International Business: Costs of Globalization

International Business: Costs of Globalization
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International Business: Costs of Globalization
Business in the modern world is conducted both locally and globally with goods and services being exchanged. Technologies, knowledge and capital are also exchanged in this trade. In particular, technology has aided the commercialization of activities around the world in a manner that people had not foreseen years ago. The geographical boundaries and limitations have been dealt with and enabled people to access world markets and transact both at the local and international levels. These business transactions carried out at an international level have led to massive benefits especially with trade liberalization. However, the process has not been without its own costs. Weak industries in developing countries, environmental degradation, brain drain, tax avoidance, less cultural diversity and general inequality are the costs associated with globalization. The costs have resulted into a need to address all the challenges posed by international trade in a way that enable countries to enjoy the benefits of the trade while minimizing its negative effects.
Despite having many benefits, globalization has its own costs. To begin with, developing economies are adversely affected through free trade. Evidently, trade liberalization only tends to benefit mainly the developed countries and a few of the developing ones due to the fact that a majority of the developing economies have no means of using the free trade to their advantage (Fletcher, 2011, N.p). Considering that this free trade exposes these countries to the global market that is very competitive, it means that they gain so little because they do not have much to sell as compared to developed countries. Furthermore, their levels and quality of production has not been enhanced as some of the technologies used in the production processes have not been acquired by a majority of these developing countries. With such weak industries that cannot compete on an international level, the benefits of free trade to developing countries are close to none.
Globalization also has its environmental costs. As Pettinger (2017, N.p) notes the use of non-renewable resources has been on the rise with globalization. The consequences of this can be seen in global warming that is currently an issue of concern in the world, and massive pollution. Concerning energy sources, non-renewable ones such as gasoline have been strained beyond measure due to increased transportation that is necessary in the transfer of products from one area to another or from country to country. The increasing global warming can be attributed to the continued ozone layer depletion, which is as a result of emission of harmful gasses from aircrafts used in transportation. Moreover, the increased industrialization due to globalization has led to a lot of industrial effluents being dumped in water bodies the result of which is massive loss of aquatic life and contamination of these waters. Nigeria is a good example of a case where globalization has not considered the effects on the environment. As Isola and Mesagan (2014, p4) note, oil flaring is a common practice in Nigeria. This is done without considering the effects ...