My career plan

Offshore production

The world’s consumption of fashion is huge. The European Union imported textiles (clothing and carpets) to the value of €83.7 billion in 2010. Prices have fallen, too, with hand-finished shirts costing less than five euros. To make clothes at these low prices, companies have to keep costs down. They use offshore production to do this. Large companies make their products in developing countries where workers are paid much less than in developed countries.

A point that should be considered in that case is that developing countries encourage developed countries to invest in them to provide jobs. Supporters of overseas production point out that increased investment has positive effects in the long term. Nobel prize-winning economist Paul Krugman points out that the growth in manufacturing has an impact on the rest of the economy, because it reduces the number of people needing to work in agriculture and increases competition for labour. This leads to higher wages, which lead to other improvements, such as the ability to send children to school. On the other hand, the disadvantage of this foreign investment is the fact that it can have a negative impact on the economy of developed countries, because people lose their jobs when production is outsourced to other countries.

It seems that if multinationals are going to benefit from low production costs by using overseas suppliers, they should do more to improve the social situation-for example, by building schools for the children in those communities. It is also clear that multinationals should invest in communities in the developed countries where they sell their products. Furthermore, given multinationals do benefit from lower costs of production in developing countries and their workers, they need to feel obliged to protect the workers in overseas manufacturing plants.

Over the past few decades, more and more countries have opened up the markets, increasingly transforming the world economy into one free-flowing global market. The question is:is economic globalization good for all?

Those who advocated globalization claim that economies in developing countries will benefit from new opportunities for small and home-based businesses. For example, small farmers in Brazil who produce nuts that would originally have sold only in local open-air markets can now promote their goods worldwide by the Internet. According to the World Bank, one of its chief supporters, economic globalization has helped reduce poverty in a large number of developing countries. Home to some three billion people, these twenty- four countries have seen incomes increase at an average rate of five percent compared to two percent in developed countries.

Critics take a different view, believing that economic globalization is actually widening the gap between the rich and poor. A study carried out by the U.N.-sponsored World Commission on the Social Dimension of Globalization shows that only a few developing countries have actually profited from integration into the world economy and that the poor, the uneducated, unskilled workers, and native peoples have been left behind. Moreover, they maintain that globalization may eventually threaten emerging businesses. For example, Indian craftsmen who currently seem to benefit from globalization because they are able to export their products may soon face fierce competition that could put them out of business. When large-scale manufacturers start to produce the same goods, or when superstores like Wal-Mart move in, these small businesses will not be able to keep up and will be crowded out.

One thing is certain about globalization--- there is no turning back. Advances in technology combined with more open policies have already created an interconnected world. The challenge now is finding a way to create a kind of globalization that works for the benefit of all.