Globalization is the most talked and debated issue in the contemporary world. Globalization is a process of opening up economies so that trade between countries could take place freely. For them increasing globalization has helped in the expansion of opportunities for nations and benefited workers in rich and poor countries alike. Stopping the process would mean stalling economic and technological progress, which is tantamount to stop the pace of time.
Many think globalization as the concerned strategy of the industrial world, particularly of the Trans National Corporations, to safeguard their interest and spur a new form of colonization. For them, globalization means increasing poverty and deteriorating the living standard of the workers, widening gap between the rich and the poor within the country and also among the countries, and internationalization of capital to the detriment of labour market. Even for the moderates, globalization is a process of restructuring the world economy to find ways for business to maximze profits. The process of restructuring is led by the Trans National Corporations, the governments of the industrial countries, and the international financial institutions for their own benefit.
Without falling into a definitional debate, by globalization, we mean a process of increasing economic and non-economic linkages across the world. This process is taking place at a faster pace despite some hitches coming from the formulation of regional trading blocks and the financial crisis in the Asian and Latin American countries. In fact, deregulation, liberalization, and privatization, which connote globalization, have become some of the catchwords in the development philosophy of the contemporary world.
Globalization is a widely-used term that can be defined in a number of ways. In its literal sense ‘globalization’ is the process of transformation of local or regional phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, socio-cultural and political forces. Globalization is often used to refer to economic globalization, that is, integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. In other words, globalization in economic context refers to the reduction and removal of barriers between national borders in order to assist the flow of goods, capital, services and labour although considerable barriers remain to the flow of labour.
Michael P. Todaro and Stephen C. Smith, “Globalization is a process by which the economies of the world become increasingly integrated, leading to global economy and, increasingly, global policy making, for example, through international agencies such as the World Trade Organization (WTO). But in its core economic meaning, globalization refers to the increase openness of economies to international trade, financial flows, and the direct foreign investment.”
Effects and Benefits of Globalization
The effect of globalization is both positive and negative. First let us consider many aspects of globalization which affect the world in several ways.
- Industrial sector: Emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries.
- Financial sector: Emergence of worldwide financial markets and better access to external financing for borrowers. As these worldwide structure grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidence by the financial crises of late 2008.
- Economic sector: This is the realization of a global common market, based on the freedom of exchange of goods and capital. The interconnectedness of these markets however meant that an economic collapse in any one given country could not be contained.
- Political sector: Some use ‘globalization’ to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization. With the influence of globalization and with the link of Chinese economy to the economies of USA and Europe, the People’s Republic of China has experienced some remarkable growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry and technology to challenge the United States for the position of leading world power.
- Informational aspect: This refers to the increase in information flows between geographically remote locations. Possibly this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.
- Competition: Survival in the new global business market certainly needs improved productivity and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition.
- Ecological sector: The start of global environmental challenges that might be solved with international cooperation, such as climate change, cross-boundary water and air pollution, and over-fishing of the ocean. The increased global warming and the depletion of Ozone layer have definitely been a common concern of all the nations. Since many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution. But industrial revolution of present developed nations is the evidence that economic development historically required a ‘dirty’ industrial stage, and it is argued that developing countries, by way of regulation, should not be prohibited from increasing their standard of living.
- Cultural sector: Culture is defined as patterns of human activity and the symbols that give these activities significance. Culture is what people eat, how they dress, beliefs they hold, and activities they practice. Globalization has joined different cultures and made it into something different. It has brought growth of cross-cultural contacts; advent of new categories of consciousness and identities which represents cultural transmission, the desire to increase one’s standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a ‘world culture’. In this regard, some complains about the resulting consumerism and loss of languages.
- Greater international travel and tourism: There is increase in cross-national of people for the purpose of pleasure seeking, trekking, exploration, conference and seminars, trade and business, and mountain climbing. There are estimated records that up to 500,000 people are on planes at any time.
- Technical sector: These are the development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable and wireless telephones.
- Immigration: Greater immigration sometimes illegal immigration is another aspect connected to globalization.
- Social development of the system of non-governmental organizations: NGOs as main agents of global public policy, including humanitarian aid and developmental efforts.
- Increase in the number of standards applied globally: To protect the right of the inventors, and enhancing legal trading, there is increase in the number of standards applied, for example, copyright laws, patents and world trade agreements.
- Legal/Ethical sector: These are related to the creation of international criminal court and international justice movements, raising awareness of global crime-fighting efforts and cooperation, and the emergence of Global Administrative Law.