Strategy of Globalization:
In the Report (2006) East Asian Renaissance, World Bank Advisor Dr Indermit Gill stated: Cities are at the core of a development strategy based on international integration, investment and innovation. East Asia is witnessing the largest rural-to-urban shift of population in history. Two million new urban dwellers are expected in East Asian cities every month for the next 20 years. This will mean planning for and building dynamic, connected cities that are linked both domestically and to the outside world so that economic growth continues and social cohesion is strengthened.The market economy seems to be more concerned with the growth of consumerism to attract the high income groups who are mostly in the cities in the developing countries. Rural economy and the agricultural sector were out of focus in the strategy of globalization.
WHAT IS GLOBALISATION?
In the past two to three decades, more and more MNCs have been looking for locations around the world which would be cheap for their production. Foreign investment by MNCs in these countries has been rising. At the same time, foreign trade between countries has been rising rapidly. A large part of the foreign trade is also controlled
by MNCs. For instance, the car manufacturing plant of Ford Motors in India not only produces cars for the Indian markets, it also exports cars
to other developing countries and exports car components for its many
factories around the world. Likewise,activities of most MNCs involve
substantial trade in goods and also services.
The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. Globalisation is this process of rapid integration or interconnection between countries. MNCs are playing a major role in the globalisation process. More and more goods and services, investments and technology are moving between countries. Most regions of the world are in closer contact with each other than a few decades back.Besides the movements of goods, services, investments and technology, there is one more way in which the countries can be connected. This is through the movement of people between countries. People usually move from one country to another in search of better income, better jobs or better education. In the past few decades, however, there has not been much increase in the movement of people between countries due to various restrictions.
FACTORS THAT HAVE ENABLED GLOBALISATION :
Technology
Rapid improvement in technology has been one major factor that has
stimulated the globalisation process. For instance, the past fifty years have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
Even more remarkable have been the developments in information and communication technology. In recent times, technology in the areas
of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities (telegraph, telephone including mobile
phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices. As you would be aware, computers have now entered almost every field of activity.You might have also ventured into the amazing world of internet, where you can obtain and share information on almost anything you want to know. Internet also allows us to send instant
electronic mail (e-mail) and talk (voice-mail) across the world at negligible costs.
Liberalisation of foreign trade and foreign investment policyLet us return to the example of imports of Chinese toys in India. Suppose the
Indian government puts a tax on import of toys. What would happen?
Those who wish to import these toys would have to pay tax on this.
Because of the tax, buyers will have to pay a higher price on imported toys. Chinese toys will no longer be as cheap in the Indian markets and
imports from China will automatically reduce. Indian toy-makers will prosper. Tax on imports is an example of trade barrier. It is called a barrier because some restriction has been set up. Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country. The Indian government, after Independence, had put barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competitionfrom imports at that stage would not have allowed these industries to come up. Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum etc. Note that all developed countries, during the early stages of development, have given protection to domestic producers through a variety of means.
Starting around 1991, some farreaching changes in policy were made in India. The government decided that the time had come for Indian
producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the
country since they would have to improve their quality. This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.
Removing barriers or restrictions set by the government is what is known as liberalisation. With liberalisation of trade, businesses are
allowed to make decisions freely about what they wish to import or export. The government imposes much less restrictions than before
and is therefore said to be more liberal.
In the Report (2006) East Asian Renaissance, World Bank Advisor Dr Indermit Gill stated: Cities are at the core of a development strategy based on international integration, investment and innovation. East Asia is witnessing the largest rural-to-urban shift of population in history. Two million new urban dwellers are expected in East Asian cities every month for the next 20 years. This will mean planning for and building dynamic, connected cities that are linked both domestically and to the outside world so that economic growth continues and social cohesion is strengthened.The market economy seems to be more concerned with the growth of consumerism to attract the high income groups who are mostly in the cities in the developing countries. Rural economy and the agricultural sector were out of focus in the strategy of globalization.
WHAT IS GLOBALISATION?
In the past two to three decades, more and more MNCs have been looking for locations around the world which would be cheap for their production. Foreign investment by MNCs in these countries has been rising. At the same time, foreign trade between countries has been rising rapidly. A large part of the foreign trade is also controlled
by MNCs. For instance, the car manufacturing plant of Ford Motors in India not only produces cars for the Indian markets, it also exports cars
to other developing countries and exports car components for its many
factories around the world. Likewise,activities of most MNCs involve
substantial trade in goods and also services.
The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. Globalisation is this process of rapid integration or interconnection between countries. MNCs are playing a major role in the globalisation process. More and more goods and services, investments and technology are moving between countries. Most regions of the world are in closer contact with each other than a few decades back.Besides the movements of goods, services, investments and technology, there is one more way in which the countries can be connected. This is through the movement of people between countries. People usually move from one country to another in search of better income, better jobs or better education. In the past few decades, however, there has not been much increase in the movement of people between countries due to various restrictions.
FACTORS THAT HAVE ENABLED GLOBALISATION :
Technology
Rapid improvement in technology has been one major factor that has
stimulated the globalisation process. For instance, the past fifty years have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
Even more remarkable have been the developments in information and communication technology. In recent times, technology in the areas
of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities (telegraph, telephone including mobile
phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices. As you would be aware, computers have now entered almost every field of activity.You might have also ventured into the amazing world of internet, where you can obtain and share information on almost anything you want to know. Internet also allows us to send instant
electronic mail (e-mail) and talk (voice-mail) across the world at negligible costs.
Liberalisation of foreign trade and foreign investment policyLet us return to the example of imports of Chinese toys in India. Suppose the
Indian government puts a tax on import of toys. What would happen?
Those who wish to import these toys would have to pay tax on this.
Because of the tax, buyers will have to pay a higher price on imported toys. Chinese toys will no longer be as cheap in the Indian markets and
imports from China will automatically reduce. Indian toy-makers will prosper. Tax on imports is an example of trade barrier. It is called a barrier because some restriction has been set up. Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country. The Indian government, after Independence, had put barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competitionfrom imports at that stage would not have allowed these industries to come up. Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum etc. Note that all developed countries, during the early stages of development, have given protection to domestic producers through a variety of means.
Starting around 1991, some farreaching changes in policy were made in India. The government decided that the time had come for Indian
producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the
country since they would have to improve their quality. This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.
Removing barriers or restrictions set by the government is what is known as liberalisation. With liberalisation of trade, businesses are
allowed to make decisions freely about what they wish to import or export. The government imposes much less restrictions than before
and is therefore said to be more liberal.