*the growing ease and cheapness of international communications, with the Internet the leading aspect;
*the trend toward closer international economic integration, resulting in the diminished importance of political boundaries. This trend is fueled partly by the first two trends, but even more powerfully by official policies aimed at trade and investment liberalization;
* the apparently growing significance of issues and problems extending beyond national boundaries and the resulting impetus to deal with them through some form of internationally concerted action; and
* the tendency toward uniformity (or "harmonization"), by which norms, standards, rules, and practices are defined and enforced with respect to regions, or the world as a whole, rather than within the bounds of nation-states.
Globalization could be also the act of expanding and implementing one’s vision, services and products into other markets, conducting and communicating business across boundaries, creating a network of business hubs around the world to foster growth.
Another type of definition is: the phenomenal interlink ages, interactions, integration and interdependence among nations that are manifested in unprecedented trading volumes, massive financial flows, concentration of corporate power in progressively fewer multinational players.
Globalization in this paper will be understood to mean major increases in worldwide trade and exchanges in an increasingly open, integrated, and borderless international economy. There has been remarkable growth in such trade and exchanges, not only in traditional international trade in goods and services, but also in exchanges of currencies; in capital movements; in technology transfer; in people moving through international travel and migration; and in international flows of information and ideas.
There are at least couple of fundamental blessings of globalization that is really important for the whole world :
- Reductions in poverty
- Faster economic growth (expansion in international trade)
- Growth of the multinationals
- Environmental standards
- Information flows across nations
- Respect for intellectual property rights
- Wider variety of Goods and Services have become available at lower prices
- Lower-cost and timely access to Information that reduces transaction costs, and accelerates the process of catch up
- More choices for development Finance
- Lower costs of cross-border trade and spot operations due to a harmonization of Standards
- More fertile soil for democracy
- Global Corporate Activities connect national economies- consumers and producers alike, create marketing channels, and diffuse technology (technical and managerial)
- Improvements in product quality
In the other hand there are also negative sides of globalization. In theory globalization can have a positive impact on agricultural growth. In practice globalization benefits those with technology, resources, contacts, information and access to markets. But it has negative impact on the poor. There are always winners and losers.
Winners:
- The purveyors of globalization
- The owners of technology
- The owners of skill
- The affluent, rich nations of the world.
Losers:
- Developing, poor countries of the world
- Recipients/Users of technology
- Nations relying on export of primary commodities (high concentration of export index)
There are also risks associated with globalization:
- Free trade is never so free (trade-distorting measures, e.g. subsidies, non-tariff barriers, etc are still being taken by rich and poor countries alike)
- Globalization is making the gap between the rich(est) and the poor(est)
- Free movement of people (especially those without skill) across national borders is still curtailed
- Investment funds flow very sluggishly
- Globalization of Corporate Activities often goes against sovereignty and impedes the growth of indigenous firms and industries
- Globalization of Goods, Services, Investment often calls for agglomeration (scale economies) that leads to monopoly power, and uneven presence of economic activities resulting in both cross-country and regional disparities.
- Globalization of Finance creates “hot money” and calls for good governance that often limits policy options in developing countries.
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political instability and internal upheavals - ethnic conflicts and the tyranny of local militia, indeed of even national governments in Third World countries
The view taken here, representing in this paper, is that there are both positive and negative aspects to globalization, that some of its positive features stem from the effects of competition that it entails, and that some of the negative aspects that could potentially lead to conflicts could be offset by international or global cooperation through agreements on policy or through the development of new international institutions. Thus, while globalization can cause international conflicts, it can also contribute to their containment through the beneficial effects of competition and the potential of global cooperation to treat economic and other threats facing the planet.
In our common quest for knowledge - as apart from pure belief or speculation –we can pretty safely assume that globalization works differently under different circumstances, in different local communities, in different countries, in different parts of the world.
From a political perspective, the most important question is not an abstract discussion of "who benefits the most from globalization", but: "How is globalization perceived by those who live with its effects?".
Even if globalization were to be bridging the gap between the rich(est) and the poor(est), we would still have a problem if the poor(est) somehow feel otherwise. We would still have a problem if the poor feel just as powerless, just as marginalized, just as alienated as before. In a world of rising expectations, fueled by CNN and increasingly also by the Internet, perceptions of reality are fast becoming just as important as reality itself.
If we believe free markets unleash forces that are destructive to human happiness and must be controlled by active government intervention, we will tend to see globalization as a threat. If we believe that free markets, operating within a rule of law, are essentially self- regulating and lead, in the words of Adam Smith, "as if by an invisible hand" to a greater general prosperity, then we will tend to see globalization as a blessing.
1.David Henderson, "The Changing International Economic Order: Rival Visions for the Coming Millennium," Melbourne Business School, 9 Sept. 1999.