Chapter 2 Economic Impact Of Global Is At Ion

In this chapter, you will learn about:

3. Economic Impact of Globalization

1

Positive

Negative

2

Improvement in Standard of Living

Mobility of Talented / Skilled Labour

Positive

Intense competition among Nations

3

Widening Income Gap between Developed & Developing Countries

Brain Drain

Negative

Developing Countries trapped in poverty

Widening Income Gap in Developed Countries

4

Positive 1. Improvement in Standard of Living • Many countries have enjoyed increase in income levels. • As they earned more due to increased foreign investment, the governments make use of the revenue to improve education, health, defence, housing and transportation. • As such, their citizens benefit from a higher standard of living. 5

Positive 1. Improvement in Standard of Living • Furthermore, with free trade, citizens can now buy a large variety of foreign goods besides local ones. • The increase in choice leads to a better quality of life – improvement in standard of living.

6

Positive 1. Increased competition among nations • Globalisation leads to increase competitions between nations as they compete to attract Transnational Corporations (TNCs) to invest in their countries. • Countries that are able to offer financial incentives, excellent transportation and production infrastructure to foreign investors will be more successful in attracting them. • As such, very often, such competition for investments and markets leads to further growth

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Positive 1. Increased competition among nations • Globalisation leads to increase competitions between nations as they compete to attract Transnational Corporations (TNCs) to invest in their countries. • Countries that are able to offer financial incentives, excellent transportation and production infrastructure to foreign investors will be more successful in attracting them. • As such, very often, such competition for investments and markets leads to further growth

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Positive 1. Mobility of Talented /Skilled Labour – Opportunities for Talented workers • With globalisation, people are able to move from one country to another in search of employment. • People who are highly skilled are in high demand. • As such, Globalisation has presented the workforce with the opportunities to find employment with better benefits (e.g. higher pay) in another country. 9

Negative 1. Brain drain • With globalisation, people are able to move from one country to another in search of employment with better benefits (e.g. higher pay) • As such, countries may suffer from brain drain or shortage of talent as many may leave their country of origin on search of better jobs. • However, this meant a shortage of talented manpower for their countries which will affect their competitiveness and hence, economic growth. 10

Negative 1. Developing Countries trapped in poverty • In a globalised world, countries that are able to offer financial incentives, excellent transportation and production infrastructure to foreign investors will be more successful in attracting them. • Many developing countries find it hard to attract foreign investments due to reasons such as poor infrastructure and political instability. • Hence, very often, they will remain poor as their economies would not benefit from foreign investments. 11

Negative 2. Widening Income Gap between Developed & Developing Countries • Refer to Paragraph 1 and 2 on pg. 55 and Paragraph 1 on pg. 56

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Negative 2. Widening Income Gap in Developed Countries • Refer to Paragraph 2 on pg. 56

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Positive •

Improvement in Standard of Living

•

Increased Competition Among Nations

•

Mobility of Talented / Skilled Labour

Negative •

Brain Drain

•

Widening Income Gap between Developed & Developing Countries

•

Widening Income Gap in Developed Countries

•

Developing Countries trapped in poverty 14

Instructions: Answer the Structured Essay Question ONLINE by 1.30pm and click on “Submit” Duration

: 25 minutes

Total Marks: 13

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