To What Extent Does Globalization Narrow the Development Gap?

Topics: Developed country, Developing country, World Bank Pages: 3 (1288 words) Published: November 8, 2012
To what extent does globalization narrow the development gap? The development gap was first identified in 1981 by the West German Chancellor Willy Brandt. He explained that there was a clear North-South divide where the North holds 80% of the earth’s wealth and the south 20%. The development gap was explained in this case as the difference between the wealth of the countries. This can be measured via GDP per capita. However the general development gap is explained as not only the differences in wealth but the differences in the quality of life that the populations experience in different countries. This can be determined by the freedoms experienced, environmental quality, availability of clean water, and commonly access to the global internet. The Rostow Model shows a different way of dividing the countries into categories; Traditional society, preconditions for takeoff, drive to maturity and a high mass consumption society. This theory argues that countries go though the different stages in growth and development until they reach a high mass consumption society as the UK and US have done in the past years. However countries can be depressed and find it hard to complete the preconditions for take-off leaving the county in the lower reaches of the curve. In some ways Globalization does narrow the development gap. The ability of TNC’s to contribute to GDP in a country is massive. This can be directly via the creation of jobs or indirectly as TNC’s often outsource to other domestic companies. TNC’s such as LG and Hyundai have helped to provide jobs and finance thought South Korea helping to bring them from having a GDP per capita of under $ 5000 in 1981 to over $15000in the 2001. The top 4 firms in South Korea; Daewoo, Samsung, LG and Hyundai now contribute around 60% of South Koreas GDP showing the impact that these major TNC’s have has in the once poor country. Korea is not the 15th largest economy and is in the “drive to maturity” stage of the Rostow...
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