Problem solving essay

Friedman (2005) contends in his book, The World Is Flat, that economic development in today’s society is the embracing of globalisation to increase the financial status of countries. The overall standard of living increases and corporations expect higher revenues due to the promises that globalisation increases opportunities and platforms for engagements. However, the quality of the governmental institution is put to the test as it will affect how much will the countries benefit from this phenomenon. The higher quality institutions will lead to great economic gains, but on the other hand, corruption will cause countries to experience the negative side of globalisation. Several solutions have been proposed in recent years like alleviating corruption through enforcing law and the use of social media to garner support to identify companies that are guilty of corruption. Both solutions’ effectiveness will be discussed further in this essay.

Wei (2001) suggests the idea of corruption as the abuse of public office in exchange for private benefits. Corruption has a long history; however, it should not be neglected. Wei also mentions that corruption is a hindrance to the economic growth of the country brought by globalisation. The risk of doing businesses in the country increases and it chases away foreign direct investments (FDI). The importance of FDI cannot be underestimated in today’s context. Countries with low corruption rate like Singapore depends heavily on FDI to sustain the high gross domestic product, whereas countries like China are faced with this threat, where many of its people are living under the poverty line.

Globalisation brings about more flowing of FDI into many developing countries. Companies may be discouraged to enter countries with high corruption rate and the people will suffer as a result. Without a stable income, most of them will not be able to support their families and everyone suffers. The ideal effect of globalisation is to bring about a more equality income instead of the widening income gap for the rich and poor (IMF, 2007). To reduce this negative impact, countries like China are taking an aggressive approach of this problem. Currently, China was ranked eighty out of one hundred and seventy-six countries in the Corruption Perceptions Index and convicts nearly one hundred and fifty thousand for corruption since 2008 (Reuters, 2013). Lu (2000) suggests that the most prevalent corruption is by graft, where officials receive bribes to reduce the red tapes of MNCs operating in China. Fortunately, the new government led by Chinese Premier Xi Jinping, has shown determination in eradicating corruption in the country. One example is the conviction of ex-mayor of Dalian province to life imprisonment for receiving bribes. The severity of the law imposed on officials receiving bribes acts as deterrence and officials may think twice before accepting any favours. Gu and Wu (2013) suggest that the prevalence of corruption may be due to low salaries, therefore countries should review their pay structure of its public officials to further prevent them from corrupting. Government devote more resources to the existing anti-corruption agency to bring officials that are guilty of corruption to justice. However, many resources need to be allocated to these areas, therefore it is not possible for every countries to follow the policies recommended.

Another solution is to identify the companies that are guilty of providing bribes for the government. The Internet can be used to disseminate information regarding the issue to other users through popular social media platforms. People can use their consumers’ power to stop purchasing products and services from these companies. The problem with this situation is the difficulty in accurately identifying the companies that are involved in corruption. The reports have to be factual, objective in nature and not biased. Furthermore, the society cannot be tolerance against any kind of corruption. Wei states that the Thai people have a high tolerance for the misbehaviour of its government officials. The people must believe what is right and have a firm stand on this issue. Ignorance is ‘not’ a bliss in this context.

In conclusion, the understanding of how corruption can reduce the positive effect of globalisation and boost the negative impact on its people is a worrying issue. It must be address by both the government, through its policy and integrity, and the society, to keep the government in check. Only through these efforts, the positive impact of globalisation can be beneficial to the people.

References:

Friedman, T. (2005). The World Is Flat. United States.

IMF. (2007). Chapter 4: Globalisation And Inequality.  Retrieved from                http://www.imf.org/external/pubs/ft/weo/2007/02/pdf/c4.pdf

Reuters. (2013). China convicts nearly 150,000 for corruption since 2008. Retrieved from                http://www.reuters.com/article/2013/10/22/us-china-corruption-idUSBRE99L0OZ20131022

S. J. Wei. (2001). Corruption and Globalisation.  Retrieved from                http://www.brookings.edu/research/papers/2001/04/corruption-wei

T. Gong and A. Wu. (2013). Does Increased Civil Service Pay Deter Corruption?  Retrieved from          http://rop.sagepub.com/content/32/2/192.abstract

Transparency International. (2013). Corruption by Country / Territory. Retrieved from                http://www.transparency.org/country#CHN

X. B. Lu. (2000). Cadres and Corruption. Stanford University Press.