The Negative Impact of Economic Globalization
In this case the elimination of love for domestic products because many foreign products circulating in the World. The negative impact on the nation's generation is a lifestyle that tends to imitate western culture. The negative impact of globalization also causes social inequality between the rich and the poor due to free competition.
This can lead to disputes between the rich and the poor. In addition, another negative impact is the formation of individualism that causes a sense of ignorance to others even to the nation, following the impact of globalization in the economic field, namely:
Increasing the prosperity of people in a country Freer trade allows people from various countries to import more goods from abroad. This causes consumers to have more choices of goods. In addition, consumers can also enjoy better goods at lower prices.
Expanding markets for domestic products Freer foreign trade allows each country to obtain a much wider market than the domestic market.
Can get more capital and better technology capital can be obtained from foreign investment and especially enjoyed by developing countries because of the problem of lack of capital and experienced experts and educated staff mostly faced by developing countries.
Providing additional funds for economic development Industrial sector development and various other sectors are not only developed by foreign companies, but mainly through investments made by domestic private companies. These domestic companies often need capital from banks or the stock market. funds from abroad, especially from developed countries that enter the money market and the domestic capital market can help provide the needed capital.
The entry of foreign workers
The loss of the world product market due to losing competition with foreign products
Businesses in the world will die because many imported products in the world market
In addition, economic globalization also has a negative impact on the lives of the world's people including:
Inhibiting the growth of the industrial sector, One of the effects of globalization is the development of a freer foreign trade system. This development has caused developing countries to no longer be able to use high tariffs to provide protection to emerging industries (infant industry). Thus, freer foreign trade creates obstacles for developing countries to advance the domestic industrial sector more quickly. In addition, the dependence on industries owned by multinational companies is increasing.
Worsening the balance of payments of globalization tends to increase imported goods. Conversely, if a country is unable to compete, then exports do not develop. This situation can worsen the balance of payment conditions. Another adverse effect of globaliassi on the balance of payments is that net payments for factor income from abroad tend to experience a deficit. Increased foreign investment causes the flow of investment payments (income) abroad to increase. An underdeveloped export can have a negative impact on the balance of payments.
The financial sector is increasingly unstable One of the important effects of globalization is drainage
investment (capital) portfolio that is increasingly large. This investment mainly includes the participation of foreign funds into the stock market. When the stock market is rising, these funds will flow in, the balance of payments will increase and the value of money will improve. Conversely, when stock prices on the stock market decline, domestic funds will flow abroad, the balance of payments tends to get worse and the value of the domestic currency slumps. This instability in the financial sector can have a devastating effect on the stability of overall economic activity.
Worsen the prospect of long-term economic growth If the things stated above apply in a country, then in the short term economic growth becomes unstable. In the long run this kind of growth will reduce the speed of economic growth. National income and employment opportunities will grow slower and unemployment problems cannot be overcome or worse. Finally, if globalization has a negative effect on a country's long-term economic growth prospects, the distribution of income will become more unfair and the socio-economic problems of the community will get worse.
The Role of Government in Economic Globalization
To deal with global capitalism, the government needs to do the following things including:
The need to immediately eradicate KKN seriously. The reduction of KKN to very minimal conditions is a big capital to face the era of global capitalism. Next, we need a planned step to get the maximum benefit.
The government needs to put in place a policy framework to enable the movement of resources towards sectors that have bright prospects. This is done through policies that are not distorting investors' decisions, including allowing them to measure the level of risk accurately.
Strive for changes that occur gradually, so as to give time for economic actors engaged in non-competitive industries to switch to more competitive industries.
Prepare human resources so they can take advantage of open opportunities. This includes, for example, by seeking certification of internationally recognized expertise and training to obtain the certificate. From the impact of globalization, tips can be taken in dealing with globalization, namely: in the field of the economy of the world the nation needs to implement article 33 of the 1945 Constitution by building cooperation with economic actors consisting of cooperative business entities, state-owned enterprises and private-owned enterprises. Regions must be empowered to be able to produce regional superior products that can be appointed as national superior products. Thus, the nation's competitiveness that is needed in the free market era can be created