NEWS | World Trade
T
here has been much stated
about the pros and cons
of globalisation. Critics
include groups such as
environmentalists, anti-
poverty campaigners and, surprisingly,
trade unionists.
They claim that globalisation helps
the richest countries to continue to
dominate world trade at the expense of
developing countries. The role of Least
Economically Developed Countries
(LEDCs) in the world market is mostly to
provide the North and West with cheap
labour and raw materials.
Proponents of globalisation point
to the number of people globally who
have benefited from it. According to the
World Bank, between 1981 and 2010, we
witnessed the single greatest decrease in
material human deprivation in history.
However, there are no guarantees that
the wealth from inward investment will
be used to benefit a local community.
Profits are invariably sent back to the
More Economically Developed Countries
where the Transnational Corporations
(TNCs) are based.
SO WHAT IS GLOBALISATION REALLY
ABOUT AND WHY HAS IT HAPPENED?
Globalisation has been happening for
centuries. However it has sped up over
the last 50 years, mainly due to the rate
of innovation in communication and
transportation technologies. Movement
of goods, people and services has never
been easier, which in turn is bringing
more questions about the need to trade
and how to govern its growth. Freedom
to trade is the cornerstone on which
organisations like the World Trade
Organisation are founded, promoting
free trade between 164 countries who
are all committed to removing barriers
between them.
The biggest companies are no longer
national but multi-national corporations
with subsidiaries in many countries
(TNCs). Although globalisation is creating
more wealth in developing countries, it is
not closing the gap between the world’s
poorest and richest countries, with the
majority of TNCs based in the US and UK.
Factors attracting TNCs to countries
include cheap raw materials and
labour supply, good transport links,
infrastructure and access to markets
where goods are sold. These can be seen
in many emerging markets. R
DIRECTOR OF FINANCE
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