Essay No. 01
The integration of the world’s economies brought about by the rapid improvements in communication and transportation. Globalization involves the spread of economic, social and cultural ideas across the world, and growing uniformity between different places that result from this spread. It has come about as a result of increased integration of national economies through growth of international trade, investment and capital flows, made pokily by rapid improvements in technology.
The above is a fairly standard definition about what Globalization is. But the real question is “does Globalization work?”
Yes! It really works and has worked. The only way for countries to continue to increase living standards is through economic growth. The best way to achieve economic growth is free trade. Free trade allows a country to enjoy the benefits brought about by absolute and comparative advantage. The same has happened in the case of china and India.
Globalization has played a major role in export led growth, leading to the enlargement of the job market in India. Globalization in India has allowed companies to increase their base of operations, expand their workforce with minimal investments, and provide new services to a broad range of consumers. The process of globalization has been an integral part of the recent economic progress made by India.
Once of the major forces of globalization in India has been in the growth of outsourced IT and business process outsourcing (BPO) services. The last few years have seen an increase in the number of skilled professionals in India employed by both local and foreign companies to service customers in the US and Europe in particular. 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 tomorrow’s global economy.
There will be new prospects in rural India. The growth of Indian economy very much depends upon rural participation in the global race. After implementing the new economic policy the role of villages got its own significance because of its unique outlook and branding methods.
Understanding the current status of Globalization is necessary for setting course for future. For all national to reap the full benefits of globalization it is essential to create a level playing field.
Essay No. 02
The financial meltdown in the “tiger economies” of South- East Asia at the moment of manic expansion of globalization has brought into question the whole process of liberalization. What are the lessons that we can derive from the last crisis to avoid the next?
The first lesson, it would seem, is that short-term and long-term capital flows are two disparate phenomena with very little in common. The former is speculative and technical in nature and has very little to do with fundamental realities. The latter is investment oriented and committed to the increasing of the welfare and wealth of its new domicile. It is, therefore, wrong to talk about “global capital flows”. There are investments (including even long-term portfolio investments and venture capital)—and there is speculative, “hot” money. While “hot money” is very useful as a lubricant on the wheels of liquid capital markets in rich countries—it can be destructive in less liquid, immature economies or in economies in transition.
The two phenomena should be accorded a different treatment. While long—term capital flows should be completely liberalized, encouraged and welcomed—the short-term, “hot money” type should be controlled and even discouraged. The introduction of fiscally-oriented capital controls (as Chile has implemented) is one possibility. The less attractive Malaysian model springs to mind. It is less attractive because it penalizes both the short-term and the long- term financial players. But it is clear that an important and integral part of the new International Financial Architecture Must be the control of speculative money in pursuit of ever higher yields. There is nothing inherently wrong with high yields—but the capital markets provide yields connected to economic depression and to price collapses through the mechanism of short selling and through the usage of certain derivatives. This aspect of things must be neutered or at least countered. The second lesson is the important role that central banks and other financial authorities play in the precipitation of financial crises—or in their prolongation. Financial bubbles and asset price inflation are the result of euphoric and irrational exuberance— said the Chairman of the Federal Reserve Bank of the United States, the legendary Mr. Greenspan and who can dispute this? But the question that was delicately sidestepped was: WHO is responsible for financial bubbles? Expansive monetary policies, well-timed signals in the interest rates markets, liquidity injections, currency interventions, international salvage operations—are all co-ordinated by central banks and by other central or international institutions. Official Inaction is as conducive to the inflation of financial bubbles as is official Action. By refusing to restructure the banking system, to introduce appropriate bankruptcy procedures, corporate transparency and good corporate governance, by engaging in protectionism and isolationism, by avoiding the implementation of anti-competition legislation—many countries have fostered the vacuum within which financial crises breed.
The third lesson is that international financial institutions can be of some help—when not driven by political or geopolitical considerations and when not married to a dogma. Unfortunately, these are the rare cases. Most IFIs— notably the IMF and, to a lesser extent, the World Bank— are both politicized and doctrinaire. It is only lately and following the recent mega-crisis in Asia, that IFIs began to “reinvent” themselves, their doctrines and their recipes. This added conceptual and theoretical flexibility led to better results. It is always better to tailor a solution to the needs of the client. Perhaps this should be the biggest evolutionary step.
That IFIs will cease to regard the countries and governments within their remit as inefficient and corrupt beggars, in constant need of financial infusions. Rather they should regard these countries’ as Clients, customers in need of service. After all, this, exactly, is the essence of the free market—and it is from IF Is that such countries should learn the ways of the free market. In broad outline, there are two types of emerging solutions. One type is market oriented—and the other, interventionist. The first type calls for free markets, specially designed financial instruments and a global “laissez faire” environment to solve the issue of financial crises. The second approach regards the free markets as the source of the problem, rather than its solution. It calls for domestic and where necessary international intervention and assistance in resolving financial crises. Both approaches have their merits and both should be applied in varying combinations on a case-by-case basis. Where a problem yields to interventionist solution we should go for it, but we must remember too that the market economy works best where markets are free to adjust to changing realities.
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Globalization is the way that local or national ways of doing things become global, that is, done together around the world. It is about economics or trade, technology, politics, and culture. People feel differently about globalization: some think it helps everyone while others think it hurts some people.
Definition[change | change source]
Globalization is a term which may be used broadly to mean doing things as distant people do them, or more narrowly to mean complying to global standards in economy, politics, culture, education, environment or other matters. It describes the way countries and people of the world interact and integrate. Many things have become globalized as people come into contact.
Economic globalization is how countries are coming together as one big global economy, making international trade easier. In the late 20th century, many countries agreed to lower tariffs, or taxes on goods that are imported from other countries. Telegraphy and other communication technologies have helped people to buy and sell products from around the world, thus bringing globalization. Herman E. Daly has said that there is an important difference between internationalization and globalization. Internationalization is about nations working together for the same goals. These are things like treaties, alliances, and other international agreements. Globalization is about international trade being less blocked by national borders.
Political globalization is how institutions and countries can influence the whole world. The United Nations are an example of globalization because most countries of the world are members of its General Assembly. This international organization can make countries follow rules and apply economic sanctions to a country that doesn't. This means the countries in the U.N will punish them by not talking or trading with them, so they don't benefit from globalization.
Cultural globalization is how culture is becoming homogeneous, which means that people from all over the world act in similar way. For example, many people around the world write with the Latin alphabet, wear T-shirts and jeans and watch Hollywood movies and other media.
Criticism[change | change source]
Some people, like Noam Chomsky, do not like globalization because they feel it only helps rich people get richer by making poor people poorer. Offshoreoutsourcing, such as a company hiring workers in a developing country, is often a part of globalization. This sometimes means that some people in a developed country lose their jobs. Joseph Stiglitz said that international groups like the World Bank and the International Monetary Fund (IMF) have made it harder for poorer nations to get richer. Globalization also means that problems from other countries will affect your country. For example the Great Depression of the 1930s started in the United States but affected the entire world.
Many countries also dislike it when international organizations such as the United Nations tell them what to do. However they obey to avoid sanctions. Many people also criticize the fact that globalization means that fewer people are deciding what brands, like Coca-Cola and McDonald's, taking over smaller, local shops and businesses. They criticize the fact that powerful countries have bigger influence on world culture than others. For example, the United States is the biggest cultural exporter, which means that countries around the world are becoming like the United States. However, this hurts local cultures. Jean Baudrillard believes that globalization hurts local cultures and is the cause of most terrorism. He also believes that most supporters of globalization just want to stay in power.
Gregory Meyjes interprets globalization as a largely hegemonic, unequal process of socio-cultural imposition. Questioning the various processes (economic, political, cultural) by which globalization or globalisation has favored rapid Anglo-cultural dominance over a more gradual, egalitarian evolution towards an inclusive world civilization, Meyjes argues for cultural policies that support "ecological" relations between local ethnocultural traditions, by protecting cultural specificity in the short term and allow as many cultural groups as possible to organically contribute to the whole. At the global level, Meyjes therefore proposes the term universalization or universalisation to denote a process of (largely) non-imposed socio-cultural exchange between state-level and sub-state-level groups and "nations" – i.e. a transnational process that informs the gradual emergence of a universal civilization.
Support[change | change source]
Others, like Thomas Friedman, believe that globalization can bring people together and make everyone richer without getting rid of local cultures. People who support globalization also believe that it makes war less likely because it is bad for business.Francis Fukuyama also argued that globalization would eventually lead to a system of world governance which would cause wars to end.
Many believe that globalization helps out poorer nations by bringing them business. A report by the World Bank said that poverty in India and Indonesia was cut in half because of globalization. The report also said that people in poorer nations are living longer and better because they were making more money.
Related pages[change | change source]
References[change | change source]
More Reading[change | change source]
- Peter Berger, Four Faces of Global Culture (The National Interest, Fall 1997).
- Friedman, Thomas L. (2005). The World Is Flat. New York: Farrar, Straus and Giroux. ISBN 0-374-29288-4.
- Kitching, Gavin (2001). Seeking Social Justice through Globalization. Escaping a Nationalist Perspective. Penn State Press. ISBN 0-271-02162-4.
- Mander, Jerry (1996). The case against the global economy : and for a turn toward the local. San Francisco: Sierra Club Books. ISBN 0-87156-865-9.
- Steger, Manfred (2003). Globalization: A Very Short Introduction. Oxford, New York: Oxford University Press. ISBN 0-19-280359-X.
- Stiglitz, Joseph E. (2002). Globalization and Its Discontents. New York: W.W. Norton. ISBN 0-393-32439-7.
- Wolf, Martin (2004). Why Globalization Works. New Haven: Yale University Press. ISBN 978-0300102529.