One of the aspects of globalization is trade. It is an important tool for transferring goods and services between countries. The idea behind it is that the less developed counties will be able to export their goods and services to the global market. Capital movement is another aspect, which can become a good source for developing countries. Direct foreign investment has been especially common as a way to supply money to developing economies. Movement of people is the next aspect. It is not as developed yet as capital movement, for example, but it has potential for people to find better job opportunities abroad. On the other hand, it also causes the flight of skilled labor from the countries that most need it. Finally, the spread of knowledge and technology also counts as a globalization aspect. It seems to be the most important one since knowledge is the building stone for everything else. With its help countries are better equipped to find their own solutions for existing problems.
The GDP growth in different regions has been uneven. For instance, Asian newly industrialized countries have been the most successful in GDP growth while African countries still remain on a disturbingly low level with the slight decline in GDP per capita over the years. The starting conditions of the countries were unequal, as indicated in the chart. However, one can see that China with lower GDP per capita to start with displays a more notable growth than Africa that had better starting conditions. This shows how unequal the development is. The IMF argues that even though the GDP might not be growing in all countries, they still benefit from globalization because of increased life expectancy, better health care and education system, and increased social benefits.
As the needs of societies change under the globalization, the nature of the jobs required changes as well. There is a shift to more service-oriented jobs. That is why many workers in developed countries face lower wages or unemployment. There is also a problem of cheap immigrant labor that poses another threat. The IMF proposes to provide vocational training for workers so that they can transition to new kind of jobs more easily. Another thing to do is provide good social safety nets for those people who find themselves out of job. These are some worthwhile suggestions but they are far from being comprehensive. The issue of immigrant labor is not discussed at all. Moreover, the IMF puts emphasis on acquiring new skills for new demands but it doesn’t address the issue that some of the jobs become less and less appreciated while they are still essential for the society. Cleaning job is one example. While the workers may go through the vocational school to upgrade their skills they are still not protected from the low salary because of the job they happen to do. To say more, there are no suggestions from the IMF for the workers of developing countries.
One of the mistaken assumptions that the IMF has is that market liberalization of developing countries will help them catch up with the developed ones more quickly. Stiglitz argues that this process has made developing countries extremely vulnerable and over-dependent on the foreign investments. These money influxes are very dangerous as they can leave at any time. Moreover, there are often strict conditions and rules associated with receiving foreign financial aid. On the contrary, the Asian countries that were more successful in adjusting to globalization adopted a system where the governments regulated the markets and protected national economy. That gave them an opportunity to take what they need from the globalization process without becoming too open to the external economic forces. This misconception by the IMF has happened because the fund took the scheme of the markets that functions in the developed countries and tried to impose it upon the developing economies that are not equipped for this step.