Discuss Whether Countries Should Globalise Their Economies Despite the Many Risks of Economic Globalisation.

Discuss whether countries should globalise their economies despite the many risks of economic globalisation.

Economic globalisation entails a greater interconnectedness between countries, allowing countries path towards greater economic development through greater trade, greater labour and capital mobility. Even though of the potential benefits of globalisation for both short term and long term economic growth and increasing competition that leads to better quality products being produced; government must be mindful of the potential cost it may inflict on the country as a result of economic globalisation.

Countries should not globalise their economies as it exposes an economy to various micro and macro-economic problems. Economic globalisation would allow for greater mobility of capital flow between countries. As such, MNCs could leverage on a country’s comparative advantage for their pursuit of profit maximisation by outsourcing their operations in various parts of the world. As such, in the developed economies, where many skilled workers exist; many knowledge-based operations like design and supply chain management were outsourced to countries like Singapore and the United States. As such, these skilled workers are of high demand, and thus their job opportunities and wages increases. On the other hand, older and less-skilled workers in these developed countries faces a suppresses wages and lower job opportunities as more and more operations that that are labour intensive are being relocated to countries like China and India to take advantage of the low labour cost there. As such, the more a country embraces globalisation, the more severe the problem of mismatch between the job requirement and the skills possesses by the older workers. As such, the problem of structural unemployment becomes increasingly severe. Income disparities amongst the rich and the poor widens as such. Given that these are increased threats of structural unemployment and widening...