Improvement in the share of newly-industrialised countries notwithstanding, the terms of trade of all these countries have deteriorated in favour of advanced nations. Transnational corporations are instrumental in perpetuating such unfair business practices. Together with their governments they control almost 80 per cent of international trade in a great many commodities and a large portion of the flow of foreign investments. With the recent trend towards mergers and the acquisition of other enterprises, they have become the real economic empires in the new global economy, posing formidable challenges not only to the governments of developing countries, but to governments of advanced countries as well. And while there is no doubt that they could contribute to the increase of output in developing countries, help in the transfer of technology and make up for the shortage of investment and absorb part of the unemployed workforce in these countries, their contribution to development is in the end determined by global strategies conditioned only by the search for ever-higher profits.
Globalisation also impacts on welfare provisions in both the South and the North.
Increased globalisation of markets and production structures has not allowed the advanced industrial countries to resolve their unemployment problems. The problem of unemployment is more acute in countries of the South where an estimated one billion people remain unemployed. And while some countries in East Asia managed to combine growth, under conditions of globalisation and employment creation, recent financial crises dealt a severe blow to such efforts. Social safety nets in developing countries are subject to almost unbearable pressures as governments and society deal with the paradox of dwindling revenues, as a result of austerity measures, the requirements of stabilisation policies or government retreat from management of certain sectors of the economy, combined with expanding demand for social protection. The responsibility of dealing with the consequences of globalisation must be shared between the countries of the North and South.