Joseph and Europeans at large. This being evident

 

Joseph Stiglitz (2003),
a Nobel Laureate in Economics, explains globalization as that process that has
led to a closer integration of nations in the world by the reduction in costs
of transportation and communication; through the breaking down of artificial
barriers to the movement of goods, services, capital, and people across
borders.   A study by Stanley
Greenberg and Associates of the Roosevelt Institute show that trade
liberalisation is one of the major sources of discontent for most American and
Europeans at large. This being evident in the large street demonstrations
during WTO, IMF and World Bank meetings. Population, for example, in the U.S,
has had its bottom 90% citizens endure income stagnation. This facts are also reflected
in health statistics especially life expectancy.

The question remains:
Who are the biggest winners and losers in the last 2 decades of globulisation? Winners
are mainly the middle class in newly emerging economies while losers remain the
middle class/ working class in advanced countries and the poor (those living
below a dollar a day).

Globulisation has had
numerous advantages, ranging from wider market for goods and services, e.g Coal
production for China grew largely from global trade, foreign direct
investments, free movement of people, goods, capital, cultural exchange and
information sharing worldwide. However, the negative effects are equally substantial
and may result in economic disorientation if disregarded by the key
stakeholders in global trade.

Negative Aspects Of
Globalisation

Neo- colonialism has
since been felt, as developed countries seek to assert their dominance over
developing countries in the name of globalisation. Moreover, it has led to
global lobbying by the former so that the latter does not overtake the
developed nations. This is seen from a report by BBC News (2015) of the U.S’s Greenpeace International’s hindering
progress of the major Indian development projects; among many other instances.

Since free trade
results to improved demand for unskilled labour, imports from China have
reduced demand for unskilled labour in the U.S, U.K and Africa as a whole.
This, as a result of the assumption of perfect markets, is due to their
competitive advantage over other developed economies. Workers bargaining power
has weakened overtime with cheap and affordable labour from such countries as
India, Philippines and China. (Stiglitz.
J. 2016)

Globalisation created
the need for outsourcing workforce especially in service industries such as
education, accounting, information technology etc. causing job insecurity, off
shoring and flight of jobs. As a result, human capital outsourcing has driven
down wage rates in developed countries like the U.K and U.S.A. with threats of
pay cuts from employers seeking to export jobs.

Interdependence economy.
Many investors pegged their investments on U.S economy when the world saw its economic
development prospects and currency growth. This in the long run, has the
potential to create a ‘global domino effect’ if the U.S economy becomes shaky.
This was witnessed during the great recession in 2008 that caused a negative
ripple effect to other economies worldwide.

Pressure on national
culture was and is still being felt as a result of globalisation. Changes in
norms, values and people behaviours have been exhibited from information
sharing across the globe. This fact has been contributed by internet access
with social media taking the world by storm. These habits are homogenized
overtime. An example in the Coca- colonization and Mcdonaldization of society.
By these we mean, globalisation of American culture pushed by popular American
brands and products like Coca cola and Mc donalds.

Environmental
degradation is another demerit of globalisation with economic activities
resulting in increased industrialisation, pollution, habitat destruction and
depletion of the ozone layer. Moreover, dependence on technology has created a
lot of health problems.

With movement of
people, information, capital and goods, spread of social evils and crime is
bound to happen. With improved digital markets, digital crypto currencies such
as Bitcoin, with there storage being in electronic wallets, are prone to
malware attacks and hacks. Social media has also facilitated contact sharing to
facilitate terrorist activities.

Disregard for
independence of economies. Joseph Stiglitz, summarises how pro- globulisation
policies have potential of doing good if well administered and incorporated in
each individual country’s characteristics. Countries ought to embrace
globalisation on their own terms, bearing in mind their culture, traditions and
unique histories. If not, some countries are prone to increased instability,
vulnerability to external shocks, reduced growth and increased poverty as well
as marginalisation.

International trade and
fiscal implementation issues. Sebastian Edwards (2002), in his review of Globulisation and its  Discontents; explains how fast
liberalisation policies (led by the IMF and U.S Treasury) have been implemented
overtime, and how disregard for adequate economic analysis has negatively
affected globalisation. As a result, there was an increase in destitution and
social conflict worldwide.

Major instances argued
by both authors shows IMF’s non- gradualism in implementation of fiscal
policies, imposing capital account liberalisation and its response to the East
Asian Crisis; specifically on how it imposed fiscal austenty and raising
interest rates.

Globalisation made multi-national
corporations flourish and created an opportunity for them to monopolize the
economy. This killed small and medium sized companies. Though it has helped
improve standards of living in developing countries, there still exists a
widening income disparity with the rich becoming richer and the poor being even
more poor.

It has also facilitated
negative implications on taxation in various economies. Many multi- nationals
are trading with other countries when based in another by exploiting tax havens
such as Luxembourg and Hong Kong to avoid taxes payable to the countries they
generate profits from. This comes even after EU issues a tax haven blacklist to
17 extra nations including Samoa, South Korea, Tunisia, United Arab Emirates
and Barbados in December 2017. These nations stand to lose EU funds and incur
sanctions if they do not adjust to the laws to reduce international tax
avoidance. (Sikka.P, 2017).