3. Globalization of the Food Industry and its Negative Consequences in the Middle East:
a. The Integration of the Middle East Economy and the Transformation of the Competitive Environment;
b. The Negative Effects of Globalization on the Food Industry;
c. The Negative Effects of the Use of GMO Products.
4. Conclusions:
a. Recommendations and Solutions.
At the end of the 1990s, the sociological circulation introduced a new concept of "globalization", which was used not only by scientists, but also by all politicians and the media (Riaz et al, 2014, p. 608). If one considers globalization as a massive phenomenon, it is possible to state that it unites a big amount of human activities, life, making them the same type and common for everyone. The advent of the Internet and other media has made the international relations and trade easier, and faster; thus, the world has changed and become more unified. Globalization affects not only large-scale spheres of human life; it also gets into all the processes of human life, society, and polity. The most striking examples of globalization are the corporations such as Microsoft, Apple, McDonald`s, and Coca-Cola. These companies and their product have changed the lives of people around the world forever. The food industry is one of the main branches of a State system, so its globalization can cause the most dramatic changes. Globalization of the food industry is a cause of the numerous negative changes in the Middle East, which leads to unemployment, poverty, and the use of genetically modified products.
The definition of "globalization". In order to determine the negative impact of globalization on the food industry of the Middle East, it is necessary to understand what globalization is and determine its main trends. According to Riaz et al (2014), globalization is a historical process of "turning the world into a single system with common characteristics" (p. 610). Historically, such a system gives rise to effects of globalization factors: e.g. "the electronic means of communication that can compress to a minimum separating people time and space, technological changes allowing to spread throughout the world of production, and the formation of global ideologies such as environmental or human rights movement" (Baldwin, 2014, p. 214). In the late 90s of the last century, the term "globalization" entered into the scientific circulation. Globalization can be determined as a process of "unification of the world economies and a creation of a unified legal, economic, and information space" (Riaz et al, 2014, p. 612). A characteristic feature of globalization is to strengthen the role of multinational corporation (MNC). Basically, MNC is a commercial enterprise that operates in two or more countries and contains certain foreign components (Riaz et al, 2014, p. 612). As a rule, MNCs are national in matters of capital and international at place of application. Currently, there are more than 7 thousand MNCs that include about 700 thousand subsidiaries located in different countries. The main subsidiaries are usually opened in underdeveloped or developing countries. According to Riaz et al (2014), the main home countries of almost all MNCs are the US, UK, and Japan. Today, "MNCs establish 80% of the latest technologies", which income exceeds the gross national income of some developed countries (pp. 612-312). Baldwin (2014) states that MNCs occupy the 51st position in the list of the 100 largest economies in the world. It should be noted that a scope of the majority of them is connected with the development of high technologies, which includes "innovative technologies, network computers, new computer programs, technologies of formation of public opinion, and mass consciousness" (p. 216). Today, the developers and owners of such technologies monitor financial markets and determine the character of the world economy.
Globalization of the Food Industry and its Negative Consequences in the Middle East
Precisely, the integration of the Middle East into the global economy entails significant changes in the business environment for the domestic food industry "transforming the competitive environment in the food markets" (Rózsa, 2014, p. 11). In recent years, a place of the Middle East countries on the global food world market has changed. Globalization of the food industry leads to a degradation of entire industries and radically transforms the value chain. "A significant part of the final product's cost is formed not within a country but abroad", which means a decrease of both the food and economic securities (Baldwin, 2014, p. 218). Thus, the food industry can be attributed to a group of industries for which globalization presents more risks than opportunities. All threats to global competition are so serious that the competitiveness of the Middle East food industry can be undermined, and the possibility of its further development will be limited. The reason for this situation is a fact that "the food industry of the Middle East does not use the benefits of globalization"; it is not sufficiently diversified and is characterized by "a low level of innovation and resource efficiency" (Rózsa, 2014, p. 12).
Unfortunately, globalization is the cause of the public health worsening in the underdeveloped and developing countries. It can be explained by the fact that globalization entails an increase in imports and exports, and in many cases, long distance transportation of food implies a chemical treatment of products in order "to enhance their shelf life to a maximum" (Rózsa, 2014, p. 12). According to Wilhelmina et al (2010), there are several problems such as appearance of genetically modified products in the market (p. 366). Researchers still argue whether genetically modified food is the cause of various diseases. For example, the appearance of genetically modified products in the Middle East markets led to the fact that "multinationals and other companies gradually displace farmers from their lands" (Wilhelmina et al, 2010, p. 366). This can lead to a dependence of local people on food corporations; moreover, there is a risk of environmental disasters. In addition, the globalization of the food industry has many other problems. Due to the large number of imported products and foreign investment, a gap between the wages of skilled and less-skilled workers increases, moreover, there is a tendency of a growing unemployment among the latter (Baldwin, 2014, p. 217). Wilhelmina et al (2010) state that many manufacturers of various products "reallocate their production to countries with low wages" because of "the intense globalization of the food industry growth", which is not always desirable for the individual economies (p. 361). The problem of child labor can also be attributed to the negative effects, which is very common in the Middle East (Rózsa, 2014, p. 13). Such conditions make earnings disregard safety rules in a workplace. In connection with this fact, the state of the environment deteriorates too: this is due to differences in the economic interests of the countries of the Middle East and major investors.
Globalization of the food industry increases the dependence of the Middle East countries on the world economic system's stability and normal functioning. In most cases, "MNC limits the state's ability to carry out nationally oriented economic policy in many industrial fields", which also affects its structure (Riaz et al, 2014, p. 619). Moreover, "the external debt to the international financial organizations is growing because of the globalization of the food industry" (Wilhelmina et al, 2010, p. 364). These debts usually prevent from further progress of both the industry and the development of the whole economy. The promoted MNCs often put their own interests above the public, thus, "the role of the states weakens and a part of the functions passes to the various supranational organizations and associations" (Riaz et al, 2014, p. 620).
Conclusions
Therefore, the Middle East integration of the food industry into the global economy entails significant changes in business conditions for domestic enterprises. The food industry, along with agriculture, refers to a group of industries for which globalization presents more risks than opportunities. Definitely, enterprises should expect a reduction in domestic markets and focus on winning the competitive position on the global market. Because of this, the industry should make a qualitative leap in the area of increased demands for efficiency and competitiveness, adapt to already occurring qualitative changes in the external environment, and learn to operate in the international market or at least comply with the conditions of competition that create a global market. In addition, the authorities should also pay attention to the development and use of genetically modified products, i.e. it is necessary to test their quality and possible implications in the framework of globalization.
References
Baldwin, R. (2014). Misthinking Globalisation: Twentieth-Century Paradigms and Twenty First-Century Challenges. Australian Economic History Review, 54(3), 212-219. doi:10.1111/aehr.12046
Riaz Mir, U., Mahnaz Hassan, S., & Majeed Qadri, M. (2014). Understanding Globalization and its Future: An Analysis. Pakistan Journal Of Social Sciences (PJSS), 34(2), 607-624.
Rózsa, E. N. (2014). Environment, Society and Security: Interrelated Challenges in the Middle East. Palestine-Israel Journal Of Politics, Economics & Culture, 19/20(4/1), 9-14.
Wilhelmina, Q., Joost, J., George, E., & Guido, R. (2010). Globalization vs. localization: global food challenges and local solutions. International Journal Of Consumer Studies, 34(3), 357-366. doi:10.1111/j.1470-6431.2010.00868.x
