Globalization & The World Economy
The modern world posses challenges to all nations. Economies are ever changing and quickly becoming globalized – whether they want to be or not. The speed of information, communication, and services throughout the world add to the simplicity of globalizing our economies. However, even with the great rewards of having such a connected world, there are even greater disparities among the haves and the have-nots.
Some of the reasons for the disparities rely on the governments of the countries. Since the fall of the Soviet Union and the nations of communist Europe, the disparities have become more evident. It is easy to see how capitalism can make the rich, richer and the poor, poorer.
Regional factors can also be attributed to the wealth of a nation. Middle Eastern countries are extremely wealthy because they have an abundance of oil. If there wasn’t such a need for oil, these countries would collapse into poverty. However, while they may be wealthy, their standards of living are less than that of North America and Western Europe. There are many nations, particularly in Africa, that lack natural resources for export which leads to lack of funds for the governments, which then leads to lack of funds to aid the citizens in need. The World Trade Organization and the World Bank have made an attempt to rectify such problems through better trade relations and loans between nations. Unfortunately, this brings about the problem of a cycle of debt in countries that cannot afford to have debt.
With the ease of mobility in our world, it is possible for a company to relocate from country to country in an attempt to achieve a greater bottom line. The relocation of corporate facilities, such as factories, to other countries can also bring revenue for the countries through taxes and wages for employees. In theory, this would make life better in countries that lack natural resources to be used for trade. With this mobility comes a problem of exploitation and greed. The money that is made in one nation does not necessarily stay there – the money will, more than likely, end up in a wealthy nation. Corporations do not necessarily have an interest in improving an impoverished country, nor do they have that responsibility. However, morality should force them into a committed interest in improving living, working, and socio-economic conditions.
In some cases, corporations and international loans cannot aid a country enough to support its citizens. As is the case in some South American and East Asian countries, people are desperate for money and will resort to illegal activities to attain wealth. Illegal trade also brings about violence among people as they do not want to give up the wealth and freedom that they have and will resist authorities by any means possible. This can be seen in Colombia as oil companies from America and Europe operate and primarily hire non-Colombian citizens for the work that is done.
More recently, the problem of the populous resorting to illegal means of income can be seen in Afghanistan. There is an attempt by the United Nations to rebuild the country after decades of war and bring commerce and foreign trade to the region. A prominent problem is that farmers have discovered that it is more profitable to grow poppy than it is to harvest wheat or any other agricultural venture. Western nations condemn the crops of poppies and form a relation between them and international terrorism. Unfortunately, the Western nations that condemn their actions do not provide economic alternatives that are as profitable. Without fixing this problem, the global economy becomes forced into a cycle of violence that could potentially collapse the wealth of the wealthy nations.
Corporations and foreign governments are not the only reasons for the disparities in wealth. Corruption in local governments adds to the woes of the poor. In some instances, wealthy countries have corrupt officials – those who take bribes, embezzle funds, and take advantage of the poor. However, in more wealthy nations, corruption does not have as great of an impact on the economy (except in the instances of massive corporate corruption such as Enron and WorldCom) as it may in a poorer nation. In countries that are lacking strong economies and that, usually, have dictators, the bilking of funds necessary for maintaining the economy and supporting the population can cause famine, disease, and the destruction of civilization.
As long as greed exists in the world, there will be a disparity among the rich and poor. The rich must take initiative to achieve greater equality among the population. A possible solution to bridging the gap of rich and poor is to realign global economies. More or less like collective bargaining agreements in sports leagues, the wealthy nations must help the poor nations without expecting anything in return. Unfortunately, this theory is not appealing to capitalists as it undermines the ideals of their economies. There must be more of a moral obligation among the rich to assist the poor and give equality to all.
