Answer : The term “globalization” has acquired considerable emotive force. Some view it as process that is beneficial – a key to future world economic development – and also inevitable and irreversible. Others regard it with hostility, even fear, believing that it increases inequality within and between nations, threatens employment and living standards and thwarts social progress. This brief offers an overview of some aspects of globalization and aims to identify ways in which countries can tap the gains of this process, while remaining realistic about its potential and its risks. Globalization offers extensive opportunities for truly worldwide development but it is not progressing evenly. Some countries are becoming integrated into the global economy more quickly than others. Countries that have been able to integrate are seeing faster growth and reduced poverty.
is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through trade and financial flows. The term sometimes also refers tithe movement of people (labour) and knowledge (technology) across international borders. There are also broader cultural, political and environmental dimensions of globalization that are not covered here. At its most basic, there is nothing mysterious about globalization. The term has come into common usage since the 1980s, reflecting technological advances that have made it easier and quicker to complete international transactions – both trade and financial flows. It refers to an extension beyond national borders of the same market forces that have operated for centuries at all levels of human economic activity – village markets, urban industries, or financial centers.Globalization is not just a recent phenomenon. Some analysts have argued that the world economy was just as globalized 100 years ago as it is today. But today commerce and financial services are far more developed and deeply integrated than they were at that time. The most striking aspect of this has been the integration of financial markets made possible by modern electronic communication. There are four aspects of globalization:
Developing countries as a whole have increased their share of world trade –from 19 percent in 1971 to 29 percent in 1999. For instance, the newly industrialized economies (NIEs) of Asia have done well, while Africa as a whole has fared poorly. The composition of what countries export is also important. The strongest rise by far has been in the export of manufactured goods. The share of primary commodities in world exports – such as food and raw materials – that are often produced by the poorest countries, has declined.
Globalization sharply increased private capital flows to developing countries during much of the 1990s. It also shows that:
•the increase followed a particularly “dry” period in the 1980s;
•net official flows of “aid” or development assistance have fallen significantly since the early 1980s; and
•the composition of private flows has changed dramatically. Direct foreign investment has become the most important category. Both portfolio investment and bank credit rose but they have been more volatile, falling sharply in the wake of the financial crises of the late 1990s.
3.Movement of people:
Workers move from one country to another partly to find better employment opportunities. The numbers involved are still quite small, but in the period 1965-90, the proportion of labour forces round the world that was foreign-born increased by about one-half. Most migration occurs between developing countries. But the flow of migrants to advanced economies is likely to provide means through which global wages converge. There is also the potential for skills tube transferred back to the developing countries and for wages in those countries Tories.
4.Spread of knowledge (and technology):
Information exchange is an integral, often overlooked, aspect of globalization. For instance, direct foreign investment brings not only an expansion of the physical capital stock, but also technical innovation. More generally, knowledge about production methods, management techniques, export markets and economic policies is available at very low cost, and it represents highly valuable resource for the developing countries.
Q.2 Describe the positives of trade liberalization. (10 Marks)
Q.3 Write a short note on GATT and WTO, highlighting the difference between the two. (10 Marks)
Q.4 Think of any MNC and analyze its business strategy orientation. (10 Marks)
Q.5 What does FDI stand for? Why do MNCs opt for FDI to enter international market?
Q.6 Viewing culture as a multi-level construct, describe various levels it consists of.