Globalisation

The International

Monetary

Fund defines

globalization

as the

growing

economic

interdependence of countries worldwide through increasing volume and variety of crossborder transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology. The process of globalisation is popularly described as a gradual removal of barriers to trade and investment between nations. It aims to achieve economic efficiency through competitiveness, while seeking the broader objectives of economic and social development. Globalisation is not a new phenomenon since the process has been happening for ages. For example, the practice of sipping tea as an energising drink originated in China several centuries ago. Once tea-drinking became popular, the product spread to different parts of the world. This is a prime example of the process of globalisation. Thus, the issue has to be studied in the context of its time and impact. Perhaps it is impossible to label globalisation as either good or bad, since there is no easy readymade answer.

However, the process of globalisation needs to be observed in a different manner rather than just in terms of liberalisation and privatisation which many people tend to group together. The basic distinction between globalisation, liberalisation and privatisation is that while globalisation is not time-bound, the other two can occur in a time-bound manner. two extremes. Effects of Globalisation
i.

The processes are all interrelated as

globalisation encompasses liberalisation, privatisation, and the middle ground in-between the

Economic Increase in international trade at a much faster rate than the growth in the world economy Increase in international flow of capital including foreign direct investment Creation of international agreements leading to organizations like the WTO and OPEC Development of global financial systems Increased role of international organizations such as WTO, WIPO, IMF that deal with international transactions Increase of economic practices like outsourcing, by multinational corporations

ii. iii. iv. v.

vi.

Political

The political aspects of globalization are evidenced when governments create international rules and institutions to deal with issues such as trade, human rights, and the environment. Among the new institutions and rules that have come to fruition as a result of globalization are the World Trade Organization, the Euro currency, the North American Free Trade Agreement, to name a few. Whether a government is to consciously open itself to crossborder links, is the central question of this aspect. Social activist and non-profit organizations such as Amnesty International and Greenpeace are also becoming more global in scope. Culural

Cultural global ties also grow through globalization as news ideas and fashions through trade, travel and media move around the globe at lightning speed. Global brands such as Coca-

Cola, Nike & Sony serve as common reference to consumers all over the World. An individual in China enjoys the same soft drink as an individual in Puerto Rico--at opposite ends of the globe. However, these ties may also cause strains: for example Western Ideas of freedom of expression may clash with Islamic views on Religious tolerance. And if not strains, critics contend this is really an imposition of cultural imperialism in order to preserve economic interests. Technological

The other aspect of globalization is the revolutionary change in technology, particularly in transport and communication, which ostensibly creates a global village.

Industrial Emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies, particularly movement of material and goods between and within national boundaries. International trade in manufactured goods has increased more than 100 times (from $95 billion to $12 trillion) since 1955.

Informational Increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.

Religious The spread and increased interrelations of various religious groups, ideas, and practices and their ideas of the meanings and values of particular spaces.

Critics
Concern over economic well being in developed countries In industrialized countries discourse about globalization centers on economic self-interest. Newspaper articles about globalization typically express concerns involve the interconnectedness

of international financial markets and the potential for economic crisis, as well as threats to the livelihood of workers. Concern over the impact of globalization in developing countries

The establishment of the WTO in 1995 and subsequent protests led to a large-scale antiglobalization movement that is primarily concerned with the negative impact of globalization in developing countries. Their concerns range from environmental issues to issues like democracy, national sovereignty and the exploitation of workers. Critics argue that globalization results in:

Poorer countries suffering disadvantages: While it is true that globalization encourages free trade among countries, there are also negative consequences because some countries try to save their national markets. The main export of poorer countries is usually agricultural goods. Larger countries often subsidise their farmers (like the EU Common Agricultural Policy), which lowers the market price for the poor farmer's crops compared to what it would be under free trade. The exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor. The shift to outsourcing: Globalization has allowed corporations to move manufacturing and service jobs from high cost locations to locations with the lowest wages and worker benefits. An increase in exploitation of child labor: for example, a country that experiencing increases in labor demand because of globalization and an increase the demand for goods produced by children, will experience greater a demand for child labor. This can be "hazardous" or "exploitive", e.g., quarrying, salvage, cash cropping but also includes the trafficking of children, children in bondage or forced labor, prostitution, pornography and other illicit activities.