Impact of Globalization on Developing Countries and Japan
Impact of Globalization on Developing Countries and Japan
Globalization is the integration and interaction among individuals, governments, and companies in the entire world (Holroyd & Coates, 2012, p. 15). Information technology and the international investment and trade facilitate the process of globalization. Consequently, globalization has a profound influence on various economies and subsectors. Japan has experienced a series of advancements through globalization, and has in turn invested in automobiles, high tech products, and microelectronic gadgets or products. However, the benefits of globalization to Japan are much less in comparison with the demerits.
Impact of Globalization in Japan
Globalization has influenced Japan in a negative way, owing to the country’s failure to present a boom in the Foreign Direct Investment (FDI), which is the major driver and determiner of the level of globalization of a country (Mr Globalization, 2011, par. 2). In 2004, for instance, Japan’s FDI stock amounted to 2% of the Gross Domestic Product, which was the lowest level of all OECD countries (Mr Globalization, 2011, par. 3). In addition, Japan’s mergers and acquisitions accounted for 60% of the flows in FDI (Holroyd & Coates, 2012, p. 122). Consequently, the European Union represented 47% of the value in world’s mergers and acquisitions, while the United States represented 22% (Mr Globalization, 2011, par. 5).
Additionally, the wave of globalization accounts for Japan’s low interest shares in domestic demand, within OECD countries (Holroyd & Coates, 2012, p. 118). Similarly, globalization accounts for the low number of Japanese tourists in various countries in the world. Global skills and knowledge are relevant in order to experience the positive effect of globalization, and Japan registers the least number of students who study abroad, among the 30 OECD countries.
Equally, Japan benefits negatively from globalization, since it records the least outflows and inflows, leaving the least chance for overall migration. Foreign residents that hold Japanese work permit, for instance, amount to approximately 180,000, which correspond to 0.3% of Japanese labor force (Holroyd & Coates, 2012, p. 120). The percentage is the lowest among the OECD countries, and equally below the 9% average (Mr Globalization, 2011, par. 5). Consequently, various factors contribute to Japan’s failure for benefiting from globalization.
Japan fails to benefit adequately from globalization owing to extremely high barriers in Japanese border, in the agricultural sector (Mr Globalization, 2011, par. 6). Despite the exertion of various efforts to reduce the barriers, Japan is still behind OECD countries in the negotiation of free agreements of trade. Therefore, real barriers between the country and others include behind-the-border barriers such as labor market and product negotiations. In addition, stiff Japanese rules limit its cross-border mergers and acquisitions (Mr Globalization, 2011, par. 8).
Japan’s minimum participation in investment, migration, and trade accounts for its failure to embrace the positive effect of globalization. Globalization majorly revolves around various production systems that promote the investment and trade of multinational companies, thus Japan blocks the possibility of successful participation in system production (Holroyd & Coates, 2012, p. 122).
Additionally, Japan participates in one-sided globalization, since the country exports more products in comparison to its imports (Mr Globalization, 2011, par. 3). Furthermore, the country invests and imports massively in other countries, but blocks inward investment. One-sided globalization therefore explains for Japanese poor performance in the race of globalization, in comparison with the OECD countries (Mr Globalization, 2011, par. 2).
Measures for Benefiting from Globalization
Japan should exert much effort in boosting productivity in order to achieve its prosperity. Consequently, participation in the Foreign Direct Investment would facilitate for the effective boosting of the country’s productivity (Holroyd & Coates, 2012, p. 125). Additionally, Japan should facilitate for efficient migration, which would equally enhance the filling of labor shortages that include health care. Health care demand grows rapidly owing to the country’s ageing population, thus an enhancement in labor shortage would be effective (Mr Globalization, 2011, par. 9).
Conclusively, in order for Japan to benefit from globalization, the country should boost the level of demand by exerting a lift in barriers, especially various regulations on the elderly group that covers approximately 60% of the country’s massive savings (Mr Globalization, 2011, par. 10).
References
Holroyd, C., & Coates, K. (2012). Japan in the Age of Globalization. London: Routledge.
