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The Arguments For and Against the Current Globalisation and Circumstances for Protectionist Measures

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Since multi corporations increased, the geographically dispersed supply chains and their diverse workforce can be easily managed and controlled through modern information and communication technologies. More work can be outsourced at fewer costs for the corporations, where the necessary resources are available or close to the markets. Integration can mean the fast spread of economic crisis: Economies have inter-linked and become interdependent to one another through trades and financial markets, which result in devastating situations during a global or regional crisis. It causes adverse global or regional shocks that affect the domestic economies, impacting negatively in the changes of real prices of commodities, the decline in imports, and portfolio shifts that impinge on interest and exchange rates when dealing with the highly integrated financial markets (Solimano, n.d. ).

Because most countries have pegged their exchange rates to the US dollar or other dominant western currencies, when the US economy begins failing, they all sink together where strong mechanisms to save the economies are not in place. This is what happened to the economy of Thailand that had opened its capital markets allowing foreign investment, especially from the US and Europe, which fuelled a currency speculation (PBS. org, n.d. ).

These are some of the risks that arise from the volatile capital movements that may force governments to seek protectionist measures. For example, when a nation wants to protect its currency under pressure from the open market system, and the reserves are depleting, the remaining option may be to use the nontariff mechanism of devaluing their exchange rate for monetary protection. This incident was experienced in Thailand, when the government was forced to devalue, resulting in an Asian crisis as a contagion and request for a bailout from the IMF.

Job displacement: Globalization brought in flexibility in the labour market; hence both employees and employers are in competition of acquiring the best pay and talents respectively.  

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