Globalisation Boon or Bane

The role of globalisation in alleviating poverty has been subject to intense and recurrent debate while the pro-globalisation (Globalism) movement propound that it has helped many countries such as India and China to reduce poverty[1] , the alter-globalist have denounced globalisation as an unfair development that has increased poverty and widen inequality between the rich and the poor. When we talk about globalisation we mean it is a process that is taking place where national economies, societies are being integrated into a global network of communication and trade. The integration of regional economies in the international economy is gradually being done through the liberalisation of trade, capital flows, migration and the spread of technology. The main drivers of globalisation are shown in the diagram below.

Economic globalisation revolves mainly around the idea of liberalising trade and capital flows, this proposal is inspired from J.Williamson set of ten economic policies recommendations known as the “Washington Consensus”. Free trade refers to the removal of government erected barriers such as tariffs and quotas to facilitate trade which according to the theory of comparative advantage allows both the buyer and seller to make gains. The arguments in favour of trade liberalisation are that it spurs innovation which eventually benefits the consumer. In a situation where firms have to compete with local and foreign competitors innovating and producing at the lowest possible cost is a necessity if the firm wants to retain customers. When the government has protectionist tendencies i.e. close down or restrict access to the market it is clearly done at the expense of consumers who are charged higher price. A clear of example of protectionism in Russia is the increase in tariffs by 15% on car imports which is believed to be a strategy to weaken the demand for import cars and boost up the demand for Russian cars to help the local car industry which makes car of poorer quality hence the customer loose. In addit