Pros & Cons of Globalization

Presented by:

Kunal 30 Mohan 28 Disha 29 Sunil - 31 Mindo 32

Meaning of Globalization
Globalization refers to the integration of economics and societies all over the world. It simply means making the economy more open rather than remains as closed. Globalization involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure.

Globalization is
Globalization, reminds us about the death of Princess Diana. Her death is claimed to be a symbol of globalization.
How?
The reason that her car accident is highly globalized: She is an English princess with an Egyptian boyfriend Crashes in a French tunnel, Driving a German car with a Dutch engine, Driven by a Belgian who was drunk on Scottish whisky, Followed closely by Italian Paparazzi, On Japanese motorcycles, treated by an American doctor, Using Brazilian medicines. Were reading on this computer using Bill Gates's technology, that uses Taiwanese chips, And a Korean monitor, assembled by Bangladeshi workers in a Singapore plant, Which is Transported by Indian lorry-drivers.THATS GLOBALIZATION!!!

Globalization features

War & Globalization

The beginning of Globalization

An American entrepreneur-turned-minister Charles Tazz Russell first coined the term 'corporate giants' in 1897.

The first era of globalization (in the fullest sense) during the 19th century was the rapid growth of international trade between the European imperial powers, the European colonies, and the United States. The word "globalization" has been used by economists since 1981.

After World War II, globalization was restarted and since 1990s it was driven by major advances in technology, communications and trade

Globalization In India

Beginning of globalization in India

In June of 1991, when the current Prime Minister Dr. Manmohan Singh was the Finance Minister (and Mr. Narasimha Rao was the Prime Minister), country received first significant shock of globalization and liberalization

The idea behind the new economic model known as Liberalization, Privatization and Globalization in India (LPG), was to make the Indian economy one of the fastest growing economies in the world.

It implies that the reduction in trade barriers (i.e. tariffs and quotas) to permit free flow of goods and services across the world

Showed quick and efficient recovery from the acute macroeconomic crisis of 1991 It appeared that policy makers by 1995 were convinced that globalization is what is needed for faster economic growth.

Some of the Steps taken to Globalize The Indian Economy

Devaluation: To solve the balance of payment problem Indian currency were devaluated by 18 to 19%. Disinvestment: To make the LPG model smooth many of the public sectors were sold to the private sector. Allowing Foreign Direct Investment (FDI): FDI was allowed in a wide range of sectors such as Insurance (26%), defense industries (26%) etc. NRI Scheme: The facilities which were available to foreign investors were also given to NRI's. Removal of quantitative restriction on import Reduction of peak custom tariff from 300% to 30% Dismantling of Industrial licensing.

India Trade 1991 - 2010

Growth of Indian Economy

Formation of new economic reform known as LPG model Increase in investments by foreign investors and companies. India on 4th rank for market capitalization. New fiscal policies and budgets in favor of foreign investors and companies. Worth of textile, retail, banking, IT and finance industries increases rapidly

Foreign Investment Inflows

Merits due to globalization in India

GDP has increased Current 8.3%

Exports have boomed

Incidence of poverty has been reduced Begging by India for economic aids has stopped up to some extent

Fall in the inflation rate (Current 9.06%)

Scarcity of goods have disappeared

Quality of products have improved

Progressively vibrant & internationally competitive Better technological development

FDI Share of Top Investing countries in India

Demerits due to globalization in India

Rise in demand for labor Voluntary retirement for many public sector units. Too many sales person chasing customers. Too many cars on the road

Excessive power and infrastructure affecting industrial expansion.

Increased competition between the foreign companies and domestic companies With the foreign goods being better than the Indian goods, the consumer preferred to buy the foreign goods. Due to advancement in technology many semi-skilled & unskilled labourers being removed from their jobs.

Positive effects for the world

For consumers there is a wider range of products to choose from.

Increase in flow of investments, which can be used for economic reconstruction. Greater and faster flow of information between countries Imported goods are available

There is a feeling of an international economy

Local industries work hard to compete with international firms, which results in overall economic development of a country

Negative effects for the world

Local industries get dislodged. There is political interference and conflicts arise Underlying threat of multinational corporations with immense power ruling the globe.

Intense Competition
Widening of Gap between rich and poor countries Difficult for smaller industries to establish themselves Exploitation of workers Due to outsourcing it has resulted in loss of jobs in developed countries.

Globalization
Who Benefits
Corporations Smart people who invent Establish Large companies Communists Govt. like China
Developed & Developing countries

Who Doesnt
Poor People Non-Technical people Labourers/Workers Small & Medium Firms Environment

Should we de-globalize???

Conclusion
Globalization is Here To Stay!!
Globalization does have problems & negative effects, but it will

not disappear & is inevitable We need to learn how to reap its benefits and minimize the cost and save the environment. To accomplish this we must do:
Understand its impacts

Work to remedy its problems

Protect global warming Govt. should implement policies that support globalization and are beneficial to the nation.

Thank You!