GLOBALISATION
Write the answers for the following questions ( 1, 2, 7 & 8 in the notebook and paste the
Worksheet in the notebook and refer to it for examination.
[Link] are the economic implications of globalisation? How has globalisation impacted on
India with regard to this particular dimension?
Advantages / Merits of Globalisation
The process of globalisation has had its economic impact more so in terms of a wider market for
consumer goods that it has created and in terms of the benefits it offers to the people.
a. Globalisation has expanded the role of international institutions like the World Bank and the
IMF in determining and influencing the economic policies of the countries.
b. It led to a greater flow of goods, services and capital resulting in increased trading activities
among the nation states.
c. It has resulted in the relaxation of trade barriers leading to greater and free flow of
commodities.
d. It has encouraged foreign investments. For example, it has resulted in the MNCs setting up
factories and production units and purchasing lands and assets. This has resulted in the greater
integration of markets and countries.
e. Globalisation has led to a greater exchange of ideas and beliefs, increased migration of people
and growth of electronic media. Internet also has contributed in the making of more informed
citizenry.
f. It has increased the choice for consumers in terms of a wide range of goods and services being
offered to them.
g. It is argued that globalisation has led to an economic growth with the MNCs providing greater
employment opportunities.
h. It has resulted in the inflow of foreign capital and investment.
2Q. Disadvantages / Demerits of Globalisation
But, on the other hand, it is widely contested as to what is so global about Globalization as it has
not had similar impact everywhere. Rather, it has created disparities among the people of the
world.
[Link] has increased inequalities and has drastically reduced the welfare activities of the
states.
b. There have been reductions in states’ expenditures in education, health and state-led subsidies.
c. Globalisation had its worst impact on the poorer countries that argued for fairer Globalization
so that its benefits reach them all. Critics have associated Globalization to re-colonisation as the
poorer countries have to adhere to the norms laid down by the IMF and the World Bank, which
are, in turn, controlled by the capitalist countries like the US.
d. Globalisation has impacted the agrarian economy where the government, in an attempt to
create SEZs, has acquired the lands of poor farmers without reasonably compensating them.
3Q. Some factors that have enabled globalization include:
Technology: The rapid development of technology has enabled globalization. For example,
telecommunication and the internet allow people to communicate and send electronic mail
across the world at a low cost.
Liberalization: The removal of trade barriers and restrictions by the government has allowed
for the easy import and export of goods and services.
Multinational corporations (MNCs): MNCs can transport cars made by Indian workers to be
sold abroad.
Partnerships: Partnerships can enable globalization.
Local companies: Local companies can contribute to globalization.
Other factors that have enabled globalization include: Customer pressure, Changing political
situations, Foreign investment policies, Information transfer, and Market integration.
Globalization has had several impacts, including:
Increased variety and quality of goods and services.
Consumers can purchase items and services from far-off markets.
Producers can sell their goods and services on a broader global market.
GLOBALISATION : Paste this WORKSHEET in the register
[Link] economic impacts of Globalization are as follows:
a. Globalisation has brought about an increased inflow of foreign capital; it has widened the
choice for consumers.
b. MNCs have provided employment opportunities to the masses, and the local companies
supplying raw materials to these industries have also prospered.
c. Globalisation has also created opportunities for the new companies providing services,
particularly those involved in offering IT services. The Indian companies today provide a host of
services like data entry, accounting, administrative and engineering, which are exported to the
developed countries.
However, on the other hand
a. Many small manufacturers and small scale industries had to shut down because of their
inability to cope with the foreign brands, thereby creating unemployment.
b. Globalisation has impacted the agrarian economy where adequate protection is not given to
the farmers.
c. Growth of MNCs has increased the inflow of foreign goods that have posed fierce competition
to the local industries.
d. Globalisation has instead created a class of people who indulge in lavish consumerism.
e. It has resulted in regional disparities as the backward areas suffer and get raw deal. They are
generally not considered for investments and continue to remain neglected.
[Link] corporations (MNCs) can have both advantages and disadvantages for
India, including:
Advantages Job creation: [Link] can provide employment opportunities for the people of a
nation.
2. Improved economy: MNCs can contribute to a country's increased trade and boost its
economy.
3. Infrastructure investment: MNCs can invest in infrastructure.
4. Improved quality of goods: MNCs can improve the quality of goods.
Disadvantages
[Link] to local businesses: MNCs can dominate the market and threaten small and local
businesses.
2. Exploitation of workers: MNCs may take advantage of workers due to lax labor laws.
3. Conflicts with the country: MNCs may face conflicts with the country they operate in due
to an unstable political climate.
4. Repatriation of profits: MNCs send profits to their country, which adversely affects the
host country's foreign exchange reserves.
5. Technological unemployment: MNCs can cause technological unemployment.
6. Depleted environmental resources: MNCs can deplete environmental resources.
[Link] is the process of integrating the world's economies, industries, markets,
culture, and policies. It involves the flow of goods, services, investments, and information across
borders, connecting people from different cultures, ideologies, and regions.
Here are some aspects of globalization:
Interconnectedness: The world is becoming increasingly interconnected, with events in one
part of the world influencing events in other parts.
Free trade: Globalization involves the free movement of money, people, and trade across
national borders.
Multinational corporations: Multinational corporations (MNCs) have been a major force in
the globalization process, connecting distant regions of the world.
Social, economic, and geographic barriers: Globalization aims to break down these
barriers. Benefits: Globalization can help the economy adopt new production methods,
increase productivity, and modernize technology.
Globalisation refers to the integration of global economics, industries, markets, culture and
policies making around the world free from socio-political control and reduces distances between
regions/countries through a global network of trade, communication, immigration, and
transportation.
4Q. Merits of Globalisation:
(a) Globalisation states that social, cultural, scientific and economic activities of the people of the
entire world are crossing national boundaries and are coming closer to each other.
(b) Today Globalisation is mainly used in the context of world economic activities.
(c) Globalisation has led to the opening of world markets.
(d) It has helped in an increase in production.
(e) It has also promoted individual skills and initiatives taken by people.
(f) It has now made trade, consumer oriented.
(g) Big national companies have now become multinational and are busy in promoting
Globalisation.
5Q. Globalisation has Been Enabled by the Following Factors
Technology
i. Rapid technological advancement has accelerated the globalisation process. This has made
transporting goods over long distances much quicker and more affordable.
[Link] is now easily available due to the development in information and communication
technologies.
[Link] developments made it possible for workers to be spread out across different locations
and still be a part of a virtual workspace, which helped to fuel the IT revolution in India.
[Link] computing capabilities have made it possible to automate production, control it
precisely, and achieve homogeneity.
Trade Liberalisation
i. The government imposes different trade barriers to regulate trade flow within international
boundaries. Levying import taxes is an example of trade barriers.
[Link] process of liberalisation involves removing trade restrictions or barriers imposed by the
government. The government is said to be more liberal when there are fewer limitations.
[Link] limitations can support increased growth and productivity in a developing
economy. However, it might be hazardous once it reaches a particular stage of development.
[Link] 1991, India liberalised its trade, allowing businesses to freely import and export
commodities and materials. Organisations like the World Bank supported this.
Foreign Investment Policy
[Link] direct investments (FDI) refer to a company’s significant financial investments in
foreign enterprises.
[Link] investment can be used to expand a company’s territory and establish an international
presence.
Here are some steps government can take to make this happen:
The government can help small producers increase their output.
It can guarantee that labour laws are adhered to and that workers’ rights are upheld.
The government can use trade and investment barriers if necessary.
It can bargain with the WTO for “fairer rules.”
It can also join forces with other developing nations to fight the wealthy nations’ dominance in
the WTO.
Q6. MNCs set up production in various countries based on the following factors:
MNCs set up offices and factories for production in regions where they can get cheap
labour and other resources; e.g., in countries like China, Bangladesh and India.
At times, MNCs set up production jointly with some of the local companies of countries
around the world. The benefit of such joint production to the local company is two-fold.
First, the MNCs can provide money for additional investments for faster production.
Secondly, the MNCs bring with them the latest technology for enhancing and improving
production.
Some MNCs are so big that their wealth exceeds the entire budgets of some developing
countries. This is the reason why they buy up local companies to expand production.
Example, Cargill Foods, An American MNC has bought over small Indian company such
as Parakh Foods.
MNCs control production by placing orders for production with small producers in
developing nations; e.g., garments, footwear, sports items etc. The products are supplied to
these MNCs which then sell these under their own brand name to customers.