Who has benefited from the Globalization process, the developed or developing world?

Hasnain Gul
Published in
10 min readApr 6, 2023
Photo by Markus Spiske on Unsplash

Globalization is an age-old phenomenon that can be traced back to the times of European Voyager Vasco da Gama or even before. Nevertheless, the emergence of the free-market economy at the end of the Cold War, followed by a global tech boom, gave this phenomenon a new shape, according to the KOF globalization index. It triggers the debate: Is the globalized world for the welfare of the entire globe? Or is it a Western-led project intended to serve its masters (the developed countries)? Going deeper into the idea, one can find that although integration of economies has helped uplift countries out of poverty. However, the First World goes on to be the winner of this phenomenon. Because, with the rising globalization in the global north, its components—according to the International Monetary Fund (IMF)—the gross domestic product (GDP), the level of industrialization, and human development there continue to be on an upward spiral. On the contrary, the global south bears the severe repercussions of it. As per the Keynesian economic theory, neoliberalism which is at the heart of economic interconnectedness has been responsible for the financial meltdown in weak economies. These areas resultantly bear the brunt of the worst socioeconomic and climatic conditions. Amid such scenarios, western scholars contend that socioeconomically-weak states are less globalized they should go for more of it in their countries. Part true. However, the developing world lacks ground for the erection of a development structure that can comply with the tenants of the globalization mantra. Therefore, as the developed world continues to dictate the political, economic, and societal language of International Society, it stands as a winner of this phenomenon of integration of the world at large.

However, some scholars assert that economic interconnectedness has reduced poverty in the world. They put forth the success stories of emerging economies such as China and India. It is true that with the liberalization of the economy China grew sevenfold. As well India is now the 5th largest economy in the world. But inflation-adjusted per capita income in China and India is not as brighter as in first-world countries. And inflation-adjusted per capita income, according to the Globalization Index 2020, is a vital element viz-a-viz national GDP. Therefore, Chinese and Indian economic expansionism cannot be touted as the success of the globalization phenomenon in the developing world, considering the rest of the underdeveloped world is reeling under the repercussions of it.

As far as elements of globalization are concerned global governance is at the top of the list through which the developed world claims its role as Global Master. With the emergence of the United Nations (UN), International Monetary Fund (IMF), and other corresponding multilateral arrangements, political and economic integration got an impetus. As a result, these institutes became avenues for cooperation between nations. Thus, various issues of inter and, to some extent, the intranational character started coming into the fold of these organizations. For example, issues related to culture, society, and economy — according to article-1 of the United Nations charter — are the centerpiece of the organization’s agenda. Since the Group of Seven, the G7 nations, steer much of the decision-making in these institutes, with veto power in UN Security Council and GDP share-based voting in IMF. Hence, it is indisputable that first-world countries harness global governance.

Political globalization, in contemporary times, is at large the diffusion of liberal democracy across the globe. On the heels of the Second World War, as decolonization became a reality, the nascent nation-states in Asia, Africa, and beyond emerged on map-of-the-world. These newly-born states, just naming a few, Pakistan, India, Israel, and others, inherited democratic governing dispensation. Though fragile in form but democracy started thriving in these states. Furthermore, as democratic ideas commenced making inroads into the Soviet Empire, the world saw liberal democracy attaining its zenith, which resulted in the collapse of the Soviet Union in 1991. Now there was no political system in the world that could challenge liberal democracy. Thus, scholars like Francis Fukuyama could maintain that liberal democracy is an end in itself as far as political ideologies are concerned.

As economies of the world are globalizing, the influence of rich countries on the global market is becoming conspicuous. It is because, in modern times, economic globalization predicates upon Laissez-fair economic model (free market economy) and economic interdependence. Therefore, the industrialized economies with greater control over global supply chains and production have significant leverage on the Global markets and consumers. In this regard, the Russo-Ukraine conflict of 2022 is the best bet to fully comprehend how economic interconnectedness and the influence of powerful economies on the rest of the world reign the global economy. The crisis fundamentally began in Europe. However, it triggered a global upheaval in the food and energy supply chains. This turning of the European crisis into a global one is a glaring example that developed regions control the global market.

In addition, wealth accumulation is one of the pivotal aspects of the economic integration of the globalized world that holds the rich, whether countries or individuals, victorious in the process. The economists contend that only seven countries, the G7 economies, possess more than 30% of global wealth. Scholars like Shashi Tharoor draw the roots of this wealth accumulation from European imperialism. However, in contemporary times, market globalization is one of the largest sources that add to the GDP growth of developed economies. As a result, first-world countries, such as those belonging to the group of seven, are always found among the top-ten economies of the world, with the United States securing first place.

Furthermore, human development, one of the primary components of globalization, is always found on the upward spiral in the developed world. It is because the notion of growth and the globalization process run on three components, GDP growth, industrialization, and human development. These three are inextricably-knotted phenomena that the growth of one sets the stage for the other two. It is a reason that countries like India, China, and Brazil, which despite higher GDP growth, are not considered part of the first world. Moreover, the aforementioned-growth indicators are the benchmark for measuring the level of globalization process attended by a country. For example, Norway and Switzerland, one of the finest paradigms of human development, are among the top three globalized states as per GED publication. Thus, with the ascending levels of globalization phenomena, the developed world is attaining higher levels of human development and vice versa.

Moreover, with the mounting globalization of the world, the culture of the Western world is gaining a universal character. Global food chains such as McDonald`s, KFCs, and ubiquitous brands like Nike and Levi’s are giving rise to universal products, foods, and fashions. Furthermore, film industries such as Hollywood and Netflix, in modern times, are the pertinent ploys that are spreading Western cultural norms. Some scholars assert that the West is wielding soft power across the globe. To a greater extent, it is true. Because, as in the entire project of globalization of the world, the West continues to be the largest beneficiary. Similarly, in the cultural aspects of globalization, the first world takes precedence.

Moreover, the developed world continues to be the champion in the domain of research and development. It is because the global north, being the spring of knowledge, science, technology, and innovation, has capitalized on the project of globalization. Thus, globalization expedites research and development. In turn, the higher levels of research and development in these countries drive the process of globalization. Resultantly, these developed countries have given top-notch research centers to the world as Harvard University, Stanford University, and MIT. Therefore, like every other sector, the developed world stands as the winner of the research and development aspect of globalization.

In addition, the developed world continues to do miracles on the technological front of development. Technology, the driver of globalization, heavily leans on globalization to flourish. Tech products and services demand a broader user base to thrive. Therefore, technology and globalization are interconnected phenomena. In this regard, the first-world countries which are more globalized have a competitive edge on the technological front as compared to the underdeveloped world. The Big Giants, such as Google, Microsoft, Apple, Amazon, etc., best describe the tech might of the developed world. Because these tech initiatives are the brainchild of advanced countries and now reign across the globe. Such technological advancement emerged because of globalization and, in turn, expedites the process of globalization. Thus, it can be asserted, like the economic, cultural, and political aspects of globalization, the first world ace in technological aspect too.

On the contrary, the developing world remains under the brunt of globalization. The neoliberal economic model across the globe is contributing, at large, to the economic miseries of weak economies. Many experts argue that the free market economy, the heart of globalization of markets, is incompatible with underdeveloped societies. In this regard, ‘John Perkins’ in his book “Confessions of an Economic Hitman” has maintained that the neoliberal paradigm of economics entails policies that intend to exploit, subjugate, and doom underdeveloped nations and underprivileged people. The extent and how neoliberalism makes the developing world dependent on the developed economies can be best described through Global Recession in 2008, which though initiated in the United States, hit the developing world in the worst possible manner.

As a result of the free market economy, the world bears the worst implications of globalization in terms of yawning inequalities within and across countries. There are voices looming in the international arena that this phenomenon has reduced poverty in the underdeveloped world. However, far from being the guardian angel of the poor globalization gave rise to a global middle class as China, India, Brazil, and the national middle class, the urbanite bourgeois. In addition to that, there exists a myriad of reports that claim that the largest winners of the globalization project are the top one percent of the global population — the rich. On the contrary, the World Bank report on Globalization: “The Winner and Losers of Globalization 2018” says the income of five percent, the poorest of the world, remained stagnant. In a nutshell, it can be said that globalization has widened the gulf of haves and haves not.

Furthermore, globalization has contributed to the worsening socioeconomic conditions in third-world countries. Such vulnerabilities in these areas of the world, many scholars argue, are part and parcel of economic inequalities. Consequently, economic inequalities that are an offshoot of the neoliberal economic paradigm exacerbate education, public health, and other life amenities in less developed countries (George money boat; the guardian; 2016). Having said that it can be deduced that the project of globalization has increased the socioeconomic woes in the underdeveloped world.

The chronic decline in living standards in poor states has increased mass migration to the developed part of the world. This phenomenon is cropping up due to a dearth of economic opportunity and unfair income levels. That a person working, for example, in an advanced economy can earn sevenfold, in fewer working hours, than a person working in a low-income economy in the Global South. In this regard, the lead economist at the World Bank `Branco Milanovic` rightly said that income variability depends on the place one resides. Such a situation in third-world countries is giving rise to a phenomenon like a brain drain which, in the long run, creates a crisis of human capital in the less developed region of the world.

In the underdeveloped world, globalization, hand in hand with the political and economic crisis, is creating societal issues in the shape of the deterioration of indigenous cultures. With the acceleration of the process of globalization, global products, foods, and fashions are taking center stage worldwide. It leads to the rise of global consumption patterns, which affect the consumption of indigenous items in the long run. The roots of this intrusion of a foreign culture can be traced back to European imperialism, whose guiding principle was exploitation. This exploitation of resources, cultures, people, and places destroyed the indigenous heritage and imposed a culture many scholars call colonial leftover. It shows that rapid globalization is the death knell to the indigenous culture, creating the worst-case scenarios in the underdeveloped world.

As the climate changes, impoverished nations depict the worst climatic scenarios. The experts contend with the idea that climate change is an offshoot of the intense boom of the economies. It is because industrialization is the pivot of globalization. And this is now a settled issue among climate scientists that excessive growth of the industrial process is the monster that led to the phenomenon the world witnesses today as climate change. Industrialization and consumption patterns in the developed world are breeding grounds for the economy and climate change. And since our economy and climate are at war (Naomi Klein; Climate versus capitalism; 2014). Thus, industrialized countries should reorient their economic goals to save the world from the brunt of climate change.

In order to compensate for the worst implication of globalization in underdeveloped regions of the world, shared prosperity is one best strategies that can reduce the plight of the developing world. Conventionally, there has been relief aid in the shape of humanitarian and climate funds by the developed world to underdeveloped regions in Africa, Asia, and Latin America. However, the global masters need to revisit the economic goals and align the trade regime with ground realities in economically weak regions. In the words of Asli Amirguc-Kunt, it will ensure shared prosperity leading to reduce inequalities.

Conclusively, it will be pertinent to say that coming together of the world under a common umbrella of politics and economy has benefited the rich — countries as well the people — of the world at the cost of the poor. Because on the one hand, this interconnectedness of the world has boosted global trade and technology. Then on the other side of the picture, the underdeveloped world portrays a perpetually bleak scenario. The income of individuals and states in the less developed regions continues to remain at a lower ebb. In addition, cultural setbacks, climatic catastrophes, and socioeconomic susceptibilities are dooming frail people and fragile places across the globe. Therefore, economic integration has though reduced destitution in the regions like China and India. However, with growing influence on the political, economic, cultural, and technological fronts, the developed world is the inordinate beneficiary of the phenomenon of globalization.

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Hasnain Gul

An avid reader and independent thinker who finds magic in words