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Challenges of globalization...82.1 Developing economies are dependent on economic agreements, complex binding regulations...82.2.Globalization leads to an economy dependent on exports...

HCMC UNIVERSITY OF TECHNOLOGY AND EDUCATION FACULTY FOR HIGH-QUALITY TRAINING

COURSE: SCIENTIFIC WRITING

Topic: Globalization refers to the interconnectedness and integration of economies, cultures, and societies around the world It is characterized by the free flow of goods, services, capital, and people across national borders, facilitated by advances

in technology, transportation, and communication Globalization has many dimensions, including economic, political, cultural, and social Economically, globalization is driven by the expansion of international trade and investment, as well as the growth of multinational corporations that operate across multiple countries.

Analyzing the benefits and challenges of globalization for developing economies.

Lecture Ph.D Nguyen Thi Thanh Thuy

Ho Chi Minh City, 9 May, 2023

A

INTRODUCTION 2

1.The definition of globalization 2

2 An overview of globalization in developing economizes 2

3.The issue facing developing economies 3

B.CONTENT 4

1 The benefit of globalization 4

1.1 An overview of globalization trend 4

1.2 Since participating in globalization, developing economies growth up better 4

1.3 Globalization solves the problem of employment and human resource allocation 1.4 Developing science and technology in the country 6

1.5 Implement the policy of multilateralization of international relations 6

1.6 Globalization is an opportunity and a driving force for developing economies 7

2 Challenges of globalization 8

2.1 Developing economies are dependent on economic agreements, complex binding regulations 8

2.2.Globalization leads to an economy dependent on exports 9

2.3 The competitiveness of the economy is weak 10

2.4 Debt of developing countries is increasing 11

2.5 Globalization is bad for the environment 12

2.6 Globalization leads to a strong gap between rich and poor 13

2.7 Globalization leads developing economies to become dependent on foreign enterprises 14

REFERENCES 15

LIST OF FIGU Figure 1 Vietnam's long-term growth 3

YFigure 2 Gross international assets and liabilities( trillions of US dollars) 4 Figure 3 Investment growth rate

Figure 4 Import and export situation of FDI sector in Viet Nam

Figure 5 The ration of public debt to GDP

LIST OF TABLE

Table 1 Barriesr to developing a circular economy model towards sustainable economic development 10

LIST OF PICTURE

Picture1: Environmental Kuznet’ Curve 13

INTRODUCTION 1.The definition of globalization

“Globalization appeared in the 1960s, during the development of the globaleconomy, it has become and is becoming the most widely used concept in the world It isconsidered as a trend for the future, linking relations between countries, narrowingeconomic, political and social borders Dr Nayef R.F Al-Rodhan gives a definition ofglobalization that “Globalization is a process that causes the causes, course, andconsequences of transnational and transcultural integration of human and non-humanactivities.” This article will talk about the effects of globalization on various aspects ofthe economy in general and the economies of developing country in general

2 An overview of globalization in developing economizes

Globalization and regionalization have taken place strongly in recent decades,especially since the end of the Cold War This process has been adjusted in recent yearsand is an irreversible trend that will continue in the future It is an opportunity fordeveloping countries in general and Vietnam in particular to be able to compete withdeveloped countries in the region such as China, Korea or Japan Joining globalization,countries with conditions favorable conditions to strengthen connectivity, promotecooperation and development in the region, develop the country's economy, and raise thenational position For example, participating in FTAs helps them expand import-exportmarkets, increase FDI attraction, improve the competitiveness of the economy, etc.Participation in regional and global cooperation initiatives such as:Greater MekongSubregion (GMS), Mekong - Lancang (MLC), Belt and Road (BRI), Equitable EnergyTransition Partnership (JETP)… help them have favorable opportunities for developmentand connecting cross-border economic corridors, dealing with the challenge of climatechange In addition, participating in globalization, countries have the opportunity to

strengthen relations with major countries, especially permanent members of the UnitedNations Security Council, participate in handling international issues and area.

3.The issue facing developing economies

Solving the problems of poverty, employment, and economic resiliency is theissue Connections between countries in the area and globally, as well as cultural andeconomic development A prime illustration of globalization is Vietnam

Source:

Figure 1 Vietnam's long-term growth

Since 1984, Vietnam has reformed its economy, abolished the subsidized economyand switched to a market economy Normalize relations with hostile countries Table 1shows the growth of the Vietnamese economy before and after joining globalization

1 The benefit of globalization

1.1 An overview of globalization trend

Trade liberalization expands, tariff barriers between countries are abolished orreduced, goods have wide circulation conditions From there, developing countries canexport key products to potential markets around the world The nature of the economyoperates on the basis of trust between the parties, cooperation and development.Participation in globalization, cultural and political exchanges, especially in the economicfield, helps countries integrate with the general trend of the world, thereby improvingpeople's living standards

1.2 Since participating in globalization, developing economies growth up better

Figure 2: Gross international assets and liabilities( trillions of US dollars)

Note: The financial integration data are based on a dataset constructed by Lane and Milesi-Ferretti(2006) The time period of analysis is 1970-2004

The charts show how the components add up to the total itegration measure ineach period Debt includes both official and unofficial debt The category “other”includes financial derivatives and total reserves minus gold Since 1980, engaging ininternational integration has improved the economies of developing nations The group'soverall reserve of assets and liabilities has, on average, expanded more than five times is

an order of magnitude greater than in other developed countries over the past twodecades For example, Vietnam has signed economic development agreements withcountries in the region and around the world, thereby opening up its economy, such as theASEAN Economic Community (AEC), trade agreements and trade agreements free trade(FTA).The international market is the best place for trade, import and export of essentialcommodities to serve the people By joining the WTO trading system, it not only helpseconomic development but also preserves peace and security as the most basic principle

of the trading system

1.3 Globalization solves the problem of employment and human resource allocation

People said that small entreprenurs form the backbone of the global economy.They provide more than 70% of jobs worldwide and contribute more than 50% of theGDP of developing countries, according to the International Labor Organization (ILO).That contributes to solving job needs, contributing to stabilizing people's lives,stimulating domestic spending, contributing to economic development A worker can nowapply for a job anywhere, working for a transnational company without moving to thatcountry Remote work has become popular since the world was quarantined due to thepandemic Globalization has opened the way to commercialization around the world,drawing borders closer than ever By expanding the job market, workers can find it easier

to find a job they love with the desired salary According to the Department of LaborManagement, since 2009, Vietnam has had 65,787 people choose to work abroad since

2009.Globalization brings many job opportunities for workers in developed countries.For many years, developed countries started the process of "going for work" That attracts

a large number of low- to high-skilled workers to move to countries like Japan and Koreawith a higher salary than in the country

1.4 Developing science and technology in the country

The advancement of science and technology and the liberalization of the financialsectors with potential for development are one of the factors that contribute to strongglobalization, the development of financial markets from which people, investors,businesses borrow more National policies, infrastructure development as well as high-quality labor resources, thereby attracting many foreign enterprises to Vietnam forproduction The development of science and technology helps people to quickly accessknowledge That is especially true of the labor market Accelerate the process ofimproving skills and knowledge, and catch up with the trend of globalization.thereduction of time and costs related to trade to the maximum, leading to benefits inpromoting factors such as money, technology, and knowledge Especially withdeveloping countries, reduce the economic and social gap with other countries

1.5 Implement the policy of multilateralization of international relations

The strong rise of emerging economies when participating in globalization makesthis trend growing stronger Actively participate in international integration proactively,

in many fields that are being prioritized for comprehensive and sustainable development.For example, the Asia-Pacific Economic Cooperation (APEC) forum helps to connectsupply chains in the region in particular and the world in general Trade equality "APECstrategy on small, medium and micro enterprises, green, sustainable and innovative", tosupport the development of small, medium and micro enterprises.That helps them toaccess and expand the goods consumption market, capture the requirements and quality

of the target markets For example, Vietnam, APEC has created 7/10 largest exportmarkets, contributing 78% of foreign direct investment (FDI).

1.6 Globalization is an opportunity and a driving force for developing economies

Source: Haver's analysis; World bank

Figure 3: Investment growth rate

The Figure compares investment growth rates of developed, emerging anddeveloping countries with China and without them We can easily see that during thecovid 19 pandemic in 2019, economies tend to have negative growth But in whichemerging and developing economies still maintain a better position than other economiesEspecially after the covid 19 pandemic, developed economies have a strong recovery.FDI inflows into developing economies increased by 30% to nearly 870 billion USD, ofwhich East and Southeast Asia increased by 20% in 2021 This is an opportunity as well

as a challenge that needs to be overcome in order to develop stronger in the context ofthe pandemic.In the context of the global economic downturn, developing countries havethe advantage of investment growth, thereby narrowing the gap between the twocountries Especially, foreign enterprises tend to shift production since the US-Chinatrade war has developed strongly Emerging economies like Vietnam, India, etc

Technology transfer and production lines have been a global trend in the context ofavoiding a supply chain disruption In the past, Vietnam's agricultural products could only

be exported to the Chinese market By export agreements to markets that bring high value

to agricultural products, such as the Comprehensive and Progressive Agreement forTrans-Pacific Partnership, have brought economic benefits to farmers Developingcountries currently have the conditions to attract FDI such as low labor costs, stablepolitical situation, international trade agreements and diverse modes of transportation.Vietnam is a typical example of these conditions The international press once said thatVietnam will become an Asian dragon thanks to strong economic development, curbinginflation and coming up with the right policies to attract foreign businesses One pointthat makes globalization a lever to help developing economies have more than oneopportunity to break through is the transfer of technology and taking advantage of theavailable high-quality labor force The strong application and investment in automationhas met the output standards for products assessed by prestigious organizations in theworld, helping products to conquer markets with high value as high as the US, Japan,and Australia

2.2.Globalization leads to an economy dependent on exports

Globalization is like a financial plan for every country and the most important part

of any plan is planning in case it doesn't go as planned The lessons of the past have allcome from the result of a succession of events Because of the great benefits thatglobalization brings, more and more countries are participating in the process FDI haspoured into developing economies, which has revealed a weakness that is heavilydependent on exports On the other hand, there are only a few foreign enterprises but theycontribute a large part to the economy That shows that there are many risks, low growthquality

Source: Department of planning and investment Figure 4 importand export situation of FDI sector in Viet Nam

The table below compares the proportion of the economy Vietnam is one of thefastest growing and stable economies The proportion of trade surplus accounts for thecan of the economy Exports are nearly three times larger than imports The table aboveshows that there are some major problems such as growth recovery and high growth

quality follicles There should be solutions to "leave room for mistakes" when there arebig contractions in the market For example, the economic crisis (2008), the covid 19(2019) pandemic, the Russia-Ukraine war, or the latest is the banking crisis Policies such

as raising taxes and raising deposit interest rates are aimed at saving the economy that hasbeen hurt during the covid 19 pandemic That shows, only one or a few potential marketsneed to tighten policies such as tariffs, protection of domestic products, openness ofmarkets in developed countries

2.3 The competitiveness of the economy is weak

The issue of core technology and supporting industries is also one of the majorproblems affecting the sustainable development of emerging and potentially disruptiveeconomies

Source:Grafström, J., & Aasma, S (2021) Breaking circular economy

barriers Journal of Cleaner Production 292, , 126002.