2. What is
Globalization?
Globalization is the process by which ideas,
knowledge, information, goods, and services
spread around the world. In business, the term
is used in an economic context to describe
integrated economies marked by free trade,
the free flow of capital among countries, and
easy access to foreign resources, including
labor markets, to maximize returns and benefit
for the common good.
3. 3 components of economic globalization
Academic literature commonly subdivides
globalization into three major areas
Economic Globalization
Cultural/Social Globalization
Political Globalization
4. Economic Globalization
1. Production
2. Finance
3. Markets
4. Technology
5. Organizational
6. Regimes
7. Institutions
8. Corporations
9. Labour
It refers to the widespread international
movements of goods, capital, services
technology, and information.
Economic Globalization primarily comprises
the globalization of:
Economic Globalization is one most often
mentioned in the media.
It is associated with massive amounts of
financially traded daily on the different stock
markets around the label "NEW ECONOMY".
5. In order to monitor the economy, 3 economic institutions were created.
Economic Globalization
The International Monetary
Fund (IMF) --- would oversee
the international monetary
system;
1.
2. The International Bank for
Reconstruction and Development (IBRD)
later named WORLD BANK (WB) --- would
provide loans for European
reconstruction but later
expanded its activities to
the developing world.
3. The General Agreement on
Tariffs and Trade (renamed, of the
WORLD TRADE ORGANIZATION in
1992) --- would oversee multilateral
trade agreements.
6. Cultural Globalization
Refers to the transmission of ideas, meanings, and values across national borders.
Migration is an important aspect of cultural globalization.
1.
This process has been going on for several centuries, with languages, religious
beliefs, and values being spread by military conquest, missionary work, and trade.
2. Food is the most obvious example of cultural globalization.
Food consumption is an important aspect of culture and most societies around the
world have diets that are unique to them, however, the cultural globalization of food
has been promoted by fast-food giants such as McDonald's, Coca-Cola, and
Starbucks.
3. Sport is another fairly obvious example of cultural globalization.
All the international sporting events - most notably the World Cup and The Olympics
which binds millions together in shared, truly global, 'leisure experience'.
7. Cultural Globalization
1. Converging Global Consumption Patterns
Today you can go to pretty much any major city in the
world and share in a similar 'consumption experience'.
More and more in Asia and South America are coming to
enjoy a high-consumption lifestyle.
Central to this is the growth of similar styles of shopping
malls, and leisure parks which provide a homogenous
cultural experience in different regions across the world.
2. Homogeneity
Comes into society in several ways - ethnically(Japanese),
religiously(many Arabs), culturally(Indians),
politically(communism).
The study has shown that the most prominent type of
homogeneity is ethnicity, where everybody shares
similar physiological characteristics and cultural
behavior.
3. Financial Homogeneity
It exists in many countries. It was prevalent in many
communist countries- this type of homogenous society is
in decline now a day.
North Korea is a great example of financial homogeneity, at
an extreme level, another good example is Scandinavian
countries, where the government makes sure that every
citizen of their country enjoys high-level living standards.
4. The Global Village/Global Consciousness
Individuals and families are now more directly
plugged into the news from the outside world - some
of the most gripping events of the past decade have
unfolded in real-time in front of a global audience.
8. DETRADITIONALISATION- In his classic 1999 text, Runaway World, Anthony Giddens
argues that one consequence of globalization is detraditionalization - where
people question their traditional beliefs about religion, marriage, gender roles, and
so on.
GLOBAL RISK CONSCIOUSNESS- Ulrich Beck (1992) argues that a fundamental
feature of globalization is the development of a global risk consciousness, which
emerges due to shared global problems which threaten people in multiple
countries.
Cultural Globalization
Threat of terrorism
International nuclear war
The threat of global pandemics
The rise of organized crimes funded primarily through international
drug trafficking
The threat of planetary melt-down due to global warming.
Examples:
9. Political Globalization
The globalization of political refers to the absence of the absolute
sovereignty of a state’s political borders over a certain area as well as
increased interaction between the systems of government and
increased external intervention and interaction on the basis of
democracy, non-governmental organizations, human rights, and
freedoms.
Examples of Political Globalization:
1. European Union- The European Union is a trade and treaty bloc
comprising 27 nation-states on the continent of Europe. It is the
successor of several other political agreements established
after World War 2 to help integrate the European continent after
the war.
2. NATO - The North American Treaty Organization is another
multi-national political treaty established after World War 2.
NATO’s primary goal is to contain Russian aggression by creating
a military pact. If one NATO nation is attacked, then the rest will
(supposedly) come to their defense. This deters potential
Russian aggression.
3. Belt and Road Initiative - The Belt and Road Initiative is a trade
initiative established by China designed to spread China’s
sphere of influence across Asia and the Middle East.
4. War Games - Many allied nations engage in yearly war games
in a bid to strengthen military ties and protect their interests.
5. NAFTA - NAFTA was a flashpoint of anti-globalization
sentiment in the 1990s because it was seen to decrease labor
standards and would lead to the exodus of blue-collar jobs from
the United States.
Advantages Of Political Globalization:
1. Establishment of International Norms -
When nation-states sign treaties with
international bodies, it’s an agreement to
operate within a set of norms and
standards that all signatories will adhere to.
2. Ease of Movement -
Often, political agreements between
nations lead to the relaxing of the
movement of labor across boundaries. This
can lead to immigration and emigration
opportunities for millions of people.
3. Ease of Trade -
One of the key goals of political
globalization is to create better trade routes
around the world (in effect, to support and
promote economic globalization).
Disadvantages Of Political Globalization:
1. Loss of Power at the Nation-State Level -
When nation-states make multinational
agreements, they often make concessions in
order to reach a middle ground that’s
satisfactory to all parties. They also sign off on
certain norms and standards that restrict their
abilities to unilaterally take action.
2. Levels of Bureaucracy -
Multinational political agreements can add
extra layers of bureaucracy to the everyday
activities of businesses and citizens. For
example, many global political agreements put
in place standards that you need to ‘tick off’
before sending a product to market.
3. Decreased Political Accountability
One of the biggest critiques of bodies like the
WTO, the EU, and United Nations is that they
are full of unelected bureaucrats.
11. The global economy refers to the interconnected worldwide economic activities
that take place between multiple countries. These economic activities can have
either a positive or negative impact on the countries involved.
What is the Global Economy?
The global economy comprises several characteristics, such as:
Globalization: Globalisation describes a process by which national and regional economies, societies,
and cultures have become integrated through the global network of trade, communication,
immigration, and transportation. These developments led to the advent of the global economy. Due
to the global economy and globalization, domestic economies have become cohesive, leading to an
improvement in their performances.
International trade: International trade is considered to be an impact of globalization. It refers to the
exchange of goods and services between different countries, and it has also helped countries to
specialize in products which they have a comparative advantage. This is an economic theory that
refers to an economy's ability to produce goods and services at a lower opportunity cost than its
trade partners.
International finance: Money can be transferred at a faster rate between countries compared to
goods, services, and people; making international finance one of the primary features of a global
economy. International finance consists of topics like currency exchange rates and monetary policy.
Global investment: This refers to an investment strategy that is not constrained by geographical
boundaries. Global investment mainly takes place via foreign direct investment (FDI).
12. Why is the global economy important?
We can understand the importance of the global economy by looking at it in
relation to emerging markets:
Economic importance at a micro and macro level:
The increase in the world’s population has led to emerging
markets growing economically, making them one of the
primary engines of world economic growth. The growth and
resilience shown by emerging markets are a good sign for
the world economy. Before delving into the next point, you
need to understand the concept of microeconomics. It
refers to the study of the behavior of households, individuals,
and firms with respect to the allocation of resources and
decision-making. In simpler terms, this branch of economics
studies how people make decisions, what factors affect their
decisions, and how these decisions affect the price,
demand, and supply of goods in the market. Therefore, from
the perspective of microeconomics, some of the largest
firms with high market value and a few of the richest
individuals in the world hail from these emerging markets,
which has helped in the higher distribution of income in
these countries. However, many of these emerging countries
are still plagued by poverty, and work still needs to be done
to work towards eradicating it.
Long-term world economic outlook:
According to financial and economic projections based on
demographic trends and capital productivity models, the GDP in
emerging market economies in 2019 is likely to keep increasing
at a positive rate. According to an emerging markets economic
forecast for 2019 conducted by Focus Economics, the economy
is set to increase by 7.5% in India, 6.6% in the Philippines, 6.3% in
China, 5.3% in Indonesia, 5.1% in Egypt, 4.9% in Malaysia, 3.8% in
Peru and 3.7% in Morocco.
13. Benefits Costs
Economies of scale/lower prices Environmental costs
Increased global investments Tax competition and avoidance
Free movement of labour Brain drain from some countries
May reduced Global inequality Less cultural diversity
Who controls the global economy?
Although governments do hold power over countries' economies, it is the big banks and
large corporations that control and essentially fund these governments. This means that
the global economy is dominated by large financial institutions.
Benefits of Global Economy
Factors affecting the global economy
According to the latest economic news,
here are some of the key factors that
influence and affect how well the global
economy works:
Natural resources;
Infrastructure;
Population;
Labour;
Human capital;
Technology;
Law.
15. Market integration occurs when prices among
different locations or related goods follow similar
patterns over a long period of time. Groups of goods
often move proportionally to each other and when this
relation is very clear among different markets it is
said that the markets are integrated.
For example, if the
demand for baby
dolls within a given
geographical market
were to suddenly be
reduced by 50%,
there is a good
chance that the
demand for baby
doll clothing would
also decrease in
proportion within
that same
geographical
market.
What is the impact of market integration on the global
economy?
Economic integration can reduce the costs of trade,
improve the availability of goods and services, and increase
consumer purchasing power in member nations.
Employment opportunities tend to improve because trade
liberalization leads to market expansion, technology
sharing, and cross-border investment.
16. Reasons for Market Integration
To remove transaction costs
Foster competition
Provide better signals for optimal generation and consumption decisions.
Improve security of supply
Theoretically one can integrate two markets without interconnection.
The advantages include increasing market share,
reducing competition, and creating economies of
scale. Disadvantages include regulatory scrutiny,
less flexibility, and the potential to destroy value
rather than create it.
18. What is the Global
Interstate System? It is the whole system of human interactions. The
modern world-system is structured politically as an
interstate system - a system of competing and
allying states. A political scientist commonly calls
this the international system, and it is the main
focus of the field of International Relations.
19. Each government
pledges itself to employ
its full resources, military
or economic, against
those members of the
tripartite pact and its
adherents with which
such government is at
war.
Each government
pledges itself to
cooperate with the
governments signatory
hereto and not to make a
sperate armistice or
peace with the enemies.
1.
2.
The institution that govern
International Relations
United Nation
United States President
FRANKLIN ROOSEVELT coined
the name united nations that
was used in the declaration of
United Nation on January 1st
1942. UN means allies to fight
against Axis Powers in the
Second World War II. Only 26
nation's representatives
pledge their government to:
International Financial
Institutions:
World Bank
International Monetary
Fund
Asian Development Bank
African Development
Bank
20. Pros Cons
Increased Economic
Growth
Increased job outsourcing
Lower government
spending
Poor working conditions
Technology transfer
Degradation of national
resources
Trade Agreement
It is when two or more nations agree on the terms of trade between them.
They determine the tariffs and duties that countries impose on imports or
exports. All trade agreements affect international trade.
Import are goods and services produced in a
foreign country and bought by domestic residents.
That includes anything shipped into the country
even if it's by the foreign subsidiary of a domestic
firm.
Exports are goods and services that are made in a
country and sold outside its borders. That includes
anything shipped from a domestic company to its
foreign affiliate or branch.
22. What is
Global
Governance?
Global governance
encompasses activities that
transcend national
boundaries at the
international, transnational,
and regional levels and is
based on rights and rules
that are enforced through a
combination of economic
and moral incentives.
National policies has a direct effects on a country.
Good or bad.
Its global effects on other countries cannot be
ignored.
Global governance stresses on cooperative forms of
conflict management.
It helps nations to develop their capacity to deal with
the challenges of globalization.
Global governance includes citizens' participation in
the global decision making.
Why we need Global Governance:
Making global governance work is a
defining challenge of our time, given that
too often international leaders fail to agree
on, let alone pursue, concerted action to
address pressing transnational problems at
the intersection of peace, security and
justice.
