Negative Effects Of Globalization Essay

Globalization is not a new phenomena. It was primarily formed long time ago, when Greeks, Romans conquered other countries and spread their power to them. However, the nature of globalization has been changed over time and reached to the stage of modern globalization. In the article “Spiritual perspective on globalization”, Ira Rifkin (2003) says that the modern globalization could be identified from a meeting on 1944 in Bretton Woods where forty five nations agreed to establish the IMF and the World Bank. The renovation of information technology, especially the spread of Internet has pushed the globalization process to happen faster than ever before and changed the whole world dramatically. Many countries are taking advantage of globalization to stimulate their economic growth, create more jobs and improve social benefits. However, they are also suffering several negative effects of globalization: the disappearance of some traditional culture, the destruction of environment, and the disparities between rich and poor.

The first negative effect of globalization is that it is reducing the diversity of traditional culture of some small nations. Each country has its own identical culture. However, with the development of advance technology as well as international trade, a lot of multinational corporations are established; result in an interconnected world and the removal of national borders. Some countries are unable to resist the cultural interaction with other countries as well as the cultural imperialism of developed countries. Their traditional culture is losing and replaced by Americans and Western styles. Rifkin writes that the Americans and Western culture have affected or even obliterated the traditional culture of some countries. People in these countries are more and more prefer McDonald’s fast food, Hollywood films or Disney entertainments. In “The deadly noodle”, Hasting, Thiel and Thomas also mention that the American processed food may be one kind of American cultural sovereign. It has changed the food habits of many countries.

In addition, in some extend, globalization also impacts on the way people consider knowledge. In this Information Age, it is easy to get all necessary information on the Internet and they are often formal modern knowledge. Thus, traditional knowledge is disappearing. In “Exiled to Cyberia”, Kunda Dixit says that we have paid too much attention on formal modern knowledge, and overlooked the traditional knowledge. These cultural changes also happen in Vietnam. Young people now like to listen to the songs of the world famous singers like Celine Dion, Micheal Jackson or Lady Gaga and keep away most of Vietnamese traditional music. A lot of traditional games are no longer their favorite things. They like to spend their free time playing games online or chatting with friends on the Internet. At cinemas, Hollywood films are advertised everywhere but it is difficult to find a Vietnam film. Gradually, many countries are losing their cultural diversity and identity. And there will be no big differences between countries’ culture because of the powerful spread of America and Western culture.

Perhaps the next generations will not be aware that they used to have an unique traditional culture in their society. Another problem which countries are facing with under the effects of globalization is the degradation of environment. Human can be considered the owner of natural environment and have power to change it. However, the impacts of human on environment are more and more aggressive because of the explosion of population and economic growth. Global environment has been destroying in many different ways. In “Poverty and Environmental Degradation”, Mabogunje writes that the world’s population has increased rapidly, especially in developing countries and urban areas due to medical achievements. This population explosion has put many people in the poor standards of living. As a result, to make a living, they have cut trees in forests and over cultivated their farmlands.

Therefore, a lot of species have no place to survive and then be extinct, a wide range of lands become desertification, and losses of topsoil are happening in many countries. The global ecosystem is becoming imbalanced and the environment is seriously degraded. Also, globalization has brought serious pollution for many countries in the world. Air pollution, water pollution and climate changes are now a big issue which requires all countries to cooperate to resolve. There are several factors causing pollution. One cause of air pollution and global warming is the increase in numbers of vehicles in cities, especially in developing countries. In “If poor get richer, does world see progress”, Knickerbocker tells us that Chinese economy has been quickly developing. In Shanghai, numbers of cars have been increasing significantly every week while the bicycles may be not permitted on some big roads.

This change is making global atmosphere polluted. The situation of Vietnam is as same as other developing countries. Recently, numbers of vehicles have been growing faster in big cities and they are a main cause of air pollution in Vietnamese urban areas. The consumption of the poor people also results in pollution. According to Maboguje, the biomass fuels and other products consumed by the poor are causing serious air pollution. The broad uses of chemicals, fertilizers and pesticides are another cause of pollution. Maboguje says that in order to produce more agricultural products, farmers in many countries have broadly used fertilizers and pesticides which pollute water sources and are harmful to environment as well as people’s health.

Lastly, globalization is widening the gap between the rich and the poor. It has affected all the participants who involved in globalization process in many ways. Although some countries have already got out of poverty and developed their economy, wealth countries are those who have taken most benefits from globalization and become richer and more powerful. Multinational corporations in developed countries make huge profits from outsourcing their productions to developing countries where labor costs are very cheap and other production conditions are more favorable. As results, the gap between rich countries and poor countries are increasing. According to Rifkin, the unequal difference between the rich and the poor are widening. More than one billion people in the world are ling in very poor conditions.

The rapidly economic growth in developing countries also results in the inequality in income and living standards of people living in cities and those living in rural areas. In fact, the economic growth often happens first in industrial areas and in cities, so people who have good education or working skills can get higher income and improve their lives. In rural areas, on the other hand, people’s lives basically depend on agriculture which is slowly developed so their incomes do not change very much or even decrease because of the impact of environment changes on their agricultural production. Moreover, when economy is growing, the goods price and standards of living are also higher. These things affect seriously to the poor people and make their lives become harder.

In conclusion, globalization is unavoidable trend in this advanced technology era. Most countries in the world were involved in this spiral of globalization. Although globalization has created a lot of significant benefits to these countries, helped them increase the economic growth, improve people’s living standards, it also has brought many challenges and disadvantages for these countries, in which the dismissal of traditional culture, environmental degradation, and disparities between rich and poor are notable issues. Each country suffers the negative effects of globalization on different levels. Thus, many countries may have different solutions to their problems. However, in order to reach to the sustainable development, every country needs to coordinate together to solve the issues and minimize the disadvantage effects.

Dixit, K. Exiled to Cyberia. Global
Hastings, M and Thiel, S and Thomas, D. (2003, January 20). The deadly noodle. Newsweek, 141, 3. Knickerboker, B. (2004, January). If poor get richer, does world see progress. Christian Science Monitor. Mabogunje, A. L. (2002, January/February). Poverty and environmental degradation.Environment, 44, 1. Rifkin, I. (2003). Spiritual perspectives on globalization. Woodstock: Skylight Paths Publishers.

Negative and positive impact of globalisation

Critical Literature Review


Redding (1999) defines that globalisation as the increasing integration between the markets for goods, services and capital and at the same time the breakdown of borders.

Other researcher found that the process of globalisation not only includes opening up of world trade, development of advanced technologies such as communication, internationalisation of financial markets, growing importance of multi-national corporations (MNCs), population migrations and generally increased mobility of persons, goods, capital, data and ideas but also critical problems such as infections, diseases and pollution (Braibant, 2002).

Thus, from many point of views, globalisation is seen to be the borders between countries, governments, the economy and communities, increasing liberalization and openness of markets, particularly through the elimination of barriers to trade in goods and services and the development of integrated international financial market. PRUS (2001) simplified the term of globalisation as a process of increasing connectivity, where ideas, capital, goods, services and people are transferred across country borders.

Labour and employment

Positive Impact

However, the process of globalisation can bring more jobs opportunities in host country when MNCs move their production operation into developing countries. According to Rama (2003), job creation only will occur in export-processing zones where large amount of work forces are required in order to keep the production running.

A good example of jobs creation would be Coca-Cola decided to invest in Malaysia with a new bottling plant, consist of $301 million investment. They stated that this investment will able to create 600 to 800 jobs at the plant with 8,000 jobs connect with local suppliers (Agence France-Presse, 2010).

Negative Impact

Woods (2000) stated that the government of developing countries start to compete with each other by deregulate their policy to attract foreign direct investment (FDI) and multi-national corporations (MNCs). Hence with lower the wages and taxes rates enable the investors to avoid the risk of losing their capital invested in developing country.

Research done by The Economist (2001) and Woods (2000) and found that when the government of developing countries increasing minimum wage and labour safety standards in order to protect local workers' rights, this might could cause MNCs relocate their operation to another developing countries, where that particular country's labours, who were probably willing to accept low wages by any standards, lack of union representative and legal protections such as child labour and other gross labour that abuses by global companies.

Technology transfer

Positive Impact

Transfers of technology depend on resource available by MNCs with the ability to achieve the level of technology development in order to make them competitively in global market. Usually developing countries unable to do research and development on their own as the technologies that required implementing the competition strategy are most likely to come from other countries through technology transfer (Stewartet al., 2003). Hipkin and Bennett (2003) stated that the extent of developing countries, participation in global economy depend on their ability to respect where the importance of technological transfer cannot be overemphasized.

There are ten modes of technology transfer which has been identified by Peter Buckley (1985, citied in Transnational Corporations and Technology Transfer to Developing Country) but the most conventional form will be whole-owned subsidiaries. This form is also known as FDI where MNCs can lower their transaction cost (Cantwell and Dunning, 1994).

Hence technology transfer to subsidiary in other country allow developing country to learn the operation of new technology. Sometime subsidiary didn't allow local firms to learn but they somehow find their way to obtain the technology such as hiring operator from that particular subsidiary (Mansfield and Romeo, 1980).

Negative Impact

However globalisation can also bring negative impact to developing country. Certain MNCs transfer their technology to developing country as those technologies might cause health problem to employees as well as local citizens.

Good example would be Bhopal disaster caused by America MNCs' subsidiary, Union Carbide India Limited that produces pesticides. Sophisticate technology bought into India but the leakages of chemical caused more than 500,000 people suffer from the disaster (Eckerman, 2005).

Social impact

Positive impact

Globalisation can bring good and bad effect to developing countries. Developing able to reduce the amount of population that live below poverty level with the help of globalisation as the effect of job creation has been achieved (Lee and Vivarelli, 2006). Local citizens are able to get a job and ensure the survival of their family and improve their living standard.

Negative Impact

In this era of globalisation, social aspect is tightly related to the effect of the waves of globalisation such as living standard, career, families and their communities. In this case, globalisation are claimed that it is a method to organise someone's life which consist of assimilation, communication among people, organisation, and the government as well in other part of the world.

Hence, it was also called the method that used driven by global trade and investment aided by information technology. Besides, this issue is also directly inter-related with some other issues such as unemployment, disparity and scarcity, and environment as the chain effect of the waves of globalisation (Globalisation 101, 2002).

The inter-relationship between the technology and economic is very critical and it succeeded in consisting the rise of the theoretical approaches where the centrality of changes in technology have been accepted and the dynamic force of the term innovation in the elements of economical changes (Freeman, 1998; von Tunzelmann, 1995). According to Nussbaum and Sen (1993), investment in technology appears to have an optimistic link to wider philosophy in developing economic interests which include social choices and freedom capability in longevity and education.

Globalisation on impact of the countries' economy

Positive Impact

According to Baghwati (2004) globalisation is playing the significant role of enhancing economic affluence by offering new hope to developing countries. Gangopadhyay and Chatterji (2005) saying that globalisation has been characterised as a reduction in trade barriers such as free flow of goods, services and labour from one country to another.

Richardson (2000) contends with these views as, the effect of this is increasing the trade which turn into increased income for developing countries and serves as an opportunity to stabilise their economies by taking the advantages of trade. This statement is true and has been proving by (Richardson, 2000; Dierks, 2001) that globalisation has greatly reduced the trade barriers between countries through adjustment of tariffs and import duties.

Negative Impact

The rise in globalisation has increased capital flow into developing countries' economies. Foreign Direct Investment injects capital into developing countries in terms of stabilizing the countries' economic. This is also a benefit that increased the countries' financing through loans and grants from developed countries (Aurifeille, 2006). However, there will be net capital inflow that could lead to negative effects on trade.

Chan and Scarritt (2001) noted that the large capital inflows were caused by the appreciation of exchange rates and inflationary pressures that impact on the country's current account. This means that globalisation in improving the countries' economy could actually stop the progress of the economy unless the host countries' balance of payment focuses on the foreign plant where the export is more than import.

The adjustment in trade barriers has lead to the promotion of specialisation to developing countries because they are able to concentrate on the production of commodities which can be produced at the least cost (Aurifeille, 2006). Developing countries fully use the advantage of globalisation to enhance their income through trading goods which they can produce most effectively.

Such development is giving developing countries an opportunity to obtain goods that prove expensive to produce in their own countries. Corsi (2009) saying that, competition is always an effective way of enhancing innovation to produce better quality goods. Thus, globalisation had enhanced competition as the flow of goods and services between countries has becomes easier.

Globalisation impacts on economic and environment

Negative Impact

Economic and environmental problems show few signs of improvement for a large share of the world's people but when comes to external debt levels, weak export and real income growth, it often enter a mutually destructive relationship with environmental and resource degradation which linked to the agriculture and urban activity. The important connection between economic and environmental problems can be clearly seen in the widespread social and economic impacts towards soil erosion, deforestation, urban congestion, unmanaged chemical such as heavy metals, air pollutants, solid and liquid industrial and residential waste (Long, 1990).

According to Huber (1982) and Simonis (1989), ecological modernisation was one of the primary modes of sustainable development which comprised both a theory and a policy or political programme based on the view that comprehensive political and economic change could be implemented to achieve a less material and energy-intensive economy through the application of integrated and preventive resource and pollution-reduction strategies.

This technologically-intensive mode of production would not be a viable option for lower income nations because the intensive technological basis of ecological modernization suggests that its effective operation and flow-on benefits are probably beyond the reach of poorer nations. Indeed, rapid global technological progress has often resulted in the Intensification of uneven development rather than enhanced opportunities for the poor (Freeman, 1987). The post-materialist solution for technologically advanced economies would


Although globalisation can help developing countries to grow and become developed countries through different kind of benefits enjoyed by them but at the same time globalisation can bring disaster to developing countries, even can bring the whole country collapse in few months times.

Research done by scholars indicated that globalisation can be a benefit to developing country but at the same time it's also a threat to developing country. However the net benefits enjoyed by developing countries is greater than net cost paid as shown in this literature view can say that globalisation can actually bring benefits to developing countries.

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