Is Globalisation a Good Thing?

Globalisation is probably the most powerful trend of our time. Almost every single rich company in the world today has taken part in the process. Some countries such as America have more than one multinational company. This is why America is so rich, multinational companies can earn more money in a year than a country does. For example General Motors, an American company earns more than 165 billion dollars per year. This is more than Turkey and Denmark who both roughly earn 145 billion dollars per year. Globalisation is happening all the time, the more we the public spend, the bigger multinational companies will get.

The term globalisation means when rich powerful companies expand their business and take their trade to other parts of the globe. Companies will set up factories and give people in towns and villages jobs. Globalisation has an impact on everybody in the world. The effects of globalisation differ, depending on your circumstances in life and where you live in the world. If you live in a rich country then globalisation affects you in a bad way. Because rich companies are manufacturing their products in countries where people will work for less, jobs can become scarce. If you are in a poorer country and a multinational company moves in then life could be made easier. Job opportunities will be available and wages will probably be more than what you earn at your current job. However this is not always the case. Up until recently some multinational companies have been exploiting the public and their workers. Some companies have had to pay out millions of pounds in legal fees and compensation. Accidents have occurred in multinational company owned factories; in fact the biggest human disaster ever occurred in such a factory. Special watch groups have been set up to monitor these multinational companies to make sure that nothing unacceptable happens.

An example of a multinational company is Phillip Morris. Phillip Morris produces cigarettes, alcohol, non-alcoholic drinks and food products. The company is based in New York and employs 137,000 people. The reported sales of 1999 were 78.5 billion dollars. Phillip Morris brands include:

Benson & Hedges
Callard & Bowser
Cote D'or
Cracker Barrel
Dairylea
Foster's
Marlboro
Miller Lite
Seven Seas

There are 183 brands in total. All of these brands are big name brands and are mostly popular with the public. Most of the Phillip Morris brands are cigarettes. The fact that Phillip Morris brands all of these products increases the amount of complaints received to the company. Phillip Morris has been under criticism and has had to payout a lot of money. The company has been under scrutiny for tobacco five times, three times for corporal influence, two legal disputes and unfair trade. The most the company has ever had to payout is 73.96 billion dollars in July 2000. The cigarette industry altogether paid out I45 billion dollars. A judge decided that the nation's five largest cigarette makers and industry groups had produced defective and deadly products for decades and had concealed their knowledge of its harmfulness. In May of 2001 Philip Morris and two other companies agreed to pay 710 million dollars to smokers no matter how their appeals processes turned out. Phillip Morris has also been involved in fair trade matters concerning their coffee beans and how much the farmer earns from the profit. The company does not have a policy on this and the coffee packaging displays no organic or shade grown sign (meaning that coffee beans aren't grown with pesticides or fertiliser). The company is under fire from the public~ Phillip Morris is profiting from cigarettes, which can cause illnesses and exploiting workers of the company.
Phillip Morris has been praised for some charitable deeds, such as donating 10 million dollars to the victims of the terrorist attacks on September 11th. One of the brands, Kraft Foods sent two food processing experts out to Mongolia to help Monsuu. Monsuu is a private dairy company to learn the world standards of dairy production and processing. The program was set up by UNISTAR, an operation run by UN volunteers. There may be some good in Phillip Morris, but I think that the company is more interested in making money than people's rights and people's health.

A place that has been affected by globalisation is Bhopal in India. A multinational company named Union Carbide, an American company, set up a chemical plant there and wanted to produce a certain chemical called methyl isocyanate. Union Carbide produced this gas in Bhopal because it is illegal to produce it in America because of the damage it can cause. The chemical plant was in the heart of Bhopal, in the middle of the city. This would certainly have not been allowed in America because of the dangers if ever an accident occurred. Because a multinational company moved into Bhopal people started to come into the city to find work. As a result Bhopal grew in size. On December the 3rd 1984, gas leaked from a tank of methyl iscocyanate as well as other gases hydrogen cyanide and mono methyl amine. This led to the fleeing of local residents and neighbouring communities. The gases burn the tissues of your eyes and lungs. The gases can do damage to every single system in your body. This is exactly why these gases are not allowed to be produced in America. There were approximately 500,000 people living in or around Bhopal at the time, unofficial figures stated that 8,000 people died in the immediate aftermath of the disaster. Recently the figures have been updated and state that 16,000 deaths have been caused. Union Carbide released a report on the accident and claimed that approximately 3,800 people had died and that the gases did little or no infection to eyes or lungs. The company blamed the accident on a worker and accused an employee of sabotage. In February 1989, the Supreme Court of India made Union Carbide Corporation and Union Carbide India Limited to payout 470 million dollars to all of the claims stating that they had been affected severely by the gas leak. I think that Union Carbide should never have been allowed to have a chemical plant, where dangerous gases would be produced in the middle of a city. If it's not allowed in America what gives them the right to do it in India? If the plant had been out of the city in a remote part of India, then maybe the whole accident would never have happened.

Another place affected by globalisation is Puerto Rica in South America. People working on Del Monte banana plantations have been complaining of poor working and living conditions. The fields are sprayed with pesticides without any warning to workers; this causes skin infections and impotence. The employees are supplied with a few pesticide spraying suits which protect them, but employees complain that the suits are bulky and old fashioned. Also, the suits are too hot to work in and slow the employees down. Living conditions are quite primitive with houses being only one or two rooms. The sewage systems by the workers houses are open and disease has been known to spread. After the workers first 10 months on the plantation 85% are fired because they can no longer keep up with the demand or have health related problems such are backache, liver and kidney problems and exhaustion. Del Monte are clearly exploiting their workers and making a bigger profit from taking advantage of these people.

Some of the main problems of globalisation are that multinational companies take over their surroundings. The environment can be totally changed, Globalisation doesn't just affect people. Cities in India have been totally transformed by globalisation and look like modern western cities. For example Bangalore in Karnataka looks like a typical western city, it has a resemblance to Florida in America because of globalisation. Small villages have turned into bustling cities and pollution has risen because of the number of people in a city being able to buy cars. The city starts to become less environmentally friendly. The bigger a company gets, the less it remembers all of its labour workers such as factory workers. The standard of human rights can decrease because of this and people may be affected in numerous ways. Workers may be exploited by big companies and given less of a wage than they should be getting. Staff may be treated poorly by inspectors and children may be able to get jobs because of staff not checking documents to prove when a certain person was born. This scenario occurred in Indonesia, girls as young as 14 were getting jobs in factories and working up to 12 hours a day. Wages in poorer countries are less, so the company can make the same product, just as good quality for a fraction of the price it would cost to make them in its own country. Factory work in richer countries is harder to come by because of this. Therefore prices of things such as brand name trainers are over priced because the companies can afford to make them expensive. The company will never be making a loss; it costs a manufacturer like Nike a mere £3:75 to get a shoemaker to make a shoe. The company can then sell off the shoe for as much as £120. In richer countries like America a shoe would cost a lot more to make because of the status of the country and the pay given to workers. Materials may be a lot cheaper in poorer countries as well because they will accept whatever offer they are given. The country cannot afford to refuse an offer from a big company. It's hard to keep track of so many multinational companies going abroad and manufacturing their products. An advantage for multinational companies is that they can manufacture things they are not allowed to manufacture in their own country. Union Carbide is a good example of this. Poorer countries have to accept globalisation or they will remain poor and multinational companies will go elsewhere.

Globalisation can benefit people, it's not all bad. The people who benefit the most from are the multinational companies. If you are the boss of a multinational company then you are making an extraordinary amount of money. Because people in poorer countries will work for less, multinational companies save money on wages. If you had to pay someone in Europe or America £20 a day, someone in a less fortunate country could work for as little as 50 pence a day. You can then sell your products for a higher price than they are actually worth. Which all means at the end of the day you earn more money form your products and save money on wages. Secondly by poorer countries having multinational companies in their cities, the people of that city have a chance to learn new skills and get a well paid job. The more money people have to spend the richer the government becomes, so cities can become cleaner and services such as hospitals may become more advanced. If a country starts to earn more money then life expectancy will increases, if families have enough money to pay for medical bills then people will live longer. According to the World Trade Organisation (WTO) globalisation helps make peace between international countries. By multinational companies doing business in less fortunate countries that country then earns more money and therefore becomes friends with that country. Relations between rival countries may strengthen because of trade. Development of poorer countries can rapidly increase. If you look at places like Bangalore and Indonesia you soon learn that these places have developed in a space of thirty years. Places have become richer a lot quicker because of globalisation. The citizens of these countries have benefited by earning larger amounts of money quickly because of rapid development.

In conclusion, I do not have a lot of positive things to say about globalisation. In my opinion multinational companies do more harm than good. Based on evidence from accidents in Bhopal and exploitation in banana plantations like the ones in Puerto Rica, multinational companies seem to take advantage of every money saving scheme they can think of. Paying low wages to factory workers and setting up offices in poorer countries so it will cost them less is scandalous. Globalisation isn't just a thing that affects poorer countries; it affects everyone living in the world today. If a multinational company like Nike suddenly goes bust hundreds of thousands of people would be out of work. A poor country where Nike goods are manufactured would suffer without a doubt. Poor countries need multinational companies and multinational companies need poor countries to survive. This chain is what keeps poor countries poor. Nike being a big American company brings in a lot of income to the United States. The fact that America has so many multinational companies keeps them rich, by there being poor countries where cheap labour is accepted these companies will always be making a profit. America and other rich countries will never end poverty because of this chain. Globalisation keeps poor countries poor. Multinational companies are rich enough to set up factories in their own countries but wages would be higher and they could not get away with short changing employees. Having explored evidence from web sites such as Responsible Shopper.org I have learnt that multinational companies seem to receive a lot more criticism than they get praise. Some of the stories about these companies are shocking, amounts of money that these companies have had to payout is astonishing. I learnt from this site about Phillip Morris. I find it unbelievable that one company can own so many brands of cigarettes, alcohol, non-alcoholic drinks and food products. Globalization is such a powerful movement that two thirds of the entire world's trade is controlled by 500 companies. However globalization isn't all bad, countries like Indonesia been modernised in the space of thirty years. There are more jobs so people are becoming wealthier. Quality of life in Indonesia is rising; the government now has more money to spend because people can afford to buy more expensive things. Gross Domestic Product (GDP) in Indonesia is 174 billion dollars. Multinational companies are rich enough to manufacture their own products in their own countries but don't because it's cheaper not to. Surely they could spare a few million pounds to build factories in their own countries and pay people in richer countries a fair wage? These companies are earning enough money to rid the world of poverty, yet still pay measly wages to workers in poorer countries. They keep poorer countries poor and that is wrong.

If globalisation had never happened and there were no multinational companies the world would be a much fairer and equal place for everybody. I don't agree with globalisation, but it has made its mark, and is here to stay.

Luke Gregory