Globalization's Effects on Third-World Countries

by Kristyn Hammond; Updated September 26, 2017
Globalization seeks to improve the world economically.

Globalization is the attempt to unify the world economically, through a combination of deregulated foreign trade, reductions in trade tariffs and the removal of export fees. Globalization seeks to utilize foreign markets effectively for trade as well as provide new development opportunities for production employment in foreign countries. The effects of globalization come into question when the reality fails to meet these beneficial goals.

Foreign Aid

Inherent in the idea of globalization, foreign aid seeks to eliminate the natural economic differences between nations. As a part of globalization, foreign aid is responsible for providing positive force that helps third-world countries improve the living conditions of their populace. Globalization requires thriving markets, filled with people who have money to purchase foreign products and establish a thriving market. Since the 1980s, overall foreign aid had diminished sharply for third-world countries, providing no market force to improve third-world markets and demonstrating how the idea of globalization fails to translate to third-world countries.

Migration

Globalization offers improved employment opportunities for people in many countries around the world. However, the largest percentage of these new employment opportunities occur in already developed nations. As a result, people who live in third-world countries have to migrate in order to move into these new opportunities. This migration from third-world countries into developed countries strains local economies in third-world countries and shifts able, working people to already healthier economies -- and away from third-world markets where their expertise would be useful.

Economic Gap

The process of globalization, when filtered through companies with specific economic intentions, fails to translate into real economic improvements to third-world countries. Instead, financial support is diverted to developed nations, who are more likely to repay debts and support the existing credit system. For instance, institutes such as the International Monetary Fund and the World Bank have shown a preference for developed countries, lending more money to these areas because money lent to third-world countries is not being paid back quickly enough. The effect is a wider gap between the economic stability of third-world countries and their developed neighbors.

Improved Standard of Living

One of the primary goals of globalization is the worldwide improvement of living conditions. The theory of globalization says that when more people have the economic power to purchase, they purchase and the total economic gain is felt through all businesses who sell to these people. As a result, globalization has led to improvements in the living conditions of people in some third-world countries and helped raise awareness throughout the world about the poor living conditions that still exist in some areas.

About the Author

Kristyn Hammond has been teaching freshman college composition at the university level since 2010. She has experience teaching developmental writing, freshman composition, and freshman composition and research. She currently resides in Central Texas where she works for a small university in the Texas A&M system of schools.

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