Abstract:
Globalization has improved the overall world’s status, but current economic crisis has serious impacts on this process, which should be encountered.
Content:
The process of Globalization connects the countries all around the globe through businesses and different organizational activities. Globalization has made the world small enough to create an easy inter-connection between countries. This process pumps the worldwide growth by enabling national development in an impressive manner and also provides a wide exposure to all countries. Currently, world economic crisis is being a threat to globalization and causing serious impacts on it. Further in this article, we’ll discuss few prominent impacts of economic crisis on globalization and also the ways to encounter this problem.
- Decline in Trade Industry & Foreign Investments:
The studies have shown that economic crisis leads toward decline in trade industry and foreign investments as well. This is because trading only grows if a country is economically strong and able to afford the finances of import. Crisis in finances affects the production of export items as well which also result in decreased trading. On the other hand, surveys prove that foreign investments also fall because every nation is concerned about their profits and gains. This whole scenario affects the process of globalization by disturbing the connection between countries.
- Affected Engines of Globalization:
Globalization takes place through some prominent engines such as multinational companies, open markets, private sector investments and global logistics. These engines basically run the process of globalization by conducting global activities and mutual working. But, economic crisis once again interrupts the activities of all these sectors and stops the rapid growth of globalization. Due to decline in investments, the multinational companies face finance issues and look forward to reliable governmental banking. The private sector gets affected by less property investments, whereas global logistics chains begin weakening due to limited resources.
- Increased National Interests rather than International:
Another impact of economic crisis on globalization is that national interest becomes more preferable than international interest. Countries begin focusing on their national sectors by investing more into them and improving their production. Studies also show that countries begin enforcing the law of buying national products. Governments remove the international products from markets to increase the purchase of their national products in order to improve economical status. The more the national products will be sold, the more advantage nation will secure, but ultimately this will lead to an overall loss. This scenario affects the globalization due to less international approach and more national progress.
- Ways to Encounter the Impacts of Economic Crisis on Globalization:
- The trade sector should be improved globally by introducing rules and regulations on international level for all countries. It will diminish the biased approach and ensure the nations about equal rights and profits, so that trading can be continued in order to improve financial status without any doubts.
- The multinational companies should have a back-up plan for crisis situations. They much satisfy their investors with some serious sureties by introducing an impressive progression plan.
- Government should consider raising the taxes on international products, instead of banning them in economic crisis. This way trade industry will not be affected and national economic situation can also be improved through raised taxes on international products.
Author bio:
The writer of this article is James Cameron, who is an economist and works in the finance department of Government sector, Louisiana. You can take him after at Do my paper for me – Masterpaperwriters.com
