Globalization Good or Bad?
Table of Content
Meaning of Globalization
Arguments in Favour of Globalization
Arguments in Against of Globalization
Conclusion
References
Meaning of Globalization
The term globalisation refers to the integration of the economy of the nation with the world economy. It
is a multifaceted aspect. It is a result of the collection of multiple strategies that are directed at
transforming the world towards a greater interdependence and integration.
It includes the creation of networks and pursuits transforming social, economical, and geographical
barriers.
Globalisation tries to build links in such a way that the events in India can be determined by the events
happening distances away.
To put it in other words, globalisation is the method of interaction and union among people,
corporations, and governments universally.
Corporations in developed nations can gain a competitive edge through globalization.
Developing countries also benefit through globalization as they tend to be more cost-effective and
therefore attract jobs.
India is one of the countries that succeeded significantly after the initiation and implementation of
globalisation.
The growth of foreign investment in the field of corporate, retail, and the scientific-sector is enormous
in the country.
India reduced customs duties on imports to open the domestic markets for the steady flow of foreign
manufactured goods.
Globalization ensures contribution of every country to the world GDP growth.
Arguments in Favor of Globalization
Some arguments in favor of Globalization are as follows:
(i) Increase in employment opportunities: As globalization increases, more and more companies are
setting up businesses in other countries. This, in turn, increases the employment opportunities that
people at one place have. People can get better jobs without having to move to other countries in
search of better jobs.
(ii) Education: With the increase in globalization, it has become easier for people to move across
borders to different parts of the world to acquire better education. This has resulted in an integration
of cultures. People from underdeveloped and developing countries often move to developed
countries to get better education.
(iii) Increase in free trade: An increase in free trade has opened doors for investors in developed
countries to invest their money in developing countries. Big companies from developed countries
have the freedom to operate in developing countries.
(iv) Faster flow of Information: Information flows from one part of the world to the other immediately,
resulting in the world being tied together. Vital information can be shared between individuals and
corporations at a very fast rate. It has also facilitated in increasing the ease of transporting people
and goods.
(v) Reduction of product cost: The product cost is reduced due to globalization. Because there is no
restriction to move goods from one country to another country in the world. In fact, the
transportation cost is also reduced due to a better communication process. As a result, consumers
can get goods at a fair price.
(vi) End of monopoly market: The monopoly market is ended due to globalization. No one can wish to
capture the whole market alone under the globalization process, everyone has the same rights to
move in the market. Thus, no one can set high prices alone in the market under the globalization
process.
(vii) Increase in compensation: After globalisation, the level of compensation has increased as
compared to the domestic companies due to the skill and knowledge a foreign company offers. This
opportunity also emerged as an alteration of the management structure.
Arguments in Against of Globalization
Some arguments in against of Globalization are as follows:
(i) Environmental degradation: Developed countries can take advantage of underdeveloped countries’
weak regulatory laws in terms of environmental protection.
(ii) Unfair working conditions: Many multinationals have been accused of social injustice by exploiting
labour in underdeveloped countries in order to cut costs. Labourers are provided unhealthy working
conditions leading to health hazards. Many large companies have also been accused of employing child
labour in their factories in underdeveloped countries.
(iii) Growing disparity among the rich and the poor: 86% of the world’s resources are said to be
consumed by the richest 20% of the world population. This means that the poorer 80% population only
gets to consume 14% of the world’s resources. This is a direct result of globalization according to some
activists who believe that globalization only serves the rich whereas the poor have to face its
disadvantages.
(iv) Rapid spread of deadly diseases: Deadly diseases such as AIDS or other communicable diseases can
spread at very fast pace via travellers or due to other means as a direct consequence of globalization.
(v) Source of Economic Crises: The new global order has been experiencing increased financial volatility.
Financial crises have become more and more threatening and extensive. For the last three years, the
World has been living with global economic recession.
(vi)Strengthened Role of Multinational Corporations (MNCs): Under the grab of globalisation, the
business community, particularly the MNCs have also mounted powerful efforts for dominating
governments. By enlarging business profits and weakening labour, globalisation has shifted the balance
of power in favour of the big business and their MNCs.
(vii) Increased Role of Big Business in Politics: Most of the agreements and demands of the
international financial institutions now support the policies desired by the big business and industrial
corporations. Big businessmen have started dominating governmental policies and decisions.
Conclusion
Globalization is a broad concept that flows through many aspects of the world. Key areas of effect of
globalization are economy, trade, industry, finance, culture and health etc…The impact of
globalization on international finance is a buzz topic in today’s context with the world financial
crisis.
International finance is a main area that has a significant impact from globalization. Economy and
international finance are closely interconnected where international finance accommodates the world
economy. There are number of benefits international finance and it can be stated as the backbone of
the economy. International Monetary Fund, World Bank are the key institutions of international
finance.
Structure and the practices of international finance are largely impacted from globalization.
Although the world has faced financial crisis the importance and the volume of international finance
is high. However proper governance of international finance is of vital importance due to the
complexities of impact of globalization.
Developing countries have a significant impact on their overall economy with globalization. Their
financial system has a number of effects. They are largely benefited by World Bank and other
institutions which is essentially important for the development of these countries. However, at the
same time with imposed conditions and rules by these institutions they have to face problems in
terms of the internal affairs.
Overall international finance is both positively and negatively impacted from globalization. It has
always helped for the development of the financial system, Improvement in the financial
infrastructure and availability of new and more capital. But globalization can also lead to crises if
there are imperfections in international financial markets.
In conclusion globalization is double edged sword affects International Finance. A well thought
through process of activities would enable a country to maximize the benefits while reducing the
adverse results.
References
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