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The phrase World has become a global village is very common now a
days. The multinationals also stress upon Think global. These
concepts relates
to the globalization process that refers towards an ongoing process by
which
regional economies, societies, and cultures have become integrated
through a
globe-spanning network of communication and execution. The concept
was first
described by Charles Taze Russell in 1897 but the term was widely used
after
1960s.
There were four aspects of globalization as indicated by the presenters
i.e.
economic aspects are the economic integration of the world economies
that is
said to lead the world toward prosperity and economic excellence.
Environmental
aspects such as global warming etc also lead to the unification of the
world to
think about the whole world about environmental issues. Political
aspects of the
globalization stress upon the cross country political cooperation and
understanding of other political systems of the globe and the last
cultural and
social aspects of the globalization relate to the understanding of the
other cultural
norms and social patterns.
The history of the globalization is very much old indeed starting from
the
colonizing the people in other regions of the world as the British did.
Australia
and America were colonies of the Europe in the beginning. Moreover,
golden
Islamic age also laid the foundation for the globalization as the Muslim
traders
and preachers travelled across the world to trade and spread their
ideology. In
British Empire the East India Company and various other companies
exploited
the potential and richness of the sub continent but this thing also
contributed
towards the concept of globalization. After World War II, the evolution
of the
global financial institution such as IMF and World Bank also led towards
the
unification of the world. The recent developments include the
inauguration of
WTO and European Union.
The things contributed towards the globalization also include free trade
areas under different treaties as NAFTA, SAFTA etc; evolution of the
custom
unions and alliances; development of common markets and economic
unions.
European Union is the most popular example of all this.
The global institutions supporting this concept are WTO main function
of
which is to liberalize trade, elimination of various quotas and
settlement of trade
disputes among the countries of the world; and IMF which formed 1944
as result
of Bretton woods conference to oversee the monitory issues of the
world and
Globalization
2
supporting the under developed countries by providing them loans; and
UNCTD
United Nations Conference on Trade and Development established in
1964 as a
Globalization:
Meaning of Globalization:
Globalization is the process of making a transformation of things or
phenomena into global ones. It can be described as a process by which
the
people of the world are unified into a single society and function
together. It also
means erasure of national boundaries for economic purposes;
international trade
(governed by comparative advantage) becomes inter-regional trade
(governed by
absolute advantage). Precisely, it refers to an increasing
interconnectedness of
different parts of the world through common processes of economic,
environmental, political and cultural change.
In short Globalization is how our world is becoming more and more like
one country each and every day. There are several meanings and all
usually
mention the increasing connectivity of economies and ways of life
across the
world. The Encyclopedia Britannica says that globalization is the
"process by
which the experience of everyday life is becoming standardized around
the
world." While some scholars and observers of globalization stress
convergence
of patterns of production and consumption and a resulting
homogenization of
culture, others stress that globalization has the potential to take many
diverse
forms.
Definition of Globalization:
Globalization is a term which has become very popular and is used in
radius of its factory. China is heavy and breaks easily, so cheap china is
traditionally sold within a small area. Almost overnight, this company
lost more
than half its market.
Globalization
6
One of its customers, a hospital cafeteria where someone went surfing
on
the internet, discovered a European manufacturer that offered china of
apparently better quality at a lower price and shipped cheaply by air.
Within a few
months the main customers in the area shifted to the European
supplier. Few of
them, it seems, realize let alone care that the stuff comes from
Europe.
Experiences such as this have become, if not ubiquitous, then at least
common-place.
Drucker goes on to conclude:
In the mental geography of e-commerce, distance has been
eliminated.
There is only one economy and one market The competition is not
local any
more in fact, it knows no boundaries.
2) Tastes:Another key driver of the current experience of globalization and one
which is often overlooked by its critics is the way in which people
allover the
world have acquired a generally increasing taste for the products and
experiences of people in other parts of the world. Advances in
transportation and
communications and reductions in their cost have clearly played a
role in this
process, by making it possible for more people to experience more of
more parts
Globalization
8
Various aspects of Globalization affecting the world:
Below are the important aspects of globalization that affect the world in
different
ways:
Industrial (alias Trans Nationalization) -: Emergence of
worldwide production markets and broader access to a range of goods
for
consumers and companies
Financial -: Emergence of worldwide financial markets and better
access to external financing for corporate, national and sub-national
borrowers
Political -: Spread of political sphere of interests to the regions and
countries outside the neighborhood of political (state and non-state)
actors
and the potential formation of a global citizens movement
Informational -: Increase in information flows between
geographically
remote locations.
Cultural -: Growth of cross-cultural contacts; advent of new
categories
of consciousness and identities such as Globalism which embodies
cultural diffusion, the desire to consume and enjoy foreign products
and
ideas, adopt new technology and practices, and participate in a
"world
culture".
Ecological -: The advent of global environmental challenges that can
not be solved without international cooperation, such as climate
change,
cross-boundary water and air pollution, over-fishing of the ocean, and
the
11
Measuring Globalization:Looking specifically at economic globalization, it can be measured in
different
ways.
Goods and services, e.g. exports plus imports as a proportion of
national
income or per head of population.
Labor/people, e.g. net migration rates; inward or outward migration
flows,
weighted by population.
Capital, e.g. inward or outward direct investment as a proportion of
national income or per head of population.
Technology, e.g. international research & development flows;
proportion of
populations (and rates of change thereof) using particular inventions
(especially 'factor-neutral' technological advances such as
the telephone,
motorcar, broadband)
To what extent a nation-state or culture is globalized in a particular
year
has until most recently been measured employing simple proxies like
flows of
trade, migration, or foreign direct investment, as described above.
A multivariate approach to measuring globalization is the recent index
calculated by the Swiss Think tank KOF. The index measures the three
main
dimensions of globalization: economic, social, and political. In addition
to three
indices measuring these dimensions, an overall index of globalization
and subindices referring to actual economic flows, economic restrictions, data
on
companies that have done well in India in the recent years include
Pepsi, CocaCola, McDonalds, and Kentucky Fried Chicken, whose products have
been well
accepted by Indians at large.
Globalization in India has been advantageous for companies that have
ventured in the Indian market. By simply increasing their base of
operations,
expanding their workforce with minimal investments, and providing
services to a
broad range of consumers, large companies entering the Indian market
have
opened up many profitable opportunities.
Indian companies are rapidly gaining confidence and are themselves
now
major players in globalization through international expansion. From
steel to
Bollywood, from cars to IT, Indian companies are setting themselves up
as
powerhouses of tomorrows global economy.
Global comparisons describe India as a fastest growing country after
China. Trade and investment are two of the very important reason of
progress
leading in lowering the rates of poverty and global inequality over the
decades.
The proportion of the world population living in poverty is continually
declining.
There are five major areas where India has to keep on concentrating in
order to
achieve this goal and those areas are: Technological entrepreneurship
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New business openings for small and medium enterprises
of the country. The largest contributor in the previous years to the total
agricultural exports is the marine product which accounts to be the
total of one
fifth portion of the agricultural products. Oil seeds, rice, coffee, and tea
are other
prominent products which accounts in total of the agricultural products
of 5 to
10%
A Comparison with Other Developing Countries with India:
Indias share of world exports increased from 0.05% to 0.07% over
the last
2 decades and Chinas share has tripled to almost 4% over the same
period.
Indias share of the global trade is exactly similar to that of the
Philippines,
an economy which is 6 times smaller according to estimation of IMF.
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FDI flows into India have averaged around 0.5% of GDP against 5%
for
China and 5.5% for Brazil over the past decade. FDI inflows to China
now
exceeds by US $ 50 billion annually. It is US $ 4billion only in the case
of
India.
Advantages of Globalization:
It is the advantages of Globalization which act to bring about economic
welfare
on international levels, thereby benefiting the worldwide
population. Mentioned
below, are the advantages of Globalization which facilitate the
development of
world economies immensely:
trends. Capital and technology are fluid and they will move where the
benefits
are greater. As the nations come together whether it be in the political,
social or
economic arena, some sacrifice of sovereignty is inevitable. The
constraints of a
globalised economic system on the pursuit of domestic policies have to
be
recognised. However, it need not result in the abdication of domestic
objectives.
Another fear associated with globalization is insecurity and volatility.
When countries are inter-related strongly, a small spark can start a
large
conflagration. Panic and fear spread fast. The downside to globalization
essentially emphasizes the need to create countervailing forces in the
form of
institutions and policies at the international level. Global governance
cannot be
pushed to the periphery, as integration gathers speed.
Empirical evidence on the impact of globalization on inequality is not
very
clear. The share in aggregate world exports and in world output of the
developing countries has been increasing. In aggregate world exports,
the share
of developing countries increased from 20.6 per cent in 1988-90 to
29.9 per cent
in 2000. Similarly the share in aggregate world output of developing
countries
has increased from 17.9 per cent in 1988-90 to 40.4 per cent in 2000.
The growth
rate of the developing countries both in terms of GDP and per capita
GDP has
been higher than those of the industrial countries. These growth rates
have been
in fact higher in the 1990s than in the 1980s. All these data do not
indicate that
is not a viable choice. There are at present 149 members in the World
Trade
Organisation (WTO). Some 25 countries are waiting to join the WTO.
China has
recently been admitted as a member. What is needed is to evolve an
appropriate framework to wrest maximum benefits out of international
trade and
investment. This framework should include:
(a) Making explicit the list of demands that India would like to make on
the
multilateral trade system, and
(b) Steps that India should take to realize the full potential from
globalization.
Where does Indian stand in terms of Global Integration?
India clearly lags in globalisation. Number of countries have a clear
lead among
them China, large part of east and far east Asia and eastern Europe.
Lets look at
a few indicators how much we lag.
Over the past decade FDI flows into India have averaged around
0.5% of
GDP against 5% for China 5.5% for Brazil. Whereas FDI inflows into
China now exceeds US $ 50 billion annually. It is only US $ 4billion in
the
case of India
Consider global trade - India's share of world merchandise
exports
increased from .05% to .07% over the pat 20 years. Over the same
period
China's share has tripled to almost 4%.
India's share of global trade is similar to that of the Philippines,
an
economy 6 times smaller according to IMF estimates. India under
trades
countries only because they can take advantage of low wage levels or
so they
can access their natural resources.
The Future of Globalization:
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So what does the future hold? What will be the result of the
increasingly
interconnected state of the worlds nations?
While there are many opinions, there is only one source that can give
us
the true answerthe Holy Bible. In it, God accurately foretold the rise
and fall of
the major nations throughout history, including the Babylonian, MedoPersian,
Greek and Roman empires. He even prophesied the sudden rise of the
American and British people to world prominence.
And God has foretold todays fast-paced interconnected world and its
matchless advances in science and technology: But you, O Daniel,
shut up the
words, and seal the book, even to the time of the end: many shall run
to and
fro, and knowledge shall be increased.
The Bible states that, in the future, a union of ten nations (or groups of
nations) will arise, and replace America as the dominant world power. It
will
attack and defeat America and Britain, taking the survivors into
captivity. This
political, economic and military combine will be backed by a universal
false
church. It will become a world-leading trading bloc, possessing vast
riches and
trading all over the world in every product imaginableeven human
beings! This
and tea are other prominent products which accounts in the total of the
agricultural products of about 10%.
India, which is now the fourth largest economy in terms of purchasing
power parity, may overtake Japan and become third major economic
power
within 10 years. The economic impact of globalization in Vietnam and
China
demonstrate that globalization can be beneficial to the growth of
developing
countries and can furthermore enhance the sovereignty of domestic
governments. While globalization can and does have negative side
effectssome multinationals do exploit their workers, domestic
institutions will
face more risk from capital flows, and the threat of social instability
may risethe
aims to trade are nonetheless supported by the majority of crosscountry
empirical data. While the manner in which developing countries can
best utilize
Globalization
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international capital and markets should remain an issue of concern
and further
study, the claim that globalization is merely a source of problems is
unjustified
given the analysis of Vietnam and China. It was indicated in the paper
that it is
important to differentiate the concept of globalization from
internationalization
and regionalization.
It was also indicated that globalization had some specific effects on the
economies of the developing countries of Africa. It was indicated that
under
certain circumstances globalization can lead to higher unemployment
and an
risks involved with it. Indian companies now have become respectable
countries
in International market. Agriculture went to 18% increase of the total
annual
export of the country. China and Vietnam also developed its economy
through
privatization and globalization. Thus, Globalization has played a very
important
role in every developed and developing country but mainly in
developing
countries. Though Globalization is very good for developing countries
but in few
places it has bad effects on those countries as well.
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Websites visited:
This report has been compiled after the collection and careful
scrutiny of information from the following websites:
www.economywatch.com/economicstheory/globalization/effects.html
www.buzzle.com/articles/negative-effects- of-globalization.html
www.business.mapsofindia.com/globalization/india-industry/
www.bizcovering.com/business-and- society/globalization-and- itsimpacton-india/
www.en.wikipedia.org/wiki/Globalization
www.imf.org/external/np/exr/Key/global.htm
www.globalpolicy.org/globalization.html
www.tradechakra.com/indian-economy/globalization.html
www.ris.org.in/Seminar_on_India_Globalization.htm
www.realtruth.org/articles/070223-001- globalization.html