Thursday, March 24, 2011
Globalization of Businesses: Helpful or Harmful?
While business globalization has many positive impacts such as job creation in developing countries, the net effects of globalization on the countries entered can quickly become destructive.
We all remember the haunting picture of the vulture watching the starved, dying Sudanese girl on her way to a food camp that won photographer Kevin Carter the Pulitzer Prize in 1994. We could spend hours debating the causes, forces and string of events that led to this child’s death, but I would like to focus on one argument—the argument that this photo is the result of business globalization. Simply put, Talisman Energy, an oil and gasoline company based in Calgary, Alberta, expanded globally in order to drill for oil in Sudan. The drilling displaced thousands of local citizens. Talisman made profits from the oil and paid large royalties to a corrupt local government who used the money to build its army, rather than benefit its citizens. This in turn caused a larger income disparity in Sudan, which led to greater suffering for the poor. Perhaps this even indirectly sped up the death of this little girl.
Let’s look at an environmental issue related to globalization. A double standard exists for multinational companies operating in developing countries. Large companies may enter developing countries where environmental laws are non-existent, or are not strongly enforced, and take advantage of the relaxed standards. This sort of issue led to one of the worst industrial accidents in history. In 1984, Union Carbide India Limited (UCIL) pesticide manufacturing plant in Bhopal leaked gas that immediately killed at least 3800 people and caused long-term health consequences and premature deaths for thousands more. The incident occurred because UCIL adopted safety standards that were below levels that were acceptable in its home country.
What do these events teach us? Large companies like Talisman have great amounts of resources and power with which they can influence corrupt governments away from using royalties in ways that hurt their countries’ citizens. International standards for environmental safety, preventative strategies, and industrial disaster preparedness in developing countries would help avoid accidents like the Bhopal disaster. What these events teach us is that research must be done about effects of globalization on the community, laws must be put in place to protect society and the land, and strategic planning must be conducted to help create a net positive effect on countries entered by companies expanding globally.
GlassFrog blogger, Sherisse