What is Globalization ? - Meaning and its Importance
We often hear the word globalization in many contexts and repeated frequently as a concept to denote more trade, foreign companies and even the ongoing economic crisis. Before we launch into a full-fledged review of the term and its various manifestations, it is important to consider what exactly we mean when we say globalization.
Globalization is the free movement of goods, services and people across the world in a seamless and integrated manner. Globalization can be thought of to be the result of the opening up of the global economy and the concomitant increase in trade between nations. In other words, when countries that were hitherto closed to trade and foreign investment open up their economies and go global, the result is an increasing interconnectedness and integration of the economies of the world. This is a brief introduction to globalization.
Further, globalization can also mean that countries liberalize their import protocols and welcome foreign investment into sectors that are the mainstays of its economy. What this means is that countries become magnets for attracting global capital by opening up their economies to multinational corporations.
Further, globalization also means that countries liberalize their visa rules and procedures so as to permit the free flow of people from country to country. Moreover, globalization results in freeing up the unproductive sectors to investment and the productive sectors to export related activities resulting in a win-win situation for the economies of the world.
Globalization is grounded in the theory of comparative advantage which states that countries that are good at producing a particular good are better off exporting it to countries that are less efficient at producing that good. Conversely, the latter country can then export the goods that it produces in an efficient manner to the former country which might be deficient in the same. The underlying assumption here is that not all countries are good at producing all sorts of goods and hence they benefit by trading with each other. Further, because of the wage differential and the way in which different countries are endowed with different resources, countries stand to gain by trading with each other.
Globalization also means that countries of the world subscribe to the rules and procedures of the WTO or the World Trade Organization that oversees the terms and conditions of trade between countries. There are other world bodies like the UN and several arbitration bodies where countries agree in principle to observe the policies of free trade and non-discriminatory trade policies when they open up their economies.
In succeeding articles, we look at the various dimensions of globalization and the impact it has had on the global economy as well as in the mobility of people from poverty to middle class status. The point here is that globalization has had positive and negative effects and hence a nuanced and deep approach is needed when discussing the concept. What is undeniable is that globalization is here to stay and hence it is better for the countries in the global economy to embrace the concept and live with it.
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- What is Globalization ?
- The Global Economic Crisis
- Introduction to the Global Economy
- Causes of Global Economic Crisis
- Impact of Global Economic Crisis
- Globalization - A Win-Win Situation
- Drivers of Globalization
- Globalization and its Discontents
- A Global Perfect Storm in 2013
- Globalization and Economic Crisis
- The Global Economic Crisis of 2008 and the Retreat of Globalization
- Lack of Regulation and the Crisis
- Global Recession and Finance
- Paradigm Shift in Global Economy
- Derivatives & Global Financial Crisis
- Global Economic Crisis: Too Much Debt
- Indian Economy in a Downward Spiral
- Future of Globalization after Crisis
- Effect of Globalization on Young Workforce
- Globalization and Young Workforce
- Globalization & Trickle Down Theory
- Effect of Crisis on Indian IT & BPO Sector
- Typical Responses to the Global Crises
- New Frontier for Globalization
- The Global Move towards Austerity
- The Double Whammy of Austerity and Unemployment Confronting the West
- International Capital is Country Blind and Seeks Returns instead of Sentiments
- How the Economic Boom of 1990s and 2000s Resulted in Debt, Environmental Destruction and Inequalities
- Historical Origins of the Present Global Economic Crisis
- Why We Should Not Let the Present Global Crisis Go Waste and Make Positive Changes
- Why Reforms are the Only Answer to the Current Crisis Confronting India
- The Great Deleveraging and the Reason why the Global Economic Recovery would Falter
- BRICS: The Next Frontier for Investors
- The Future of Energy
- The Future of Work
- Future of Work and Its Impact on Students and Professionals
- New Emerging Markets: Mexico, Indonesia, Nigeria and Turkey (MINTs)
- The Rise of Impact Investing and its Relevance to the 21st Century
- Ageing Populations in the West and their Impact on Healthcare Management
- A Comparison of Healthcare Systems around the World
- Medical Tourism and its Potential for Developing Countries
- The Benefits of Automation for the Healthcare Sector
- Healthcare Systems and their Functioning During Hard Times
- The Need for Accountability in the Healthcare Sector
- The Passage of Health Care Reform (Obamacare) and its Implications for the US
- The Role of Electronic Healthcare Records in the Healthcare Sector
- Is India on the Brink of a Serious Economic Crisis?
- The Healthcare Sector must cater to all sections instead of only for those who can pay
- What is Health Insurance and the Different Health Insurance Systems around the World
- The Shock of Gray and Its Implications for the Healthcare Sector
- Why Europe is Broke and no amount of Central Bank Monetary Easing would Help
- Why the Eurozone Crisis is about to get a whole lot worse than now