GLOBALI$ATION,

G$T &
ANTI-GLOBALI$ATION
Presentation By:

Mohd Nor Syafiq bin Abdul Majid 2012822138
Nur Sakinah binti Mat Zaki 2011989339
Naim Yusree bin Mohamed Idris 2011598475

Presented For:

Global Business Issues (GBI 795)

INTRODUCTION & OVERVIEW
Globalization
Definitions of Globalization
The worldwide movement toward economic, financial, trade,
and communications integration

Globalization implies the opening of local and
nationalistic perspectives to a broader outlook of an interconnected
and interdependent world with free transfer of capital, goods,
and services across national frontiers


However, it does not include unhindered
movement of labour and, as suggested by
some economists, may hurt smaller or
fragile economies if applied indiscriminately

Source: businessdictionary.com

Definitions of Globalization
Joseph Nye and John Donahue:
Globalism is a state of the world
involving networks of
interdependence at multicontinental
distances.

World Bank: Globalization is the
growing integration of economies
and societies around the world.

Views from Economists
Rodrik: Globalization may come at the expense
of developing more responsible educational,
health, and social security networks
Amartya Sen: Third world development must be
understood. Policies should focus on health
and education, not simply GDP
Views from Economists
Immanuel Wallerstein: Criticizes
global capitalism and his analysis is
renowned by the anti-globalization
movement

James Tobin Governments
should intervene in the economy
in order to stabilize output and
avoid recessions
People Say About Globalizations
Economic Globalization caused several social ills today such as deterioration of
environment worldwide (global warming), third world debts, animal rights, child
labour and anarchism

Target anti-globalization WTO (free trade), IMF (bank loans while the countries
were in crisis), and World Bank (long term loans)

Exploitation of world poor, workers and environment
It make easier for the rich companies act with less accountability

Countries individuals culture are becoming
overpowered by Americanization. (MacDonald and Star buck, Wal-Mart)

Globalization target profit

Anti-Globalization saw what were and will happening in the world and fights for
global justice


Globalization Pros
Worldwide Market For Companies And The People
Productivity growth among countries that produces
goods and services in which they have a comparative advantage
More access to products of different countries

Open Economy Spurs Fresh Innovative Ideas From Abroad
More influx information between two different countries
Cross cultural mix of ideas, in time adopt favourable idea

World Power
Politics merging that is beneficial for everyone
Minimizing compartmentalized powers
Globalization Pros
Supporters of globalization points out the economic theory of
comparative advantage

Mainstream economists argue that standard of living can increase
through free trade

The outcomes is not always successful. Constant debate about
policies and tradeoffs

Globalization Cons
Job Lost
Due to imports or productions shift abroad
Service and white-collar jobs Vulnerable to operations relocating
offshore

Western Employees
Lose their competitive advantages companies build advanced
factories in low wage countries, making them just as productive and
thus shifting quality to other countries
Fear of losing job, companies operating under pressure
Face pay-cut demands from employers, which often threaten to
export jobs

Corporations
Threat of corporate take-over, a lot of power through globalization
GST
Goods and Service Tax
Introduction on GST/VAT
GST which is also known as VAT (Value Added Tax) in many
countries is a multi-stage consumption tax on goods and services

GST is proposed to replace the current consumption tax i.e. the sales
tax and service tax (SST)

GST is levied on supplies of goods or services purchased and
includes most products, except certain politically sensitive essentials
such as groceries, residential rent, and medical services, and
services such as financial services

End-users pay this tax on all liable goods and services directly, in that
the purchase price of goods and services includes GST
Countries Implementing
GST or VAT


No. Region No. of Country
1 ASEAN 7
2 Asia 19
3 Europe 53
4 Oceania 7
5 Africa 44
6 South America 11
7 Caribbean, Central & North America 19
ASEAN (7 Countries)
No. Country
GDP Per Capita
(World Bank, 2011,
USD)
Year of
Implementation
Initial Rate
(%)
Current
Rate (%)
1 Indonesia 3,495 1984 10 10
2 Thailand 4,972 1992 7 7
3 Singapore 46,241 1993 3 7
4 Philippines 2,370 1998 10 12
5 Cambodia 897 1999 10 10
6 Vietnam 1,407 1999 10 10
7 Laos 1,320 2009 10 10


Source: Official Web Malaysia GST
Last Updated : 24/1/2014 16:41
Tax & Non-Taxable
Taxable Supplies Non-Taxable Supplies
Standard-Rated
Supplies
(x% GST)
Zero-Rated
Supplies
(0% GST)
Exempt Supplies
(GST is not
applicable)
Out-Of-Scope
Supplies
(GST is not
applicable)
Goods Most local sales
would fall under this
category.

E.g. sale of TV set in
a retail shop
Export of goods
E.g. sale of laptop to
overseas customer.
The laptop is shipped
to an overseas
address by the
supplier
Sale and rental of
unfurnished residential
property

Importation and local
supply of investment
precious metals
Sale where goods
are delivered from
overseas to another
place overseas

Private transactions
Services Most local provision
of services would fall
under this category.

E.g. provision of spa
services to customer
Services that are
classified
as international
services
E.g. air ticket from
Singapore to Thailand
(international
transportation service)
Financial services

E.g. issue of a debt
security
How does GST work
After registration, businesses must charge GST at the prevailing rate

This GST that they charge and collect is known as output tax,
which has to be paid to Inland Revenue Board (IRB)

GST incurred on business purchases and expenses (including
import of goods) are known as input tax

Businesses can claim input tax if conditions for claiming are satisfied

This credit mechanism ensures that only the value added is taxed at
each stage of a supply chain.
1. Manufacturer Pays GST to Customs for imports

Import value = $100
Import GST paid = 7% X $100=$7 (input tax to claim from IRB)
Charges and collects GST for sale of toys to retailer

Selling price to retailer = $200
GST charged to retailer = 7% X $200 = $14 (output tax to pay IRB)
2. Retailer Pays GST to Manufacturer

Purchase value = $200
GST paid = 7% X $200=$14 (input tax to claim from IRB)
Charges and collects GST for sale of toys to end consumer

Selling price to end consumer = $300
GST charged to end consumer = 7% X $300 = $21 (output tax to pay IRB)
3. End-consumer Pays GST to Retailer

Purchase value = $300
GST paid = 7% X $300=$21

End consumer is not GST-registered. Therefore, he cannot claim GST paid on his purchase from
IRB.
The difference between output tax and input tax is the net GST
payable to or refundable from Inland Revenue Board
Example 1:


Output tax to be paid = $30
Input tax to be claimed = $10 (i.e. input tax less than output tax)
Net GST payable to IRB = $20

Example 2:

Output tax to be paid = $10
Input tax to be claimed = $30 (i.e. input tax more than output tax)
Net GST refundable from IRB = $20
Various benefits from GST
Improved Standard of Living
Used for development purposes for social infrastructure like health facilities and institutions,
educational infrastructures and public facilities to further improve the standard of living

Lower Cost of Doing Business
Under the current system, some businesses pay multiple taxes and higher levels of tax-on-tax
(cascading tax). With GST, businesses can benefit from recovering input tax, thus reducing cost
of doing business

Nation-Building
More funds can be channeled into nation-building projects for progress towards achieving a high
income nation

Fairness and Equality
With the GST, taxes are levied fairly among all the businesses involved, whether they are in the
manufacturing, wholesaling, retailing or service sectors

Enhanced Delivery System
GST will be administrated in a fully computerized environment, therefore speeding up the
delivery, especially for refund claims. This makes it faster, more efficient and reliable

Increase Global Competitiveness
Prices of Malaysian exports will become more competitive on the global stage as no GST is
imposed on exported goods and services, while GST incurred on inputs can be recovered along the
supplies chain. This will strengthen our export industry, helping the country progress even further

Enhanced Compliance
The current SST has many inherent weaknesses making administration difficult. GST system has
in-built mechanism to make the tax administration self-policing and therefore will enhance
compliance

Reduces Red Tape
Under the present SST, businesses must apply for approval to get tax-free materials and also for
special exemption for capital goods. Under GST, this system is abolished as businesses can offset
the GST on inputs in their returns

Fair Pricing to Consumers
GST eliminates double taxation under SST. Consumers will pay fairer prices for most goods and
services compared to SST

Greater Transparency
Unlike the present sales tax, consumers would benefit under GST as they will know exactly whether
the goods they consume are subject to tax and the amount they pay for
INFORMATION IN BRIEF
Anti-Globalization
What is Anti-Globalization
Term used to describe the political stance of people and
groups who oppose certain aspects of globalization in its
current form
Considered by many to be a social movement, while others
consider it to be an umbrella term that encompasses a number
of separate social movements
Participants are united in opposition to Political power of large
corporations Trade Agreements that undermines the
environment and labour rights.
Anti-Globalization Movement
Developed in the late 20th century

Seeks to protect the worlds population and ecosystem from what
they believe to be the damaging effects of globalization

It includes diverse and sometimes opposing understandings of the
globalization process, and incorporates alternative visions,
strategies and tactics.
Anti-Globalization Movements
J18 (June 18, 1999) - London, UK Eugene, Oregon


Seattle/N30 (Battle of
Seattle)
Occurred at WTO meeting in
Seattle on November 30,
1999
5,000 protesters blocked
delegates entrance to WTO
meetings in Seattle
Protesters forced the
cancellation of the opening
ceremony and lasted the
length of the meeting until
December 3
Over 600 protesters were
arrested

Genoa July 18-20,
2001 (The battle of
Genoa)
Occurred at G8 summit
in Genoa , Italy, in 2001
Biggest anti-
globalization gathering
in history, 300,000
protesters against the
G8 meeting in Genoa,
Italy
Carlo Giuliani was
killed and several
hundreds of protesters
were injured

Environmental

Global warming issues
Biodiversity lost
Species extinction
Pollution


Why Anti-Globalization
Developing countries depend upon
agriculture and this will particularly be
effected by global warming
Developed countries exporting
hazardous waste to developing
countries

Economical

Exploitation of third world country resources
February 26 2007 Starbucks Vs. Ethiopian Coffee
Plead for Starbucks support to trademark 3 of its coffees in U.S.
1lb beans average price $1.45 (-) generator fuel (-) bank interest
(-) labour (-) transports = less than $1
2432 Ethiopian farmer $0.55 a day

Cultural

Local and minority cultures are
diminishing
Western influences engulf
developing countries
Global expansion McDonalds
100 countries
Serves 50 million people daily

Women and Children

Majority of sweatshops employ female
3 major issues subjected to workers
Wal-Mart 60,000 plus suppliers in 70 countries

Child labour as Ages 4

Nike factories in Pakistan
1996 12-year-old Tariq
Stitching Soccer Balls
$0.60 a day 45+ balls
Human Rights
Other issues arise correlating with sweatshops
Wal-Mart
Code of Conducts and human rights is promoted to the public, but
not regulated or implemented on workers. Strictly their interest is not
the welfare of others, instead, their generating profits
Nike
In Pakistan it is clearly documented that child labour is against the
law, but the government carries lack of willingness to do
anything about it
The Pouty Bratz dolls factory in Southern China
Working 94 hours a week, $0.17 cents paid to workers for making
each doll at $19 retail price in US. More than 120 million Bratz dolls
sold in US since 2001
Social

The unequal wealth distribution worldwide
The gap between the developed countries and the third world
counties (i.e. technology)
The gap between the poor and rich

Can All Countries Benefit from
Globalization?
Establish international monitoring system
Domestic
each country should build up a system that can integrate into the
global market
protectionism in the domestic market
International
International institutions should reform to fit into the needs of the
globalization, such as IMF, World Bank, UN
Be more responsible for all the countries, rather than some or
few countries
Be more transparent and be monitored by member
countries from third world

Enhance Corporations Between Countries And Regions
Make free trade free and fair for both developing and developed
countries
Eliminate or reduce the trade barriers
Get more countries involved into the global market
Equal and balance development in the global market

Q & A