The impact of globalization

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Table of Contents

Abstract
Introduction
The Kenya horticulture industry
Decline of informal production: the case of artisans in Quito, Ecuador
Case study of textile and garment industry in Vietnam
Conclusion
References

Abstract

Globalization has far reaching implications on several aspects of communities. With the world today being a global village, where everybody can access everywhere and everything, globalization has been seen to have major impacts on community practices and the livelihoods of people. This paper seeks to establish the impacts of globalization on meso level in different parts the world.

Introduction

Today, globalization is characterized by increased integration of the international economy and easy market access by industries even in the rural areas. The integration of the international economy is a result of easy flow of capital, labor, goods, services and technology (Kramer, Urquhart, & Schmitt 2009.

With these changes, globalization has had immense impact on the way that trade practices are handled. Those particularly affected are people and industries in rural areas communities and small economies.

In many occasions, globalization has improved the standard of living of individuals through improving the earning capacity of employees while at the same time improving the general economy of regions through increasing employment opportunities and alleviating poverty as a result of easy access to the international markets. There are also negative impacts of globalization.

To effectively ascertain the reality of the above assertions, it is imperative to provide case studies of places where the impacts of globalization have been felt. Below are examples of places where the positive and negative effects of globalization on the meso level have been witnessed.

The Kenya horticulture industry

Kenya’s horticulture industry has experienced tremendous growth since the 1990’s (Jenkins, 2005). This was because of its access to international market, especially the European market. While there was increased production of the horticultural products can be seen as direct creation of jobs to those involved in the production process, it is in most cases forgotten than strict international trade practices reduce the number of individuals that be allowed to supply to the market.

Most international distributers of such agricultural produce demand for quality products to meet the standards stipulated by European markets. With majority of farmers in Kenya being small scale farmers using basic farming methods, their inability to meet the standards of the make the distributers of Kenyan horticultural products in the European market contract farms using modern farming technologies for their supply. This reduces job opportunities and income earnings for Kenya’s small scale farmers.

Although the view that employment opportunities will be created with access to such international market is valid, the beneficiaries of those opportunities will not be the average Kenyan farmer. Many of them (Kenyan farmers) are only employed as unskilled or semi skilled laborers in contracted farms.

This may be significant in reducing unemployment rates in the country but has no major impact on poverty as many of the citizens still live below poverty line. This case study of effects of globalization in Kenya resonates with Dercon (1995) view that globalization increases employments rates while at the same time it may reduce the already existing jobs. This is especially so when there is use of technology to aid in production process.

Decline of informal production: the case of artisans in Quito, Ecuador

Another similar example of the impacts of globalization on the meso level is the case of the Ecuadorian artisans. According to Middleton (2007), the informal sector in Ecuador employs almost 70% of the total population. Most of these people engage in industries such crafting shoes, watches, handbags and other products.

These wares are then sold in the local markets. Since the liberalization of the market and access to international market, globalization has had different effects to the performance of this industry. According to him, during the 1980s when such products accessed international market for the first time, production by artisans was greatly improved and the artisans had improved earnings.

This did not last long as during the 1990s towards 2000, the increased earning potential from this industry led to the government encouraging investment in this sector. This move had a negative impact on the earning potential of the artisans since their production was reduced and unemployment rates in artisans were very high leading to a big number of artisans living below poverty line.

This was because with globalization, ready demand for the products demanded the use of modern production techniques which rendered the artisans useless. Again, because of globalization, the earning potential of the artisans was reduced as they could only sale to the locals who still saw value in the hand made products such as shoes and watches. However, such products are too expensive for an average citizen compared to machine made, mass produced products which were cheaper.

Although Ecuador’s main exports are oil and bananas, the increase in the oil prices in the international market has no direct effect on the average earnings of the artisans. However, with increased earnings of other citizens due to increase in oil prices, this effect eventually trickles down to affect the production of the artisans as the buying capacity of the citizens are improved leading increased earnings by the artisans.

Case study of textile and garment industry in Vietnam

The textile industry plays a major role in the economy of Vietnam. Since its access to international market in the 1990s, there has been explosion in the textile and garment industry. There was need for increasing productions in the textile industry international demand. The increase in production increased employment opportunities for the citizens as the industries needed many workers to increase the production. This improved the earning potential of the citizens and their eventual quality of life.

With increased exchange income from the textile and garment exports, the government also encouraged investments in the sector leading to small scale investors setting up factories. As these factories set to increase production, they often subjected workers to poor working conditions, long working hours and paid minimum wages.

Some of the workers also complained of medical conditions after working in these factories. International trade practices then dictated that such improve their working conditions to meet international standards. The employees then benefited from high wages and better working conditions as a result of the international market.

Conclusion

From the above case studies, it is evident that the impacts of globalization on the meso level are diverse and in some cases contradictory. Some of the impacts are situation dictated such that one practice in a given location may lead to positive outcomes while in another case it may lead to negative. Therefore impacts of globalization on the meso level cannot be generalized as positive or negative.

References

Dercon, S. (1995). On Market Integration and Liberalization: method and application to Ethiopia. Journal of Development Studies. 32 (1), 112-143

Jenkins, R. (2005). Globalization of production, employment and poverty: Three macro-meso-micro studies. The European Journal of Development Research, 17(4), 601–625

Kramer, D. B., Urquhart, G. & Schmitt, K. (2009). Globalization and the connection of remote communities: A review of household effects and their biodiversity implications. Ecological Economics, 68(12), 2897-2909

Middleton, A. (2007). Globalization, Free Trade, and the Social Impact of the Decline of Informal Production: The Case of Artisans in Quito, Ecuador. World Development, 35 (11), 1904-1928

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