One of the fall outs of the current Global Financial Crisis will be the end of Globalization as it is being propounded by the Western Countries today. The concept of Globalization was born more out of a necessity for both the developed and developing countries.
The developed countries started losing their core competencies over a period of last two decades. Their agriculture is highly subsidized and hence very inefficient. The industrial wages had risen to such an extent that it just does not make business sense to produce in developed countries for the costs will be extremely high. What they were ahead at were in the services sector, with their better infrastructure, education level and connectivity. But this is something that is easily duplicable and others caught up with it very fast. The only that save the developed economies from collapsing, especially USA, was that they were huge consuming economies. The market for value added goods was enormous. Though the developing economies has a bigger population, majority of them were on basic level of sustenance. As any decent marketing man knows, the profit is in value added goods and not on basic goods.
On the other hand, the developing and under developed countries lacked in infrastructure, investment capability, a market with purchasing power and required education level. They had to look westward for the first three. These countries have been smarter. Over the past twenty years, they have steadily overcome these weaknesses and today they are in a much better position by way of self sufficiency.
To be continued tomorrow.............................
