Globalisation

Globalisation increases competition and makes it easier for nations to trade with each other. Poor countries have seen a rise in employment and national income as companies relocate to save money on taxes and wage costs.
There is evidence that inequalities in global income and poverty are decreasing and that globalisation has contributed to this turnabout. China, for example, is now open to world trade and this has resulted in a general growth in income. The gap between rich and poor is reducing in Asia and Latin America. The countries that are getting poorer are those which are not open to world trade, particularly many African nations.
It’s not uncommon for a corporation to move production to an Asian or South or Central American country in order to reduce wage bills and pay less tax. As a result, Western governments are finding it harder to maintain an effective welfare system.

Globalisation results in the exploitation of millions of workers in countries that do not give workers rights to organise.
Workers in poor countries may have to work 12 hours a day, seven days a week with few protections for health and safety. In some countries, globalisation leads to the exploitation of children, and forced labour.

Another point is that goods produced in the West cannot compete with those made in poorer countries where production costs are far lower. The result has been a call for ‘fair trade’, as opposed to ‘free trade’.

As corporations become increasingly more powerful, they appear to be communicating less with their governments. This gives them a free hand to operate pretty much where and how they like.

Furthermore, as firms relocate in search of lower taxes and a cheaper labour force to increase profitability, I believe that we’ll soon be seeing a significant change in the global economy. Many countries, particularly in South East Asia, now have a highly-skilled labour force and a good infrastructure. I think we’re going to see a flight of capital from the West which may result in serious unemployment problems for developed countries.