With global economic growth slowing and inequality rising, the case against globalisation is strengthening - Edexcel - A-Level Economics A - Question 8 - 2022 - Paper 2

Statistics show that countries specialize in the production of goods for which they have a comparative advantage, enhancing global output. For example, a country rich in natural resources can focus on extracting and exporting these resources, while importing other goods, resulting in mutual benefits.

Globalisation has spurred the rise of MNCs, which can leverage economies of scale, access to cheaper labor, and diverse markets. MNCs often lead to increased employment opportunities in developing countries but can also result in exploitation and wage suppression.

As MNCs invest in developing countries, they help to establish new industries and create job opportunities, which can lead to increased incomes and reduced poverty levels, positively affecting the global economy.

However, the rise of protectionism can counteract these benefits. Countries may impose tariffs and quotas to protect local industries, which can decrease global trade and hinder growth, as seen in recent shifts towards nationalism in several economies.

Moreover, with industries shifting to locations with lower labor costs, structural unemployment may increase in developed countries as workers face job loss and skill gaps, leading to social and economic challenges.

Additionally, globalisation can exacerbate environmental degradation due to increased transport of goods and exploitation of natural resources, which poses long-term sustainability challenges for the global economy.

Lastly, while globalisation can enhance growth, it may also widen economic inequality both within and between countries. The benefits of growth are often not evenly distributed, leading to disparities that can destabilize economies.