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Global Growing Pains

Ali Günertem
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One the most important issues that has recently arisen in the US presidential election is the slumping economy and the negative effects of competition brought about by globalization. It may come as a surprise to some that polling shows both Democratic and Republican voters' primary concern is no longer the Iraq War and its negative results but rather the economy.
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According to an Associated Press-Yahoo News poll taken in April, 67 percent of voters stated that the economy was the foremost issue in their minds, followed by the increase in the price of gas at 59 percent, with the issue of Iraq taking a bit of a backseat with 48 percent.

In the past couple of weeks, Democratic candidates Hillary Clinton and Barack Obama have been faced with questions regarding free trade agreements that the US recently signed with Colombia. Outsourcing, the term used for the shipping of American jobs overseas because of the greatly lowered cost of production, is rapidly becoming one of the most sensitive issues in the race. Unemployment has risen and many manufacturing jobs are now largely being performed by workers in foreign countries. According to figures released in March 2008, the number of unemployed in the US has reached 7.8 million, while the rate of unemployment is 5.1 percent.

In addition to manufacturing, the customer service and research and development departments of large companies have also been shipped overseas to countries such as India, where employment costs are much lower. The customer service side of telecommunication and Internet companies such as AT&T and AOL have already been outsourced to India. A person in America who calls customer service more often than not finds him or herself talking to someone from India. Even technical support, as long as it is not too complicated, can be performed from abroad.

Companies from a wide variety of sectors ranging from airlines to banks are choosing outsourcing as a business option. Delta Airlines, HSBC, Verizon, Cisco, Capital One, and Alcoa are among the 400 companies that have outsourced to India.

In recent times, American consumers have begun to voice their unhappiness with this trend. Cultural differences, language difficulties, and timeliness are all issues that consumers have raised in an attempt to bring these services back to the US.

However, it can't be argued that only major economies have seen benefits from this trend. The technical knowledge and skills that have been gained are quite astounding. When we say “major economies” we are, of course, referring to China and India. There are 2.5 billion people living in these two countries and in this era of rapid globalization, these populations are quickly integrating into the globalized economy. This integration, however, is not a completely smooth process and the road to success is paved with difficulties. The increase in gas prices is just one of the many visible manifestations of this trend.

India is planning to release a car built by its own Tata Motors, which will sell for $2500. Moreover, the French car producer Renault and its Japanese counterparts Nissan, Toyota, Hyundai, and the Chinese Chery, are also preparing to manufacture cars close to this price. Renault has gone one step further by actively searching for partners in Indian factories. In other words, all these new technologies and approaches show that already limited energy sources will be depleted even further. Developing countries are simply attempting to get a slice of the energy pie as a result of economic growth.  
When one looks at the figures, one can see the following: 70 million vehicles were sold in developing countries such as China and India. According to numbers released on March 31, 2008, the number of cars sold in India has reached 9.6 million. In a country such as China, where the number of people wishing to be car owners is rapidly rising, the number of car owners still numbers at 20 out of every 1000 people, while in the world as a whole the number is 120 out of 1000. If we assume that in 2010 7.5 million units of vehicles will be sold in China and the number of car owners will reach that of developed countries, than we can obviously see the future threats to natural resources.

There is also the issue of security in the production of cars at this low price. People are living in fascinating times. Developing countries are now doing what Western economies did years ago and it is now relatively easy to see what is right and wrong with this process. The trend of irresponsible consumption essentially started in the United States. It is the same place that that trend has seen a decline due to humankind's endless search for natural resources. To put it in simpler terms, we have consumed the whole earth. With each passing day, we are taking more and more out of the pockets of our children. As we look at China's and India's integration into the global economy, we see that the process itself is reckless. Responsible people are now searching for a solution. They are seeking to implement economic structures and alternative energy resources that will allow them to live happily in the near future.

I reiterate that although Turkey is still at the beginning of this development and has not yet lived up to its fullest potential, there is still a chance that the country will get through difficult times with a minimal number of scars, depending of course on responsible planning. From what I've seen so far, however, we, like India and China, are growing without a proper sense of control or education. Personal education is very important in this planning process. In the end, both planning and consumption are personal choices about how to act in society. It will be too late if we don't take steps now to partner with private and public institutions in order to educate younger generations on safe energy usage. This holds true not only for Turkey but also all developing countries that are experiencing growing pains in their search for development.
Last modified onSaturday, 06 May 2017 10:07

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