1 INTRODUCTION
Globalisation is the "reduction" of the world and the increased consciousness of the world as a whole. It is a term used to define the changes in societies and the world economy that is a result of dramatically increased cross-border trade, investment, and cultural exchange. As a result people around the world are more connected to each other, information and funds flow between countries quickly than ever than before. Products and services produced in one part of the world are readily available in all other parts of the world. A good example will be the coca cola, a product found even in the remotest parts of the world.
Many countries, including South Africa have embraced every aspect of globalisation. As these aspects of globalisation do bring about rapid economic changes; the country have embraced the concept regardless of whether it works for good or bad.This assignment will outline the advantages and disadvantages that globalisation has had on South Africa and its population.
2 INCREASED BUSINESS OPPORTUNITIES
Countries in the world are dependent on each other for services and goods. But during apartheid there were sanctions against South Africa. It could trade and compete only against itself. Only after the advent of democracy in 1994, did the South African economy opened up to the rest of the world. Only then did the country integrate into world economy bringing closer economic, political, social interaction. This led to the country’s businesses to have access to world markets and consumers to a greater variety of products and services.
South African experience with globalisation created increased competition and opportunities for its businesses, especially in the export industries. These opportunities can be related to technological advancement, transport infrastructure and so on. When new technology is embraced by businesses, they broaden their involvement in domestic and international markets. International Multi National Corporations (MNCs) saw these business opportunities and began investing in the country. As business grew they began expanding by franchising. Profit gains are reinvested in the country and it benefits the economy.
This being a mineral rich country (with minerals such as coal, platinum, diamond and gold), it has transformed itself to an ideal foreign investment destination. Many countries such as Brazil, Russia, India and China (BRIC group) are and/or looking to be South Africa trading partners. Raw materials from South Africa are exported to these countries, and manufactured goods are being imported from these trade partners. Further, South African companies such as Shoprite, MTN Group and Vodacom have expanded and established themselves in Africa making them as one of the most successful businesses of the country. South African businesses are fast becoming the economic powerhouse of the African continent contributing almost half of the African gross national products.
However, not all businesses benefit from globalisation. The fierce competition and increased varied products and services available for consumers affect mostly the local markets. Local businesses, especially smaller ones are forced to continuously improve their products, deliver on time and adjust to changing market conditions. This puts them at a disadvantage as they do not have resources to establish themselves and at the same time compete at in the domestic and global markets.
Another disadvantage is that the profits gained from these business opportunities by the international businesses are not ploughed back in the host country but elsewhere. This can affect the country’s economy in a bad way, resulting in job losses,
3 EMPLOYMENT CREATION
The advantage of globalisation is the increased employment opportunity. Globalisation has opened up numerous opportunities for people looking for jobs. Through the removal of economic barriers and the opening up of borders at both the national and international levels, has enabled jobseekers to move from country of origin to other countries in search of jobs. Moreover, the migration of people which has become easier, has led to improved job opportunities. Companies are moving towards the developing countries to acquire labour force. This obviously caters to employment and income generation to the people in the host country. In addition, the South African companies which are expanding and establishing themselves in Africa continually recruit potential employees from own country. The host country also benefits as most if not all lower levels positions in the company will be filled by the locals.
In South Africa however, there is slow job growth and a large percentage of the population is unemployed. The country is unable to create enough jobs to meet the demand. Government job projections are not being met. This is further exacerbated by sporadic service delivery protests, strikes, especially in the mining industries which influence economic growth and performance, as well as from increased competition of skilled and unskilled immigrants. Subsequently this leads to job seekers fighting for already scarce jobs. Subsequently, some of the country’s citizens resort to xenophobic violence to rid of job competition from immigrants. South Africans claim that immigrants work for meagre wages and they are taking jobs that rightfully belong to them.
In most cases MNCs take advantage of immigrants by paying them low wages as they do not have an option but to accept in order to survive. In other cases immigrants are employed because of the skills they posses. For example, you will find that the government is employing science and mathematics teachers as well as doctors as the country does not have enough. This brings us to the issue of education and training.
4 EDUCATION AND TRAINING
There are links between education and globalisation. International organisations and businesses are constantly looking for better qualified and skilled workers. The direction and objectives that the country’s education system had previously has to change. It has to be replaced with the idea that education is at the service of economy. Hence, the quantity and quality of education and training determines whether and how countries can participate in the processes of globalisation. In order to participate in the globalisation processes, South Africa’s education systems need to keep up with technological advancements and prepare individuals for a dynamic work place. By so doing, produce better qualified, skilled worker for the labour market and thus build a productive society.
There have been numerous changes in educational technologies. Distance learning has grown tremendously and has become a reality because of internet and other social media. This advancement in technologies allows people from different nations participate in the programmes; student contact can be across far distances and intellectuals can share ideas on various global issues. This participation allows integration with different cultures, meeting and learning from various people through the medium of education is all due to globalisation. The huge number of foreign students enrolled in South Africa’s tertiary educational institutions is also a positive indication that the education in South Africa is internationally recognised. Globally English is recognised as the international language of communication in most nations. South Africa’s recognition of English as an official language of communication and medium of instruction in most educational institutions has placed its skilled professionals to compete internationally, interact and learn from other countries.
Education provides the necessary skills required to find employment in the labour market. But education in South Africa is rated low if compared to other developing countries. Not everyone can afford studying at tertiary institutions, even though the government is trying to provide funds to deserving individuals through NASFAS, . The companies’ demands are increasing for educated and skilled workforce in order to compete internationally. Yet, the country’s education system is not producing enough professionals. The few that are produced are being recruited and/or are crossing international borders for exploration of new career opportunities. South Africa is losing a large percentage of its skilled labour (doctors, nurses and engineers) to other developing countries.
As the economy creates demand for skilled labour, government need to pay attention to education and find ways to retain skilled professionals to remain in the country. According to the Minister of Education, Angie Motshekga, ‘Government must see education as priority and critical to any kind of development’. Government needs to give scholarships to deserving young people and/or increase funding (bursaries). Businesses need to offer wages and fringe benefits that can compete with international markets. Hence, stop skilled labour to opt for other countries for what they view as more rewarding.
5 LIVING STANDARD
Globalisation is bringing unprecedented prosperity. One of the benefits of globalisation is the rise in living standards of people in countries around the world. As a member of an international community, South Africa has been affected by all the changes that globalisation brings. Information technologies brought about knowledge where people are better informed about products, prices, choices and accessing global brands. Credit cards and master cards have become the norm for consumers. They can be used globally and users have the convenience of not moving around with lot of money.
South Africa adopted Western culture, while the west did not adopt ours. This influences us to purchase their products, benefiting its businesses and economy to the disadvantage of ours.
There appears to be a rising number of people living in extreme poverty, especially within the African continent. In South Africa for an example, the cost of living is rising and the economic outlook is even gloomier. The gap between the haves and have-nots is widening. Credit is easily accessed and consumers are drowning in debts. It is a known fact that South Africans are not savers. Minister of Finance, Pravin Gordhan, in his Budget Speech of 2014, reiterated that the ‘government is concerned about the level of over-indebtedness of households’. According to the President in his state of the nation address South Africans are living longer. This can maybe attributed to the improvements of the country’s health system. This adds financial burden on government to provide social grants, healthcare, to mention but a few, places a burden on the country to look after its citizens.
6 ECONOMIC INFRASTRUCTURE AND DEVELOPMENT
Globalisation provides opportunities to countries to access markets around the world. Today with various modes of transportation available, one can conveniently deliver the products to a customer located at any part of the world. Besides, other infrastructural facilities like, distribution, supply chain, and logistics have become extremely efficient and fast. This connectivity allows the sharing of international currencies, such as the US dollars. In some developing countries like Angola a consumer does not even have to go into a financial institution to exchange the dollars into a local currency (kwanza) in order to purchase something. The US dollars have become the preferred currency to the detriment of the kwanza.
South Africa for an example is blessed with divergent natural resources such as gold, platinum and coal and is becoming an economic powerhouse by selling locally produced products around the world. Further, economic integration increased the importance of stock markets (the Johannesburg Stock Exchange which is trading worldwide).
As a result of this connectivity to various part of the world, an economic recession in one part of the world affects all, including South Africa. For an example, the 9/11 disaster in the United States made the US dollars to plummet and as a result it negatively affected various economies. Further disadvantage is counterfeit products being brought inside the country. Government has to use funds which were supposed to be used for something else, has now got to combat this issue.
7 GOVERNMENT REGULATION
South Africa favours the perspective that holds that the current path of globalisation must change. By this is meant that too few shares in its benefits and unequally at that and something have to be done to change the situation. The benefits of globalisation can and must be extended to more people. As a country committed to economic and social justice, South Africa is of the opinion that the benefits of globalisation should be expanded and that the means and resources needed to create a better world for all are indeed available.
In the era of unprecedented globalisation, from which the continent of Africa and other countries of the South have generally benefited little. It shows that government has less control over global markets. Hence, as it was mentioned earlier that an economic influence in one part of the world affects other economies as well. Government has to have a regulatory system in place to guide, control and monitor the financial sector, industries and manufacturing trade. This will dissuade businesses from being only profit driven but also act ethically and engage in development issues to better the country.
8 INTERNATIONAL TRADE
International trade has flourished over the years due to the many benefits it has offered to different countries across the world. International trade accounts for a good part of a country’s gross national product (GNP). It is also one of important sources of revenue for a developing country. With the help of modern production techniques and advanced transportation systems and technologies the international trade system is growing and spreading very fast. The rise in the international trade is essential for the growth of globalisation. Restrictions to international trade would limit the nations to the services and goods produced within its territories, and they will lose out on the revenue from the global trade. Nations with strong international trade have become prosperous. This is one of the contributors (global trade) to the reduction of poverty.
South Africa is very open to international trade. South Africa is the economic powerhouse of the African continent contributing almost half of the African GNP. It is rich in mineral resources and is the largest producer and exporter of gold, diamond, coal and platinum. Over half of the largest African companies (MTN, Vodacom, and etcetera) are South African. As a result South Africa has high market potential and competitive domestic economy. International trade enabled South Africa to import things which either cannot be produced within its border or production may cost high, from other countries. Consumers have diversity in choices to buy and consume those goods which cannot be produced in their country. Enables different countries to sell their surplus products to other country and earn foreign exchange
High rate of criminal violence and strikes are factors that contribute negatively to foreign investment.
9 INNOVATION AND TECHNOLOGY
One of the striking manifestations of globalisation is the use of new technologies by businesses to exploit new business opportunities. Globalisation has increased the speed of technology transfer and technological improvement. Business can now communicate efficiently and effectively with their partners, suppliers, customers and better manage their distribution network. Local markets can now sell their goods in distant markets with the same ease and speed as in their home country.
Through advancements in information communication technologies (ICTs) and transport channels, globalization has also been enhanced. Such advancements are continually bringing humanity together in economic, communications and transportation networks. These networks have made it possible for cultural ideas and images to be transferred instantaneously from one part of the world to another through the use of ICTs. Consequently, different cultures from around the world are coming into contact at amazing speeds. There is therefore need to develop cultural understandings through the establishment of a global culture which is capable of rising above the ethnic, racial, economic, political and even religious conditions of the people that come into contact.
6 CONCLUSION
In conclusion, globalisation is a source of both hope and apprehension. Globalization cannot be defined as a single concept. It is a dynamic process that impacts on the social, economic, and political spheres of different societies in unique ways. South Africa through its apartheid policies had been blocked out of the global activities for a while. However, in the wake of 1990’s it re-entered the global scene and since then has been affected in numerous ways by globalization. Even though globalization has positive impacts on a given country in terms of economy and social interaction, it also has its disadvantages.
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