South Africa
South Africa is a large country, the history of which has been forged in African migration, resettlement, and pastoral economy followed by European port trade and eventual extensive land appropriation for commercial agriculture, and then mineral exploitation. By the late 1970s, the outlines of what came to be called globalization were beginning to suggest themselves in new forms of communication, capital flows, and business organization, which were by the 1970s, to have profound and revolutionary implications for the entire order of the country.
Globalization has changed South Africa, and caused different effects on the country. On the one hand, it seemed to be a beneficial phenomenon, as it brought free trade, transnational organizations, migration of skilled labor into the country, technological and transportation advances. But on the other hand, it exacerbated the burning issues, which already existed. They include poverty, migration of poor residents of other countries, and air pollution.
The Concept of Globalization
Globalization is not just westernization of the world, but mutual and uneven infiltration, and even heterogenization, which results in the blurred lines between the west and other parts of the globe. The process of globalization leads to the economic integration of formerly sovereign national economies. It is worth emphasizing that the process of growing globalization creates new economic adjustments and political challenges for people. The thing is that the ability of national governments to act independently on economic and social policies is reduced by growing global economic interdependence. Given the reduced ability of national governments to regulate economic, social, environmental, and cultural changes, there is likely to be a growing need for internationally coordinated global political action to deal with any undesirable changes. It should be mentioned that in the short or medium term, it is rather difficult to understand who gains from the process of globalization.
The South African economy prior to 1994 combined the characteristics of a colonial economy. Sanctions imposed a form of attack on the economy. Much of industry was heavily protected and shielded from global competition. The black population was evicted, deprived of its land, and prohibited from high-wage employment and opportunities to acquiring capital. At the end of apartheid, South Africa had a highly damaged economy and faced a deterrent task of destroying internal colonialism while restoring the country in the global economy. Globalization was marked by the spread of liberal democracy and increasing political interdependence through institutions of global governance. During the period of globalization the borders were opened to the flows of money, technology, people, media, internet, the World Wide Web, and media corporations.
Economic transformation has probably most affected the lives of ordinary South Africans. Not only has South Africa become exposed to the forces of global capital and markets, but also the economic policy pursued by the government. Currently, South Africa has witnessed negative effects of globalization, such as poverty, air pollution, and migration.
Positive Consequences of Globalization
Transnational Corporations: A giant leap in the development of globalization was made in the second half of the 20th century. During this period, the new forms of international cooperation, which have brought together different material and spiritual resources, were developed. One of the consequences of globalization is the emergence of transnational corporations. They have changed cultural patterns of every country. Transnational corporations lead to the mutual penetration of cultures in South Africa. One of the main benefits of globalization is greater efficiency in manufacturing, creation of new jobs, and improved material conditions of people. Spread of transnational corporations had positive competition effects, economic effects, employment effects, and technological effects. Listing on American and European exchanges and relocating corporate headquarters did not signal the death knell for South African business and had to be perceived in the context of growing global capacity of African corporate entities. Listing on leading European-American exchanges had provided new sources of capital, and coupled with the increasing internalization of African business.
Andre Jordaan in the article Challenges of Globalization for Development in the Southern Africa (2001) emphasizes that
The process of generating higher levels of economic growth and accelerating the development of the region should be directly linked to the foreign sector of the economy. Knowledge, information and skills from abroad is essential to increase the economic potential of the region, trade, capital and technology inflows.
Technology: Globalization has brought the development of technology in South Africa, and it assisted in reducing the communication costs, increasing the electronic export, and promoting the strategic alliances by transnational corporations. Currently, the country is dependent on the western technology in order to continue the process of development of the modern strategic industries. The most marked dependence exists in the areas of sophisticated electrical equipment, scientific instrumentation, computers, and nuclear energy. The technological manufacturing sector in the country accounts for about 20% of the total economy. For that reason, advances in technology are essential for the overall situation within the country.
Foreign direct investments: Foreign direct investments (FDI) might be perceived as one more positive feature of globalization. Foreign direct investment is the investment, which is paid in order to market or produce a particular product in a foreign country. It is understandable that federal direct investment is beneficial for the country, which receives it. Globalization increases the volume of FDI. The thing is that the great number of large corporations perceives the world as arena for their business activity. For that reason they are undertaking FDI in order to make sure that they have significant presence in various countries of the world. The matter is that it allows stimulating the economic growth of the host country. Federal direct investments are beneficial for South Africa as they presuppose the supply of capital, management resources, technology, supply of financial resources, and technology results in expansion and development of an enterprise, which receives the federal direct investment, improvement of technical level, quality and competitiveness of the enterprise, steady financial position, and earrings expansion. While discussing the employment effects, it is necessary to take into account that improvement of the host country’s enterprise results in a burning need for new skilled employees. Thus, new working places are created, and foreign multinational enterprises start employing citizens of the host country. What concerns the competition effects, it should be mentioned that FDI increases the competition within the market, and stimulates the investment. The practice has shown that increased competition results in better services and lower prices of products.
Outsourcing: This aspect of globalization is beneficial for South Africa as it increases the employment rates. Global outsourcing affirms many of indispensable features of contemporary globalization: it deals with international competitiveness in a way that highlights the growing interrelationship of developed and developing countries. South Africa is loaded with college graduates who speak Western languages and can handle outsourced work (Brown, 2012). This economic process assists South African people in obtaining of decent jobs and getting good salaries, taking into account the average salary in South Africa, and it is mutually advantageous for American and European companies, as it provides them with the qualified staff and provides an opportunity to reduce the costs.
Transportation: globalization promoted urbanization in South Africa. Cities are important at any level of globalization. They are the main engines of growth for the rural hinterland in less globalized countries, such as South Africa. In the past, post-colonial authorities did not devote decent attention to the transportation system. Transportation facilities are essential during the globalization process, as they reinforce position of the country on the global arena. Currently, the transportation system is not perfect, and it is the major hurdle on the way to the increased cross-border trade (McMahon, Barkhuizen, & Schutte, 2014).
Negative Effects of Globalization in South Africa
Poverty: Social problem is an objective contradiction that leads to the violation of social functioning and to the change of well-established way of life. It is worth noting that globalization exacerbated poverty in South Africa. The problem of poverty resulted in the failure of population to actively participate in the economic development.
Globalization stops at the border of poverty, and the latter generates the emergence of social and ethnic conflicts, inhuman spread of hostilities for redistribution of resources, resulting in significant tension in international politics. In other words, globalization leaves poor behind, it causes and deepens poverty. Such situation happened in South Africa. The thing is that globalization demands the nations to adapt, and to do it as quickly as possible.
Globalization increased inequality, as it had uneven effects upon various types of social stratification, including class, country, gender, and race. It resulted in the unequal use of benefits, which favor rich countries and marginalize poor ones. The thing is that South Africa was perceived as a reserve, where rich countries can take cheap labor force and natural resources. Kema Irogbe (1997) emphasizes the fact that the economic policies of the World Bank and the IMF stifle the lives of South African population. IMF and the World Bank closed down clinics, hospitals, and schools, as it was considered that the government spends too much money on the poor. It worsened the situation, and currently the poverty is really severe in South Africa. Greg Nicolson in the article South Africa: Where 12 Million Live in Extreme Poverty (2015) emphasizes that the poverty rate there is 39%, and the great number of people live on less than $1,25 a day.
Migration: South Africa has been a region of international migration. The country exhibits better economic performance, a general fear has been of people moving from the rest of the region to these countries. South Africa already has a significant number of illegal immigrants from Zimbabwe. While signaling of the protocol indicates trust among the governments in the region, the major test will be at the ratification stage when a wider support by other political actors is needed. Migration of residents of other countries to South Africa is not beneficial for the country, as despite its better economic condition, it still suffers from unemployment and poverty, and migration just triggers these social processes.
Air Pollution: Globalization has brought new industries to South Africa, and they have given people jobs and money. They have also damaged the environment and harmed people. Today the government, industries, and environmental groups are working together to stop pollution and preserve the wildlife of the country. Globalization also led to air pollution. Globalization has also increased in the South Africa. The environment becomes more and more contaminated by gaseous, liquid, and solid wastes. Various chemical substances enter soils, air, and water, and cause serious health problems. Air pollution leads to chronic poisoning. It may cause kidney and liver disorders. Radioactive contamination causes various allergies, asthma, and even cancer.
Implications and Globalization
This work depicts how globalization influences South Africa. Despite the fact that it seems to produce positive outcomes for the country, its negative consequences distort the whole situation. Deep analysis of globalization effects reveals a number of challenges, which appear as side-effects.
Despite the fact that globalization brought jobs, money, and free trade into the country, it also brought material expansionism. Rich countries use South Africa as the place with cheap working force and resources. Of course, new plants and factories have created new opportunities, but they also led to new problems, like pollution and fossils application. Moreover, technologies have changed the dimensions of business, and resulted in outsourcing. However, the problem is that the country was not totally ready for it. New technologies required higher level of training and advanced skills. Lower education and absence of practical skills makes South African population less attractive to the multinational corporations, or results in the lowering of their salaries.
In general, globalization turns out to be efficient for rich layers of population, but not for the ordinary citizens. In case of continuing the current way of work, South Africa will turn into the country with severe inequality, poverty, and air pollution. In order to change the course of events, South Africa should start the open market practices and should pay more attention to the environmental aspect; otherwise it will remain the place, where rich countries earn their money. Currently, rich countries use South African natural resources, workforce, and economic opportunities in order to strengthen their own economies. Certain changes should be incorporated in order to achieve success. Europe and the USA will not take care about the consequences of their actions, unless South Africa starts defending its rights. It should start thinking about its economy, its government, and benefits of its people.
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