Rethinking Globalisation: The Unseen Impacts of a Connected World
The effect of globalisation on the world is primarily a question of the perspective of nations or people. Economically developed countries do so by capitalising on expanded markets, reducing consumer prices, and improving efficiency. At the same time, inequality, labor exploitation, and environmental damage are very real problems in many developing countries. On this divide turns the current debate over the merits of globalization: It has rescued millions from poverty and promoted innovation, but it has also fostered systemic inequalities and ecological devastation.
The material fruits of globalization are self-evident in the ascension of the developing nations that have embraced global trade. The fact that China went from being a closed economy in 1978 to being the world's largest exporter by 2022, with more than $3.7 trillion of goods flowing across its borders, is a testament to the force of market liberalization. Vietnam has experienced similar growth; foreign investment in manufacturing there hit $15.8 billion in 2021, leading to job growth and technological spillovers. The complex of successes finds its foundation in the principle of comparative advantage, allowing countries to specialise in those in which they hold efficiency gains, like China’s electronics assembly or Germany’s precision-engineering skill in auto supply chains.
Competition in a global marketplace has also speeded innovation, especially in IT. Competition between Apple and Samsung has led to smartphone innovation worth over $300 billion to consumers and more than $34 billion in profits for Apple. Simultaneously, the globalization of semiconductor manufacturing (design in the U.S., fabrication in Taiwan, lithography in the Netherlands) has allowed an exponential increase in computer power. Studies indicate that those trade restrictions could reduce worldwide research and development by as much as one-quarter, hampering future advances. Consumers, especially in richer countries, have had access to more affordable products, from electronics to life-saving drugs. U.S. tariffs on Chinese imports, for example, were inflating costs by $50 billion a year, demonstrating how protectionism stokes prices and deflates buying power.
But the risks of deglobalization are high. A collapse in global trade — which amounts to a mind-boggling $28 trillion annually — would wrench apart complex supply chains, pushing up prices by 30-40% and hitting low-income families hardest. Industries like the auto sector in Germany, which can survive only if it can export, would wither, and hundreds of thousands of jobs would disappear. The interconnected nature of present-day production has led local trade curbs to have ripple effects, evident when pandemic-era disruptions led to shortages of everything from microchips to medical supplies.
The downsides of globalisation, however, are clear, especially for developing countries that have been pushed into it on harsh terms by vested interests. The IMF and World Bank have been responsible for decades of structural adjustment programs prioritising austerity, privatisation and deregulation – these measures have frequently plunged nations into deeper poverty and inequality. During the Asian Financial Crisis, for instance, the IMF forced South Korea and Indonesia to dismantle protective industrial policies. At the same time, Western countries continued to provide subsidies and bailouts to their. This double standard has enabled the rich to dominate poor countries, holding the latter at bay from pursuing self-sustaining growth.
Environmental decimation is yet another cost associated with globalisation. The quest for cheap labour and loose regulations has transformed portions of the Global South into “sacrifice zones” – landscapes and communities upon which the effects of resource extraction and pollution are commonly felt. Soybean exports have caused deforestation in the Amazon; toxic cobalt mining takes place in the Congo; and textile factory disasters occur in Bangladesh — all as a result of economic integration that entrenches global value chains through the exploitation of the weak. Even as wealthy nations jettison their environmental footprints — 28 per cent of global CO₂ emissions from the production of goods were outsourced to developing nations, and millions of tons of discarded fast fashion from Europe are dumped in Chile’s Atacama Desert — developing countries are left to deal with the consequences. This environmental apartheid makes sure that the good of globalisation rises and pours upward, while the ill flows outward and pools downward to the poorest. Labour exploitation is widespread in the global supply chain system, where companies seek the lowest wages and the least regulation. Sweatshops in Vietnam and child labour in Chinese factories: the price for such cheap goods is paid in human life. Cultural identities are also threatened as globalism imposes logic, rendering local crafts, languages and traditions to Western consumer goods. Cultural diversity is under attack as global brands bring commercial media to a culturally diverse heritage in favour of a commercial universal world.
The real task is not to reverse globalisation but to remake it into a system that puts equity and sustainability first. Economists like Kate Raworth are pushing for a “doughnut” that finds what they consider the sweet spot between human well-being and ecological limits, where no one falls into deprivation but we stop shy of environmental collapse. This means rethinking trade policy to back up the green industry, enforcing fair labour standards, and holding corporations accountable for exploitation. The incumbent should be globalisation that people can rally around, not just profit.” Because there must be more to success than the size of the GDP, it’s not an option between open borders and closed borders, and it’s an option between a system that works for a handful of people and a system that works for everyone else.
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