Globalization

Introduction
 Globalization refers to the rapidly
developing process of complex
interconnections between societies
 Many, if not most, of the things we

buy are usually made from another

country
 What is Globalization?
 Globalization is the process of
international integration of products,
technologies, human resources,
capital, information and culture.
 As Globalization progresses,

economics social and political of

different countries more freely
interacts with one another and adapt
to promote further interaction.
 What is Globalization?
 There are four
main parts
• globalization of
economy
• globalization of
politics
• globalization of
human flows
• globalization of
culture
Level & Indicators of Globalization
 WORLD LEVEL GLOBALIZATION-

Foreign Direct Investment

GDP
Multinational Companies
Foreign Exchange
Foreign Exchange Markets
Balance of Payments (BoP)

 COUNTRY LEVEL GLOBALIZATION-

National Income
Investment Income
International Tourism Traffic
Level & Indicators of Globalization
 INDUSTRY LEVEL GLOBALIZATION-

Industry Exports
Foreign Investment in Industry
Investment Income

 FIRM LEVEL GLOBALIZATION-

Entry to Foreign Market

International Licensing
Joint Venture
 Globalization Trends
 Reduction in Import tariffs

 Removal of quantitative restriction

 Liberalization of Entry of Multinational

Corporation

 Liberalization to FDI

 Freedom to FII

 Convertibility of Rupee on Current Account

 Recent measure to promote
Globalization
 Trade measure

 Foreign Investment
measure

 Foreign portfolio
management

 External commercial
borrowing
Benefits & Cost of Globalization
 Benefits
• Faster economic growth
• Better living standards
• Democratization
• Free interchange of ideas, values; new opportunities
 Costs
• Greater risk/variance in outcomes
• Greater income inequality
• Social dislocation
Marketplace doesn't always advance social
objectives
 Challenges of Global Diversity
 Diversity and complexity of systems that
transnational corporations face creates
challenges, for example
• If a company does business in a nation that
does not grant women equal rights, should
that company hire and promote women at
work, even if it violates local laws and
customs?
• Should a company enter into a business
venture with a government-owned enterprise if
that government has a reputation for violating
its citizens’ human rights?
Globalization : Good or Bad?
 Economic globalization is good because
• Big firms means more efficiency
• A bigger economic ‘cake’ for al globally
• Free movement of money means that LDCs can develop
 True : the world economy is bigger & more of the
world can afford modern consumer goods
 Other positive benefits include the transmission
of common values on human & civil rights,
democracy and exposure to culture diversity
 Resistance movements are in one sense a
symptom of the wider process
 Globalization : Good or Bad?
 BUT negative sides to (economic) globalization
 Anti-globalization protesters highlight these at G8
summits
 Key issues
• Effect on democracy & national governments
• Growing wealth inequalities
• Excessive power of TNCs & financial markets
 Globalization benefits the wealthy at the expense
of the poor majority
 Huge poverty still in Africa, Latin America & Asia
(in some place getting worse)
 Also environmental destruction: Brazilian
rainforest, demise of big game in kenya, turtles in
the Carribean