Assignment on Globalization and its impact on developing countries

Globalisation can be seen as one of the most important force impacting on the economy.It refers to the increasing unification of the world's economic order through reduction of such barriers to international trade as tariffs, export fees, and import quotas. According to Brittan (1998:2) globalisation is viewed “as a whirlwind of relentless and disruptive change which leaves governments helpless and leaves a trail of economic, social cultural and environmental problems in its wake.”

Globalisation is a term used as buzzword without showing the implication of globalisation. Walker en Fox (1999:2) states that the global integration of the financial markets can be seen as an example globalisation. Walker en Fox argues than the process of financial globalisation is the most important part of the process of globalisation. It is possible to gain insight into the general process of globalisation by studying the process of financial globalisation. It is accepted that the world economy has become more integrated due to the process of globalisation (Neuland en Hough, 1999:1). Despite the fact that globalisation is not a new phenomenon, the intensity of the process of globalisation has increased in die 1990’s. The increasing intensity in the process of globalisation is evident in the increase in financial transactions in the world markets.
Hak-Min (1999:1) indicated that the threefold increase in private capital transactions between 1980 and 1990 could be ascribed to the process of globalisation in the international financial markets. Some of the issues that will be dealt with in the paper are the definition of globalization, the impact of globalisation on unemployment, the distribution of income and the sovereignty of developing countries. Before the impact of globalisation can be discussed it is also crucial to give a brief overview on the current situation of economic development in Africa. The impact of globalisation on economic policy in developing economies will also be covered. The paper will conclude with a few remarks on the impact of globalisation on the NEPAD initiative.

The process of globalisation is a reality. The increasingly integrated global economy provides and unprecedented opportunity for growth and higher living standards throughout the world, if the risk associated with the process of globalisation (IMF, 2000:1). It is important for Africa’s development and growth that policy makers in Africa understand the process of globalisation and knows how to deal with the impact of globalisation.
Globalisation is a term that has become very popular and used in many different contexts in the literature.
In most of the definition of globalisation that is found in the literature the process of globalisation is seen as the breakdown of borders between countries, governments, the economy and communities. In the financial markets it is also the blurring of borders between different markets.

According to the Oxford English Dictionary, the word "globalization" was first employed in a publication entitled Towards New Education in 1930, to denote a holistic view of human experience in education.
The United Nations ESCWA says globalization "is a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour... although considerable barriers remain to the flow of labor.
Tom G. Palmer of the Cato Institute defines globalization as "the diminution or elimination of state-enforced restrictions on exchanges across borders and the increasingly integrated and complex global system of production and exchange that has emerged as a result."[11]
Thomas L. Friedman has examined the impact of the "flattening" of the world, and argues that globalized trade, outsourcing, supply-chaining, and political forces have changed the world permanently, for both better and worse. He also argues that the pace of globalization is quickening and will continue to have a growing impact on business organization and practice.[12]
O’ Brien (1992:5) also links the definition of globalisation to geographical borders. O’Brien distinguishes between national, international, offshore and global. National transactions take place between businesses in the same country.
International activities are activities that take place between different countries. It is inter-national. International also means trade that does not take place in a national country. Multinational describes activities that take place in more than one country.
Global combines elements of international and multinational as a more advanced stage of integration between countries. A truly global activity does not know any internal borders. It also gives limited recognition because of the fact that the country is irrelevant when it comes to global activities.
Finally, Takis Fotopoulos argues that globalization is the result of systemic trends manifesting the market economy's grow-or-die dynamic, following the rapid expansion of transnational corporations. Because these trends have not been offset effectively by counter-tendencies that could have emanated from trade-union action and other forms of political activity, the outcome has been globalization. This is a multi-faceted and irreversible phenomenon within the system of the market economy and it is expressed as: economic globalization, namely, the opening and deregulation of commodity, capital and labour markets which led to the present form of neoliberal globalization; political globalization, i.e., the emergence of a transnational elite and the phasing out of the all powerful nation-state of the statist period; cultural globalization, i.e., the worldwide homogenisation of culture; ideological globalization; technological globalization; social globalization.
Background of globalization: The historical origins of globalization are the subject of on-going debate. Though several scholars situate the origins of globalization in the modern era, others regard it as a phenomenon with a long history An early form of globalized economics and culture, known as archaic globalization, existed during the Hellenistic Age, when commercialized urban centers were focused around the axis of Greek culture over a wide range that stretched from India to Spain, with such cities as Alexandria, Athens, and Antioch at its center. Others have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire, and the Han Dynasty. The increasing articulation of commercial links between these powers inspired the development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome.[16] With 300 Greek ships a year sailing between the Greco-Roman world and India, the annual trade may have reached 300,000 tons.