Monday, January 31, 2011

Globalization Part 2: The road to prosperity (for some)

I took a walk in the park with my family yesterday. There is a nice paved bicycle trail that runs by a farm land. The paving is so nice and smooth that you could rollerblade on it. Here is my story...

In Australia we have the luxury of such a lovely paved road just for bicycling as a hobby, while many in the poorer countries would be happy to have just a simple cement rendered road for their everyday use. Yes, I recall that my hometown in Malaysia had to wait for years and submit countless appeals just to get that realized. The difference is that Australia places a lot of emphasis on social welfare and has the means to do so. Like all the countries in the West, industrialization brought about a big jump in prosperity to these countries. Along with it came social improvement programs, which we now continue to see and enjoy.

Fast forward to the 1970's. Globalization started to roll. Factories and jobs moved over to the countries that could offer low cost labour. These countries, however, do not share the same social welfare aspiration of the West. Therefore their labour costs will always be lower than in the West. They are not going to see money splurged on beautiful parks (they destroy the parks to build factories), or lovely paved bicycle roads (are you mad?!), or aged care for the old (let the weak take care of the weak).

Globalization has indeed created the road to prosperity for some. It comes at a social cost and an environmental cost. The winners: jobs for the jobless in the newly industrialized countries. The losers: working life is never the same for many in the West.

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