Globalisation refers to the process of the integration of economic, political, social and cultural relations among people, companies and governments of different nations and countries. It is a process aimed improving international movement of goods, services, labour and capital. This process also has a direct impact on the environment, culture, political systems, economic development and prosperity, and a human physical wellbeing of societies in the world.
Globalisation also indirectly suggests internationalism and mutual agreement and support between countries, as opposed to nationalism and protectionism, which have negative defining characteristics.
Globalisation goes back as far as the era before the First World War. During that time globalisation’s general tendencies produced a very uneven pattern of global economic development, exposing the limits of global economic integration. For example, the integration of the African economy into the capitalist economy is part of the globalising tendencies of capitalism.
Over the past 30 years the globalisation of the economy led by the World Bank, the International Monetary Fund and transnational entities have happened at a very quick pace. These institutions have pressured governments of developing countries such as South Africa to remove barriers to the cross-border flow of capital and products.
Even though globalisation is a positive or powerful force intended at improving the well-being of humankind, at aiding developing countries to create better economic environment, to quickly advance into the information age, improve access to technology and enhance global harmony, it’s effect on South Africa’s political, economic, social and cultural nerves cannot be ignored without severe consequences.
Firstly, the government’s liberalisation of macro-economic policies coupled with the advancement of telecommunications and technology has made it possible for exorbitant amounts of capital to move freely around the world by just a push of a button in search of the highest interest rate possible. Over the past decade South Africa has experienced extensive disinvestment and capital outflow to overseas which meant lost output, trade, and employment here at home. Moreover, the volatility on investment flows has also had a relatively weak impact on the GDP. At present investment represents only about 17 per cent of GDP in South Africa.
Robin Kibuka, an adviser in the Africa Department of the International...