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This essay provides information about Globalisation !
Simply globalisation can be depicted as increasing global interconnectedness. It is a process rather than an outcome, which signifies the trend toward the growing interconnectedness of different parts of the world, not to their being interconnected.
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It primarily is an interchange of economic, social, cultural, political, technological attributes that takes place between societies when different societies come into contact with each other. Though this interchange is going on for times immemorial, this process was termed as “globalisation” for the first time around the second half of 20th century while much of the literature on this has appeared since the late 1970s and 1980s.
Globalisation as an idea of modernisation within the global market was mentioned in the writings of Marx and Saint-Simon also. Certain scholars even argue that this process of globalisation has been going on since the beginning of mankind and it has affected all cultures, even remote and isolated, though in varying degrees. The contemporary globalisation differs from the process that could be observed in the past primarily in terms of the quantum of interchange and interconnectedness. Everything happens much faster today than it did in previous eras.
The current process of globalisation, which is popularly described as gradual removal of barriers to trade and investment between nations, was started towards the end of the 20th century. It is said to aim to achieve economic efficiency through competitiveness, while seeking the broader objectives of economic and social development. It touches all spheres of human life; economic, social, cultural, political and environmental.
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The most common definition of present-day globalisation refers to the growing integration of various countries to the world economy. It results mostly from a freer movement of capital, products and information, which affects not just the economy, but also, the political, cultural, social and environmental arenas. Different disciplines such as Economics, History, Political Science, Sociology, etc. employ different criteria for elaborating and defining the concept of globalisation.
Antony Giddens, a sociologist, defined globalisation as an intensification of worldwide social relations, via which faraway places are linked together in such a way those events in one place are affected by a process taking place many miles away and vice versa. David Henderson, an economist, views globalisation as a model of fully internationally integrated markets meeting the two conditions of (i) the free movement of goods, services, labour and capital resulting in a single market in inputs and outputs, and (ii) full national treatment for foreign investors as well as nationals working oversees, so that economically speaking there are no foreigners. For Meghnad Desai globalisation is the growing reciprocal interdependence and integration of various economies around the globe.
There has been faster growth in world output during the past few decades compared to former days. World trade has grown significantly more rapidly than world output and the national economies have become more open and more closely integrated. International capital flows have grown even faster than international trade. Ideas, technologies and cultural attributes are exchanged at a higher acceleration. Contemporary globalisation has led a greater volume of exchanges of goods and services and it has led to a greater variety of things being exchanged. Many goods and services, once non-traded, now regularly enter the world market.
For example, a Japanese architect may design a building in France; marketing services may be transmitted from India to USA or UK, etc. The advancement of Information and Communication Technologies (ICTs) reduced the geographic distance significantly. Technologies such as Internet and mobile phones made it possible for people to communicate anywhere around the globe instantly. This accelerated the growth and development of knowledge society.
There have also been increased incidences of people migrating for work globally. There is a significant change in the relative power of world organisations during the current phase of globalisation. On the one hand, the international financial institutions such as IMF and World Bank as well as WTO — an international organisation to regulate global trade — become more powerful.
On the other, global institutions that have focused on more human-centred interests such as United Nations (UN) and International Labour Organisation (ILO) have found their position relegated to the background and their power and effectiveness relatively diminished in the face of global changes. The more powerful institutions (IMF, World Bank, WTO) have pushed for increased use of markets and less government involvement in economies in order to achieve free flows of trade and investment of funds and less regulation by the national governments. The shift in power of the global institutions is reflected in all spheres of human life.
The current process of globalisation also resulted in the globalisation of national policies and policymaking mechanisms of national governments. National policies including in economic, social, cultural and technological areas, which were till now under the jurisdiction of states and people within a country, have increasingly come under the influence of international agencies and the big private corporations. Under pressure from these international organisations the national governments have had to restructure their economies that demand more thrust in free trade and less spending in social sector.
They had to increase taxes or shrink government spending by reducing expenditures on social sectors such as education, healthcare, sanitation, subsidies in housing, fuel, public distribution systems and transportation. The national governments had to dismantle the administered price mechanism applicable to the essential commodities of mass consumption. The externalities associated with globalisation have also had a global impact on the environment, a new set of global ‘bads’ have been produced, for e.g., global warming, depletion of ozone layer, etc.
The globalisation process received additional impetus in India when she opened up her economy in the early 1990s following a major crisis that led by a foreign exchange crunch that dragged Indian economy close to defaulting on loans owed to international financial institutions. India adopted a New Economic Policy that included the elements of “globalisation”, “liberalisation” and “privatisation”.
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The two central components of these neo-liberal policies adopted by the Indian government have been the liberalisation of India’s private sector and reform of the public sector. Globalisation integrated the Indian economy with the global economy through reduction in import duties and export restrictions, promotion of foreign investments and permission for free flow of foreign technology and skills, etc.
Along with the easing of restrictions on external trade there has also been a removal of some internal restrictions on the movement of commodities. At the same time, there has been a considerable loosening of the existing governmental licensing system (popularly called as licence-permit raj), especially on private sector firms, as well as the lifting of reservations for many products. The licence-permit raj has become a buzzword of the past. The role of the Directorate- General of Foreign Trade has been near non-existent and the near free flow of foreign goods and services has been permitted.
The subsidies given to fertilizer and agriculture had to be drastically reduced or withdrawn. A drastic reduction was there in the allocation to poverty alleviation programmes and health and education. At the same time there has not only been an integration of production globally, but also across the country internally. There has been rapid privatisation of publicly owned companies, of state and community headed resources of hitherto reserved areas like banking and insurance. There has been deregulation of labour protection leading to massive growth of contract labour and sub-contracting.