The term “globalization” refers to the growing interconnectedness, integration, and connection between people and businesses in diverse parts of the world. The process of integrating different economies throughout the world without impeding the free flow of capital, technology, products, services, and natural resources is known as globalization.
Important Features of Globalization
- The reduction of trade restrictions to promote free commerce in products and services
- Nations create the conditions necessary for the free flow of money.
- Nations create the conditions necessary for the free exchange of technologies.
- The construction of an environment that allows for the free movement of labor from the perspective of emerging nations.
INDIA AND THE GLOBAL ECONOMY: TRADE, EXPORTS, IMPORTS, CRISIS
Advantages of Globalization
People’s social, economic, and cultural ties are stronger and more dynamic. Globalisation integrates social, commercial, political, cultural, and technical aspects. It entails global interconnections among all individuals on the planet.
Its essential aspect is the free movement of knowledge, technology, products, services, and people across all societies. It seeks to soften geographical barriers, allowing all individuals to strengthen their relationships and linkages.
Economic Integration
Globalisation promotes global economic integration, helps supply less developed nations with money and skills. Globalization also enlarges the global market. Globalization causes export-led growth to replace import substitution strategies.
It allows developing nations to raise money without taking on debt. It also allows underdeveloped nations to utilize contemporary technologies without investing in R&D and helps underdeveloped nations improve their exports.
India as an Emerging Economic Power: Strengths, Economy, Exports, Finance, Challenges, Etc.
Helps Developing Nations
It promotes assistance to developing nations in general development. Trade restrictions can be lifted, and countries’ collaboration can be strengthened. Diffusion of knowledge from developed to developing nations takes place.
This enables a reduction in the cost of communication and transport, allowing for a faster spread of information and reduction in tariff. A rise in the percentage of national income can be attributed to foreign trade.
Economic activities are influenced by both the domestic and global markets. It refers to the process of incorporating local economies with the global economy. It represents the emancipation of import-export activity and the unrestricted flow of commodities and services across boundaries.
Economic and Financial changes due to Globalization
Advocate economic and monetary changes to enhance free global commerce, free entrepreneurship, and free markets. Attempting to keep the government out of the private ownership of the means and distribution, but permitting free movement of industrial, commerce, and economic activities beyond frontiers.
Promoting entrepreneurial partnership in order to ensure quick modernisation, development, and technical advancement.
It argues for the free flow of economic relations between all nations. Each state accords MFN (most favoured country) status to other nations and maintains its trade and commerce free from overly onerous and restrictive regulatory and protectionist regimes. It advocates for the independence of company owners to launch any industry, trade, or business enterprise both domestically and internationally.
Largest Economies in the World 2022
Disadvantages of Globalization
Greater earning countries gained the ability to negotiate for greater compensation. The World Bank discovered that between 1988 and 2008, the real income of the global highest 1percent of earners increased by over 60 percent.
Emerging middle class in developing nations, are experiencing growth in real earnings. Wealthy people invest overseas and benefit from reduced tax rates abroad due to globalization.
Multinational Corporations
Multinational corporations can benefit from tax incentives and lower-cost workers overseas. Amazon and Google, for instance, have established subsidiaries in Ireland and Luxembourg to profit from reduced taxes. Furthermore, manufacturing is becoming more international; for example, Apple designs in the United States but manufactures in China.
This leads to price reductions which help consumers. Labor markets have become more dynamic as a result of increased labour mobility. Supplying labour vacancies in health care, for example, with foreign-born worker.
EVOLUTION OF GLOBALIZATION AND ITS TREMENDOUS IMPACT ON THE WORLD
Winners and Losers
Certain countries have benefited more than others through globalisation. South East Asian nations, particularly Vietnam, Korea, and China, have witnessed an increase in standard of living as a consequence of their export surge. Nevertheless, nations in Sub-Saharan Africa have failed to increase their living standards because their exports have not advanced at the same rate.
Unskilled manual labourers who have witnessed a decrease in work prospects as a result of the economy’s structural shift towards globalization. The globalisation also impacts average taxpayers who suffer as a result of large businesses’ tax evasion tactics.
The environment is also effected by globalization, which is undergoing global warming and resource depletion. While highest earners and the middle class have witnessed growing earnings, the World Bank determined that the lowest 5% of the global total saw stagnating real incomes between 1988 and 2008.
Emerging countries that lack the infrastructure required to create an export-oriented manufacturing base. The agriculture industry has grown at a slower rate in terms of actual income. Because farm products have low price elasticity, demand for agricultural production does not increase at the very same rate as real GDP.
Several nations have experienced a “brain drain,” in which young talented people migrate to higher-income nations. This is particularly troublesome for Eastern European economies, which have suffered net outflows to Western Europe. Social tensions have been developed as a result of population increase in Western Europe.
Manufacturing industry in nations with high labour costs are also getting hit. Manufacturing firms in the United Kingdom and the United States have suffered a comparative drop as they face competition with cheaper labor-cost rivals.
Check out this V-2: Story of the First Object to reach Space.
SIGNUP FOR MORE INTERESTING AND EXCITING NEW CONTENT
For more content and updates, FOLLOW US on Social Media
- Are You an AI Expert? Take Our Quiz and Find Out Now!
Test your AI knowledge with our Ultimate AI Quiz! Whether you’re a student or a professional, take the quiz and learn about this fascinating field! - THERMODYNAMICS
It is the branch of physics that deals with the concepts of heat and temperature and the inter conversion of heat and other forms of energy. - THERMAL PROPERTIES OF MATTER
Temperature is a relative measure or indication of the hotness or coldness of a body. The temperature of a body determines the direction of the flow of energy. The SI unit of temperature is kelvin (K). °C is a commonly used unit of temperature. - MECHANICAL PROPERTIES OF FLUIDS – PART 2
The viscous drag increases with increases velocity of the body, but it is found that the body after attaining certain velocity starts moving with a constant velocity called terminal velocity. - MECHANICAL PROPERTIES OF FLUIDS – PART 1
The materials that can flow are called fluids. Liquids and gases are collectively known as fluids. Unlike a solid, a fluid has no definite shape of its own.
You might want to see Nikola Tesla: Top 10 Inventions to Make You Wonder.