What Is Global Interdependence?

Global interdependence means mutual dependence at an international level. Countries depend on each other for certain commodities. The import and export of various goods and services greatly contribute to global interdependence.

Commodities, like oil, have formed a global interdependence among countries that produce these commodities and those that need them. With economic globalization, places across the world are linked through activities such as trade, production and consumption. The economic growth of a nation is increasingly dependent on its trade partners’ economic welfare, as national economies are integrated through global trade. Worldwide social relations connect distant regions and intensify relations among these nations.

Globalization promotes competition among countries and allows corporations to benefit from lower labor costs in developing nations. This is made possible by an international division of labor and free-trade agreements. Companies particularly outsource manufacturing to lower-cost areas, which are typically found in developing countries with few environmental regulations and no minimum wage. For example, the clothes-making industry has now been relocated to developing nations in Asia, North Africa, Eastern Europe and Central America.

According to the United Nations Office for Economic and Social Development Support and Coordination, technological improvements and policies geared towards opening national economies to competition have also contributed to the growth of global interdependence. It is important to promote a coherent approach to policy making to ensure that globalization extends its benefits to many countries.