Globalization has been under a heated debate concerning third world, poorer, less developed countries. Some argue that with globalization comes exploitation where richer countries take advantage of the poorer countries, creating a large gap between them. But comparing rich and poor countries or developed and developing countries is like comparing apples to oranges. Different parts of the world have different values and to someone who is unaware of these parts work may mistake globalization’s opportunities for corruption. International trade allows for developing countries to continue to develop by increasing national incomes to fund modernization. Globalization can benefit all countries, rich or poor, if that country is willing to be open to international trade. Not only do they have to be open to the world market, but they would have to do it in such a strategic way based on how their country is run in order to gain from trade. Practicing globalization the exact same way, by a set of regulations may lead to a country’s economic downfall. By choosing the best way to engage in international trade, a country can successfully grow economically as well as socially.
By using a country’s comparative advantage, or what they can produce at a lower opportunity cost than other countries, they can get all the benefits of trade. If every country has a comparative advantage that means that everyone can gain from trade. There is remarkable evidence that globalization is helping countries expand and achieve higher incomes or a higher GDP. Research was conducted on national incomes around the world during the 1990s and results showed that the income of rich globalized countries increased by 2% each year. The results also show that poor, more globalized countries have a higher increase in income per year than poor, less globalized countries. Actually according to this research the poor, more globalized countries have had an increase in income of 5% each year while the poor, less globalized countries had a decrease of 1% per year. On the other hand it is suggested that there is a big gap between the rich and the poor. In 1960 the average income of the richest 20 countries was 15 times higher than the poorest 20 countries. Today the income of the richest 20 countries is 30 times higher.
Globalization significantly led to higher incomes is in China over the past several decades. They have mastered the concept of globalization in their own way far from the Western norms. In an article by Dani Rodrik China has averaged almost 8 percent per annum per capita by opening up to the world economy. By taking part in globalization China has been able to fund modernization by selling its products on the world market. Another remarkable fact as a result of opening up to free trade is that in 1960 China’s life expectancy was only 36 years of age and by 1999 reached 70 years. These statistics prove that with a strategy most fit to a country, globalization can be achieved successfully.
Many people are anti-globalization for several reasons. They say it is wrong to pay workers overseas a very small fraction of what an item sells for in wealthier countries. According to an example in an article by Jagdish Bhagwhati, a designer jacket may sell for $190 in New York while the worker overseas gets paid 60 cents an hour. This amount is considered to be cheap labor according to those against globalization. Of course 60 cents an hour would seem like an unfair wage to a wealthier country. Also this price of $190 is only for one jacket; not all jackets sell and the cost to get these products to their destination have to be covered as well. The fact is these “low” wages are about the same as what the average worker makes in these poor countries. In fact according to the same article by Bhagwhati, workers that work for foreign-owned enterprises in Vietnam are making more than workers not employed by these international enterprises. A study was conducted in the late 90s by economist Paul Glewwe that found workers in foreign companies were making twice the salary as the average worker at a Vietnamese company. It is impossible to compare wages of wealthier countries to poorer countries much less compare they way a poorer country runs their nation to a richer one.
Another issue concerning globalization is child labor and workers that work long strenuous hours in so called “sweatshops”. In these developing countries, sending their children to work is the only way a family can survive. Usually there is not an abundance of schools and medical care like in the wealthier countries, and even if education and proper health care is available it is only available to the wealthier families who can afford it. Through globalization, households will make higher incomes which may eventually enable a family to send their children to school and provide some type of health care. In another article by Jagdih Bhagwati he states, “child labor will certainly diminish over time as growth occurs, partly due to globalization.” A proposed bill called the Harkin Child Deterrence Bill that was trying to eliminate child labor only led to child workers getting laid off and trying to find jobs elsewhere. Much worse some of the female children were forced into prostitution. These workers, adults and children, in poor countries are not being forced into hard labor, but it is more like it is a necessity in order to survive. Nicholas Kristof and Sheryl WuDunn, writers for New York Times Magazine say that these workers volunteer to work longer hours in order to earn more money. These workers are willing to work as much as possible in order to stay alive.
People who are anti-globalization are merely blind to the actual facts. Poorer countries do what they can to survive, and globalization helps them obtain higher incomes and improve living conditions. Just because wages are significantly smaller in poorer countries does not mean exploitation is present. Countries with lower incomes, poor literacy rates, and poor health care cannot become wealthy and efficient over night. Globalization is a slow process, but it is working. It is allowing for more techniques and methods to be shared around the world. A country closed to the rest of the world will not learn to better themselves, and continue to do things they way they have been doing. As a result there will not be as much room for improvements and new opportunities to countries that do participate in globalization.
Contact me at mthong@radford.edu or melanie.thong@gmail.com