Ways in Which Globalization Has Led to Marginalization in the Developing World - Essay Sample

Introduction

In the contemporary globalizing world, the global political economy has become a significant topic of discussion mainly concerning the ongoing threat of marginalization in the developing world in the light of the specific components of the growing process of globalization. Ideally, the concept of globalization began many years ago in a primitive way when people first moved and settled in various parts of the world. But in the recent times it has portrayed a steady and a swift progress instead and has developed into a substantial international dynamic which, as a result of the constantly evolving technological innovations, has augmented in scale and speed such that nations in all the five world continents have been engaged and impacted differently (Sharma, 2013). The term globalization is however affiliated with a variety of implications in various academic disciplines and in economics, which is the primary focus of this paper, it is primarily used to describe a process that applies international strategies in an attempt to expand business operations into a global level that is hugely facilitated by the worldwide communications via the technological advancements as well as the social economic and political developments. In a complete definition, globalization is the increase in the financial flows and international trade, which in turn has resulted in the free movement of people, products and services across the globe. The predominant aim of globalization is thus to put businesses in a more significant competitive position with reduced cost of operations to acquire a large variety of customers, goods, and services.

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Nonetheless, recently there has been an emotive debate in the field of world economy concerning the significant impacts of globalization on the developing countries particularly on the issue of marginalization. As a result of globalization, many of the economies within the developing world have been marginalized within the global economy due to various distinct factors, which has indeed hampered their efforts to engage in the global markets gainfully. In essence, the term marginalization is effectively applied to describe a situation where some of the world economies are experiencing a decline in their participation in the significant undertakings that characterize globalization (Sharma, 2013). As such, they are pushed to the margins of these activities and denied the opportunity to enjoy the many benefits that come along with the increased aspect of trade of globalization. Therefore, the central argument of the present paper is to offer a critical overview of the ways globalization has created even more marginalization in the developing world, which is indeed contrary to its purpose. Over the past few years, globalization led to the present third world while the modern day economic globalization steadily continues with this marginalization of the developing economies (Dercon, 2017). However, the main difference between the two periods is the transparency of the global disparities and inequalities in today's age of information technology as compared to much earlier when technology was less developed.

The primary purpose of globalization is to enhance the development of new and more investment opportunities through the diversification of resources and creation of additional markets that substantially increases the number of goods and services within various businesses. Therefore, successful globalization is meant to assist the participants in eradicating or reducing poverty that hinders economic development (Murshed, 2013). Despite this, the current globalization has immensely marginalized a considerable percentage of the low-income developing world. While it is apparent that the developed and some average-income developing countries are performing excellently out of their exposure to international trade, the benefits of globalization are most widespread in the developed world. This can accurately be demonstrated through the current flow of the foreign direct investments (FDI), where the developed economies account for approximately 50 percent of the total FDI flows. The low income developing countries, on the other hand, constitutes or contributes only 19.7 percent of the entire merchandise exports across the world, which makes up about 21.6 percent of the FDI inflows (Murshed, 2013). Therefore, this is sufficient evidence portraying how the developing world has dramatically been marginalized in the modern era of globalization.

The many continuing research concerning globalization as well as the significant challenges that hinder the successful incorporation of the most vulnerable economies has revealed marginalization as the primary problem facing the developing countries. In particular, with the increasing number of the emerging economies, and the developing nations, the benefits that have come along with the globalization of investments, finance and businesses over the past few years have left far much behind the developing world, and thus widening the gap between the richest and the poorest (Nshimbi, 2015). In essence, one of the main ways in which globalization has brought about the marginalization of the developing economies is via the specific present economic rules by the World Trade Organization (WTO) specifically the ones that permit anti-dumping actions. As a consequence, this has created one of the major hindrances towards fruitful export promotion by the developing economies, which has, in turn, lowered the number of exports leading to costly lawsuits for the developing nations (Naseer, 2018). Dumping typically refers to the act of interfering with the competing domestic sector of the importing economies. However, this system is deficiency of transparency and is hugely biased towards the less developing countries in two primary ways (Nshimbi, 2015). One is that a more prosperous nation regularly defines the reference comparison price while the second one involves the act of cumulating market shares across a large number of small exporters. However, to overcome this problem, it would be much more comfortable and significant to use appropriate safeguard measures because these offers short-term relief from trade-related challenges. In doing so, this method would result in a double dividend primarily because it takes into consideration both the customers' interests in the more productive nation and the interest of the exporters in the developing economies.

The developing world represents about 12 percent of the global population although they are of little importance for those traders with a higher aspiration of working or exploiting the opportunities of the global economy. Today, the developing economies only account for 0.3 to 0.4 percent of the world trade which is a drop from 0.6 percent in the past decade. The only hope of their economic development is portrayed through the increased rates of growth in the Growth Domestic Product as well as in the FDI flows (Nshimbi, 2015). All these are clear indications of the developing world marginalization with the currently increased globalization. Many reasons have been identified as significant contributors towards the marginalization of the less developed countries, which also contributes to their difficulties in participating in global trade opportunities or accepting any investment offer (United Nations Press Release, 2013). Some of these reasons can be classified as external factors such as the trade rules set by WTO that are always a disadvantage to the developing countries such as the anti-dumping and safeguard regulations that more often meant to hinder competition from the Labour intensive products.

Another significant example of an external factor is the lower and declining prices of commodities and the domination of the world trade by several companies of the products that the developing countries mostly export such as oil. The industrial nations often determine the global commodity prices and thus a disadvantage to the developing economies (Nshimbi, 2015). For instance, a decrease in the prices of commodities in the global markets negatively impacts the export incomes earned by most developing countries primarily because a significant number of the traders in these countries enormously depends on the profits made from the exports if the primary products. Worse is that these products have to face competition from similar commodities that are significantly subsidized within the U.S., Japan and EU economies both domestically and in the international markets. Internal problems, as well as physical issues, have also contributed considerably to the developing world marginalization in spite of the ongoing economic globalization. Such factors include the nature of social, political and economic like political instability, corruption, high poverty levels, and over-dependence on just a few products for foreign exchange earning that consequently makes is complicated for these economies to take advantage of the trading opportunities in the global market. Physical challenges may include adverse climatic and geographic conditions as well as the size of the nation in terms of the market and population.

Notwithstanding its complex nature as well as the steady pace at which globalization is progressing, the developing world which includes countries such as Africa, Latin America, and Southeast Asia, still encounters challenges that apparently makes the countries' economy to lag much further behind making it hard for them to keep pace with the advanced industrialized states with high performing economies (Rugumamu, 2017). For instance, the decrease in total incomes and economic performance in the developing economies contrasts with the growing revenues and production of the many industrial nations such as China and U.S. Besides, not only have the incomes or rather the profits have reduced, but also other indicators of development as well as the well-being including the stagnating literacy rates and HIV/AIDS pandemic have deteriorated (Naseer, 2018). Therefore, the poor economic performance, the income reduction and the challenges facing some of the developing countries suitably reflect on the general augmentation of marginalization in some nations and societies.

Economic globalization according to many of the modern economists is meant to play a prominent role in ensuring that the gap between developed and developing nations in the present times is minimal, but apparently, this is to the contrary. To effectively illustrate this, the United Nations Development Program (UNDP) closely follows up and reproduces the figures indicating the income differences between the more industrialized and developing nations (Rugumamu, 2017). For instance, with the contemporary round of globalization, the value has increased with a high magnitude of 72:1, providing the most significant conclusive evidence of marginalization in the developing world (Murshed, 2013). Social, economic disparities that arise among the economies taking part in a free market system due to the competitive market dynamics are thus a significant indicator of the concept of marginalization facing the developing world in the wake globalization. Furthermore, viewing economic globalization as the effective incorporation of national economies into global economy via the capital flows, technology, trade and direct foreign investments one can profoundly understand how the significant activities that happen within the multilateral regimes influenced by the WTO have hugely marginalized the poorest countries along with their populations in the modern international economy.

Additionally, unequal competiti...