Globalisation

Spread of; manufacturing, services, markets, culture, lifestyle, capital, technology and ideas across national boundaries and around the world. The movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms. Is an increasing global connectivity and integration of economy, culture and technology.

 Also the integration of these geographically dispersed economic and social activities. Huge impacts on people and nations. The whole world is affected by globalisation

Integration of Economies
The increasing reliance of economies on each other The opportunities to be able to buy and sell in any country in the world The opportunities for labour and capital to locate anywhere in the world The growth of global markets in finance
Stock Markets are now accessible from anywhere in the world!

Integration of Economies
Made possible by:
Technology Communication networks Internet access Growth of economic cooperation trading blocs (EU, NAFTA, etc.) Collapse of communism Movement to free trade

Trade versus Aid?

Benefits of Trade:
Increased choice Greater potential for growth Increase international economies of scale Greater employment opportunities
Trade has led to massive increases in wealth for many countries.

Trade versus Aid?

Disadvantages of trade:
Increase in gap between the rich and the poor Dominance of global trade by the rich, northern hemisphere countries Lack of opportunities for the poor to be able to have access to markets Exploitation of workers and growers

How far does trade help children like these?

Corporate Expansion
Multi-national or trans-national corporations (MNCs or TNCs) businesses with a headquarters in one country but with business operations in a No matter where you go in the world, certain businesses will always have a presence. number of others.

Corporate Expansion
Characteristics:
Expanding revenue Lowering costs Sourcing raw materials Controlling key supplies Control of processing Global economies of scale

Controlling supplies may be one reason for global expansion.

Corporate Domination
Key Issues: Damage to the environment? Exploitation of labour? Monopoly power Economic degradation Non-renewable resources Damage to cultures
Shell and Nikes activities have come under severe criticism in some quarters.

Advantages:
Increased trade across national boundaries. One company having subsidiary companies and plants in many countries. One company procuring material required from multiple countries. One company selling its products in many different countries. Growth of joint ventures and technical collaborations between companies from different countries. Lowering of trade barriers and simplified import and export procedures.

Advantages(Contd )
Greater employment opportunities for people. Availability of greater variety of goods and services to the consumers. More competitive price to the competitors. Ability of companies to achieve lower costs. Access to bigger markets to business firms. Faster and wider spread of new technologies across the world.

Disadvantages:
Unrestricted globalization can hamper the development of less developed countries. Smaller firms may lack the resources to compete internationally and therefore may be forced out of business. Countries become increasingly dependent on other countries for meeting their needs for goods and services. This can become a major disadvantage in situations like war. Adverse economic condition in one country can escalate to other countries and may even adopt global proportion. Globalization may also lead to faster spread of infectious disease, for people animals and plants. Such infection may be carried through, people or goods.

Effects of Globalisation In India

Cultural Changes
Cultural Changes Access to television grew from 10% of the urban population (1991) to 75% of the urban population (1999). Cable television and foreign movies became widely available for the first time and have acted as a catalyst in bulldozing the cultural boundaries Indian youths leaving education in mid-way and joining MNC's There has been a increase in the violence, particularly against women.

 Extension of internet facilities even to rural areas. In place of old cinema halls, multiplex theatre are coming up. Old restaurants are now replaced by Mc. Donald s. Fast food and Chinese dishes have replaced juice corners and Parathas. More availability of cheap and filthy material (CD's or DVD's of Hollywood movies, foreign channels like MTV) in the name of liberalization. Scientific and technological innovations have made life quite comfortable, fast and enjoyable.

 More inflow of money has aggravated deep rooted problem of corruption. More scandals and scams compared to preglobalization era. In India, land-line or basic phone was a prestige symbol few years back but now you find people riding bicycle with a mobile in hand, talking or listening music.

Economic Changes
A country of savers has become spenders. Greater employment opportunities for the masses. Companies and government have changed the way they do business to cut the red tapisum. The rupee has gained on the dollars so it is less advantage for Indians to live overseas and send money back home..

The Bright Side of Globalization :

The rate of growth of the GDP of India has been on the increase from 5.6 % during 1980-90 to 7% in the 1993-2001 period. In the last four years, the annual growth rate of the GDP was impressive at 7.5% (2003-04), 8.5% (2004-05),9% (2005-06) and 9.2% (2006-07). The foreign exchange reserves were $ 39 bn (2000-01), $107 bn (2003-04),$145 bn (2005-06) and $180 bn (in February 2007).

 India s trade deficit during 1990-1991 to 2006-2007 ranged between 3.6% to 6.9% of GDP. The fluctuation in Foreign portfolio Investment were much sharper then FDI, The FPI rate decreases by 36% from period 1990-00 and again shows upward growth rate in period 00-07 was 22.1%. FDI (net) shows a gradual upward growth from $97 million in 1990-1991 to $3272 million in 2000-2001 and again rising and touching the peak of $8779 million in 2006-2007.

 Share in world exports raise from 0.52% in 1990 to 1% in 2007. In the rate of growth of per capita income there has been a sharp acceleration in the growth of per capita income, almost doubling to an average of 7.2% p.a. (2003-04 to 200708).

Darker Side of Globalisation

Industrialization did not take place as per expectation. Share of agriculture in the GDP went down drastically to 24 per cent and further to 22 per cent in 2006-07. The number of rural landless families increased from 35 per cent in 1987 to 45 per cent in 1999, further to 55 per cent in 2005.

 Corruption, lack of efficiency in work and ineffective management became the common features of public sector. Decreased FDI: The data of FDI shows 50% (approx) gradual upward growth from 90-00. The FDI growth decreased by 20% from period 2000-07. Our progress in education has been slow and superficial , without depth and quality, to compete the international standards.