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Negative impacts of globalization on the viability of traditional industries and domestic labor

Abstract

This paper attempts to analyze the involvement of the state government in guarding the global economic
policy towards the interests and development of the local business of the country itself to see that the
failure of a state government to protect its domestic interests by applying global economic policies
without undertaking efforts to protect existing local businesses, it is the cause of no impact on global
economic policies in reducing poverty due to not maximizing the empowerment of local resources for the
welfare of the people.

Introduction

Economic globalization may not be new, began to develop in the 19th century, but to this day remains a
contradiction to many observers about the role of globalization for the welfare of the people of the world
(Svrtinov, n.d). Many even consider economic globalization to be another form of trade colonization by
superpowers in developing countries in order to dictate commodities that suit their interests. But behind
all the contradictions and facts that exist about the negative impacts of globalization, whether it can not
be controlled and entirely a mistake of economic globalization, whether economic globalization can be
used as a reason for the failure of the state government in the prosperity of its people because global
economic policies disarm the state in making economic policy and independent authority to manage
existing resources for the welfare of its people.

Negative impacts of globalization and empowerment of domestic businesses and labor

When a developing country opens up and plays a role in global economic policy, for example in terms of
opening the door to investment and commerce with the outside world, some of the negative impacts that
must be immediately identified are ("Globalization and Women," n.d):

1. The defeat of traditional domestic-type businesses in terms of capital ownership and development.

If we take an example in the field of agricultural business, generally agriculture activities of developing
countries are carried out traditionally with limited yields and long periods of production, while
meeting the needs for a country's population should be sufficient (Todhunter, 2014). Failure to meet
consumption needs by traditional agriculture encourages the government to issue import policies in
order to meet the existing shortcomings, but problems arise when imported products of the same
type have better quality and faster supply but in cheaper prices than traditional domestic products ,
this causes a blow to the domestic business because it is less competitive and forced price adjustment
with imported goods, which means reducing their income, and if not immediately able to adjust
technology and knowledge in order to offset imported products, domestic business finally stalled
which precisely resulting in total state dependence on imported products.

2. Inadequate domestic workforce empowerment because businesses and high technology-based


industries do not require many low-class workers.

The use of technology in many areas of the industry creates an automated production process, which
no longer requires a large number of skilled workers ("Globalization and Women," n.d). While this is
very contrary to the conditions of many developing countries, where the level of education is still low
so it is more available low-skilled manpower. This causes the industrial investment entering a country
to have no significant impact on employment absorption unless it only absorbs the raw material
resources which overall only benefit the investor country, and in the end there is no increase in the
welfare of the people in developing countries.

How the role of state government can improve the situation

To overcome the situation faced by developing countries in the face of economic globalization is very
important for the state organizers to be able to understand the true condition of the economy of the
country and its own society. It is absolutely necessary to do analysis by the state to find the root cause of
the slow growth of the country's economy before issuing the economic policy that is considered
appropriate to solve the existing problems. The existence of honesty and transparency of state organizers
is also needed to always make decisions oriented towards the welfare of the people as a whole free of
personal interests or groups that pollute economic policies with elements of corruption.

State organizers must also have an awareness that the existing level of education in the community
strongly influences the acceleration of development at a higher level of prosperity. Mastery of knowledge
and technology in all fields is the key to be able to accelerate the necessary growth acceleration. From the
negative impacts of globalization that have been discussed, the state government can make policies such
as:

a. In addition to importing goods / services that are still not fulfilled by domestic traditional
production within planned limits (quota). The state is obliged to improve the educational
infrastructure and improve the accessibility of its people to access higher education as an
institution of knowledge improvement and technological transformation to be immediately
applied to local traditional industries in order to meet the shortcomings and competitiveness with
similar industries in the world.
b. State administrators should be able to subsidize in order to develop traditional domestic
production capabilities to a more advanced stage by providing waivers, providing education for
transfer of technology and knowledge, and providing other forms of protection as needed.
c. With the availability of a higher-skilled workforce, the investment of technology-based industries
that enter a country can contribute to a more maximal labor absorption. In addition, the ability of
productive communities who have higher skills can innovate in achieving prosperity in accordance
with the challenges of conditions and availability of existing resources in the country.

Conclusion

State organizers should not easily make economic policies in the context of globalization without
understanding the true problems that occur in the country. It remains necessary for the role of state
organizers to protect and develop industries that are still traditional. In addition, advances in one
economic field of a country will certainly be an important compensation for other economic weakness
points.

References

Globalization and Women. (n.d). Globalization and The Labor Market. Retrieved from
http://www1.aucegypt.edu/src/globalization/labor_Market.htm

Svrtinov, V. (n.d). Positive and negative effects on financial globalization on developing and emerging
economies. Retrieved from
http://eprints.ugd.edu.mk/8586/15/Positive%20and%20negative%20effects%20of%20financial%20glob
alization%20on%20developing%20and%20emerging%20economies.pdf

Todhunter, C. (2014). Forget the Propaganda from Big Agritech, the Key to Reducing Poverty and Ensuring
Food Security Lies with Small Farmers. Retrieved from https://www.globalresearch.ca/how-global-agri-
business-destroys-farming/5384510

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