Globalization

...

As previously stated, Latin America has a lot of natural resources it needs to take advantage of. The problem is that when a country is already very poor, it does not have to ability to do so. For example, let us say that a country has fertile land for crops. If the people cannot afford the tools necessary to grow, this land just goes to waste. Without the ability to buy fertilizer, seeds, pesticides, how could the people overcome their circumstances and do better?

Although expanding to open markets gives countries the ability to reach out and distribute their goods foreign consumers, it could also have a negative impact on Latin America. By opening up the borders for trading, globalization also allows for incoming trade. Countries who have the means to mass-produce goods for cheaper can move in and sell them for cheaper. While doing this, foreign countries would completely kill Latin America’s local industries. This then results in people losing their jobs and just widening the gap between the poor and the wealthy as the poor get poorer and the wealthy get wealthier.

Anti-globalists argue that globalization promotes economic growth for worldwide corporations without doing anything to benefit the people. They say that along with this economic growth, comes with more economic instability and financial woes. According to the Center for the Study of American Business, “US companies’ direct investment abroad grew by more than 50 percent, from $613 billion in 1994 to over $980 billion in 1998. This coincided with five consecutive years of double-digit increases in corporate profits, pushing the before-tax corporate profit rate to 8.5 percent.” This means that over the span of 4 years, US corporations had increased tremendously due to globalization. Meanwhile, the rest of the world was not so fortunate. The CSAB found that Latin America’s economy plunged in the early 1990s, resulting in an economic depression. The annual income growth for Latin America averaged only 0.8 percent over a span of nine years. Statistics like this are the reason many are convinced that globalization only has a positive effect on countries that are already prospering.

The lending practices of world financial institutions also have negative effects on the growing economies of Latin America. Those against globalization insist that their practices are meant to keep developing countries in debt while destroying their local economies and keeping their people in poverty. As state by the CSAB, “In 1998, Latin America maintained the highest percentage of debt to GDP at 32.7 percent.” This is just another example of how difficult it is for developing countries to overcome their economic standing and make it to self-sufficiency.

Another point anti-globalists make is that globalization exploits natural resources and destroys the environments of countries. A previously stated, Latin America has a lot of natural resources. Some may worry that if this market is tapped into, the resources will deplete just as quickly as they have in places around the world. It is as if the country’s income is growing at the expense of the ecosystems. Many say that it is not worth it and Latin America may be better off without it.

After weighing out the pros and cons of economic globalization, it is obvious that it could have both positive and negative impacts on the economic development of countries in Latin America. On one hand, we see that globalization opens them up to new opportunities for success. Opening up other markets, learning form other countries, and using the successes of other countries worldwide could have a great impact on Latin America’s development. On the other, it is clear that these opportunities, although ideally are meant to help Latin America, could also do some damage if not handled correctly.

Globalization presents both opportunities and risks for these developing countries.

It seems as if the way global corporations are set up is not to help the developing countries like the ones found in Latin America prosper. Instead, they are set up to make sure he the global powerhouses keep expanding and get stronger while stepping on the ones who need their help the most. For globalization to work as whole, it must be reformed. This reform would require for it to be made fair to everyone, not just for the countries that are already succeeding. This is the only way that countries will be able to move past their economic crisis and be able to function economically on their own. Globalization must also be made not only to seek maximum profit, but also to preserve the environment and produce as little damage as possible to the ecosystem. Systems of global governance must be improved. The system of globalization must be must not only promote economic success, but also promote foreign assistance and debt relief to help nations that are struggling desperately. Until a system capable of making sure these countries do not fall through the cracks, globalization can not fully help Latin America become economically self sufficient.