Globalization Lecture 9 PDF

GLOBALIZATION LECTURE 9  Globalization is deemed a slippery and elusive concept; it is often referred to as a process, a policy, a marketing strategy, a predicament, or even an ideology. (Heywood, 2019) Globalization is the emergence of a complex web of interconnectedness that means t...

GLOBALIZATION LECTURE 9  Globalization is deemed a slippery and elusive concept; it is often referred to as a process, a policy, a marketing strategy, a predicament, or even an ideology. (Heywood, 2019) Globalization is the emergence of a complex web of interconnectedness that means that our lives are increasingly shaped by events that occur, and decisions that are made, at a great distance from us. The central feature of globalization is therefore that geographical boundaries such as those between nation-states are of declining relevance. (Ibid) Kenichi Ohmae defines the phenomenon as “a borderless world.”  Globalization …..is the closer integration of the countries and peoples of the world which has been brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders” (Joseph Stiglitz) Globalization refers to …..international integration proceeding rapidly as a result of the increased flow of trade, capital, money, direct investment, technology, people, information and ideas across national boundaries. (Paul Streeten) Globalisation enables the coming together of individuals, corporations and resources from different countries. The unique characteristics of globalisation have allowed people with diverse backgrounds to interact freely. It is the vehicle that has helped global trade scale new heights in the last few decades. Globalization can be defined as the free movement of trade and labour as well as the ability to trade freely with countries without any trading barriers in order to purchase the highest quality of goods at the cheapest prices. Globalization refers to the growing interconnection of nations' economies. It represents the flow of financial products, goods, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of countries around the globe fostered through free trade. Note: Heywood argues that by no means does globalization imply that the “local” and the “national” are subordinates to the “global.” Rather, it highlights the deepening as well as the broadening of the political process, in the sense that local, national and global events constantly interact. Features of Globalization: Free Trade – Globalisation has helped improve trade volumes between nations with minimal interference. The reason is that governments are not micromanaging every minute aspect of business transactions. The Gross Domestic Product (GDP) of countries that have accepted globalisation has also increased significantly, thus bringing in greater prosperity. It has also resulted in better cooperation between governments that leads to further improvement in trade. Hence, there is the Dominance of the global market. Principal players include multinational corporations, International financial institutions and a plethora of non state actors. Free trade also led to the creation of regional trading blocs. Many countries shifted their economies toward open markets which was partly responsible for the collapse of communism. With this shift came the need to secure / influence/ control markets/trade, hence the need for trade alliances / arrangements such as NAFTA, MERCUSOR , EU, CSME, UNASUR etc. Liberalization – One of the main characteristics of globalisation is the improvement in the business climate for corporations. It has helped entrepreneurs to set up businesses and transact both within and outside the country. The rules and regulations for companies are relaxed significantly to allow for more trade between nations due to globalisation. Flexibility in trade regulations pushes governments to make further concessions to industries. Both Liberalization and Globalisation are dependent on each other.  Interdependence – With the advent of globalisation, countries have become more reliant on each other. Businesses get the opportunity to import cheaper raw materials to produce their commodities. They are also being allowed to export to countries that have more demand for their finished goods. It has helped reduce trading barriers and build overall economic prosperity. Interdependence also implies that the actions of one country can impact negatively or positively on another. In the decade of the 1979- 1980 international trade accounted for a large portion of states’ economies.  Cultural Exchange – Improvement in people to people contacts have encouraged the intermingling of cultural practices and customs. It has allowed people to exchange ideas, behaviours and values with other countries. Communities are less isolated as a result of globalisation. For example, several American eateries have penetrated different parts of the world. Similarly, cuisine from far off countries is now readily available in the United States.  Urbanization – One of the consequences of globalisation is the increase in urban centres. When many foreign/local companies set up businesses in a particular area, it becomes a hotbed of economic activity. The people who work in those companies need infrastructure near their workplace in terms of housing, transport, shops and other establishments. Globalisation leads to the building of urban centres in and around industrial areas.  Increase in Employment – Every industry is responsible for generating both direct and indirect jobs. And when production increases, it has a positive effect on employment. Globalisation helps companies increase their production capacity and set up operations in different parts of the world. It also helps boost work opportunities in countries where these corporations have set up operations. Standard of Living – With increased economic activity and opportunities for employment, people have more money in their pockets. They also have more options to choose from because of improved job opportunities. It is one of the main reasons why globalisation allows more and more people to improve their standard of living. Production Cost – In a globalized world, companies are free to  Outsourcing – One of the characteristics of globalisation is that it allows companies to bring in third parties from outside the country to manage specific processes. They take this step to reduce internal costs, improve the quality of services or both. Outsourcing is a boon for several human resource-rich countries that are looking to generate employment. Countries like India and the Philippines have benefitted immensely as a result of this practice. Technology driven: Globalization facilitates the rapid development of newer technologies eg. Mobile phones, televisions, computers etc. Intensification of competition on a world scale - standards of production and quality must be met. Growth of services: Financial and tourism etc. Forms of globalization The most significant forms of globalization are; Economic globalization, Cultural globalization and Political globalization 1. Economic globalization Economic globalization is the increasing economic interdependence of national economies across the world through a rapid increase in cross border movement of goods, services, technology and capital. Economic globalization is thus the process of increasing economic integration between countries, leading to the emergence of global markets or a single world market. Economic globalization is reflected in the fact that no national economy is now an island: all economies have to a greater or lesser extent, been absorbed into an interlocking global economy through international trade. For instance, huge flows of electronic money now surge around the world at the flick of a computer switch, ensuring that currency and other financial markets react almost immediately to economic events anywhere in the world. (Heywood, 2019)  Economic globalization comprises: globalization of production; which refers to the obtainment of goods and services from a particular source from locations around the globe to benefit from difference in cost and quality. Likewise, it also comprises globalization of markets; which is defined as the union of different and separate markets into a massive global market place. Economic globalization also includes competition, technology, and corporations and industries. From this perspective, globalization is defined as “a shift from a world of distinct national economies to a global economy in which production is internationalized and financial capital flows freely and instantly between countries.” (OECD, 1995) One of the key implications of economic globalization is reflected in the reduced capacity of national governments to manage their economies, and, in particular, to resist their restructuring along free-market lines. Major players in international trade such as dominant developed economies (US, EU ) and international financial institutions (IMF, WB, WTO) are impacting the role of national governments in the management of their economies. 2. Cultural globalization Cultural globalization refers to the transmission of ideas, meanings, and values around the world in such a way as to extend and intensify social relations. This process is marked by the common consumption of cultures that have been diffused by the internet, popular culture media, and international travel. This had added to the processes of commodity exchange and colonization which have a long history of carrying cultural meaning across the globe. Cultural globalization is the process whereby information, commodities, and images that have been produced in one part of the world enters into a global flow that tends to ‘flatten out” cultural differences between nations, regions and individuals. The circulation of cultures enables individuals to partake in extended social relations that cross national and regional borders. The creation and expansion of such relations is not merely observed on a material level. Cultural globalization involves the formation of shared norms and knowledge with which people associate their individual and collective cultural identities. It brings increasing interconnectedness among different population and cultures. Cultural globalization can be seen in the promotion of food products and food chains such as Macdonald, Kentucky Fried Chicken (KFC), Coca Cola, Marlboro cigarettes. The popular image of globalization is that it is a top-down process; the establishment of a single global system that imprints itself on all parts of the world.  In this view, globalization is linked to “homogenization” as cultural, social, economic, and political diversity are destroyed in a world in which we all watch the same television programs, buy the same commodities, eat the same foods, support the same sport stars, and follow the antics of the same celebrities (Heywood, 2019) Thus, globalization is linked to the extent to which cultures influence / dominate each other, aided by telecommunications technology and access to global commodities, shared values and so on. 3. Political globalization Political globalization refers to the growth of worldwide political system, both in size and complexity. That system includes national governments, their governmental and intergovernmental organizations as well as government independents of global civil society such as international nongovernmental organizations and social movement organizations. One of the key aspects of the political globalization is the declining importance of the nation state and the rise of other actors on the political scene. A significant aspect of political globalization is the foundation of a single world government or the promotion of liberal democracy across the world. There has been a serious attempt by many countries to promote democracy across the world. Even agencies like the World Bank and International Monetary Fund priorities democracy has a condition for the grant of funds to countries. Political globalization is evident in the growing importance of international organizations (supra-national and transnational) and the influence they exert on states.  These organizations are transnational in that they exercise jurisdiction not within a single state, but within an international area comprising several states e.gs. the UN, EU, NATO, WB, IMF, WTO OECD etc. When they conform to the principle of intergovernmentalism, international organizations provide a mechanism that enables states to take concerted action without sacrificing national sovereignty Supranational organizations (e.g. the EU), on the other hand, are able to impose their will on nation-states Impacts of globalization on Caribbean states Globalization has resulted in the Caribbean not being able to export goods and services on a global scale as competing countries are able to mass produce and export at lower prices (economies of Scales) Small states cannot influence the international prices of their exports. A lack of diversification of exports, over-dependence on specific overseas markets and dependence on imported technology and intermediate/semi-finished goods could see the Caribbean continuously lagging behind. The WTOs efforts to achieve extensive tariff reductions could cause increased financial deficit (gov’t expenditure greater than receipts) in the Caribbean For many decades the income gap between rich and poor countries has been widening and has been giving rise to the high level of poverty in many developing countries. According to the UN Human Development Indicator (HDI), the quality of life for many countries has not improved, and many persons are still living in abject poverty  The ability of Caribbean countries’ businesses to turn over profits has been reducing greatly as a result of the high level of competition in the domestic and external markets, causing the economies not to be booming so as to implement proper welfare policies to improve the quality of life of many persons. On the positive side; There is an increase in investment in the region in the form of foreign direct investments Firms are now restructuring and reorganizing businesses to operate more effectively and efficiently in the. global environment Globalization has been facilitating increased awareness and access to communication. As a result, Caribbean people are now aware of the happenings of many other countries around the world and are now able to compare their own country and systems of government to those of the advanced and more developed nations Human rights have been improved as a result of globalization since media coverage on violations of the rights receives attention from all over the world. It is through globalization that leaders address inequalities since information and openness get promoted. In most cases, the result is enhanced prosperity and democracy. Heywood, Andrew. Politics. Hampshire: Palgrave Macmillan, 2019 Chapter https://byjus.com/commerce/characteristics-of-globalisation/ https://niu.edu.in/sla/online-classes/forms-of-globalization.pdf