Shezelle Mohammed

U6B
Caribbean Studies
TOPIC: Discuss the advantages and disadvantages of globalization for Caribbean
countries.

Globalization is the growing interdependency between nations that results from

increasing free trade and free movement. This move to encourage free trade is one
dimension of the globalization process. In today’s world and even years ago, countries
have been trading with each other and people from different parts of the world have been
in contact and have made links with others elsewhere. While there are advantages of
globalization for Caribbean countries, there are also its disadvantages. These advantages
includes encourages foreign investors, increased jobs, increases specialization in goods
and services, economic growth, foreign competition forcing domestic producers to be
more efficient and advanced technology. However, the disadvantages include;
competition which may lead to unemployment, exploitation of our resources and
environmental consequences.

Caribbean countries attract foreign investors as they are aware of our natural
resources. For example, Trinidad and Tobago is well known for its natural oil and gas.
These foreign investors come to our countries and provide foreign exchange as well as
revenue which the government receives. The taxes such as corporation and direct tax
imposed on licenses fees are very helpful to the Caribbean countries. Consequently, by
generating additional revenue, the government can improve public services such as health
care to citizens which in turn improves their standard of living.

Globalization provides increased job opportunities from these industries. Such

employment can result directly from the operations of multinationals or indirectly from
linkages within the economy. This aids in improving consumer welfare which these
citizens enjoy as they will now have a steady income and in so doing, they will be able to
meet more wants instead of only being able to supply their basic needs.

Globalization increases specialization in goods and services. Countries can begin

to specialize in those products they are best at making if they import those that they are
less efficient at from other countries. This is called “comparative advantage.”
Shezelle Mohammed
U6B
Caribbean Studies
Specialization can lead to economies of scale and further cost and price benefits. By
trading in this way, the living standards of all consumers of all countries trading together
should increase.

Economic growth is rapidly increasing in the Caribbean countries due to

globalization. It is an indication of the in the change of goods and services produced by
an economy. By examining the GDP and GNP figures we can tell if economic growth is
taking place.

Firms may be forced to become more efficient as they compete with overseas
competitors. In the long run they will grow and expand as they reap the benefits of
economies of scale. This in turn could lead to higher profits if it is done successfully.

Due to recent technological advancements, it has now become extremely

convenient and affordable for countries to communicate with each other quickly and
efficiently. Communications technology has enabled free flow of financial capital among
countries in the world, where financial transactions can be conducted easily through
electronic communication. Furthermore, technological improvements and automation
have made skilled workers redundant and at the same time have resulted in an increase in
the demand for unskilled labour.

A major disadvantage that globalization has on the Caribbean countries is

competition. Newly established businesses may find it impossible to survive against
competition from existing importers. This in turn prevents “infant industries” from
growing domestically. Also, the foreign companies which are entering our markets are
giving our local small businesses competition as they can afford to sell their products
cheaper. Thus, eventually, our local businesses are forced out of operation, resulting in
the loss of jobs or unemployment. In the long run, this hinders the development of our
people. For example, in Trinidad and Tobago, the Caroni Ltd was closed by the
government as it was perhaps cheaper to import sugar from abroad than to produce it
locally. Consequently, there was a loss of many jobs.
Shezelle Mohammed
U6B
Caribbean Studies
Many foreign investors come into the Caribbean countries due to the abundance
of our natural resources such as gas which is processed at the Altantic LNG. They have
no consideration for the level of reserves but instead they exploit our resources carelessly.

Increased industrial production leads to environmental degradation as factories

release increased emissions, chemical pollutants and other wastes in oceans and our
lands. This has led to the implementation of antipollution and environment friendly laws
so do not adhere to these. As a result, while globalization provides revenue, it also
destroys our flora and fauna in the Caribbean.

In conclusion it is clearly illustrated that there are both advantages and

disadvantages of globalization for Caribbean countries. In addition, globalization is an
important catalyst for development in Caribbean countries as it aids in improving the
lives of Caribbean nationals and increases economic growth and national income.