‘Nics Have Been and Continue
‘Newly industrialised countries have been and continue to be, the driving force of globalisation.
’ To what extent do you agree with this statement? Globalisation is expressed in transcontinental flows and networks of activity, interaction and power between countries, irrespective of geographic distance. It establishes and maintains economic, political and socio-cultural relations. This interaction helps economies through growth in international trade, investment and capital flows.Some factors that have acted as the driving force of globalisation include technological innovation as it had made transport and communication around the world easier, capitalism and trade have also played an important role in encouraging globalisation. Trade between countries in the developed world and the developing world has specifically been the biggest driving force of globalisation. A Newly industrialised country is a country whose level of economic development is somewhere between the development of the developing and developed countries.This is because these countries have moved away from an agricultural based economy into a more industrialised, urban economy.
‘Nics Have Been and Continue Essay Example
There are several factors that make Newly Industrialised countries the driving force of globalisation. Firstly, most newly industrialised countries have a large population; this makes the countries more attractive for investment as these countries have an abundance of cheap labour. Therefore, these countries seem more attractive to investors as they can make more profits when the cost of labour is cheap.However, this also attracts TNC’s to the country. For instance, Nike contracts out production to South Korean and Taiwanese countries which operate in their home country as well as low wage countries like Philippines and Vietnam. Nike makes a chocking 100% profit by buying these shoes from contractors in South Korea and Vietnam for $18 and selling it to retailers for ? 72. Another factor that makes Newly Industrialised countries the driving force of globalisation is economic integration.
South Korea is a Newly Industrialised country, back in the 1980s international trade tariffs were reduced and open trade was encouraged in South Korea. These measures were introduced as there were extremely high taxes in South Korea, which widened disparity made many people suffer. South Korea’s economic success was a result of a competitive education system and a highly skilled and motivated workforce. In the 1970s and 1980s, South Korea became the leading producer of ships, one of the ajor ship building countries being Hyundai but this industry began to decline in the mid-1980s as a result of the oil glut and world-wide recession. However, South Korea is once again the world’s most dominant ship builder with a 50. 6% share in the global shipping market as of 2008. Construction has also been an important in the South Korean export industry since 1960s and remains to be a critical source of foreign currency.
By 1981, overseas projects, mostly in the Middle-East accounted for 60% of the work undertaken by South Korean construction companies.South Korea’s Samsung C&T Corporation also built many remarkable buildings such as the Petronas Towers and Burj Khalifa. During the 1960s, South Korea was extremely dependent on the U. S. A to supply its armed forced but after President Nixon’s policy of Vietnamization was removed in the 1970s, South Korea began to manufacture many of its own weapons. In 2010, South Korea’s defence exports were $1. 5 billion.
South Korea’s remarkable technological advancement and industrialization has allowed it to produce extremely powerful military equipment.Therefore, South Korea wasn’t always a driving force of globalisation until the 1960s when the government set up an export-led growth economy. South Korea’s openness to trade allowed firms to take advantage of economies of scale, which was encouraged by export activity and South Korea’s exports have made it the driving force of globalisation. South Korean economies have also flourished by encouraging appropriate manufacturing activities such as ship-building and then diversifying into higher-value-added activities such as Armaments, as labour becomes more skilled and capital more easily available.Another factor which makes Newly Industrialised countries a driving force of globalisation is low taxes in trade. Hong Kong is another Newly-Industrialised country that has been a driving force of globalisation. The Hong Kong dollar is the eighth most traded currency in the world.
Following the Second World War, Hong Kong industrialised rapidly as a manufacturing centre driven by exports and then underwent a rapid transition to a service based economy in the 1960s. It is now the world’s leading centre for I. T, business consultation and professional services.Hong Kong is also the world’s largest re-export centre, most of Hong Kong’s exports are re-exports mainly made in Mainland China. Hong Kong now serves as a point of entry for investment flowing into Mainland China. Hong Kong’s largest export markets are Mainland China, the U. S.
A and Japan. Even though Hong Kong has few resources, it is attractive to firms and businesses because it offers businessmen a stable government, low taxes and minimum official interference. Hong Kong’s free money market has also eased payment problems for many buyers.Its wide range of commuting facilities as well as a duty-free port has encourages many foreign companies to maintain their sales offices there. Hong Kong’s assets include skilled labour and investable funds brought by an influx of refugee labour and capital from China. Hong Kong was also extremely flexible and easily adapted to international demand. For instance, new products were introduced and old ones adapted to consumer needs in different countries.
Another factor which makes Newly Industrialised countries the driving force of globalisation is cheap factors of production.Hong Kong’s largest industry in the textile industry but Hong Kong can compete in the textile market effectively because its production costs are low due to an absence of exchange controls and raw materials can be bought in the cheapest market. Even though competition has kept wage rates low, the living cost has also been kept low by the same forces. Therefore, Hong Kong too plays an important role in the world market and could be considered a driving force of globalisation but perhaps Hong Kong is only part of the world market as a result of its stable government; support for free enterprise and low taxes.Another factor which makes Newly Industrialised countries the driving force of globalisation is investment in technology and the use of technology, which acts as a vector for communication. For instance, Singapore has one of the highest capita per income and it has made several achievements such as best airport, least corruption and least bureaucratic country. Singaporeans have a Swiss cost of living but not a Swiss standard of living.
Unlike Hong Kong, Singapore wasn’t developed through laissez faire, free market policies that encouraged entrepreneurs but by vigorous central planning.Its post-independence government embarked on a vigorous programme to promote economic growth by welcoming high-tech Multi-National Companies, making it a big exporter of disc drives, enforced high savings in its citizens, a higher standard of education, tourism and efficient transport links between Singapore and the rest of the world. This ‘command economy’ system certainly worked and convinced the government to introduce three new strategies, which involved promoting entrepreneurialism, persuading private and state companies to nvest overseas to overcome the limitations of a small domestic market and to promote ‘computerization’. Even though it appears that Newly Industrialised countries are the drivers of globalisation, there are several factors that might disagree with this. For instance, much of the Newly Industrialised countries’ success is thanks to its demographic gift of a large population. Also, entrepreneurs did well during the early years of industrialisation but much of their success was based on exploiting natural resources or cosy deals with their own government.These entrepreneurs even exploited foreign technology and the cheap local labour to make exports that they could send to eager foreign markets.
However, as domestic markets were being opened to foreign competition, local labour hasn’t remained as cheap. India too is now facing rising labour costs. India’s outsourcing industry contributed to much of its economic book, a key factor which attracted Western companies were the low cost factor. However costs are rising as wages and the price of real estate goes up, and there is a headline inflation of 9% throughout the country.The growth in India’s IT industry also means that many people are switching jobs in order to get higher salaries. Therefore, local labour hasn’t remained as cheap. In order to cope with the changes brought by industrialisation and economic growth, countries are adopting policies which encourage people to innovate and finance technological advances.
The environment is also at a serious risk, as there isn’t much concern for bio-diversity, there is air and noise pollution in these countries, elegant old buildings and green spaces are paved to make way for unremarkable office blocks and apartments to accommodate the growing population.Along with this economic growth, globalisation and development have also brought several social issues along with it. Some of these social issues include disparity, corruption and materialism, drug abuse and crime, the conflict between religion and secularism. Therefore, I don’t think Newly Industrialised countries are the driving force of globalisation. I think that exploitation of less developed countries and industrialisation are the driving force of globalisation.