Negative And Positive Impacts of Globalization On Developing And Essay

Negative And Positive Impacts of Globalization On Developing And Developed Countries - Essay Example This is because while the countries participate in international trade and allows for importation and exportation of commodities across their borders, the value of flow in the opposite directions is different. The countries export lowly valued products such as agricultural outputs at low costs to developed countries while they import highly valued finished industrial products at high costs. Globalization therefore induces a negative balance of trade on the developing countries, a factor that is reflected on the countries’ economic status (Simpson, 2007). Such has been the case in the Sub Saharan nations and their cities such as Lagos that rely on exportation of cheap commodities with limited bargaining power. Developing countries have also suffered from increased unemployment rates because o globalization with countries such as Nigeria and Kenya loosing as high as 30 percent opportunities to retrenchment (Oduwaye, 2006). The countries’ narrow market base for their expor ts identifies another negative effect of globalized trade. While most of the countries specialize in perishable agricultural commodities, their markets are narrowed to few countries, a factor that identifies high risks of market volatility. Economic instability in case of breached link between two economies therefore leads to loss in the value of commodities that cannot be stored for a long time. Such loses may also occur due to temporary diplomatic challenges and communication barriers. Declining trend in productivity of the countries’ exports has also worsened their trade deficits (Simpson, 2007). Developing countries have also failed to reap the full benefits of globalization especially with respect to capital transfer across territories. While... This paper stresses that developed countries have derived significant benefits from globalization, especially with respect to globalized trade. Specialization in fields of production has for example led to economic advantages towards higher revenues and living standards. Specialization for example allows for efficiencies and innovation towards cost effectiveness and development of diversified products for a wider market towards higher gross income. Globalization also avails cheap commodities in the developed countries to ensure affordability. Similarly, allowance for transfer of physical property, as has been the case in the United States’ industries has facilitated efficiencies in production processes. Mobility of intellectual property into developed countries also facilitates â€Å"technological developments and innovation† that can be applied for economic advantages. Most export industries also offer higher wage rate to their employees and this improves peopleâ€℠¢s economic and social status. Another benefit of globalization on developed countries is the freedom of movement of capital that allows their investors to explore countries whose interest rates are relatively lower than domestic rates. This report makes a conclusion that globalization has largely interlinked different part of the world through economic, social, and political integration. This is associated with a level of interdependence and identifies many impacts, negative and positive, on both developed and developing countries.