Summary on Globalization

Globalization describes an ongoing process by which regional economies, societies, and cultures have become integrated through a network of communication and execution. Globalization is often term or refers to economic globalization i. e. the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. The driving forces of globalization are a combination of Economic, Technological, Socio-cultural and Political factors. Scholars indicate the increasing economic integration and interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology, and capital. It can be said that globalization is the door to global resources that opens up to the international market. Economic and financial globalization and the expansion of world trade have brought substantial benefits to countries around the world. But the current financial crisis has put globalization on hold, with capital flows reversing and global trade shrinking. There are countless indicators that illustrate how goods, capital, and people, have become more globalized. †¢The value of trade (goods and services) as a percentage of world GDP increased from 42. 1 percent in 1980 to 62. 1 percent in 2007. †¢Foreign direct investment increased from 6. 5 percent of world GDP in 1980 to 31. 8 percent in 2006. †¢The stock of international claims (primarily bank loans), as a percentage of world GDP, increased from roughly 10 percent in 1980 to 48 percent in 2006. The number of minutes spent on cross-border telephone calls, on a per-capita basis, increased from 7. 3 in 1991 to 28. 8 in 2006. †¢The number of foreign workers has increased from 78 million people (2. 4 percent of the world population) in 1965 to 191 million people (3. 0 percent of the world population) in 2005. There is a long debate about the effects of globalization, as the most common phenomenon that we heard is the capitalizing the resources of developing countries b y developed countries, brain drains as opportunities in richer countries droves talent away. In many poorer nations globalization is actually the result of the foreign businesses investing in the country to take advantage of the lower wage rate, foreign resources and engraving more markets. The anti-globalization movement developed in opposition to the perceived negative aspects of globalization. The group represents a wide range of interests and issues. Opponents of globalization point out to its negative effects. Some of them are listed below. †¢Globalization has led to exploitation of labor. Prisoners and child workers are used to work in inhumane conditions. Safety standards are ignored to produce cheap goods. †¢Job insecurity. Earlier people had stable, permanent jobs. Now people live in constant dread of losing their jobs to competition. †¢Terrorists have access to sophisticated weapons enhancing their ability to inflict damage. †¢Companies have set up industries causing pollution in countries with poor regulation of pollution. †¢Fast food chains like McDonalds and KFC are spreading in the developing world. People are consuming more junk food from these joints which has an adverse impact on their health. †¢Local industries are being taken over by foreign multinationals. †¢The increase in prices has reduced the government’s ability to sustain social welfare schemes in developed countries. †¢Multinational Companies and corporations which were previously restricted to commercial activities are increasingly influencing political decisions. It is important to ensure that the gains from globalization are more broadly shared across the population. For this purpose reforms to strengthen education and training would help ensure that workers have the appropriate skills for the evolving global economy. Policies that broaden the access of finance to the poor would also help, as would further trade liberalization that boosts agricultural exports from developing countries. Additional programs may include providing adequate income support to moderate, but not block, the process of change, and also making health care less dependent on continued employment and increasing the portability of pension benefits in some countries.