Globalization

 Globalization refers to the process of interaction and integration among people, companies and governments of worldwide by which an activity becomes
worldwide in scope and free movement of goods, services, capital and information across national boundaries. The term Globalization derives from the word 'globalize' which refers to an emergence of an international network of economic systems. Globalization has grown due to advance in transportation and communication technology.  Globalization is primarily an economic process of interaction and integration that's associated with social and cultural aspects. However, conflicts and diplomacy are also large parts of the history of globalization, and modern globalization. Economically, globalization involves goods, services, the economic resources of capital, technology, and data.

History of Globalization

Though many scholars place the origins of globalization in modern times, others trace its history long before the European Age of Discovery and voyages to the New World, some even to the third millennium BC. Large-scale globalization began in the 1820s. In the late 19th century and early 20th century, the connectivity of the world's economies and cultures grew very quickly. The term Globalization  is recent, only establishing its current meaning in the 1970s.


Four aspect of Globalization identified by IMF

In 2000, the International Monetary Fund(IMF) identified four basic aspects of globalization:
(1) trade and transactions
(2) capital and investment movements
(3) migration and movement of people
 (4) dissemination of knowledge


Forms of Globalization

(1) Economic Globalization

Economic Globalization refers to the interconnectedness of economies through trade and the exchange of resources. Economic globalization increases economic interdependence of national economies across the world through a rapid increase in cross border movement of goods, services, technology and capita. Economic globalization helped liberalization, deregulation, privatization and declining cost of trasport and communication. Multinational Companies have boosted up economic globalization in recent past.
A worldwide economic system that permits easy movement of goods, production, capital, and resources (free trade facilitates this)
Example: NAFTA, EU, Multinational corporations

(2) Cultural Globalization

Cultural Globalization refers to the transmission of ideas, meanings and value around the world in such a way to extend and intensify social relations. Cultural globalization process is marked by the common consumption of culture's that have been diffused by the Internet, popular culture media and international travel. Cultural globalization brings increasing interconnectedness amond different population and cultures.


(3) Political Globalization

Countries are attempting to adopt similar political policies and styles of government in order to facilitate other forms of globalization. Example of political globalization: move to secular governments, free trade agreements, etc.


Effects of Globalization

(1) Positive effect

*  Foreign Direct investment
*  Technology transfer
*  Specialization according to comparative advantage
*  Expands consumption choices
*  Competitive trade can benefits all countries
*  Quality products at low prices
*  Indirect way to reduce poverty

(2) Negative effects

*  Invites transational problems, environmental pollution, economic crisis, organized crimes and terrorism.
*  Greater economic and social interdependence seems to affect national decision making .
*  It ends national state power.
*  States with more economic power have more political power to influence international agenda.
*  Many developed countries have not lifted their protective barriers in textile and agriculture.