Globalization (or Globalisation) refers to increasing global connectivity,

integration and interdependence in the economic, social, technological, cultural,

political, and ecological spheres.

Definition

It has been claimed that some or all of this article or section is incoherent
and not understandable, and should possibly be reworded if the intended
meaning can be determined.

Globalisation literally means, The development of the integration of economic,

cultural, political, and social systems through internationalization and localization.
The world is becoming a smaller place, because of Globalization" This can be
applied to many different fields. For example, in economics, "globalization" may
mean an economic trend that used to be limited to one place but now extends
across the globe, to many places. Of itself, it is usually assumed to include all
fields, cultural, economic, technological, etc. It is most commonly understood as
a unitary process[dubious – discuss] inclusive of many sub-processes (such as increased
economic interdependence, increased cultural influence, rapid advances of
information technology, and novel governance and geopolitical challenges) that
are increasingly binding people and the biosphere more tightly into one global
system.[dubious – discuss] An example of a technology which enables globalization is
the invention of the telephone, or any other communication technology for that
matter.[dubious – discuss] This, making the transmission of messages globally easier.
Email, the internet, and internet market places are other technological enablers
of globalization today.
There are several definitions and all[dubious – discuss] usually mention the increasing
connectivity of economies and ways of life across the world. The Encyclopedia
Britannica says that globalization is the "process by which the experience of
everyday life ... is becoming standardized around the world." While some
scholars and observers of globalization stress convergence of patterns of
production and consumption and a resulting homogenization of culture, others
stress that globalization has the potential to take many diverse forms.[1]

In economics, globalization is the convergence of prices, products, wages, rates

of interest and profits towards developed country norms. [2] Globalization of the
economy depends on the role of human migration, international trade, movement
of capital, and integration of financial markets. The International Monetary Fund
notes the growing economic interdependence of countries worldwide through
increasing volume and variety of cross-border transactions, free international
capital flows, and more rapid and widespread diffusion of technology. Theodore
Levitt is usually credited with globalization's first use in an economic context. [3]

o
Globalization is also defined as the internationalization of everything related to
different countries [Internationalization however, is a contrasted phenomenon to
that of Globalization]

Globalization

Some Advantages Some Disadvantages

 Increased free trade between  Increased flow of skilled and
nations non-skilled jobs from developed
 Increased liquidity of capital to developing nations as
allowing investors in developed corporations seek out the
nations to invest in developing cheapest labor
nations  Increased likelihood of economic
 Corporations have greater disruptions in one nation
flexibility to operate across effecting all nations
borders  Corporate influence of nation-
 Global mass media ties the world states far exceeds that of civil
together society organizations and
 Increased flow of communications average individuals
allows vital information to be  Threat that control of world
shared between individuals and media by a handful of
corporations around the world corporations will limit cultural
 Greater ease and speed of expression
transportation for goods and  Greater chance of reactions for
people globalization being violent in an
 Reduction of cultural barriers attempt to preserve cultural
increases the global village effect heritage
 Spread of democratic ideals to  Greater risk of diseases being
developed nations transported unintentionally
 Greater interdependence of between nations
nation-states  Spread of a materialistic lifestyle
 Reduction of likelihood of war and attitude that sees
between developed nations consumption as the path to
prosperity
 Increases in environmental  International bodies like the
protection in developed nations World Trade Organization
infringe on national and
individual sovereignty
 Increase in the chances of civil
war within developing countries
and open war between
developing countries as they vie
for resources

 Decreases in environmental
integrity as polluting
 corporations take advantage of
weak regulatory rules in
developing countries

II. Main features and experiences of globalization

1. Globalization has closely intertwined economic, political, cultural and

institutional dimensions whose social impact is often not easy to
disentangle. Notwithstanding the breadth and complexity of the process,
its principal elements are well known. Technological advancements,
especially in the field of information and communication technologies,
have had the effect of connecting and bringing the world closer together in
time and space, making possible new ways of doing business and
profoundly altering social interactions. The proportion of trade in goods
and services relative to national income and consumption has expanded,
and now includes trade in such services as banking, telecommunications
and even education and culture. Domestic deregulation and liberalization
of external capital controls have propelled a vast increase in the volume
and speed of capital flows of all types, ranging from foreign direct
investment (FDI) to short-term banking flows, worldwide. Competition has
catalysed a reorganization of production networks, and a wave of mergers
and acquisitions have fostered the restructuring of corporations on a
global scale, giving them unprecedented size and power. At the same
time, venture capital-financed "start ups" are burgeoning in "high tech"
sectors in several developed as well as some developing countries. New
mass media, such as satellite television and the Internet, have contributed
to globalization and the spread of a culture of consumerism.
2. Some of these processes are driven by the logic of new technologies or
market forces which are difficult to control, while others may be more
amenable to management. Policy decisions oriented towards
liberalization, deregulation and privatization have been at least as
important as market forces and technology in the spread of globalization in
both its positive and negative aspects.

3. As a result of greater access to markets, new technologies and new ways

of doing business, many aspects of globalization have stimulated growth
and prosperity and expanded possibilities for millions of people all over the
world. At the same time, it has been accompanied by anxiety about its
disruptive effects and a sense that the opportunities provided by the
process of globalization have not been accessible to many. It has
enhanced choices for some people but diminished prospects for others
and reinforced inequalities within and across nations. Perceptions of
globalization depend a great deal on the ability of people to take
advantage of the opportunities offered by it. Typically, it is most positive
for people with adequate education and access to financial resources.

4. For various reasons, the liberalization of trade and capital flows has been
a dominating theme in the economic policies pursued by developing
countries and countries with economies in transition during the last 10 to
20 years. As a result, nearly all countries at all levels of development have
taken steps to remove or weaken policy instruments that direct and control
cross-border transactions. They have also given market mechanisms
greater scope internally and reshaped or restructured institutional
frameworks, including labour and financial markets and taxation systems,
to enable the freer play of market forces.

5. The actual experience of globalization has, to a great degree, varied with

the level of development at which a country has engaged with it. Some
developing countries and countries with economies in transition have been
well positioned to take advantage of the new opportunities for trade and
investment, and building on domestic savings, foreign investment and
capital inflows, technology transfers, human resource development and
export orientation, have achieved rapid economic growth.
6. Others, particularly the least developed countries, have not been able to
achieve the same levels of foreign investment or access to world markets,
primarily due to an inadequate economic and social infrastructure. Not
only have they been unable to grasp the opportunities offered by
globalization but they have also had to cope with its impacts, particularly
the volatility of international commodity prices, the reduction of effective
preferential treatment for their exports owing to falling overall tariffs and
the decline of official development assistance (ODA).

7. The degree and nature of participation of different categories of countries

in global markets varies substantially. For most developing countries,
trade in a limited number of goods and services constitute the major form
of international economic activity. For others, private capital inflows
supplement their foreign exchange earnings, either through FDI or through
portfolio investment. In only a few developing countries, mostly in Asia and
Latin America, have domestic companies joined the integrated networks of
transnational corporations and, in some cases, forged strategic alliances
to exploit dynamic trade and investment inter-linkages. Most developing
countries, particularly the least developed countries and most of Africa,
remain outsiders to that process.

8. A study conducted on behalf of the Department of Economic and Social

Affairs on the experience of nine countries (Argentina, Colombia, Cuba,
India, the Republic of Korea, Mexico, the Russian Federation, Turkey and
Zimbabwe) as a result of liberalization of trade and capital raises several
concerns about its social impact. In general, liberalization has led to
greater inequality of primary incomes. In all but one case, household per
capita income growth was negative or just above zero. While the
participation rate or share of the economically active population increased,
the employment situation in most countries was characterized by reduced
wages, underemployment, informalization of labour and adverse impact
on unskilled labour, particularly in the manufacturing sector. Virtually
without exception, wage differentials between skilled and unskilled
workers rose with liberalization. Most countries experienced an erosion of
the tax base and a fiscal squeeze, which was reflected in static or reduced
social spending. In some cases, social services were privatized or there
was increased recourse to user fees. Fiscal and administrative limitations
made it difficult to put in place countervailing social policies. In terms of
the enabling economic environment, though most countries achieved
moderate growth rates, at least three fared poorly. Capital flows increased
substantially, in some cases prior to crises. While exports did tend to rise
with liberalization, the export stimulus for growth was weaker than
expected partly because of an increase in imports.
 9. Although globalization raises particular concern for developing countries,
apprehensions regarding it abound and have been vocally expressed
even in developed countries. Concerns in the industrial world revolve
around employment insecurity as firms respond to competitive pressures
and technological advancements, which are to some extent also reflected
in the frequent restructuring of firms and corporations. The growing power
and global reach of mega-corporations has also raised questions
regarding economic governance in a global economy.

10. The experience of countries with economies in transition has been mixed.
In general, when these countries began their transition, they faced an
abrupt deterioration of their previously elaborate social support systems,
as well as the handicap of competing in a more open global economy with
incomplete and underdeveloped market institutions. Some countries in
Central and Eastern Europe have traversed the transition more rapidly
spurred by prospects of integration to the European Union. In others,
social disruption, sudden poverty and vulnerability to economic change
along with the dissolution of barriers to trade and capital mobility have led
the development of a parallel shadow economy and a criminal underworld
of transnational proportions.

Impact on India:

India opened up the economy in the early nineties following a major crisis
that led by a foreign exchange crunch that dragged the economy close to
defaulting on loans. The response was a slew of Domestic and external sector
policy measures partly prompted by the immediate needs and partly by the
demand of the multilateral organisations. The new policy regime radically pushed
forward in favour of amore open and market oriented economy.

Major measures initiated as a part of the liberalisation and globalisation

strategy in the early nineties included scrapping of the industrial licensing regime,
reduction in the number of areas reserved for the public sector, amendment of
the monopolies and the restrictive trade practices act, start of the privatisation
programme, reduction in tariff rates and change over to market determined
exchange rates.

Over the years there has been a steady liberalisation of the current
account transactions, more and more sectors opened up for foreign direct
investments and portfolio investments facilitating entry of foreign investors in
telecom, roads, ports, airports, insurance and other major sectors.

The Indian tariff rates reduced sharply over the decade from a weighted
average of 72.5% in 1991-92 to 24.6 in 1996-97.Though tariff rates went up
slowly in the late nineties it touched 35.1% in 2001-02. India is committed to
reduced tariff rates. Peak tariff rates are to be reduced to be reduced to the
minimum with a peak rate of 20%, in another 2 years most non-tariff barriers
have been dismantled by march 2002, including almost all quantitative
restrictions.

Conclusion:

The implications of globalisation for a national economy are many.

Globalisation has intensified interdependence and competition between
economies in the world market. This is reflected in Interdependence in regard to
trading in goods and services and in movement of capital. As a result domestic
economic developments are not determined entirely by domestic policies and
market conditions. Rather, they are influenced by both domestic and international
policies and economic conditions. It is thus clear that a globalising economy,
while formulating and evaluating its domestic policy cannot afford to ignore the
possible actions and reactions of policies and developments in the rest of the
world. This constrained the policy option available to the government which
implies loss of policy autonomy to some extent, in decision-making at the
national level.

Globalisation and Poverty:

Globalisation in the form of increased integration though trade and

investment is an important reason why much progress has been made in
reducing poverty and global inequality over recent decades. But it is not the only
reason for this often unrecognised progress, good national polices, sound
institutions and domestic political stability also matter.

Despite this progress, poverty remains one of the most serious

international challenges we face up to 1.2 billion of the developing world 4.8
billion people still live in extreme poverty.

But the proportion of the world population living in poverty has been
steadily declining and since 1980 the absolute number of poor people has
stopped rising and appears to have fallen in recent years despite strong
population growth in poor countries. If the proportion living in poverty had not
fallen since 1987 alone a further 215million people would be living in extreme
poverty today.

India has to concentrate on five important areas or things to follow to

achieve this goal. The areas like technological entrepreneurship, new business
openings for small and medium enterprises, importance of quality management,
new prospects in rural areas and privatisation of financial institutions. The
manufacturing of technology and management of technology are two different
significant areas in the country.

There will be new prospects in rural India. The growth of Indian economy
very much depends upon rural participation in the global race. After implementing
the new economic policy the role of villages got its own significance because of
its unique outlook and branding methods. For example food processing and
packaging are the one of the area where new entrepreneurs can enter into a big
way. It may be organised in a collective way with the help of co-operatives to
meet the global demand.

Understanding the current status of globalisation is necessary for setting

course for future. For all nations to reap the full benefits of globalisation it is
essential to create a level playing field. President Bush’s recent proposal to
eliminate all tariffs on all manufactured goods by 2015 will do it. In fact it may
exacerbate the prevalent inequalities. According to this proposal, tariffs of 5% or
less on all manufactured goods will be eliminated by 2005 and higher than 5%
will be lowered to 8%. Starting 2010 the 8% tariffs will be lowered each year until
they are eliminated by 2015.
GDP Growth rate:

The Indian economy is passing through a difficult phase caused by

several unfavourable domestic and external developments; Domestic output and
Demand conditions were adversely affected by poor performance in agriculture in
the past two years. The global economy experienced an overall deceleration and
recorded an output growth of 2.4% during the past year growth in real GDP in
2001-02 was 5.4% as per the Economic Survey in 2000-01. The performance in
the first quarter of the financial year is5.8% and second quarter is 6.1%.

Bibliography:

1. Globalisation and Poverty: Centre for International Economics, Australia.

2. Globalisation and India –Lecture: Prof. Sagar Jain, University of N.
Carolina.
3. “Globalisation and Liberalisation” Prospects of New World Order – Dr. A.
K. Ojha, Third Concept – An International Journal of Ideas, Aug 2002.
4. www.google.com