Introduction
Globalization affects all states and creates opportunities through better access to global markets, improved cooperation, enabled by trade agreements, the unification of laws, and other practices that target international collaboration. However, when viewing globalization as an increasing dependency between nations, several economic, business and security problems become evident, and their effect on the global community is more dangerous when compared to a non-globalized world.
The United States, in particular, are subjected to several challenges that affect the ability to respond to economic shocks and safety threats that this Committee should review since they will affect the members of the Global North and Global South likewise. This report aims to explore the three major problems that are a result of globalization, and that can have a negative impact on the nations in the Global North – economic dependency, safety, and work conditions for people in developing countries, then justify the choice as opposed to other problems of globalization, and offer solutions.
Top Three Issues of Globalization
Currently, social scientists have not agreed on a single theory that would describe the process of globalization and its future development. It can be viewed either as a development of international communities that leads to an improvement of living standards and economic state of all countries, including the developing nations or as a rapidly increasing interdependence of countries, which can be seen as a threat to the global economy and security (Steger and James 2019). Based on this, the Committee should address the issues that threaten the countries to ensure that possible crises are prevented.
Economic Dependency
Globalization leads to a change in the way states exchange goods or services with each other, altering the competition and work engagement, with foreign trade and investment being the most critical indicators of the process. In accordance with the Ricardian theory of trade and exchange between nations, comparative advantage allows producing some goods at specific states at a lower price, making it more profitable in the context of international trade (Ronald and Weder 2017). Due to this factor and with the development of technology and globalized logistics, many countries became interconnected economically.
While, in general, globalization is perceived as a positive trend that should benefit all nations and societies, one must note that the global community possesses a finite amount of resources. The improved economic and trade connections between countries lead to a faster or uncontrolled depletion of these resources. China’s coal overconsumption after joining the World Trade Organization (WTO) led to problems within the state – mainly connected to pollution and reduced the capacity of this non-renewable energy source (Amiti, Dai, and Feenstra 2017).
As opposed to coal, there are other energy sources that are used by nations such as the United States, that do not pollute the environment, for instance, green energy sourced from sun or hydropower. This is a problem because, as shown by several examples, trade agreements can negatively affect the use of finite resources, as all stated depend on them, and some may overuse them or engage in environmentally dangerous practics that will affect the international community.
Another economic aspect of globalization is the practice of international lending and financial support. One instance of this is the International Monetary Fund (IMF), which was established in 1945, and the main objective of this organization is to coordinate international monetary policies and enable trade balance (Manfred and James 2019). The central premise was to provide states that struggle with obtaining funds for their functioning or different projects with financial support. This aligns with the principles of globalization, in which the global community can aid states that require help for mutual benefit.
However, in opposition to this, such practice results in an increased financial dependency. For some countries, this results in a financial crisis because of overspending and the inability to repay the debt, as was demonstrated by the example of Greece.
Global Security
Globalization alters the balance of power and influence between states, which can be beneficial for some and have an adverse impact on others. One aspect of globalization is the establishment of a unified global community that shares the same values and views of the development (Steger and James 2019). However, it is evident that, currently, different global forces aim to establish control over other states and increase their global influence. One example is Russia, which carries out a “sovereign globalization” agenda, aiming to minimize the impact of different countries on its economic and political life while increasing its power (Gould-Davies, 2016).
This country’s policy has been aiming at establishing more control over the global community, with an emphasis on energy as the primary source of economic impact and military actions. Although Russia’s strategy has not resulted in significant developments, Gould-Davis (2016) cites activities such as they aim to establish more control over Europe’s territory where NATO’s forces are located. As such, this strategy is aimed at increasing one state’s influence while mitigating the impact of combined forces, which is a danger to global safety.
Apart from military security, globalization’s security as a whole is threatened by a different state’s pursuit of independent development strategies. Russia, which was used as an example before, aims to “limit external influence by reducing sovereign debt, circumscribing foreign ownership rights and maximizing the balance of benefits over obligations in global economic governance” (Gould-Davis, 2016, 2).
This creates a barrier for cooperation with other countries and mitigates the ability to coordinate strategies of different states, posing a potential threat. However, Russia is not the sole country aiming to achieve more independence in the globalized world, as Ghemawat (2016) mentions China and its trade war with tariffs on behalf of the United States and subsidizing some industries on China’s behalf. As such, one can argue that these states will not want to cooperate to create a unified security system that would ensure safety for all, both members of the Global South and Global North.
Work Conditions and Human Rights
In a globalized community, businesses are more inclined to hire people in developing nations than in countries similar to the United States or include companies from the developing nations into their supply chain. One the one hand, this enables them to reduce costs and therefore receive more profit, enabling economic prosperity (Steger and James, 2019). Moreover, they allow people in these states to have jobs by creating new opportunities for subsidiaries and manufacturing facilities. However, on the other hand, these jobs lack security, and they managed in a way that overlooks employment standards and human rights accepted in developed countries.
The main idea of globalization is the reduction of inequality, improvement of standards, and overall development. In Meyer’s (2007) review of globalization theory, the author argues that countries view themselves as homogeneous and the ones that possess particular virtues shared by the global community. However, there are many examples of when workers in developing countries are engaged in low-pained work in poor conditions, often dangerous for them (Coates, 2018). As such, the issue of work conditions and work ethics that arises as a result of changes within the distribution of suppliers for international companies must be addressed.
Why These Issues Merit Attention
Globalization results in a variety of problems for the global community, including members of the Global South and Global North. However, this paper only chooses to focus on the described three because they have the most impact on states and their economic activity. Mainly, this is because according to Parjanadze (2009) the globalization theory deals with the following – “money, international communication and trade, intercultural relations, environmental issues, and global security and democracy are socioeconomic, political and cultural aspects,” which are addressed in this paper (77).
In a Harvard Business Review article, Ghemawat and Altman (2019) state that the globalization process is thought to have been disrupted, and does not evolve as was perceived by scholars before. This, perhaps, is connected to the lack of attention that the three problems and overall interdependence and cooperation of states bring.
Economic Dependence
The increase of cooperation between states also affects the global response to crises. There is one notable example that illustrates the idea that globalization leads to a dependence of different countries’ economies because of intensified trade and lending practices. It is the global economic crisis occurring in 2008 and affecting countries across the world, which led to a decline in production and gross domestic product of many states, including European countries and the United States. While, according to Ronald and Weder (2017), more independent economics would be able to sustain their production in similar conditions, if their neighboring states were undergoing a similar crisis. However, this is a question of whether globalization can be stopped or reversed, to enable better national security, which is not the focus of this paper.
Another issue here is that through globalization, communities globally focus on one resource, in the described scenario it is coal, leading to depletion and creating environmental hazards, which could be mitigated if the supply was controlled by one state. Economic dependence is a threat to the state’s stability. The use of finite resources is another economic issue of globalization also connected to the economy and the ability of different countries to cooperate effectively. Arguably, the interdependency made the financial crisis more severe, and all states more susceptible to their impact. OECD’s (n.d.) report suggests that advances in communication and trade all contribute to economic instability, despite the general belief that they have a beneficial effect on trade and international relations.
The majority of the risk is a result of international lending, which became common in recent years. Apart from the financial risks, similar to the mortgage subprime lending crisis, there is also an issue of natural disasters and infrastructure destruction, which is a more common problem and can also lead to a global economy experiencing a crisis (Manfred and James 2019). Some states have already addressed these problems by pursuing independence. For instance, the United Kingdom decided to increase its independence from the European Union, and according to Ghemwat and Altman (2019), “2018 brought new obstacles — from tariff tiffs to blocked acquisitions”. Therefore, the financial and resource dependence of countries creates competition and interdependencies that endanger countries from an economic viewpoint.
Work Conditions
The third issue of relocation manufacturing facilities to developing states to reduce costs is a problem because it endangers people living in developing countries. A notable example is the fast fashion industry, which was subjected to criticism and a need to reevaluate its supply chain in 2013 after several factories were destroyed, killing thousands of workers (Coates et al., 2018. This was a result of negligence and a desire to reduce costs while overlooking basic safety standards. The Global North has a long history of business development and industrial manufacturing that allowed creating regulations and mechanisms that do not allow for such negligence.
A notable example is also connected to China becoming a part of WTO, which was discussed in the previous section. After this, the job market in the United States suffered, experiencing a decrease in employment (Amiti et al., 2017). From a business perspective, Ghwemat (2017) states that “an overreliance on localization would hamper companies’ ability to create value across borders and distance using the rich array of globalization strategies that are still effective.” Thus, while this approach may be beneficial for businesses because it allows them to create more value and increase profit margins, it mitigates the central premises of globalization theory. Mainly, as discussed by Parjanadze (2009), the idea that globalization should improve aspects of life, such as education and living standards across the globe.
However, one can state that these changes due to globalization affect not only the states in the Global South, they also have a negative impact on developed nations. According to Ghwemat, “in the U.S., income inequality has recently risen to levels last seen in the 1920s, and other countries, especially developed ones, have registered similar, if less dramatic, increases.” This occurs despite the fact that international corporations are earning record-breaking profits because they are able to take advantage of developing nation’s poor work conditions and low wages.
Global Security
While the states of the Global South may not view global security as a particularly important issue that arises as part of global development, it affects all countries. It is evident that even in a globalized community where the development of all nations is the main priority, some states aim to exert more power and have more influence. One example is Russia, which aims to pursue its interests by affecting the countries that depend on its energy resources or by leveraging its military power (Gould-Davies, 2016). The sovereign state strategy in a globalized world suggests that Russia’s plans may not align with those of other countries, and thus pose a risk to the global community.
Solutions
The problems of economic dependency, security, and work conditions are severe and can challenge the positive implications of globalization. However, there are ways in which the global community and policymakers specifically can address them. The emphasis should be placed on economic analysis that considers interdependencies, stricter work ethics regulations applied globally, and cooperation in ensuring global security. This will help leverage the main benefits of globalization theory – the improvement of different countries, the creation of unified standards, and cooperation.
In order to overcome economic dependency, more attention should be directed at the new premises of the globalized world. The main issue with economic problems is the interdependence of financial systems and supply chains, which can result in a chain effect of issues if one link is affected. While it is unlikely that this interdependence will be avoided in the future, since it creates a lot of opportunities, the policymakers and businesses must dedicate more attention to assessing the risks of their wor in a new globalized system. Hence, a better analysis that considers the new threats is a must in this globalized community.
This suggesting arises as a result of the possibility that policymakers and analysts are using old models of risk assessment that are not suitable for modern-day globalized communities and thus lead to an error. Additionally, apart from better risk assessment, it is vital to have better control of the financial institutions such as IMF that affect on the global monetary policy.
The improvement of work conditions and ethics of employment, the global community must adopt a unified standard and impose regulations and restrictions for companies working with countries that do not adhere to them. Since globalization implies an improvement of living standards and the actual examples of transferring manufacturing facilities for cost reduction do not appear to align with this model, it is better to impose a regulation that would ensure that companies can only supply products from countries with a proven record of ethical work practices. In this case, ethier manufacturers will have to move their plants to developed nations, or the states will be obliged to change their regulations and examination procedures in order to correspond with the new requirements.
Global security is perhaps the most challenging problem out of the three discussed, although it is also the most important. Cooperation and agreement of states to work on developing security strategies together is the primary strategy in this case. However, one problem that arises is the competition for the influence and power, as well as trade disagreements that can occur, which is evident from the example of Russia and China explained in this paper (Amiti et al. 2017; Gould-Davies, 2016). The main resolution here is to aim towards a compromise, where all states would contribute towards maintaining peace.
Responses from Global North and Global South
It is likely that Global South representatives would react negatively towards the idea that business and manufacturing standards must be changed, or companies must be obliged to hire contractors only from states that protect the workers’ rights. It is because their economies rely significantly on these plants (Coates et al., 2018). Moreover, the lost cost structure of developing country’s economies is beneficial for businesses because it allows for cheaper manufacturing. From a perspective of the Global North, this will be an opportunity to address sustainability and environmental standards, as well as support human rights.
It is likely that this strategy will encourage companies to manufacture goods in the states of the Global North, which is beneficial for the economy. Therefore, work conditions regulations may result in changes in the global supply network and competition. Global North representatives may benefit from policies that aim to improve work conditions of work for people in developing nations. Arguably, for Global South representatives, this approach is not beneficial in the short-term, because they may lose financial opportunities, connected to a low-cost structure.
Next, in regards to economic issues and interdependence, it is likely that the Global North representatives will respond positively to the suggestions because they imply an improvement and risk reduction, which should positively affect their development and economic stability. The Global South representatives should also respond positively since better analysis and risk planning will protect them from future crises. However, it may decrease the number of loans provided to these countries.
Next, global security, in case the states will agree to cooperate, will improve. For the Global North, emphasis on security, although it is essential, can be an issue. The representatives of this region are well-developed nations that may want to have more control over the global community. With this proposal, their influence will be less significant because they will have to rely on cooperation and coordination with others. Global South, however, will benefit, since it will receive better protection from more developed nations. In addition, it is possible that the changes in security measures will affect Global South as they will be influenced y different state actors.
Conclusion
Overall, this paper described the three major issues that arise as a result of globalization. The main problems that are the focus of this report are the economic dependance that subjects states to an impact of global crises, international security, and work conditions in developing nations. The reasoning for the problems is the examples of finite resource use that lead to depletion and pollution, susceptibility to international financial crises, lack of alignment between globalization’s strive to reduce inequality and work ethics and practice, and threats to global security from states such as Russia. This paper offers several resolutions to these issues.
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