GLOBALIZATION

Pushpakaran, K
MBA (SJP), PhD (Reading)

15th March, 2012

Globalization in its current phase has been described as an unprecedented compression of time and space reflected in the tremendous intensification of social, political, economic, and cultural interconnections and interdependencies on a global scale.
- Stegler

Integration of Economies

The increasing reliance of economies on each other The opportunities to be able to buy and sell in any country in the world The opportunities for labour and capital to locate anywhere in the world The growth of global markets in finance

Stock Markets are now accessible from anywhere in the world!

Contd...

Integration of Economies
Made possible by:
Technology Communication networks Internet access Growth of economic cooperation trading blocs (EU, NAFTA, etc.) Collapse of communism Movement to free trade

Key Processes of Globalization

Technological advances
Expansion of international commerce (exports and imports)

Rising importance of private capital flows (stock markets and multinational corporations)
Increasing travel and migration (international tourism and domestic diversity) Increased communication and interaction between peoples (through all sorts of media)

Key Controversies of Globalization

The fact there are winners and losers, and societies vary in how much they compensate the losers Continuing poverty: worlds population below $1 a day; over below $2 a day: e. g., China, SE Asia, and India Gap between rich and poor countries has widened. Inequality between rich and poor is rising

Environmental concerns and conflict over global governance

Open borders and their effects (money laundering, terrorism, disease, drugs, sex trafficking)

Trade Vs Aid
Benefits of Trade:

Increased choice Greater potential for growth Increase international economies of scale Greater employment opportunities
Trade has led to massive increases in wealth for many countries.

Contd...

Trade Vs Aid

Disadvantages of trade

Increase in gap between the rich and the poor Dominance of global trade by the rich, northern hemisphere countries Lack of opportunities for the poor to be able to have access to markets Exploitation of workers and growers

How far does trade help children like these?

Corporate Expansion
Multi-national or trans-national corporations (MNCs or TNCs) businesses with a headquarters in one country but with business operations in a number of others.

No matter where you go in the world, certain businesses will always have a presence.

It is questionable
1. Whether globalization is a Western curse? 2. Whether globalization fairly benefits the poor? 3. Whether the institutional infrastructure of globalization is adequate?
- Amartya Sen

Over the past decade globalization has been driven by technological advances..But globalization has also been driven by policies and ideas
- Bosworth & Gordon

Food for Thought

Can globalization be a solution for all economic problems?

Thank You