363031 Globalization and Sustainable DevelopmentIntroductionGlobalization is the process by which local or regional societies, cultures and economies have been integrated through an all round global communication network and trade. The integration of national economies into international economy through spread of technology, trade, capital flows, foreign direct investment and migration is called economic globalization. The integration of economies makes it more competitive for nations. It increases integration, interdependence and interaction among corporations and people around the world. In the view of global economy and financial markets industrial globalization is the expansion of multinational enterprises, financial globalization which is the emergence of financial markets worldwide and access to external financing; political globalization is the spread of political sphere of interests to outside countries; information globalization is the increase in the flow of information between geographically and remote locations; and cultural globalization is the growth of cross-cultural contacts (Victoria Capital Management 2004).
Sustainable development has several definitions but the one that is widely acceptable is-development that lasts. It refers to the use of resources in meeting the needs of people while preserving the environment to meet the future generation needs.
The satisfaction of these needs involves the satisfaction of the economic needs as well as having a healthy and a clean environment, and favorably in terms of social development. Therefore, sustainable development has three major dimensions: economic, social and environmental. It also has significant spatial and temporal components (Pearce, D and E. B. Barbier, 2000). Globalization is therefore seen widely as the principle vehicle for economic growth and wealth generation as well as providing sustainable development. BodyGlobalization has increased the local employment, foreign investment, integrated the economy, volume of trade by applying market-based instruments.
The emergence of globalization encouraged free trade. World wealth creation today has a high record as investment across the border shores. Low costs of capital and labor have been taken advantage off by free markets and competition, making wealth creation the obvious outcome (Victoria Capital Management, 2004). Globalization has benefited nations in trading goods and services, movement of capital and financial flows. International trade results to resources allocation that is consistent with comparative advantage resulting in specialization and thus leading to productivity.
There is reduction in tariff and non-tariff barriers in order to allow economic growth. The production base has been enhanced by the flowing of capital across the borders. Total world savings was distributed among nations which have higher potential in investment. For developing countries to experience capital flows they took an approach of foreign direct investment. The foreign exchange markets expansion and capital markets is the necessary tool for the international capital transfer (Rangarajan, 2006). Economic integration has a social impact on nations. The interdependence provides a sense of community which builds shared values, moral standards and commitment to taking care of the environment.
The scope of demands people feel should be included in the baseline standards are deepened and broadened by the economic integration. As much as the way won’t be smooth for parallel and political integration process, it will be deepened by the economic ties. Another social effect of economic integration that comes as a result of globalization is the distribution of income both within a country and across nations, and also decreases in poverty.
Trade and investment have grown significantly with globalization with the share of the world’s population experiencing severe poverty has dramatically reduced from 30& in 2001 to 23% in 2006 (World Bank, 2008).