Globalization is the process of interlinking the nationaleconomy with the world economy.It is a process by which regional economies, societies, andcultures have become integrated through a global network ofcommunication, transportation, and trade.
The term is sometimes used to refer specifically toeconomic globalization: the integration of nationaleconomies into the international economy throughtrade, foreign direct investment, capital flows, migration, andthe spread of technology.Globalization aims at expanding business fromdomestic/local level to global level.The purpose of globalization is to exploit globalopportunities for local growth.
The process of globalization gained momentum in INDIAsince 1991. This is because in 1991 ,the government introduced newindustrial policy (nip) 1991, which introduced a number ofreforms in respect of liberalization,privatisation andglobalization.
Globalization has closely intertwinedeconomic, political, cultural and institutional dimensionswhose social impact is often not easy to disentangle.Some of these processes are driven by the logic of newtechnologies or market forces which are difficult tocontrol, while others may be more amenable tomanagement.As a result of greater access to markets, new technologiesand new ways of doing business, many aspects ofglobalization have stimulated growth and prosperity andexpanded possibilities for millions of people all over theworld
The actual experience of globalization has, to a greatdegree, varied with the level of development at which acountry has engaged with it.The degree and nature of participation of differentcategories of countries in global markets varies substantially.Although globalization raises particular concern fordeveloping countries, apprehensions regarding it aboundand have been vocally expressed even in developedcountries.The experience of countries with economies in transitionhas been mixed.
Industrial: emergence of worldwide production markets andbroader access to a range of foreign products for consumersand companies.Financial: emergence of worldwide financial markets andbetter access to external financing for borrowers.Economic: the interconnectedness of thesemarkets, however, meant that an economic collapse in anyone given country could not be contained.
Political: some use "globalization" to mean the creation of aworld government which regulates the relationships amonggovernmentsInformational: increase in information flows betweengeographically remote locations.Ecological: the advent of global environmental challengesthat might be solved with international cooperation
Developed nations have outsourcedExploitation of labourJob insecuritySophisticated weapons enhancing their abilityBad aspects of foreign culturesTaken overReduced the government’s ability
As a new Indian middle class has developedaround the wealth that the IT and BPOindustries have brought to the country, a newconsumer base has developed.Globalization in India has beenadvantageous for companies that haveventured in the Indian market.Indian companies are rapidly gainingconfidence and are themselves now majorplayers in globalization through internationalexpansion.
DefinitionObjectiveHeadquartersCreated in July 1944Originally with 45 membersToday IMF describes itself as "an organization of 186countries (as of June 29, 2009)Member states are represented on a 24-memberExecutive Board
The IMF Charter Originally Established Adjustable Par Valuesfor the Currencies of Member Countries. The IMF charter originally set up a system of fixed exchange rates All members declared a "par value" in terms of the dollar The system has been referred to as a gold exchange standard. The founders believed this system would impose monetary discipline on member countries. Today the IMF charter implicitly endorses a system of floating exchange rates— rates governed primarily by market forces of supply and demand.
The IMF’s "Lending" Facilities Help Member CountriesMake Adjustments to Restore Balance of PaymentsEquilibrium. The founders built flexibility into the system in various ways. One important aspect of flexibility The primary method for gaining resources is through the member’s quota subscriptions Although the IMF’s assistance is usually referred to as "lending" or "loans," a member country actually "purchases" SDRs Reserve tranche Letter of Intent
Secure long-term fundingGive advisory servicesCreate the right policy and institutional frameworkAddress weaknesses in the social, structural, andsectoral policies.
In next 25 years, the population of the entireworld would go up by 2 billion to a figure of 8billion people.In 2008, more than 47% of the global populationlived in urban areas. By 2020, 4.1 billion, or 55%would be living in urban areas.
The World Bank is now aiming at maintaining parityin education and is also aiming at achieving thegender equality goals.We all must work towards building up a commitmenttowards global poverty reduction.After all, the benefits of globalization should beharnessed for delivering prosperity to the nations.
Foreign capital has not only play key role in theeconomic development of India but also of ForeignDirect Investment.In economic development not only as an addition todomestic capital but also as an important source oftechnology and global best practices.FDI has always played a major role in the economicdevelopment of developing nations
Global development finance report net private capital flows to developing countries reaches a record $647 billions in 2006. 8% of that capital flowed to poorest 51 countries. government needs to focus on the realbarriers to its foreign investment goals. The value of foreign trade has increased substantially with increase in both exports from and imports into India.
The government had announced, in April 2000-• The establishment of Special Economic Zones (SEZ) policy• To boost exports and attract foreign investments. In the financial sector it is required that public policy should be focused on maximizing benefits achieved by the growing involvement of foreign firms by encouraging diversity and competition not only between foreign and domestic banks but also between banks and financial institutions.
It is the only international organization dealing with the global rules oftrade between nations.It was formed in the year 1995.The main goal of WTO is to help the tradingindustry to become smooth, fair, free and predictable.It was organized to become the administrator of multilateral trade andbusiness agreements between its member nations.The scope and future of the WTO are limited by thevision, imagination, courage, and conscience of the trade community.
In board terms, its role is two fold, first with establishment ofinternational trade in both goods and services.And second, to progressively liberalize that trade, presentlyvalued at close to eight thousand billion dollars every year.The WTO represents the rules-based regime of the policy ofeconomic globalization .WTO also tries to resolve tradedisputes between member nations.
A multinational corporation (MNC)or transnational corporation (TNC), alsocalled multinational enterprise (MNE).It can also be referred as an internationalcorporation. The International LabourOrganization (ILO) has defined an MNC as a corporation that has its managementheadquarters in one country, known as the homecountry, and operates in several othercountries, known as host countries.Its has play an important role in globalization.
Gives foreign currency to the nation.Competes with local market to improve it.Provide employment opportunities to the unemployed.Bring India to the international market status.Give the people high quality goods and at cheaper rate.Provides and efficient means of integrating national economies
Investors purchase stocks of a number ofcompanies with the objective not to gainmanagement control, but to construct aninvestment portfolio.Some examples of portfolio investment are:Purchase of shares in a foreign company.
Purchase of bonds issued by a foreigngovernment. Acquisition of assets in a foreign country. Purchase of stocks in a foreign company
Factors affecting international portfolio investment:tax rates on interest or dividendsinterest ratesexchange rates