On one hand, neo-liberals view this as largely a good thing. They say that nearly all countries have a comparative advantage in one way or another within the global economy. There will be groups who will be worse off, but on the whole, the benefits are greater than in the past. On the other hand, neo-Marxist scholars view the neo-liberal optimism with deep suspicion. Global capitalism, they believe, will only create and reinforce inequalities within and between countries (WEB: Held, McGrew).
Verma and Elman (2007) understand that not all governments and companies desire strict labor standards as they can be hindrances to competitiveness. If the labor standards are too extensive, strict, and expensive, buying companies will go somewhere else and the industry in that country will decline. Nonetheless, Verma and Elman (2007) argued that labor standards are beneficial to all because they can boost standards of living and national economic growth (p. 57). To support the design of effective labor standards, they examined the pros and cons of hard and soft models where hard models are legislation-based and soft counterparts are largely voluntary and pressure-based. Findings showed that consensus is vital to the creation of legitimate labor standards (Verma & Elman, 2007).
In order to produce more the member countries should have identified the existing production capabilities of the region and matched them with each member nation’s demand pattern to determine the magnitude of future trade potential. Similarly, for effective resource mobilization the countries would need to resolve the regional disputes and aid each other to achieve self-sufficiency. Having failed to engage in a deeper study of aspects that could be beneficial for the members, the volume of intra-regional trade increased only marginally which did not meet the purpose of
Globalisation as a concept is beneficial to countries, however, the present form of capitalist globalisation has adversely affected the developing countries and is detrimental to the interests of the poor nations. The reduced costs of transportation and communication, revolution in technology and growth of multinational corporations have played an enormous role in globalising the world. The present form of globalisation today is driven by neoliberalism policies. Neoliberalism is a body of economic theory and a policy stance. Neoliberalism is based on the premise that government cannot create economic growth or provide social welfare; instead, it is
Globalization is benefitting even those who really do not appreciate it. The benefits of globalization far outweigh the disadvantages. Those nations that embrace this new trend will experience higher economic growth rates. References Bridges, G 2002, "Grounding Globalization: The Prospects and Perils of Linking Economic Processes of Globalization to Environmental Outcomes". Economic Geography 78 (3): 361–386 Hurst E 2008,Social Inequality: Forms, Causes, and consequences, 6th ed., pp.41.
Companies in this case often prioritize cost leadership over the product innovation and development; they offer cheaper product version and compromising valuable features and functionality in the proces. However, there is no reason to think that those consumers do not value the state of art technology but on the contrary. Studies by Boston Consulting Group found that emerging markets consumers gain more utility from state of the art features where as consumers in developed markets focus on whether features solve their problems if the features are ground breaking or not is not important (relatively
Therefore, free trade is more beneficial to developed countries rather than the developing countries. Industries still in its earlier stages are called infant industries and need some time to develop and therefore need protection. However, in most cases it is the developed countries that make it difficult for these industries to emerge as developing countries are hit with tariffs protection from developed countries. - Labor
However there are disadvantages which are clearly visible, for example some researchers declare that they observe a high increase of inequality between the rich and the poor. These changes mainly occur between countries, because the economy of an developing country grows slower whereby their population grows rapidly (Borghesi & Vercelli, 2003, p. 81-82 ). Another reason for a disadvantage is that companies of economically advanced countries capitalize of the low wages and no pollution regulations of developing countries to establish factories. (Hamdi, 2013, p. 143) 3.2 Health Systems According to article 25 of the Universal Declaration of Human Rights (1948), every human has the right for healthcare, along with food, clothing and housing.
Import Substitution Import Substitution means to reduce dependency on foreign production and encourage local production to boost local consumption. The import substitution approach substitutes externally produced goods and services, especially basic necessities such as energy, food, and water, with locally produced ones. By doing so, local communities can put their (hard-earned) money to work within their boundaries. History In 1950s and 1960s it was used as a strategy to promote economic development in developing countries. This initial effort failed because of large inefficiencies in production facilities because of which the local market was unable to compete with the global market.
It is vitally significant to consider, especially for developing countries, before deciding to weather embrace this policy or not. First argument, which, by few economists, are called “Infant industry”, it ,essentially says that in developing countries industries are also still developing, which means that most likely they would not have comparative advantage against more developed country’s industry. Also, it mentions that by having some protection and investment it is possible to develop that particular industry to a point were in time this industry would become advanced sufficiently to be able compete and even have comparative advantage. ( The other issue for trade liberalisation-free trade is that it often benefits developed countries more than developing economies. There is strong reasons to allow some tariff protectionism if developing economies are seeking to diversify out of low income growth agricultural industries.)