www.portfoliocreditcontrol.com
ww
w
lio
occrreed
ed
diitc
itco
on
nt
n
o
THE
CREDIT CONTROL
RECRUITMENT
SPECIALISTS
TRADE TALK
GLOBALISATION –
A GREATER GOOD?
Does globalisation harm developing countries? Lesley Batchelor OBE believes openness
to international markets spurs innovation and investment.
We know Credit Control and we also understand
what makes a good Credit Controller and the
T
correct skills to succeed in this industry.
HERE has been much stated about
the pros and cons of globalisation.
Critics include groups such as
environmentalists, anti-poverty
campaigners and surprisingly, trade unionists.
They claim that globalisation helps the
richest countries to continue to dominate
world trade at the expense of developing
countries. The role of Least Economically
Developed Countries (LEDC) in the world
market is mostly to provide the north and west
with cheap labour and raw materials.
Proponents of globalisation point to the
number of people globally who have benefited
from it. According to the World Bank,
between 1981 and 2010 we witnessed the
single greatest decrease in material human
deprivation in history. At a time when the
population of the developing world increased
by almost 60 percent, the number of those in
extreme poverty (subsisting on less than $1.25
per day) has dropped from around 50 percent
to around 20 percent.
There are no guarantees that the wealth
from inward investment will be used to benefit
a local community. Profits are invariably sent
back to the More Economically Developed
Countries (MEDC) where the Transnational
Companies (TNCs) are based. Economies
of scale that TNCs can use often drive local
companies out of business, however the
transitory nature of a TNC is that if it becomes
cheaper to manufacture elsewhere it will close
the operation with the resultant job losses.
Likewise, the TNC home country may lose
out in the job market to a LEDC thus creating
an imbalance in both trade and social mobility.
If you are planning to recruit on a temporary
or permanent basis please get in touch with the
Credit Control recruitment specialists on
0207 650 3199
OR CON TACT US AT
[email protected]
We look forward to hearing from you.
Removing barriers
Globalisation has been happening for
centuries, however it has accelerated
over the last 50 years mainly due to the
rate of innovation in communication and
transportation technologies. Movement
of goods, people and services has never
been easier and that in turn is bringing more
questions about the need to trade and how
28
www. portfoliocreditcontrol.com
November 2016 www.c icm.c om
The recognised standard
The recognised standard
to govern its growth. Freedom to trade is the
cornerstone on which organisations like the
World Trade Organisation (WTO) is founded,
promoting free trade between 164 countries
who are all committed to removing barriers
between them.
The biggest companies are no longer
national but multi-national corporations with
subsidiaries in many countries, becoming
TNCs. Although globalisation is probably
helping to create more wealth in developing
countries – it is not helping to close the gap
between the world’s poorest countries and the
world’s richest. Unsurprisingly, the majority of
TNCs are based in the US and UK.
Factors attracting TNCs to a country
include cheap raw materials and labour
supply, good transport links and infrastructure
and access to markets where the goods are
sold. These factors can be seen in many
emerging markets and are often linked to the
rising middle classes in these markets. With
hundreds of millions of people estimated
to join the middle classes in Africa, South
America, China and India, the opportunities
are very tempting for British and American
companies.
challenges such as climate change, promoting
economic integration is one of our three
strategic priorities.
Surely economic integration can be a
powerful force promoting efficient markets
and reform. We have seen that globalisation
increases competition in product markets,
it widens the range of financing sources
available for investment, it allows countries
to opt into institutional arrangements of a
higher standard and it imposes strict discipline
on governance, legal, regulatory and other
institutions.
Openness to international markets,
globalisation if you will, also spurs investment
and innovation within businesses and
economies as a whole. Economic integration,
and through it globalisation, empowers
entrepreneurs and consumers alike. They also
create new incentives and opportunities for
everybody involved in a modern economy.
So let’s support integration through
cross-border financial flows and investment,
trade finance, infrastructure, improved skills
and standards in SMEs, policy dialogue and
partnerships with institutional investors. This
may not be the best time to change the plan.
Economic Integration
Given the sheer number of people that have
been lifted out of absolute poverty and
especially now, when our own economy is
beginning to feel so fragile and vulnerable, can
we afford to start worrying about the impacts
of globalisation at this stage?
Are we not just part of a moving system
of civilisation that sees cultures, empires
and regimes ebb and fall? Of course, if that
was simply the case this would all be quite
straight forward, however the next stage of
globalisation begins skewing market forces
that can take their toll as internationalisation
steps in.
So ‘drawbridge up versus drawbridge
down’, as The Economist recently wrote.
The fact is, along with boosting our country’s
economic resilience and addressing global
w w w .c i c m. c o m N o ve m be r 2 0 1 6
29