The fact there are winners and losers, and societies vary in how much they compensate the losers Continuing poverty: ¼ world’s population below $1 a day; around ½ below $2 a day (has declined since article, mainly because of China and SE Asia and to some degree India) Gap between rich and poor countries has widened. And inequality within most countries has risen with globalization. Environmental concerns and conflict over global governance Open borders and their effects (money laundering, terrorism, disease, drugs, sex trafficking)
Discuss distinction between empirical and normative debates. Leaving out #3, because it is explicitly normative, which leaves five.
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By – Nikunj B. Patel
Over view <ul><li>Definition </li></ul><ul><li>Effect of globalization </li></ul><ul><li>Globalization and social change </li></ul><ul><li>Advantages of globalization </li></ul><ul><li>Disadvantages of globalization </li></ul><ul><li>Cases for globalization </li></ul><ul><li>Cases against globalization </li></ul>
<ul><li>Definition : </li></ul><ul><ul><li>- An economic phenomenon? </li></ul></ul><ul><ul><li>- A social phenomenon? </li></ul></ul><ul><ul><li>- A cultural phenomenon? </li></ul></ul><ul><li>The movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms. </li></ul>
Effect of Globalization Effects of Globalization on Indian Industry started when the government opened the country's markets to foreign investments in the early 1990s. Globalization of the Indian Industry took place in its various sectors such as steel, pharmaceutical, petroleum, chemical, textile, cement, retail, and BPO. Globalization means the dismantling of trade barriers between nations and the integration of the nations economies through financial flow, trade in goods and services, and corporate investments between nations.
Globalization has increased across the world in recent years due to the fast progress that has been made in the field of technology especially in communications and transport. The government of India made changes in its economic policy in 1991 by which it allowed direct foreign investments in the country. As a result of this, globalization of the Indian Industry took place on a major scale. The effects of globalization on Indian Industry have proved to be positive as well as negative. The government of India must try to make such economic policies with regard to Indian Industry's Globalization that are beneficial and not harmful.
In a world of deterritorialization and supraterritoriality: <ul><li>Distance becomes almost irrelevant (the end of distance) </li></ul><ul><li>Boundaries are increasingly permeable. </li></ul><ul><li>Groups and cultures increasingly don’t have a territorial basis </li></ul><ul><li>A new kind of non-physical “place” is emerging </li></ul>Globalization and Social Change
Bosworth and Gordon: A survey of some key processes of globalization <ul><li>Technological advances </li></ul><ul><li>Expansion of international commerce (exports and imports) </li></ul><ul><li>Rising importance of private capital flows (stock markets and multinational corporations) </li></ul><ul><li>Increasing travel and migration (international tourism and domestic diversity) </li></ul><ul><li>Increased communication and interaction between peoples (through all sorts of media) </li></ul>
Advantages of Globalization 1. Integration of markets: Markets are interlinked- European Union. 2. Cheaper Products for Consumer: Trainers are Cheap . 3. Leads to Outsourcing in some cases which can lead to job loses: Moving call centers to India. 4. Lowering of international Bariers: Now European Union can Trade with ASEAN and NAFTA.
5. Providing jobs in LEDC's and help develop economy (less Economically Developed Countries). 6. Helps prevent market Saturation in a specific market: stops there being too much competitors in one place e.g. too much call centers in Uk, so move to India. 7. Standardization of product: the same products can be seen in some many places - e.g coke and McDonalds.
Disadvantages of Globalization 1. Intense Competition. 2. Widening of Gap between rich and poor countries . 3. Harder for Smaller businesses to establish themselves. 4. Exploitation of workers: Paying the workers in LEDC's a fraction of what would be paid in to workers in MEDCs.
5. Income generated in Host country is not always spent in the same country - money earned from supplying cheap call centers in India will not be spent in India but maybe in Uk or US.
Cases For Globalization 1. It will help to restructure the production and trade pattern in a capital- scarce, labour- abundant eco. in favour of labour-intensive goods and techniques. 2. Foreign capital will be attracted and with its entry, updated technology will also enter the country. 3. With the entry of foreign competition and removal of import tariff barriers, domestic industry will be subject to price reducing and quality improving effects in the domestic economy. 4. It is also believed that the efficiency of banking and financial sectors will improve, as there will be competition from foreign capital and foreign banks
5. It is argued that globalization of under developed countries will improve the allocative efficiency of resources, reduce the capital output ratio and increase labour productivity, help to develop the export spheres and export culture, increase the inflow of capital and updated technology into the country, increase the degree of competition, and give a boost to the avgerage growth rate of economy. 6. It is believed that the main effect of integration will be felt in the industrial and related sectors. At the cheaper and high quality consumer goods will be manufacture at home. Besides, employment opportunities would also go up.
Cases Against Globalization 1. The globalization process is in essence a tremendous redistribution of economic power at the world level which will increasingly translate into a redistribution of political power. 2. One study reveals that in the globalizing world the economies of the world are ironically moving away from one more than coming together. 3. With the lightening speed at which globalization is taking place, it is increasing the pressure on economies for structural and conceptual readjustments to a breaking point.
Copyright NUS Business School 2008 4. It is becoming hard for the countries to ask their public to go through the pains and uncertainties of structural adjustment for sake of benefits yet to come. 5. Globalization is helping more the developed economies than the developing economies. Like in India, it is argued that it is true that letting Cokes and Pepsis have led to opening doors for INTEL, AMD and CISCO, but the sum total of their investment has been very less in relation to their investment abroad. None of the multinationals has set up manufacturing plants in India or signed any technology transfer agreement with any Indian company.