Globalization is seemed to be another good way to trade with other countries. Actually, a large number of people would say it is good because they can get a high quality goods and services in a lower price and some people would disagree because it made they lose their job, but when think about it deeply it has more than just its advantage and disadvantage. So what is Globalization It is a theory of the world trade or an idea of import and export goods and services. It also tells which country has a good economy and can produce high quality of production, and which country has not. In this essay will talk about relation between rich countries such as the United Kingdom, New Zealand, Australia, and the United States of America and poor countries such as Laos, Nigeria, Botswana, and Haiti when they trade with each other. Also included some information about what globalization helpful in each country, a useful and risk in both rich country and poor country when rich country outsourcing their production, what happen when the value of currency changed, and what government should do to prevent any risk that issue from outsourcing in each country.
In the modern society, every one has more convenient to get goods and services. Our luxury and convenient lives are derived from international trade, import and export such as machinery, computer, vehicle, clothes, shoes and etc. International trade also including visit other country in each reason and education. International trade means the transaction between country and country. International trade becomes familiar in every country because in each country have difference resource and require difference goods and services. For example, one of poor country has ability to produce some clothes and vehicle, but the quality is not as good as rich country because in poor countries does not have high technology and professional worker to do it, so poor countries have to import some goods and services from rich country for their people. That??™s why international trade happens.
International trade will develop an economy of each country because it will give an opportunity for a new business to make an investment; the number of employment will increase, it will bring new high technology to make competitive advantage, people have more knowledge of their work either develop their own machinery and system or get to know the new machinery. When poor country develop their goods and services to be equal to other country for their export, it give each country have high quality of goods and services in cheaper price because they have good raw materials which rich country does not have and they can employ low wage for their worker. When poor countries export their goods and services, it makes people in other countries know the country and sometime they come over for holiday. International trade also makes a standard of living of each country higher then usually.
Generally, rich countries will have higher technology and their worker have a higher skill than poor countries. When these two countries trade with each other, it will develop an economy of both countries. It will give an opportunity for a new business; every country will have different raw materials and sometime it is good to run a business in poor countries because it is easy to find raw material and also have lower capital input than other countries. When they produce the goods from there it will make the price of the goods lower than those produced from other countries. The company from rich country will come to poor country and run the business from there, which is a good way to enlarge their business and get more benefits. That company will bring in advanced technology like machinery and high-skilled worker. They also employ some people from that country because if the company brings every worker from oversea they have to pay a large amount of money informed of wages for their high-skilled worker, but if they employ some people in the country, they can pay low wage for those people (Williamson, 1998). When more people are employed; the economy will be better. The company also has to teach new workers how to use the machinery and some other stuff that they do not know. It will make people from poor country have more highly skilled and provide more knowledge than usually.
On the other hand, people in rich countries will be loss their job because the company can employ cheaper worker in poor countries and it might lower living standards (Weisbrot, 1999). When the company in rich country make an investment in poor country, they use their money to make an investment, in this time they loss their money and poor country also loss their own materials too.
Currency or Exchange Rate is the value of money in one country change into another value of money in another country. The exchange rate is very important for international trade or import and export goods and services of both countries that trade with each other. For example, one United States Dollar is equal ten thousand, three hundred and five Laos Kips. The company in United States wants some goods in Laos and it cost two thousand, six hundred and ten Laos, Kips. Therefore, the company in United States pays only two United States, Dollar for buys these goods. By the time gone, the value of Laos??™s money change to one United States Dollar is equal two thousand, six hundred and ten Laos Kips, now if the company in United States wants to order another goods and it cost two thousand, six hundred and ten Laos Kips. In this time, the company in United States has to pay only one United States Dollar because the value of Laos??™s money went down by fifty percent. When the value of money changed, it will harmful some countries it depends on which country you trading with. If rich country trading with poor country and the value of money in poor country goes down, it will harm the poor country because poor country have to pay more to get import goods and services and it will make poor country get less import goods and services, so people in poor country will not get high quality goods and services. However, the value of money in poor country goes up. It will harmful to rich country because rich country has to pay more to get import goods and services, and sometime rich country has to get raw materials from poor countries to produce goods, so the price in some goods will goes up.
To prevent the harmful that issue in the international trade, the government should do something. I think the government in rich country should provide some job for the people in the country when their loss their job. When people loss their job in will also cause the lower leaving standard problem, if the government provide some work for them it can help this problem.
In poor country also have some problem issue as well. When the companies in rich country open the business in the poor country, they also sell the goods and services in that country as well. All the people will go there and buy stuff from there because the can get a good quality of goods and services, that mean the money go out from the country. The government should try to persuade people not buying the goods and services from there, and also try to upgrade the company that own by poor country to produce the high quality goods and services as the company from rich country does.
The exchange rate also has problem that issue too. In this case, the government of each country should control the balance of payment in import and export goods and services because if the payment of import more then export or the payment of export more then import, it will make the currency rate change.
As you can see, international trade has both advantage and disadvantage. When rich countries trade with poor countries, the people in poor country will get a high quality goods and services from rich countries because in rich country will have high technology and high skill of worker to produce goods and services. When the rich country outsourcing or make an investment in the poor county. It will make the economy in poor country growth and the price of the goods and services low. The company has to employ some worker in poor country because they can pay the wage less that high skill worker and when the people has job, it will make the leaving standard rise but it can make some people in rich country lose their job. The government should provide some job for them because if they got no money it can cause the leaving standard low. The changes currency rate also another problem that government should rectify, control the balance of payment in import and export is a good way to make a currency fixed otherwise it can make some problem in both rich and poor country.
Weisbrot, M. (1999). ???Globalization: a primer??™. In FCOM 110: Introduction to the Commercial Environment Course Readings (pp.49-59). Wellington: Faculty of Commerce & Administration, VUW.
Williamson, J. (1998). ???Globalization: the concept, causes, and consequences??™. In FCOM 110: Introduction to the Commercial Environment Course Readings (pp.35-37). Wellington: Faculty of Commerce & Administration, VUW.