GLOBALIZATION

(A) ECONOMIC ORGANIZATIONS:

a. EU – European Union
b. ASEAN – Association of South East Asian Nations

(B) IMPORTANT TERMS:

a. Globalization:
i. Process of bringing world economies close to one another
ii. It involves removal of trade barriers and restrictions
iii. It encourages liberalization, privatization and free market economies
b. Liberalization: Relaxation of government restrictions, in the areas of social and economic policy
c. Privatization: The transfer of ownership from the public sector (Government) to the private sector
d. Tariff: The tax that is paid on goods that are coming into or going out of the country
e. Multinational companies (MNCs): Companies that operate in several different countries. The companies are large
and powerful
f. Indigenous: Belonging to a particular place rather than coming from somewhere else
g. Silk Route –World’s oldest and historically important trade route. From China to Europe through Central Asia
h. Breaking tariff barriers: Reducing the tariffs that have to paid on goods coming into or going out of the country

(C) Facts for Short answer type/ Match the following/ Fill in the blanks

a. The information technology revolution has changed the world. Computer, internet and IT products have made
global business easy, quick, competitive and profitable
b. Globalization:
i. It encourages healthy competition for mutual benefit and promotes trade
ii. This economic cooperation can lead to social and cultural understanding and hence peaceful coexistence
iii. Globalization involves breaking down of trade barriers
iv. Globalization hence allows free flow of raw materials and finished goods across borders
c. Disadvantages of Globalization:
i. Leads to greater gap between developed and developing countries
ii. Competition between foreign and indigenous industries is unequal
iii. Fear that MNCs will cause damage to the environment in developing countries
d. Multinational companies have many advantages – They can get cheap labour which is readily available in developing
countries. This helps them to make enormous profits
e. The 21st century is an age of interdependence and mutual benefit for the countries
f. The success of the economy of any country will depend on :
i. sharing of goods and services with other countries
ii. Healthy competitive trade with other countries
g. The day of isolation are over –Because no country can prosper by trying to isolate itself from the global economy
h. The path to progress and prosperity lies in Globalization. Globalization is here to stay. It has brought the world
together.
i. The vision of one world may one day be realized by the fact that Globalization has brought the world closer. This has
led to understanding, cooperation and healthy competition among the countries.
j. Examples of MNCs operating in India:
i. Coke, Pepsi, Sony KFC, McDonald’s, Nike, Reebok
ii. Many American and European companies have opened call centres in India and they outsource their work to
the call centres.