[Reading Assignment 4] What is the relation between economy and globalization?

What is the relation between economy and globalization?

 Globalization has increased the dependence of each country on the mutual economy. With the development of transportation and communication, the world's trade volume has gradually increased, and the world economy has been more and more closely linked through the FTA. In particular, the interdependence of the global economy has increased in the US, which has the largest GDP. An example of this is the 2008 global financial crisis that broke out in the United States. In the U.S., mortgage loan regulations were eased, which led to reckless loans, and as the real estate bubble burst, many financial companies went bankrupt. Many people lost their jobs, and the aftermath affected not only the United States, but also the global economy. At that time, many countries, including Korea, which had high export dependence on the United States, fell into an economic crisis and the global economy was stagnating. Because of this increased interdependence between countries, the economic crisis of one country affects other countries.

  In addition, globalization has created multinational corporations. Companies that felt the limit of demand in the domestic market entered overseas markets, and the development of transportation and communication made this easier. Regardless of the type of product, many products are sold by multinational corporations, and products of various nationalities have appeared in what we wear, sleep, and eat. Apple, Google, Nike, Samsung, and Kellogg are examples. They go abroad in a variety of ways. The green field investment method that directly invests in foreign countries is a method of directly investing production facilities or corporations in the target country. This method is not a general method as it may cause a large loss due to large-scale investment, and it mainly uses the merger and acquisition method of companies in the country. For example, Delivery Hero, a German food delivery service company, created a delivery service company called Yogiyo in Korea, but recently, it is targeting the Korean market by acquiring a domestic food delivery service called Woowahan Brothers.

  Globalization has launched a variety of world economic organizations. Various world trade organizations and economic organizations have been launched in order to increase the amount of trade and to facilitate global economic activities. First, regional economic solidarity emerged, such as the EU, ASEAN, and NAFTA. The EU, as the European Union, aims to promote economic and social development through the realization of a single market and currency in European society and implementation of common diplomatic and security policies. ASEAN was established to revitalize the regional economy through joint and integrated cooperation in resource development and technological and scientific development of Southeast Asian countries. NAFTA is the North American Free Trade Agreement, which was promoted by the United States, Canada, and Mexico in North America to create a free trade zone. Organizations have emerged to establish an order for economic cooperation and international trade transactions not only between regions but also other countries. Representatively, there are OECD and WTO. The OECD is an intergovernmental policy research cooperation organization that promotes the joint development and growth of the world economy and the welfare of mankind through mutual policy coordination and cooperation among member countries. The WTO is an international organization aimed at global economic development through trade liberalization and plays a role in mediating trade disputes between countries. In this way, globalization has increased the movement of capital and trade, leading to the launch of various world economic institutions.

  There are concerns that economic globalization will accelerate polarization. From the past to the present, countries with an economic advantage appear to exploit the material and human resources of underdeveloped and developing countries. In the past, they were exploited in the form of colonies. When Korea was colonized by Japan, many resources were deprived. They were conscripted on Hashima Island or looted many natural resources such as gold mines, coal and wood in Korea. In modern times, this exploitation is being done through a more subtle way. Seeing that the United States interfered with the Middle East war, on the surface, it was for world peace, but some criticized that the United States had participated in the war in the Middle East without justification to control the price of oil and to provide a stable supply. In addition, in recent years, China is trying to expand China's influence on the Eurasian continent through a plan called'One Belt One Road', but in this process, there is criticism from the world society that it owes excessive debt to other developing countries by building infrastructure facilities. In the past, developed countries have been exploiting the weaker countries in a direct way, but now they are exploiting developing countries behind the scenes using a superficial cause.

  What I learned newly through lectures and writings is that globalization has already progressed from a long time ago. When it comes to globalization, it is believed that the development of transportation and communication occurred after the 20th century, but the article says that globalization occurred from the colonial era of the 16th century. In particular, it is said that globalization has emerged around European countries and corporate companies that have appeared there. Many European countries have colonized many countries around the world and gained enormous wealth through trade with them. However, the value judgment on this must be made separately from the point of globalization.

  What I further learned from my lectures and articles is that in economic globalization, companies and countries do not move in the same direction. A corporate culture or organizational system is created according to the regional, social, and cultural characteristics of each country. In the case of Korea, a corporate system was created from the military culture, a remnant of the culture of the Japanese colonial period, and the vertical communication system between the members was strong. Therefore, there was a strong trend of not being able to object to the opinions of their bosses, but recently, in order to create a horizontal organizational system, they are making efforts such as saying respect to each other or not calling out ranks.

  Economic globalization in the future is an irreversible trend, but there is a need to internationally protect the industries of underdeveloped and developing countries. As mentioned above, this should be prevented because developed countries may exploit only the labor force and resources of developing countries and underdeveloped countries. To this end, international organizations should institutionalize the provision of time for third world countries to sufficiently protect and develop their own industries. Otherwise, economic globalization will be a flow for only a few rich and powerful countries.

  In addition, as we enter the corona era, appropriate measures are needed to face the post corona in the future. Due to the corona this year, a different social and economic pattern emerged. Fear of exchanges emerged among the people, affecting the industry as a whole, including the hitting the tourism industry. In the future, as the world faces the post-corona era, it is necessary to think about appropriate countermeasures and how globalization should proceed and prepare countermeasures.