competitive and efficient. This has led to greater choice of goods and services for consumers at cheaper prices.
• International migration has compensated for the lack of skilled labour. A very good example of the same is the information technology industry.

Let us now learn about the negative consequences of liberalization.
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• Globalization has further distorted the balance of power between developed and developing countries due to the dominance of developed countries in world trade.
• Powerful MNCs have driven out local companies out of business leading to loss of employment opportunities.
• The benefits of globalization have not reached everyone equally. The income disparities between the ultra rich, the middle class, and the poor has only increased.