Manifestation of Globalization and Economic Development

Manifestation of Globalization and Economic Development

The rise of globalization has had a multivariate effect on a number of significant factors. But one that can be considered to be one of the most significant of these is the power which globalization alone possesses to weaken boundaries of conventional nation states as it drives for elimination of borders through business relationships. In the current day and age, globalization is the driving factor of any country’s economic development and international trade is what spurs that development. International trade is the biggest strength and driving factor behind globalization. Globalization is a process that involves integration of various governments and financial markets into a singular global market where boundaries tend to be of much lesser significance through the powers of international trade. And globalization brings with it several boons which are not limited to just economic and entrepreneurial gains but the beginning of the process is always an aim towards economic gains. And this leads to advanced global cost-saving mechanisms like global assembly lines and global commodity chains, which can ensure that products from an American company can be manufactured in China and be sold in the rest of Asia.

Detroit had once been the heart of the American industry. But by the 1960s, the situation was changing rapidly. Urban policies began to change with a marked difference towards taxation systems in the industrial cities; this brought in itself, the concept of revenue sharing came in to eat away on revenues as cities failed to sustain themselves on self-sustained revenues. And further raising of taxes affected the movement of businesses away from such high tax areas, and the accompanying wave of deindustrialization added to the dwindling population and consequently electoral significance. This resulted in the reduction of urban spending and dismantling of programs. In order to save costs, manufacturers shifted away from places where unions had large presence and moved to non-unionized locations. The aim was to have minimum interference with market forces. The spatial processes indicate a loss of income and population in the urban centres of Detroit which leads to concentration of economic development into the suburbs which go on to be out of reach of the revenues of the city of Detroit.

China had begun its journey towards economic upliftment through opening its doors to globalization in 1978. It led this effort with the establishment of five separate economic zones. These economic zones were proposed to serve as testing grounds for policy measures that were aimed towards the economic growth of China and eventually the results did indicate the direction that it was a remarkable success. Today China stands among the most powerful economies. And international trade has, perhaps the biggest part to play in that, which can be proved through its substantial foreign reserves. But globalization has its drawback, and the great recession of 2008 did put a dent on China’s fortunes, but the fact that it is only partially integrated to the world economy saved the majority of its fortunes and it was not hit as hard as its European or American counterparts. But gradually a wave of development that rides on the backs of migrant labor, finds itself slowing down as the system ages and has to keep up with modern norms of environmental awareness. Given this tilt, the Pearl River Delta has seen lots of losses on its economic front. The spatial patterns for China demonstrate a decrease in concentration within the Pearl River Delta and an increase in concentration within Shenzhen as it looks more likely to carry the wave of development forward given its high-tech approach.

Numerous African nations have been beneficiaries of Structural Adjustment Programs of the last few decades as a result of their weaker economic conditions. Structural Adjustment Programs are essentially loans aimed at spurring the supply and demand chain in a country by providing a substantial fiscal stimulus through the IMF. And further, Structural Adjustment Programs are meant to usher in development through bringing policy reforms to the economy by causing value creation through private enterprises and reducing the reliance on state benefits. But the fact that the extent of deprivation in most of these impoverished African countries is significantly high, the answer and the decision cannot be ever as easy as pushing for privatization and ending support from the state as that would just exacerbate the problem. Ghana displays the result of the effects of such programs on the countries through the spatial patterns that emerge in Ghana. Ghana displays a great income disparity in terms of urban and rural population and as the effects of the redistribution of resources that accompany SAPs, the resources barely reach those who are worst affected.

The three cases studied, that is, of the three separate locations with varying histories but one thing in common. Somewhere these all regions were affected to a degree by global trade and while the positive trends of global trade does show in almost every corner of the world, it has to be acknowledged that China was saved during the recession of 2008 by having an economy with partially open doors, while Ghana does not show a direct benefit from global trade in terms that matter, but case of Detroit shows a story of city losing relevance as result of increasing taxes and unions that were considered too powerful.