Introduction
Globalisation, in light of the economy, entails the growth, integration and interdependence of the world economies into a single economic market (Eriksen, 2020). It entails a situation where the world becomes a single economic market where international cross-border is easy to conduct. This essay assesses economic globalisation using Iraq’s economy as a reference point.
Causes and Features of Economic Globalisation
Several factors triggered the growth of economic globalisation and can be traced back to the 19th century. These factors include enhanced transportation infrastructure, which then facilitated the movement of trade commodities across nations, sparking economic integration. Second, a surge in economic trading blocs such as the European Union, the Association of Southeast Asian Nations and the North American Free Trade Agreement, which created free trade areas and customs unions, promoted integration and triggered globalisation. Third, the exponential growth of technology has promoted the production of goods in larger quantities than through traditional methods. The internet has also promoted marketing and the proliferation of international e-commerce companies such as Amazon and Alibaba, contributing to economic globalisation. Finally, globalisation has grown because of the increase in foreign direct investment and the establishment of multinational corporations worldwide (Heimberger, 2022). Economic globalisation is pegged on four significant features that facilitate trade. These are the free movement of trade, labour, capital and technology across the borders of national boundaries (Eriksen, 2020).
Positive and Negative Consequences of Globalisation
Economic globalisation has positive and negative consequences. Its positive outcomes include boosting economic productivity, which decreases the prices of commodities in the market. Increasing productivity allows consumers to choose from a wide range of products. Globalisation also increases employment, especially through multinational companies set up in developing countries; this, in turn, boosts income and raises the global GDP (Heimberger, 2022).
On the other hand, globalisation has been attributed to adverse environmental impacts due to the overutilisation of natural resources (Heimberger, 2022). Also, globalisation tends to benefit the most developed countries at the expense of the developing countries.
Impacts of Transnational Corporations in Iraq
There are several multinational companies in Iraq, the majority being oil and energy firms such as BP, Shell, Exxon and Total Energies and non-oil companies such as Coca-Cola and Deloitte, which play a significant role in the country’s economy. These companies employ many Iraqis and contribute to the country’s GDP.
Impact of conflict on Iraq’s economy
Since Iraq became a republic in 1958, its successive governments have been faced with successive civil wars and coups. Despite having some of the richest oil reserves, Iraq continues to wallow in poverty, a phenomenon called the Dutch Diseases, where the conflicts have made it impossible for the country to utilise the resources fully for their benefit. Iraq’s invasion of Kuwait saw significant global economic players, such as the US, place trade sanctions against Iraq, meaning Iraq would not export its oil products to the US and other world markets. These sanctions reduced oil income significantly, impacting Iraq’s GDP. Finally, Iraq has spent so much resources in terms of finances, time and personnel in the successive war at the expense of developing the economy. Many Iraqis fled the country due to the war, creating a shortage in labour supply.
Conclusion
Globalisation has a significant impact on the economies of countries around the globe. However, wars and conflict adversely affect economic globalisation by impeding the four factors of production, including labour, capital and natural resources. Iraq’s economic situation is a clear depiction of the negative impacts of war on a country’s economy.
Bibliography
Eriksen, T. H. (2020). Globalisation: The key concepts. Routledge.
Heimberger, P. (2022). Does economic globalisation promote economic growth? A meta‐analysis. The World Economy, 45(6), 1690-1712. https://doi.org/10.1111/twec.13235
Bardwell, H., & Iqbal, M. (2020). The economic impact of terrorism from 2000 to 2018. Peace Economics, Peace Science and Public Policy, 27(2), 227-261. https://doi.org/10.1515/peps-2020-0031
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