1. LOGOLOGO
Globalization
Group Members
Saurabh Nilesh
Khushbu Yuvraj
Sayli Karishma
Sohail Shalini
Purnima

2. LOGO
Introduction
• Globalization is a common term for processes of
international integration arising from increasing human
connectivity and interchange
of worldviews, products, ideas, and other aspects
of culture.
• In particular, advance in transportation and
telecommunications infrastructure, including the rise
of the Internet, represent major driving factors in
globalization and precipitate further interdependence of
economic and cultural activities.
Meaning
• “It is the process of integrating country’s economy
with global economy with a view to capture global
opportunities for long term growth &
development.”
• Deepak Nayyar defines Globalization as, "the
expansion of economic activities across political
boundaries of nation states.”
Definition

3. LOGO
Measures
Exchange Rate & Convertibility.
• In 1993-94, full convertibility current account &
unified exchange rate system was introduced.
Opening up of Indian Economy.
• In the New Economic Policy, since
1995, Government has offered various
incentives to foreign investors & NRI’s.
Import Liberalization.
• The New EXIM Policy of 1992-97 allowed the
free import of all items, except those in
negative list only.

4. LOGO
Benefits
Increase in
Productivity.
Increase in Trade.
Higher Living
Standards.
Opportunities for
Growth.
Financial Markets.
Impact on
Property.
Economic Gains.
Foreign Direct
Investment. (FDI)
Interdependence
&
Competitiveness.
Better
Technologies.

5. LOGO
Shortcomings
Takeover of
National Firms.
Widens the
Disparity.
Brings the
Instability.
Excess
Utilization.
Cultural
Disturbances.
Traditional De-
values.
Environmental
Degradation.
Social Tensions.
Neglect to
Spiritual Aspects.
Beneficial to
Developed
countries.

6. LOGO
I.M.F
The International Monetary Fund (IMF) was
established on 27th December, 1945 when 30
countries signed the Articles of Agreement.
The Fund was established to remove all restrictions
on trade & exchange.
It also provided short term capital to the member-
state to overcome their balance of payment
difficulties to promote the multilateral trade.
Today it has about 185 countries associated to it.

7. LOGO
Role of I.M.F
To provide Credit assistance.
To establish a multilateral system.
To maintain orderly arrangement.
To serve as a reservoir of Currencies.
To promote Exchange Stability.
To promote Balanced Growth.
To act as a Forum.

8. LOGO
IBRD or World
Bank
The International Bank of Reconstruction &
Development (IBRD) was set up to help the member
countries with long term capital for reconstruction of
the war-damaged economies & development of
underdeveloped countries.
• The International Finance Corporation. (IFC)
• The International Development Association. (IDA)
• The Multilateral Investment Guarantee Agency. (MIGA)
• The International Bank of Reconstruction & Development. (IBRD)
• The International Centre for the Settlement of Investment Disputes.
(ICSID)
The World Bank in the early 90’s expanded from
single institution to group of 5 development
institutions.

9. LOGO
Role of World Bank
The poverty reduction & sustainable growth in the poorest
countries, especially Africa.
The solutions to the special challenges of post-conflict
countries & fragile states.
The development solutions with customized services as well as
financing for middle-income countries.
The regional & global issues the cross national boarders-
climate change, infectious disease & trade.
The greater development & opportunity in the Arab world.
The pulling together of the global knowledge to support
development.

10. LOGO
Global
Recession
A recession refers to downswing, when the economy is shrinking & the GDP is
growing at a negative rate.
No country can remain isolated from the fluctuations of the world trade
transactions.
Heavy losses suffered by the major international banks is going to affect all the
countries of the world as these financial institutions have their investment
interests in almost all the connected countries.
India is now experiencing the following features of global recession:
• Our share markets have been falling everyday.
• Our Rupee is weakening against the US Dollar.
• Our banks have been facing severe cash crunch towards liquidity in markets.

11. LOGO
Contagion
It is the spread of market disturbances on
the downside from one country to the
other, through co-movements in exchange
rates, stock prices, sovereign spreads &
capital flows.
It is a significant increase in cross market
linkages after shock to an individual
country or the group of countries.
It is a cross country transmission of
economic shocks or any of the general
cross country spill over effects whether
real, financial or from exogenous
sunspots.

12. LOGO
Contagion
Effects
Common
Shocks.
Trade Links
Competitive
Devaluations.
Financial
Links.
Margin Calls.
Rational
Portfolio Re-
balancing.
International
Counterpart
Risk.
Cross Market
Hedging.
Herd
Mentality.
Liquidity
Problems.
Multiple
Equilibriums.

13. LOGO
W.T.O
During the Uruguay Round of GATT (General
Agreement on Trade & Tariff), W.T.O (World Trade
Organization) was established to give the way of
further liberalization of international trade.
From 77 member countries in 1995 of the GATT
completely increased to 127 member countries by
1996 to 147 countries, including India by April 2004.
W.T.O is a institutional frame-work established for
free global trade at the international level.

14. LOGO
W.T.O
Agreements
Agreement on
Trade in
Services.
Agreement on
Manufactured
Goods.
Agreement on
Agriculture.
Agreement on
Textiles &
Clothing.
Agreement on
TRIPs.
Agreement on
TRIMs.
Agreement on
Subsidies &
Countervailing
Measures.
Disputes
Settlements.

15. LOGO
Implications of
W.T.O
• Increase in
export earnings.
• Agricultural
exports.
• Export of
textiles &
clothing.
• Multilateral
rules &
deciplines.
Favorable
Impacts.

16. LOGO
Implications of
W.T.O
• TRIPs
• Pharmaceutical
Sector.
• Agriculture.
• Micro-organisms.
• TRIMs.
• GATS
• Trade & Non-Tariff
barriers.
• LDC Exports.
Unfavorable
Impacts.

17. LOGO
Dispute
Settlements
The disputes in the WTO are about broken
promises.
A dispute arises when one country adopts a
trade policy measure or takes some action that
one or more fellow WTO members consider to
break the WTO agreement.
• The Consultation.
• The Panel.
The Dispute Settlement has following stages.

18. LOGO
Dispute
Settlements
• Case in Writing.
• First Hearing.
• Rebuttals.
• Experts.
• First Draft.
• Interim Report.
• Review.
• Final Report.
The
main
stages
describe
the work
of the
panel
as:

19. LOGO
Need of Foreign
Capital
Investment
Demand.
Initial Stage of
Development.
Foreign
Expertise.
Underdeveloped
Capital Market.
Balance of
Payment
Problems.
Advanced
Know-How.
Purchasing
Capacity.

20. LOGO
Role of MNCs
Giant Size.
Global
Operations.
Professional
Management.
Sophisticate
Technology.
International
Market.
Large
Employment
Opportunities.
Rapid
Industrial
Growth.
Breaks
Domestic
Monopolies.
Changes
favorable
trade.
Brings the
world closer.
Optimum
utilization of
resources.
Benefits of
Research &
Development.

21. LOGO
Causes of Rising
FDI
Government Planning.
Source of Technology.
Cost Benefits.
Crucial Inputs.
Low Cost Opportunities.
Rapid Economic Progress.
No Barriers or Permission.

22. LOGO
Thank You