PRESENTATION ON: EMERGING

GLOBALIZATION & TRADING BLOCKS

SUB: BUSINESS ENVIRONMENT

GIVEN BY:
ABDULLAH SHAHID
MBA 2nd Sem
PIMT
MANDIGOBINDGARH
 GLOBALIZATION
DEFINITION:
According to dictionary globalization means different things to
different people.
But in a broad concept Globalization (or globalization)
describes an ongoing process by which regional economies,
societies, and cultures have become integrated through a globe-
spanning network of communication and trade.
The term is sometimes used to refer specifically to economic
globalization: the integration of national economies into the
international economy through trade, foreign direct
investment, capital flows, migration, and the spread
of technology. . However, globalization is usually recognized as
being driven by a combination of economic, technological,
sociocultural, political, and biological factors.
ECONOMIC CONTEXT OF GLOBALIZATION:
When used in an economic context, it refers to the reduction
and removal of barriers between national borders in order to
facilitate the flow of goods, capital, services and labor.

Three channels of Globalization:

1: trade in goods and services
2: movement of capital
3: flow of finance
GLOBALIZATION IN INDIA:
Globalization in India is generally taken to mean integrating
the economy of the country with the world economy.
The real way to the globalization process was provided by the
government of India in July,1991 at the behest of the IMF and
the world bank.

Steps taken by GOI:

Full convertibility of rupee on current account
Open the economy to FDI
Removing constraints & obstacles to the entry of MNCs in
India.(dilution of restrictive laws like FERA)
Liberalization programmes (dilution of quantitative
restrictions to tariffs)
Bringing down the level of import duties
 EFFECTS OF GLOBALIZATION
Globalization has various aspects which affect the world in several different
ways such as:

Industrial - emergence of worldwide production markets and broader

access to a range of foreign products for consumers and companies.
Particularly movement of material and goods between and within national
boundaries. International trade in manufactured goods increased more
than 100 times (from $95 billion to $12 trillion) in the 50 years since 1955

Financial - emergence of worldwide financial markets and better access to

external financing for borrowers. By the early part of the 21st century more
than $1.5 trillion in national currencies were traded daily to support the
expanded levels of trade and investment.

Economic - realization of a global common market, based on the freedom

of exchange of goods and capital. The interconnectedness of these
markets, however meant that an economic collapse in any one given
country could not be contained.
Political - some use "globalization" to mean the creation of a world
government which regulates the relationships among governments and
guarantees the rights arising from social and economic globalization.

Informational - increase in information flows between geographically

remote locations. Arguably this is a technological change with the advent of
fibre optic communications, satellites, and increased availability of
telephone and Internet.

Ecological - the advent of global environmental challenges that might be

solved with international cooperation, such as climate change, cross-
boundary water and air pollution, over-fishing of the ocean, and the spread
of invasive species

Social - development of the system of non-governmental organizations as

main agents of global public policy, including humanitarian aid and
developmental efforts

Technical & Cultural

NEGATIVE EFFECTS:
Effects on disease:
Globalization, the flow of information, goods, capital and people across
political and geographic boundaries, has also helped to spread some of the
deadliest infectious diseases known to humans. Eg. Swine flu
Brain drain:
Opportunities in richer countries drives talent away from poorer countries,
leading to brain drains. Indian students going abroad for their higher studies
costs India a foreign exchange outflow of $10 billion annually.
Economic liberalization:
Government deregulation and failed regulation of Wall Street's investment
banks were important contributors to the subprime mortgage crisis.
Effect on Income disparity:
A study by the World Institute for Development Economics Research at
United Nations University reports that the richest 1% of adults alone owned
40% of global assets in the year 2000. The combined wealth of the 10 million
millionaires grew to nearly $41 trillion in 2008
 TRADING BLOCKS

A trade block is a type of intergovernmental agreement ,

often part of a regional intergovernmental organization
,where regional barriers to trade (tariffs and non tariffs
barriers) are reduced or eliminated among the participating
states.
Types of Trading Blocks
1. Economic & Monetary Union
2. Common Markets
3. Custom Unions
4. Free trade areas
5. Other
Economic & Monetary Union
» All economic policies (monetary, fiscal, welfare) shared by
all member countries.
Example:
1. EU: Europen union
2. CEMC: Economic And Monetary community of central
America
3. OECS: Organization of Eastern Caribbean States
4. UEMOA: West African Economic & monetary union
Common Market
» Free movement of all factors of production
» Examples:
1. CACM: Central American Comman Market
2. CAN: Common Andean Community
3. CCCM: Caribbean Community & Comman Market
4. EEA: Europen Economic Area
Customs Union
» Free trade within the area, and common national trade
policies with outsiders (Þ no need for customs inspectors)
» Examples:
1. EAC: East African Community
2. EAEC: East Asian Economic Caucus
3. EUCU: Europian Union Custom Union
4. GCC: Gulf Cooperation Counsil
Free-Trade Area
» Free trade within the area, but separate national trade
policies with outsiders (Þ need for customs inspectors)
» Examples:
1. European Free Trade Area (EFTA, 1960)
2.Latin American Free Trade Area (LAFTA, 1960, deceased 1969)
3. Association of South East Asian Nations (ASEAN, 1976)
4. North American Free Trade Area (NAFTA, 1994)
 Others:
In other block the best example can be discussed as OPEC.
OPEC : Organization of the Petroleum Exporting Countries
Created at Baghdad conference on 10-14 sep, 1960
Head Quarter is situated in Vienna
MEMBER: Qatar, Indonesia , Libya, UAE, Algeria, Nigeria,
Ecuador, Angola, Gabon

In other blocks another example is Commonwealth member

countries.
 THANKS

ANY QUERY????