Write a written report on Globalisation

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Globalisation describes a process by which national and regional economies, societies and cultures have been integrated through the global network trade, communication, immigration and transportation.

Over the a few decades, the economy developed rapidly which means that, globalisation was often primarily focused on the economic side of the world such as trade, foreign direct investment and international capital flows, more recently the term has been expanded to include a broader range of areas and activities such as culture, media, technology, socio-cultural, political, and even biological factors e.g. climate change.

Global trade has grown enormously since World War II, International trade in manufactured goods alone has grown an estimated 100 times from $95 Billion to $12 trillion in the 50 years since 1955.[1]

Finally, globalisation has eased the roles of the UN which officially came into existence on 24 Oct 1945.

With the help of globalisation, International Financial Institutions like World Bank assists developing countries like Kenya and Nigeria to provide loans for capital programs.

Reasons for Globalisation

The introduction of the World Bank and International Monetary fund provided the gateway for globalisation. The loans that are granted by the IMF AND World Bank on the condition that the borrowing country will reduce the state's role in the economy, lower barriers to imports, remove restrictions on foreign investment, eliminate subsidies for local industries etc. These conditions imposed laid the basic foundation to open economies to steer globalisation.[2]

The process of global integration was initiated by the order of World War II, when the leaders of Britain and the US helped establishing the World Bank and the International Monetary fund in 1944 to promote a liberal Capitalist world to counter the shadows of Socialism and Marxism.

As the population continues to rise rapidly, different economies continue to become more interdependent on resources while competitors make use of their competitive advantage in order to yield enough revenue to give room for further developments in its various economies. This points out the importance and reason behind Globalisation. For example, Apple and Sony are the two companies that have held their leadership position using innovation as a competitive advantage which has to their benefit of being able to ward of competitors and appeal to consumers round the world. Apple’s iPhone had the highest share and gained the most share over the past year improving from 31.8% to 41.4% compared to Samsung’s Galaxy S family from 9.2% to 13.0%.[3] Presently, Apple has sold over 365 million iOS devices since the first iPhone launched in 2007.[4]

Additionally, in past few decades there has been a general reduction in capital barriers, making it easier for capital to flow between different economies. This has increased the ability for firms to receive finance. It has also increased the interconnectedness of global financial markets. Whereas, globalisation was further initiated by the increase in mobility of labour. People are more willing to move between different countries in search for work. Global trade remittances now play a large role in transfers from developed countries to developing countries. For instance, the major sources of remittances were the US, $42 billion and Saudi Arabia $16 billion.[5]

Another reason for Globalization is that, Economic growth is global in nature. This means countries are increasingly interconnected (e.g. recession in one country affects global trade and invariable causes an economic downturn in major trading partners).[6]

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Emerging markets in the economy

The seven largest emerging and developing economies by either nominal or inflation-adjusted GDP are Brazil, Russia, India, China, Mexico, Indonesia, South-Korea and Turkey which are the world's fastest growing economies, contributing to a great deal of the world's explosive growth of trade.[7] These are emerging markets because they are nations with social or business activity in the process of rapid growth and industrialization. The emerging markets are said to reshape the economic landscape which will enhance prosperity. However, presently, the global economy could be hurt if the withdrawal of funds for emerging markets ...

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