Whereas developing countries may enjoy the benefits of globalization, it is noteworthy that such nations may witness economic challenges as a result of the world becoming a global village. There is a need to put into perspective the benefits and the bad side of globalization to the economic welfare of the people of the developing countries. It is noteworthy that globalization acts as a source of technology for the developing nations.
Notably, developing nations have no option but to exploit the capital and technological opportunities in the world market (Dani 2001 p. 53). Countries can import technologies and use it for their development and as such globalization is a worthy venture. The desire to join the world trade prompts countries to undertake institutional reforms in the financial, administrative and political institutions. Financial institutions in the world put conditions that the developing countries have to meet before gaining the benefits of global trade and integration. Adhering to the conditions enables the countries to implement reforms that favor the economy of the country and thereby a nation can spur development through reforms (Dani 2001 p. 54).
Thus, globalization can indirectly boost the economy of a country through reforms that a nation enacts to conform to the international standards of doing business.Globalization has led to the falling of trade barriers in the developing countries. Such fall prompts international organizations to operate in the developing countries and as a result, create employment. However, in dismantling the barriers, the developing nations should be careful to safeguard their domestic industries. Thus, the policies should always encourage international trade while protecting the local investors from unhealthy competition (Dani 2001 p. 61).However, globalization in trade tends to impoverish the developing countries.
For instance, some policies that the international financial institutions make disadvantage the developing nations. The wealthy nations may put conditions before they make their remittances to the IMF and the World Bank (Chang 2007 p. 22). Notably, the requirements aim at coercing the developing countries to adopt the policies that favor the wealthy nations. As a result, the developing nations pursue wrong policies that favor the wealthy countries while disadvantaging low-income nations. The global trade may undermine the development strategies of the developing nations. For example, local companies may not compete with the multinationals that use the modern technologies (Wolf 2004 p. 175). As a result, the high-income nations may not import the goods from the developing countries thereby leading to the collapse of the firms in the developing countries. Moreover, globalization may lead to environmental degradation (Glenn 2007 p. 56).
The world trade organization encourages low-income countries to implement transport-intensive systems of production (Wolf 2004 p. 188). Such systems threaten the environmental sustainability of the environment. Although the transport sectors in the developing countries boost the economy through the increase in the GDP, it is noteworthy that the developing nations may use the income to clean up the environment in the future.
Energy intensive systems that the WTO promotes may also lead to the emission of harmful gasses that …