Is Free Economic Interchange Beneficial?
When using the term globalization it is refers to the ongoing global trend toward the freer flow of trade and investment across borders and the resulting integration of the international economy. Because it expands economic freedom and spurs competition, globalization raises the productivity and living standards of people in countries that open themselves to the global marketplace. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders. A broader aspect of the definition includes cultural, political and environmental dimensions of globalization.
We must consider these four aspects of globalization. Trade, the developing of countries as a whole has increased their share of world trade?from 19 percent in 1971 to 29 percent in 1999. For instance, the newly industrialized economies (NIEs) of Asia have done well, while Africa as a whole has fared poorly. The composition of what countries export is also important. The strongest rise by far has been in the export of manufactured goods. The share of primary commodities in world exports?such as food and raw materials?that are often produced by the poorest countries, has declined.
Capital Movements, increased private capital flows to developing countries during much of the 1990s. It also shows that (a) the increase followed a particularly "dry" period in the 1980s; (b) net official flows of "aid" or development assistance have fallen significantly since the early 1980s; and (c) the composition of private flows has changed dramatically. Direct foreign investment has become the most important category. Both portfolio investment and bank credit rose bu ...