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Benefits of Globalization

The continuing global tendency towards the free flow of business and monetary infusions across nations describes globalization which helps in the formation of international financial system. It provides economic independence and triggers competition stimulating globalization to elevate the living standard of people in the nations that offer themselves to the world trade.

Benefits of globalization
"We have moved from a world where the big eat the small to a world where the fast eat the slow", as observed by Klaus Schwab of the Davos World Economic Forum. All economic analysts must agree that the living standards of people have considerably improved through the market growth. With the development in technology and their introduction in the global markets, there is not only a steady increase in the demand for commodities but has also led to greater utilization. Investment sector is witnessing high infusions by more and more people connected to the world's trade happenings with the help of computers. As per statistics, everyday more than $1.5 trillion is now swapped in the world's currency markets and around one-fifth of products and services are generated per year are bought and sold. Buyers of products and services in all nations comprise one huge group who gain from world trade for reasons encompassing opportunity charge, comparative benefit, economical to purchase than to produce, trade's guidelines , stable business and alterations in consumption and production. Compared to others, consumers are likely to profit less from globalization.

Another factor which is often considered as a positive outcome of globalization is the lower inflation. This is because the market rivalry stops the businesses from increasing prices unless guaranteed by steady productivity. Technological advancement and productivity expansion are the other benefits of globalization because since 1970s growing international rivalry has triggered the industries to improvise increasingly.

Some other benefits of globalization as per statistics:

y y y

Commerce as a percentage of gross world product has increased in 1986 from 15% to nearly 27% in recent years. The stock of foreign direct investment resources has increased rapidly as a percentage of gross world product in the past twenty years. For the purpose of commerce and pleasure, more and more people are crossing national borders. Globally, on average nations in 1950 witnessed just one overseas visitor for every 100 citizens. By the mid-1980s it increased to six and ever since the number has doubled to 12.

Worldwide telephone traffic has tripled since 1991. The number of mobile subscribers has elevated from almost zero to 1.8 billion indicating around 30% of the world population. Internet users will quickly touch 1 billion.

Globalization leading to social anxieties:

Listed below are the three sources of anxiety between worldwide markets and social steadiness: Across the nations, globalization triggers the services of large sections of working people more effortlessly substitutable, Commerce can set free factors that weaken guidelines in national practices, for example workers in South Carolina are replaced by child laborers in Honduras, Globalization and its cutthroat rivalry makes it hard for administration to perform important tasks of offering the social programs

y y y

Key areas which demand immediate attention: y y

Public education, which will demand proper evaluation and outcomes of globalization incorporating its benefits. Amending practices to review the international fiscal institutions to assist in averting crises, facilitating helpful early warning systems, better synchronization of exchange rates among the world markets and arranging the private sector in order in performing rescue functions, and

Reorganizing the bilateral liberalization of the global financial system, which should tackle the major areas related to food trade, labour pacts and the environment.

Chandrasekaran Balakrishnan for The 2004 Moffatt Prize in Economics Introduction: Globalisation is the new buzzword that has come to dominate the world since the nineties of the last century with the end of the cold war and the break -up of the former Soviet Union and the global trend towards the rolling ball. The frontiers of the state with increased reliance on the market economy and renewed faith in the private capital and resources, a process of structural adjustment spurred by the studies and influences of the World Bank and other International organisations have started in many of t he developing countries. Also Globalisation has brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer hold out promise improved productivity and higher living standard. But globalisation h as also thrown up new challenges like growing inequality across and within nations, volatility in financial market and environmental deteriorations. Another negative aspect of globalisation is that a great majority of developing countries remain removed fr om the process. Till the nineties the process of globalisation of the Indian economy was constrained by the barriers to trade and investment liberalisation of trade, investment and financial flows initiated in the nineties has progressively lowered the bar riers to competition and hastened the pace of globalisation Sponsored Links
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Definition: Globalised World - What does it mean? Does it mean the fast movement of people which results in greater interaction? Does it mean that because of IT revolution people can be in touch with each other in any part of the world?

Does it mean trade and economy of each country is open in Non-Intrusive way so that all varieties are available to consumer of his choice? Does it mean that mankind has achieved emancipation to a level of where we can say it means a social, economic and political globalisation? Though the precise definition of globalisation is still unavailable a few definitions w orth viewing, Stephen Gill: defines globalisation as the reduction of transaction cost of transborder movements of capital and goods thus of factors of production and goods. Guy Brainbant: says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC's, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution

Impact on India: India opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations. The new policy regime radically pushed forward in favour of amore open and market oriented economy. Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included scrapping of the industrial licensing regime, reduction in the number of areas reserved for the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates and change over to market determined exchange rates. Over the years there has been a steady liberalisation of the current account transactions, more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of foreign investors in telecom, roads, ports, airports, insurance and other major sectors. The Indian tariff rates reduced sharply over the decade from a weighted average of 72.5% in 1991-92 to 24.6 in 1996-97.Though tariff rates went up slowly in the late nineties it touched 35.1% in 2001-02. India is committed to reduced tariff rates. Peak tariff rates are to be reduced to be reduced to the minimum with a peak rate of 20%, in another 2 years most non-tariff barriers have been dismantled by march 2002, including almost all quantitative restrictions. India is Global: The liberalisation of the domestic economy and the increasing integration of India with the global economy have helped step up GDP growth rates, which picked up from 5.6% in 199091 to a peak level of 77.8% in 1996-97. Growth rates have slowed down since the country has still bee able to achieve 5-6% growth rate in three of the last six years. Though growth rates has slumped to the lowest level 4.3% in 2002-03 mainly because of the worst droughts in two decades the growth rates are expected to go up close to 70% in 2003-04. A Global

comparison shows that India is now the fastest growing just after China. This is major improvement given that India is growth rate in the 1970's was very low at 3% and GDP growth in countries like Brazil, Indonesia, Korea, and Mexico was more than twice that of India. Though India's average annual growth rate almost doubled in the eighties to 5.9% it was still lower than the growth rate in China, Korea and Indonesia. The pick up in GDP growth has helped improve India's global position. Consequently India's position in the global economy has improved from the 8th position in 1991 to 4th place in 2001. When GDP is calculated on a purchasing power parity basis. Globalisation and Poverty: Globalisation in the form of increased integration though trade and investment is an important reason why much progress has been made in reducing poverty and global inequality over recent decades. But it is not the only reason for this often unrecognised progress, good national polices , sound institutions and domestic political stability also matter. Despite this progress, poverty remains one of the most serious international challenges we face up to 1.2 billion of the developing world 4.8 billion people still live in extreme poverty. But the proportion of the world population living in poverty has been steadily declining and since 1980 the absolute number of poor people has stopped rising and appears to have fallen in recent years despite strong population growth in poor countries. If the proportion living in poverty had not fallen since 1987 alone a further 215million people would be living in extreme poverty today. India has to concentrate on five important areas or things to follow to achieve this goal. The areas like technological entrepreneurship, new business openings for small and medium enterprises, importance of quality management, new prospects in rural areas and privatisation of financial institutions. The manufacturing of technology and management of technology are two different significant areas in the country. There will be new prospects in rural India. The growth of Indian economy very much depends upon rural participation in the global race. After implementing the new economic policy the role of villages got its own significance because of its unique outlook and branding methods. For example food processing and packaging are the one of the area where new entrepreneurs can enter into a big way. It may be organised in a collective way with the help of co-operatives to meet the global demand. Understanding the current status of globalisation is necessary for setting course for future. For all nations to reap the full benefits of globalisation it is essential to create a level playing field. President Bush's recent proposal to eliminate all tariffs on all manufactured goods by 2015 will do it. In fact it may exacerbate the prevalent inequalities. According to this proposal, tariffs of 5% or less on all manufactured goods will be eliminated by 2005 and higher than 5% will be lowered to 8%. Starting 2010 the 8% tariffs will be lowered each year

until they are eliminated by 2015. GDP Growth rate: The Indian economy is passing through a difficult phase caused by several unfavourable domestic and external developments; Domestic output and Demand conditions were adversely affected by poor performance in agriculture in the past two years. The global economy experienced an overall deceleration and recorded an output growth of 2.4% during the past year growth in real GDP in 2001-02 was 5.4% as per the Economic Survey in 200001. The performance in the first quarter of the financial year is5.8% and second quarter is 6.1%. Export and Import: India's Export and Import in the year 2001-02 was to the extent of 32,572 and 38,362 million respectively. Many Indian companies have started becoming respectable players in the International scene. Agriculture exports account for about 13 to 18% of total annual of annual export of the country. In 2000-01 Agricultural products valued at more than US $ 6million were exported from the country 23% of which was contributed by the marine products alone. Marine products in recent years have emerged as the single largest contributor to the total agricultural export from the country accounting for over one fifth of the total agricultural exports. Cereals (mostly basmati rice and non-basmati rice), oil seeds, tea and coffee are the other prominent products each of which accounts fro nearly 5 to 10% of the countries total agricultural exports. Where does Indian stand in terms of Global Integration? India clearly lags in globalisation. Number of countries have a clear lead among them China, large part of east and far east Asia and eastern Europe. Lets look at a few indicators how much we lag.
yOver the past decade FDI flows into India have averaged around 0.5% of GDP against 5% for China 5.5% for Brazil. Whereas FDI inflows into China now exceeds US $ 50 billion annually. It is only US $ 4billion in the case of India yConsider global trade - India's share of world merchandise exports increased from .05% to .07% over the pat 20 years. Over the same period China's share has tripled to almost 4%. yIndia's share of global trade is similar to that of the Philippines an economy 6 times smaller according to IMF estimates. India under trades by 70-80% given its size, proximity to markets and labour cost advantages. yIt is interesting to note the remark made last year by Mr. Bimal Jalan, Governor of RBI. Despite all the talk, we are now where ever close being globalised in terms of any commonly used indicator of globalisation. In fact we are one of

the least globalised among the major countries - however we look at it.
yAs Amartya Sen and many other have pointed out that India, as a geographical, politico-cultural entity has been interacting with the outside world throughout history and still continues to do so. It has to adapt, assimilate and contribute. This goes without saying even as we move into what is called a globalised world which is distinguished from previous eras from by faster travel and communication, greater trade linkages, denting of political and economic sovereignty and greater acceptance of democracy as a way of life.

The implications of globalisation for a national economy are many. Globalisation has intensified interdependence and competition between economies in the world market. This is reflected in Interdependence in regard to trading in goods and services and in movement of capital. As a result domestic economic developments are not determined entirely by domestic policies and market conditions. Rather, they are influenced by both domestic and international policies and economic conditions. It is thus clear that a globalising economy, while formulating and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world. This constrained the policy option available to the government which implies loss of policy autonomy to some extent, in decision-making at

Globalization means increasing the interdependence, connectivity and integration on a global level with respect to the social, cultural, political, technological, economic and ecological levels. Advantages of Globalization

o o o o o o o o o o o
Effects of globalization

Goods and people are transported with more easiness and speed the possibility of war between the developed countries decreases free trade between countries increases global mass media connects all the people in the world as the cultural barriers reduce, the global village dream becomes more realistic there is a propagation of democratic ideals the interdependence of the nation-states increases as the liquidity of capital increases, developed countries can invest in developing ones the flexibility of corporations to operate across borders increases the communication between the individuals and corporations in the world increases environmental protection in developed countries increases

o o o o o o o

enhancement in the information flow between geographically remote locations the global common market has a freedom of exchange of goods and capital there is a broad access to a range of goods for consumers and companies worldwide production markets emerge free circulation of people of different nations leads to social benefits global environmental problems like cross-boundary pollution, over fishing on oceans, climate changes are solved by discussions more transborder data flow using communication satellites, the Internet, wireless telephones etc.

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Globali ation is a connection to all of the worlds markets. Countries around the world and corporations alike benefit from globali ation. Instead of relying on national economies self-contained within the borders of the country, by Brad Storm by Jewel Cl y Everyone benefit from globali ation. Out ourcing i a definite advantage for employers, regardless of geographic location. Cutting down on travelling, costs, wages, and increasing profits is what business is all about. Well,
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by Derotha Ann Reynolds No one benefits from the current incarnation of globalization. It has ruined the global economy. A better concept for world trade would be agreements between nations involving tarrifs where appropriate to protect read more

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by Guice The Disproportionate Distribution of Globalized Economic Benefits Globalization is an intricate, international socio-economic strategy, often too complicated for any one person to understand. There are so many facets to consider, read more

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by Siew Cheng Hoe Practically everyone benefits from globalization in some ways. It does not matter where you stay, whether you stay in Africa, Asia, North America or Middle East, you benefit from globalization in many ways. However, globalization read more

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by Aaron Dollhausen Globalization may be seen as a boon to solving many of the world's problems, but the very nature of globalization depends upon the individual which is singular and prone to shifting alliances as the individual sees fit. The primary read more

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by Joe Roissier Globalization: Who Benefits from it?

This term Globalization gets thrown around a lot these days and few of us agree on what it is although we each have our own definition. One thing many of us do agree on, however, is that globalization read more

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by Jonte Rhodes Globalisation in theory will benefit everyone over a long enough time period, although in practice this is rarely the case, and often many people suffer instead. For example if the company you work for decides to expand or relocate read more

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by Jack Roviere It seems intuitive that companies that offshore and outsource to other nations - as part of the move to "globalize," no less - only care about their bottom lines. They want to employ the cheapest workers possible, and they are read more

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by Casey Clay Because of the capitalistic nature of the global economy, many countries and many people around the world benefit from globalization. Globalization provides the largest possible base of competitors. This, in turn, provides cheaper read more

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by V. Kumar Everyone criticizes it and yet everyone keeps running after it! That, my dear, is the irony of globalization! If in spite of all the noise that is raised against it, the roller-coster ride of globalization continues unabated, read more

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by Laura Lee Winger The basic concept that globalization protestors miss is rooted in the economic fundamentals that have made America, Europe and parts of Asia so successful in the 20th century. Mass production proved to be more economical than read more

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by Peter Reilly Globalization is often seen as a major facet of world politics and from the 1970s onwards there has been a definite push towards creating a single global society. In this framework, the conventional autonomy of societies was read more

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by G Washington Smikle Globalization is not a fixed phenomenon. It is extremely fluid, and as such can be extremely disruptive. Even now we see this quality in the state of the current immature globalization. Writers who attempt to address this critical read more

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by Bruce Paine Is Offshoring a Good Strategy? Multinational Corporation's must address an offshoring strategy as part of their value chain. Companies seeking to read more

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by Jason Shi Wearing a made-in-China T-shirt, he came out from his Toyota SUV and merged into the crowd that was gathered by an anti-globalization organization through its website. This is an ironic cartoon that I have seen before. Numerous read more

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by Arjun Wadhwa Almost everyone has now heard the term "globalization". It is a very interesting term, which describes the growth of international trade, monoculture, and global village. Marshall McLuhan once said, "We are increasingly living read more

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by Zachary Garber While there are many arguments for and against globalization in the twenty-first century, it is folly to think that the tide of global interdependence can be checked. Neither governmental interference nor community attempts to read more

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by L. Candy Globalization is one of the hottest topics in the world, but how to measure the level of globalization, few people know. In simple, globalization means countries are not independent any more; they connect to each other by goods, read more

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by Respectfully - Supposn We should be asking if USA's harmed by globalization? If so, how can it be remedied? Although international trade itself is generally beneficial to participating nations, a trade deficit's always economically detrimental to the read more
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Benefits of Globalization Virtually all economists agree that the large majority of residents of our shrunken planet are considerably better off through the growth of markets and the efforts of the GATT and its successor, the WTO, to keep them open. With ever expanding technology c omes new markets, increased demand for products but also greater competition. There are

now more people with computers connected to the world who are investing than ever before. As Klaus Schwab of the Davos World Economic Forum observed: "We have moved from a world where the big eat the small to a world where the fast eat the slow." More than $1.5 trillion is now exchanged in the worlds currency markets each day, and nearly a fifth of the goods and services produced each year are traded. Consumers of goods and services in all countries are one huge community who benefit from trade for reasons which include increased competition, comparative advantage, economies of scale and access to a greater range of products and services. There are also those likely to gain less than others from globalization. Lower inflation is often cited as a favourable consequence of globalization because increased competition makes businesses more reluctant to boost prices/wages unless warranted by productivity increases. Another possible benefit is faster technological and productivity growth because increased international competition has obliged business generally to innovate more rapidly since the 70s. Social Tensions Dani Rodrik of Harvard has singled out three sources of tension between global markets and social stability: 1) Globalization makes the services of large segments of working populations more easily substitutable across boundaries, 2) Trade can unleash forces that undermine norms in national practices, for example when child labour in Honduras replaces workers in South Carolina or cuts in pension benefits in France are called for in response to the requirements of the Maastricht treaty, 3) Globalization and its competi tive pressures make it more difficult for governments to carry out the important functions of providing the social programs which since World War II helped to maintain social cohesion and domestic support for liberalization. Successful Globalizers Rodrik concludes from the experience of both Europe and Asia that successful globalizers have had "market-friendly but pro-active governments, adequate social insurance and have integrated into the world economy on their own terms. This lesson contradicts much of todays conventional wisdom that globalization requires small government, that welfare states have to be cut down to size, and that there is a single (read Anglo American) model on which all countries will reasonably converge." He asserts that it is the overall quality of a societys domestic institutions - respect for the rule of law, human rights, good governance, social and political stability, adequate infrastructure and a skilled labour force- rather than labour costs or taxes that determines where most investments go. Few question that unprecedented freedom in many markets has resulted in spectacular economic growth; international trade since 1988 alone has doubled to almost US$7 trillion. Quite a number of countries around the world are experiencing r apid overall growth, and some currently enjoy record low unemployment rates. In the case of a uniquely export dependent country like Canada, where about 43 per cent of our gross domestic output now is exports, I believe virtually all of us have benefitted from more open economies worldwide. NAFTA

When the North American Free Trade Agreement (NAFTA) began in 1994 for Canada the United States and Mexico, there were more than few skeptics. Six years later, the figures speak for themselves: total merchandise trade across North America surpassed $752 billion in 1998. Canadas merchandise trade with Mexico doubled over the same period, reaching $9 billion a year. In the last four years an estimated 1.5 million new jobs have been created in Mexico alone. Since NAFTA there were 15,883 new Mexican export firms created. There was also fear that NAFTA would lead to environmental degradation in Mexico; environmental regulations would be relaxed in an attempt to woo investors. Mexican President Ernesto Zedillo put some of those fears to rest in comments earlier this year. Since 1994, he explained, Mexicos enforcement of environmental standards has become stricter; he added that new employment opportunities offered by international trade have made it possible for highly polluting activities to be replaced by environmentally friendly ones. Developing World Many are concerned about the impact globalization is having on developing countries. Consider these statistics from the 1999 UN Human Development Report: y The income gap between the fifth of the worlds people living in the richest countries and the fifth living in the poorest was 74 to 1 in 1997, up from 60 to 1 in 1990. By the late 1990s the fifth of the worlds people living in the highest income counties had: o 86% of world GDP, while the bottom fifth, just 1%, o 68% of foreign direct investment, and the bottom fifth, just 1% o and,74% of world telephone lines, the bottom fifth, just 1.5% And most striking of all, the assets of the top three billionaires are more than the combined GNP of all least developed countries and their 600 million people. This has contributed to the perception that globalization benefits only the rich, leaving the poor behind.

Recently, countries in Sub-Saharan Africa have begun to experience the benefits of globalization, and some have led the world in percentage economic growth. Angola, Uganda and Botswana already stand among the ten fastest growing economies glob ally. The IMF forecasts that Africas overall GDP should grow by 5% in 2000, a significant improvement from 3.1% in 1999. Botswana and Mauritius are shining examples of the positive effects of globalization. Both experienced exponential growth as they embraced foreign investment on their own terms and married their economic success with good governance and generous budget allocations for education and health care. Botswana, often cited as a major African success story, was one of the poorest countries in th e world at independence, but has evidently been the fastest growing economy on earth since 1965. While such successes may continue to be the exception rather than the rule in Africa, other economies can do well too. Much of what separates the developed and developing worlds today is the knowledge gap. In many developing countries, resources and people are abundant; it is the relative lack of experience in good economic, social and political structures that hurts their ability to compete. In 1998, the Internet had more than 140 million users and that number is expected to surpass 700 million by 2001. However South Asia, home to 23% of the

worlds population, has less than 1% of Internet users. Dissemination of ideas through the Information Highway, television or satellites introduces ideas about the environment, democracy, human rights and even wealth creation. I would suggest that one of the best effects of globalization is that information technology has brought attention to the need for more democratic deve lopment worldwide and the protection of human rights everywhere. The BBC World Service, TV -5, CNN and other television broadcasters are the principal vehicles of instant communication, which has revolutionized our understanding of the world. At the same time, many worry about the growing exports of American films, music and commercial television programs. Whither Globalization? The European financial problems of the early 90s, the Latin American crisis, beginning in Mexico in the mid 90s, and the East Asian flu which also hit Russia and Brazil in 1998 99, were highly destructive of many livelihoods. If the sudden removal of capital from these countries caused financial instability, it should be added that their access to global investments helped them to prosper earlier and for most of them to recover much faster then expected. Could not these crises have been avoided through better regulation of financial markets by international organizations and national governments? In the case of the WTO, critics should note that its dispute settlement mechanism is much better than the one in the GATT, which curiously required the unanimous agreement of all members, including the offending member country itself. The WTO requires a unanimous decision to block a dispute pan el report. Even large countries have thus stopped dealing with important trade complaints outside the GATT/WTO, which should benefit smaller economies. Labour Standards/Environment The WTO also promises to phase out over 10 years the Multi -Fibre Agreement, which limited exports of textiles and apparels from developing countries to developed ones. Some initial steps have been taken to include agriculture by converting market barriers to tariffs as a first stage in negotiating them downwards. A parallel agreement on services (GATS) hopes to do for services what the GATT has done for goods. Three areas where the WTO has not extended its authority in a significant way is labour standards, human rights and the environment. I understand that the WTO does permit some uses of trade policies, including economic sanctions, for human rights abuses. The issue is more complicated for labour standards. Prohibiting slave labour and exploitive child labour is obvious, but what of issues such as minimum wage levels? If it is mostly better paid employees in OECD countries who lose from the WTOs present exclusion of labour standards from trade policy, is it not understandable that developing countries see the issue as protecting job-holders in highly developed countries? The Future The way ahead is certainly unclear judging from the fairly recent protests at the IMF and World Bank meeting in Washington DC. The next US President will probably have to obtain fast track legislation from the new Congress before any new trade negotiations can make substantive progress. Greater participation by NGOs in trade negotiations might help win public support. Developing countries should be represented formally in WTO decision-making, perhaps through a steering committee having permanent

members from developed economies and rotating reps from small/developing countries. The alternative to managed globalization could be painful if we recall what happened to the pre-1914 short-lived victory of free markets and liberal democracy over mercantilism and nationalism. Globalization today must be complemented by social programs, safety nets and more investments in education/ training. We ignore at our peril the challenge to build genuine legitimacy in each of our countries for more open economies. Many people I talk to in Canada and elsewhere think the momentum today is with the anti-globalization forces. If Fred Bergsten of the Institute for International Economics is correct that on trade matters you either move forward or fall over - the bicycle theory there is real work to be done by all of us. It is clear that globalization is a force of great change and not simply a spectre on the horizon. Through technology, communications and economics, globalization and our increasing interconnection with each other are inevitable. Time and distance are shrinking: globalization is a reflection of that reality. That is why I question those who wholly condemn the phenomenon. Countries cannot succeed in isolation today. A poor country that closes its borders to in vestment is likely to stay poor. Globalization can champion stability, democracy and greater sharing around the world. Action Needed Here are four areas in which Bergsten thinks you and I should be active in our own countries: 1. Public education above all, which will require better analyses of the real consequences of globalization, including all of its benefits, 2. An honest admission that there are costs and losers with globalization, together with creating better safety nets and education/training pr ograms in many countries for those dislocated by globalization or related factors, 3. Reviewing efforts to reform the international financial institutions to help prevent crises, including approving capital controls in certain cases, more effective early warning systems, better co-ordination of exchange rates among the big economies, and engaging the private sector more systematically in rescue operations, and 4. Restarting the truly multilateral liberalization of the global trading system, which should address the key issues of the critics, including food trade, labour agreements and the environment. As successful entrepreneurs, the world is counting on you to ensure that globalization is for the benefit of people everywhere. I wish you every success.

Introduction Globalization describes the ongoing global trend toward the free flow of trade and investment across borders and therefore the integration of the international economy. It expands economic freedom and encourages competition prompting globalization to raise the productivity and living standards of people in countries that open themselves to the global marketplace. Benefits

Globalisation enables greater trade and competition between different economies, leading to lower prices, greater efficiency and higher economic growth - and it has also enabled increased levels of investment. It has made it easier for people to attract short term and long term investment (investment by multinational companies can play a big role in improving the economies of developing countries). These countries also gain from globalization as it offers access to foreign capital, global export markets, and advanced technology; while breaking the monopoly of inefficient and protected domestic producers. While globalization may confront government officials with more challenging decisions, the result for their citizens is greater individual freedom. There is arguably less cultural diversity Problems However developing Countries often struggle to compete with developed Countries. One problem of globalisation is that it has increased the use of non-renewable resources, whilst also contributing to the increase in pollution and global warming. There is also less control on output as firms can outsource production to where environmental standards are less strict. Globalisation enables workers to move more freely. Therefore, some countries find it difficult to hold onto their best skilled workers, who are attracted by higher wages elsewhere. Conclusion Trade as a percentage of gross world product has risen from 15 percent in 1986 to nearly 27 percent today. In the past two decades, the stock of foreign direct investment assets has nearly quadrupled as a percentage of gross world product. More people than ever are crossing national borders - for business and pleasure. On average around the globe, countries received just one foreign visitor for every 100 people in 1950. By the mid-1980s there were six, and since then that number has doubled to 12. Since 1991, international telephone traffic has more than tripled. The number of cell phone subscribers has grown from virtually zero to 1.8 billion - 30 percent of the world population and Internet users will soon hit 1 billion.