Executive Summary:

The phrase World has become a global village is very common now a
days. The multinationals also stress upon Think global. These
concepts relates
to the globalization process that refers towards an ongoing process by
which
regional economies, societies, and cultures have become integrated
through a
globe-spanning network of communication and execution. The concept
was first
described by Charles Taze Russell in 1897 but the term was widely used
after
1960s.
There were four aspects of globalization as indicated by the presenters
i.e.
economic aspects are the economic integration of the world economies
that is
said to lead the world toward prosperity and economic excellence.
Environmental
aspects such as global warming etc also lead to the unification of the
world to
think about the whole world about environmental issues. Political
aspects of the
globalization stress upon the cross country political cooperation and
understanding of other political systems of the globe and the last
cultural and
social aspects of the globalization relate to the understanding of the
other cultural
norms and social patterns.
The history of the globalization is very much old indeed starting from
the
colonizing the people in other regions of the world as the British did.
Australia
and America were colonies of the Europe in the beginning. Moreover,
golden

Islamic age also laid the foundation for the globalization as the Muslim
traders
and preachers travelled across the world to trade and spread their
ideology. In
British Empire the East India Company and various other companies
exploited
the potential and richness of the sub continent but this thing also
contributed
towards the concept of globalization. After World War II, the evolution
of the
global financial institution such as IMF and World Bank also led towards
the
unification of the world. The recent developments include the
inauguration of
WTO and European Union.
The things contributed towards the globalization also include free trade
areas under different treaties as NAFTA, SAFTA etc; evolution of the
custom
unions and alliances; development of common markets and economic
unions.
European Union is the most popular example of all this.
The global institutions supporting this concept are WTO main function
of
which is to liberalize trade, elimination of various quotas and
settlement of trade
disputes among the countries of the world; and IMF which formed 1944
as result
of Bretton woods conference to oversee the monitory issues of the
world and
Globalization
2
supporting the under developed countries by providing them loans; and
UNCTD
United Nations Conference on Trade and Development established in
1964 as a

permanent intergovernmental body. It is the principal organ of the

United Nations
General Assembly dealing with trade, investment, and development
issues
Companies go global because they want to be reactive as to respond to
the low trade barriers, customer demand in global market, local
competition etc
or some companies adopt proactive approach to exploit growth
opportunities,
economies of scale and recourse assess and cost saving such as
utilizing the
cheap labor force.
The hurdles faced by the globalization process on its way are political
and
regulatory constraints of each country, currency and market
differences, cultural
and social disparity, ethical and environmental perspectives which
largely are
country specific.
Some talk about the fruits of the globalization that can be reaped in the
shape of economic and political excellence and other have some
reservation
regarding the destructive effects of the globalization on the world as it
is argued
that the all upsides are for the developed countries who are so called
drivers of
the globalization, moreover the biased role of the IMF and World Bank
toward the
less developed courtiers also raise the question. Some people are of
the view
that bubble of the globalization is a conspiracy of the Jews to take over
the world
and its resources which are concentrated in less developed Muslim
countries.
Globalization
3

Globalization:
Meaning of Globalization:
Globalization is the process of making a transformation of things or
phenomena into global ones. It can be described as a process by which
the
people of the world are unified into a single society and function
together. It also
means erasure of national boundaries for economic purposes;
international trade
(governed by comparative advantage) becomes inter-regional trade
(governed by
absolute advantage). Precisely, it refers to an increasing
interconnectedness of
different parts of the world through common processes of economic,
environmental, political and cultural change.
In short Globalization is how our world is becoming more and more like
one country each and every day. There are several meanings and all
usually
mention the increasing connectivity of economies and ways of life
across the
world. The Encyclopedia Britannica says that globalization is the
"process by
which the experience of everyday life is becoming standardized around
the
world." While some scholars and observers of globalization stress
convergence
of patterns of production and consumption and a resulting
homogenization of
culture, others stress that globalization has the potential to take many
diverse
forms.

Definition of Globalization:
Globalization is a term which has become very popular and is used in

many different contexts in literature. There are many different

definitions for
Globalization. In the financial markets, it is known as blurring of the
borders
between different markets. Redding defines globalization as the
integration
between the markets for goods, services and capital. He also links
globalization
to the breakdown of the borders. It is quite evident that there are many
different
interpretation of globalization depending on the context and on the
person who is
talking about it. Though the precise definition is still unavailable, but
there are few
definitions that are worth viewing like:
In economics, a broad definition is that globalization is the convergence
of
prices, products, wages, rates of interest and profits toward developed
country
norms. Globalization of the economy depends on the role of human
migration,
Globalization
4
international trade, movement of capital, and integration of financial
markets. The
International Monetary Fund [IMF] notes the growing economic
interdependence
of countries worldwide through increasing volume and variety of crossborder
transactions, free international capital flows, and more rapid and
widespread
diffusion of technology.
According to Guy Brainbant, the process of globalization not only
includes
opening up of the world trade, development if the advanced means of

communication, internationalization of the financial markets, migration

of the
people, growing importance of MNCs, increased mobility of goods,
data, capital,
person and ideas but also infections, diseases and pollution.
Therefore term globalization can be apparently inferred as the
integration
of the economies of the world through uninhibited trade and financial
flows which
are through mutual exchange of technology and knowledge. It also
contains free
inter-country movement of the labor.
Globalization
5
Drivers of Globalization:
The media and almost every book on globalization and international
business
speak about different drivers of globalization and they can basically be
separated
into the following different groups:
1) Technological drivers:Technology shaped and set the foundation for modern globalization.
Innovations in the transportation technology revolutionized the
industry. The most
important developments among these are the commercial jet aircraft
and the
concept of containerization in the late 1970s and 1980s. Without the
rapid growth
of air cargo services made possible by the introduction of wide-bodied
jets, it
would not have been possible for Israel to become a leading exporter of
cut
flowers to the United States or for Australia to become a leading
supplier of fresh

tuna to Tokyos sushi markets. Inventions in the area of

microprocessors and
telecommunications enabled highly effective computing and
communication at a
low-cost level. The rapid growth of the Internet is the latest
technological driver
that created global e-business and e commerce. Though it is still far too
early to
make a definitive judgement, it seems increasingly plausible that the
internet and
the technologies associated with it represent a discontinuity similar, in
at least
some ways, to electricity or the telephone.
It is interesting to note that some of the technologies which have
facilitated
the rapid growth of international trade in goods are not especially new,
but rather
represent progressive extensions of previously known technologies to
the point
where they have lowered costs sufficiently to render feasible trade
which was
previously uneconomic. These new technologies have greatly
expanded both the
range of material which can be transmitted electronically from one
point to
another and the distance over which it can be transmitted; and they
have
drastically reduced the cost of transmission. Moreover, the number of
people
able to make use of these technologies has grown exponentially.
Consider this example provided by Peter Drucker:
A mid-sized company in Americas industrial mid-west, founded in the
1920s, used to have some 60% of the market in inexpensive
dinnerware for fastfood eateries, school and office cafeterias, and hospitals within a
hundred-mile

radius of its factory. China is heavy and breaks easily, so cheap china is
traditionally sold within a small area. Almost overnight, this company
lost more
than half its market.
Globalization
6
One of its customers, a hospital cafeteria where someone went surfing
on
the internet, discovered a European manufacturer that offered china of
apparently better quality at a lower price and shipped cheaply by air.
Within a few
months the main customers in the area shifted to the European
supplier. Few of
them, it seems, realize let alone care that the stuff comes from
Europe.
Experiences such as this have become, if not ubiquitous, then at least
common-place.
Drucker goes on to conclude:
In the mental geography of e-commerce, distance has been
eliminated.
There is only one economy and one market The competition is not
local any
more in fact, it knows no boundaries.
2) Tastes:Another key driver of the current experience of globalization and one
which is often overlooked by its critics is the way in which people
allover the
world have acquired a generally increasing taste for the products and
experiences of people in other parts of the world. Advances in
transportation and
communications and reductions in their cost have clearly played a
role in this
process, by making it possible for more people to experience more of
more parts

of the world, either personally through travel or vicariously via

television, cinema,
the internet and other media. For example, in 1978,290 million people
or about
6% of the worlds population took an international trip. By 1996, the
number of
international travelers had doubled, to over 10% of the worlds
population. By
2020, this figure is expected to have increased to over 20%. Education
has had a
similar effect. Education increases peoples appetite for variety and
diversity. It
enhances their ability to make comparisons and choices between
alternatives. It
reduces their tolerance for shoddy or needlessly expensive goods and
services.
Almost inevitably, the search for alternatives leads people to look
beyond the
peripheries of their own nations for products as basic as food and
beverages or
as complex as motor vehicles; for services ranging from films to
accounting
advice; and for different avenues for investment. In this sense,
globalization is an
extension of freedom: as John Micklethwait and Adrian Wooldridge note
in their
book about globalization, A Future Perfect, globalization by its very
nature helps
to hand the power to choose to the individual.
3) Political drivers:By reducing barriers to the movement of goods, services and capital
(though generally not people) across national boundaries, the
governments have
gave way to globalization. Liberalized trading rules and deregulated
markets lead

to lowered tariffs and allowed foreign direct investments in almost all

over the
Globalization
7
world. The institution of GATT (General Agreement on Tariffs and Trade)
1947
and the WTO (World Trade Organization) 1995 as well as the ongoing
opening
and privatization in Eastern Europe are only some examples of latest
developments.
4) Market drivers:As domestic markets become more and more saturated, the
opportunities
for growth are limited and global expanding is a way most
organizations choose
to overcome this situation. Common customer needs and the
opportunity to use
global marketing channels and transfer marketing to some extent are
also
incentives to choose internationalization. (Ferrier, 2004)
5) Cost drivers:Sourcing efficiency and costs vary from country to country and global
firms
can take advantage of this fact. Other cost drivers to globalization are
the
opportunity to build global scale economies and the high product
development
costs nowadays. (Ferrier, 2004)
6) Competitive drivers:With the global market, global inter-firm competition increases and
organizations are forced to play international. Strong
interdependences among
countries and high two way trades and FDI actions also support this
driver.

Globalization
8
Various aspects of Globalization affecting the world:
Below are the important aspects of globalization that affect the world in
different
ways:
Industrial (alias Trans Nationalization) -: Emergence of
worldwide production markets and broader access to a range of goods
for
consumers and companies
Financial -: Emergence of worldwide financial markets and better
access to external financing for corporate, national and sub-national
borrowers
Political -: Spread of political sphere of interests to the regions and
countries outside the neighborhood of political (state and non-state)
actors
and the potential formation of a global citizens movement
Informational -: Increase in information flows between
geographically
remote locations.
Cultural -: Growth of cross-cultural contacts; advent of new
categories
of consciousness and identities such as Globalism which embodies
cultural diffusion, the desire to consume and enjoy foreign products
and
ideas, adopt new technology and practices, and participate in a
"world
culture".
Ecological -: The advent of global environmental challenges that can
not be solved without international cooperation, such as climate
change,
cross-boundary water and air pollution, over-fishing of the ocean, and
the

spread of invasive species.

Thus, globalization has become identified with a number of large
trends,
most of which may have developed or accelerated since World War II.
These
include the greater international movement of commodities, money,
information,
and people; and the development of technology, organizations, legal
systems,
and infrastructures to allow this movement, greater international
cultural
exchange, spreading of multiculturalism, and better individual access
to cultural
diversity, development of a global telecommunications infrastructure
and greater
transborder data flow, using such technologies as the Internet,
communication
satellites, submarine fiber optic cable, and wireless telephones. Also
witnessed is
the increase in the number of standards applied globally; e.g. copyright
laws,
patents and world trade agreements. There is a push by many
advocates for an
international criminal court and international justice movements.
Globalization
9
Historical Precedents:
The term "globalization' was coined in the latter half of the
twentieth
century, and the term and its concepts did not permeate popular
consciousness
until the latter half of the 1980s. Various social scientists have tried to
demonstrate continuity between contemporary trends of globalization
and earlier
periods.

The earliest written theoretical concepts of globalization were penned

by
an American entrepreneur-turned- minister Charles Taze Russell who
coined the
term 'corporate giants' in 1897. In the 16th century,
Globalization in its largest
extent began in Portugal. Portugal's global explorations in the
16th century linked
continents, economies and cultures as never before.
Globalization is a centuries long process, tracking the expansion of
human
population and the growth of civilization that has accelerated
dramatically in the
past 50 years. Earlier forms of globalization existed during the Mongol
Empire,
when there was greater integration along the Silk Road. Global
integration
continued through the expansion of European trade, as in the 16th and
17th
centuries, when the Portuguese and Spanish Empires reached to all
corners of
the world. The effects on European industries were notable, e.g. the
Silver
Mining in Schwaz, Austria was partly abandoned, as silver was
available from the
Spanish colonies for lower prices.
Globalization became a business phenomenon in the 17th century
when
the first Multinational was founded in The Netherlands. During the
Dutch Golden
Age the Dutch East India Company was established as a private owned
company. Because of the high risks involved with the international
trade,
ownership was divided with Shares. The Dutch East India Company was
the first

company in the world to issue shares, an important driver for

globalization.
The 19th century is sometimes called "The First Era of
Globalization." It
was a period characterized by rapid growth in international trade and
investment
between the European imperial powers, their colonies, and, later, the
United
States. It was in this period that areas of sub-saharan Africa and the
Island
Pacific were incorporated into the world system.
Since World War II, barriers to international trade have been
considerably
lowered through international agreements - General Agreement on
Tariffs and
Globalization
10
Trade (GATT). Particular initiatives carried out as a result of GATT and
the World
Trade Organization (WTO), for which GATT is the foundation, have
included
Promotion of free trade -: Reduction or elimination of tariffs; creation
of
free trade zones with small or no tariffs, reduced transportation costs,
especially resulting from development of containerization for ocean
shipping, reduction or elimination of capital controls, reduction,
elimination,
or harmonization of subsidies for local businesses
Restriction of free trade -: Harmonization of intellectual property
laws
across the majority of states, with more restrictions.
Supranational recognition of intellectual property restrictions (e.g.
patents granted by China would be recognized in the United States)
The Uruguay round (1984 to 1995) led to a treaty to create the World

Trade Organization (WTO), to mediate trade disputes and set up a

uniform
platform of trading. Other bi- and trilateral trade agreements, including
sections of
Europe's Maastricht Treaty and the North American Free Trade
Agreement
(NAFTA) have also been signed in pursuit of the goal of reducing tariffs
and
barriers to trade.
The world increasingly is confronted by problems that can not be
solved
by individual nation-states acting alone. Examples include crossboundary air
and water pollution, over-fishing of the oceans and other degradations
of the
natural environment, regulation of outer-space, global warming,
international
terrorist networks, global trade and finance, and so on. Solutions to
these
problems necessitate new forms of cooperation and the creation of new
global
institutions. Since the end of World War II, following the advent of the
UN and the
Bretton Woods institutions, there has been an explosion in the reach
and power
of Multinational corporations and the rapid growth of global civil
society. The
Global scenario group, an environmental research and forecasting
organization,
views globalization as part of the shift to a Planetary Phase of
Civilization,
characterized by global social organizations economies and
communications.
The GSG maintains that the future character of this global society is
uncertain
and contested.
Globalization

11
Measuring Globalization:Looking specifically at economic globalization, it can be measured in
different
ways.
Goods and services, e.g. exports plus imports as a proportion of
national
income or per head of population.
Labor/people, e.g. net migration rates; inward or outward migration
flows,
weighted by population.
Capital, e.g. inward or outward direct investment as a proportion of
national income or per head of population.
Technology, e.g. international research & development flows;
proportion of
populations (and rates of change thereof) using particular inventions
(especially 'factor-neutral' technological advances such as
the telephone,
motorcar, broadband)
To what extent a nation-state or culture is globalized in a particular
year
has until most recently been measured employing simple proxies like
flows of
trade, migration, or foreign direct investment, as described above.
A multivariate approach to measuring globalization is the recent index
calculated by the Swiss Think tank KOF. The index measures the three
main
dimensions of globalization: economic, social, and political. In addition
to three
indices measuring these dimensions, an overall index of globalization
and subindices referring to actual economic flows, economic restrictions, data
on

personal contact, data on information flows, and data on cultural

proximity is
calculated. Data are available on a yearly basis for 122 countries.
Measuring Attitudes towards Globalization:
Measurement of attitudes toward globalization was sought after in a
2003
worldwide globalization study. The study focused on teenagers'
perceptions
towards globalization and globalism, because soon they will be the
adults living
out the results of today's policy. The study examined the thesis
of: Teenagers are
natural globalists & Teenagers are afraid of globalization. The
sample for this
Globalization
12
study included two hundred teenagers between the ages of 14 and 18,
from New
York, Lebanon, Azerbaijan, and the Philippines. The locations were
urban. There
was a survey administered with input from Gene Ellis, a professor
(Wirtschaftswissenschaft Seminar) at the Eberhard Karls University of
Tuebingen, and global consulting principal, economist, and former
World Bank
employee Andrew Mack.
Topics of globalization and globalism were grouped into sub-categories.
Globalization categories included immigration, trade, and diplomatic
relations.
Globalism included consumption, personal freedoms, technology, and
culture.
The results of the research suggested that both American teenagers
and
international teenagers are natural globalists and are largely in favor of
globalization. Teenagers in New York had higher levels of support for

globalization than globalism. International teens were more globalists.

Importantly, all teens were very positive towards technology, cultural
exchange,
trade, consumption of international goods, and immigration.
The study suggested that the future of international technology, trade,
and
culture will depend on bringing the concepts of globalization and
globalism
together. More so, the Internet seems to be one of the most important
tools in
linking teenagers globally and this suggests that this sort of
communication
should be developed around the world at a faster rate. Finally, it was
suggested
that the future of culture and trade will depend on the rate of
technological
progress.
Globalization
13
Impact of Globalization on India:
India opened its economy in early nineteen century; it followed a major
crisis which led the economy near to defaulting on loans. After a long
time
passed, there has been a steady liberalization with the current account
transactions. Numbers of new sectors were opened for the portfolio
and foreign
direct investments in roads, telecoms, airports, insurance and many
other major
sectors.
The Indian tariff rates reduced rapidly over the decade from an average
of
72.5% in 1991-1992 to 24.6% in 1996-97. Tariff went up slowly in late
nineties
and became 35.1% in 2001-02.

Globalization in India has allowed companies to increase their base of

operations, expand their workforce with minimal investments, and
provide new
services to a broad range of consumers. The process of globalization
has been
an integral part of the recent economic progress made by India.
Globalization
Globalization
14
has played a major role in export-led growth, leading to the
enlargement of the
job market in India.
One of the major forces of globalization in India has been in the growth
of outsourced IT and business process outsourcing (BPO) services. The
last few
years have seen an increase in the number of skilled professionals in
India
employed by both local and foreign companies to service customers in
the US
and Europe in particular. Taking advantage of Indias lower cost but
educated
and English-speaking work force, and utilizing global communications
technologies such as voice-over IP (VOIP), email and the internet,
international
enterprises have been able to lower their cost base by establishing
outsourced
knowledge-worker operations in India.
As a new Indian middle class has developed around the wealth that the
IT
and BPO industries have brought to the country, a new consumer base
has
developed. International companies are also expanding their
operations in India
to service this massive growth opportunity. Notable examples of
international

companies that have done well in India in the recent years include
Pepsi, CocaCola, McDonalds, and Kentucky Fried Chicken, whose products have
been well
accepted by Indians at large.
Globalization in India has been advantageous for companies that have
ventured in the Indian market. By simply increasing their base of
operations,
expanding their workforce with minimal investments, and providing
services to a
broad range of consumers, large companies entering the Indian market
have
opened up many profitable opportunities.
Indian companies are rapidly gaining confidence and are themselves
now
major players in globalization through international expansion. From
steel to
Bollywood, from cars to IT, Indian companies are setting themselves up
as
powerhouses of tomorrows global economy.
Global comparisons describe India as a fastest growing country after
China. Trade and investment are two of the very important reason of
progress
leading in lowering the rates of poverty and global inequality over the
decades.
The proportion of the world population living in poverty is continually
declining.
There are five major areas where India has to keep on concentrating in
order to
achieve this goal and those areas are: Technological entrepreneurship
Globalization
15
New business openings for small and medium enterprises

 Quality management importance

Prospects in rural areas
Privatization of financial institutions.
Steps Taken to Globalize Indian Economy:
Some of the steps taken to liberalize and globalize our economy were:
1. Devaluation: To solve the balance of payment problem Indian
currency were
devaluated by 18 to 19%.
2. Disinvestment: To make the LPG model smooth many of the public
sectors
were sold to the private sector.
3. Allowing Foreign Direct Investment (FDI): FDI was allowed in a wide
range
of sectors such as Insurance (26%), defense industries (26%) etc.
4. NRI Scheme: The facilities which were available to foreign investors
were also
given to NRI's.
GDP Growth Rate:
The economy of India is passing through a difficult situation. Output
and demand
conditions were highly affected by the poor performance in agriculture
during the
last two years. The economy globally recorded an output growth of
2.4%. The
performance in the first quarter of the financial year is around 5.8%
and in the
second quarter is around 6.1%.
Export and Import:
The export of India in year 2001-02 extended to 32,572 and import
extended to
38,362 million approximately. Indian companies became respectable
companies
in International market. Agriculture exports rose to 18% of the total
annual export

of the country. The largest contributor in the previous years to the total
agricultural exports is the marine product which accounts to be the
total of one
fifth portion of the agricultural products. Oil seeds, rice, coffee, and tea
are other
prominent products which accounts in total of the agricultural products
of 5 to
10%
A Comparison with Other Developing Countries with India:
Indias share of world exports increased from 0.05% to 0.07% over
the last
2 decades and Chinas share has tripled to almost 4% over the same
period.
Indias share of the global trade is exactly similar to that of the
Philippines,
an economy which is 6 times smaller according to estimation of IMF.
Globalization
16
FDI flows into India have averaged around 0.5% of GDP against 5%
for
China and 5.5% for Brazil over the past decade. FDI inflows to China
now
exceeds by US $ 50 billion annually. It is US $ 4billion only in the case
of
India.
Advantages of Globalization:
It is the advantages of Globalization which act to bring about economic
welfare
on international levels, thereby benefiting the worldwide
population. Mentioned
below, are the advantages of Globalization which facilitate the
development of
world economies immensely:

 Free movement of capitals offers access to the foreign investments

to
many countries like the United States of America.
The worldwide commercial market becomes so flexible due to the
advent
of Globalization, that transactions of the international companies are
not
restricted to geographical borders of the countries.
Globalization enhances the flow of capital, permitting the investors
to invest on the untapped resources of the developing countries.
Globalization
17
Globalization of the mass media has reduced the global space
substantially, keeping the people informed about all latest international
happenings through different television channels.
Improvement in global communication networks leads to easy flow
of
important information not only to individuals but at company levels as
well.
The democratic thoughts are rapidly spread among countries
across the
world, owing to Globalization.
Globalization stresses on increasing mutual dependence among all
the
nation-states across the world.
Globalization lessens the possibilities of warfare among developed
countries to considerable extents.
The developed countries display a tendency for working towards
protecting their surrounding environments to large extents.
Globalization enhances free international trades among countries
across
the world.

 The total output levels of a country increase when productions

become
competition-oriented. This means that to compete with the existing
world
market, the products must be of best qualities and they also improve
the
lifestyle of the overall population.
Cheap imports and extensive competition on international level keep
a
check on the prices leading to lower inflation rates, which occasionally
interrupt the economic growth and development of a nation.
Economic Globalization ushers in the concept of Open Economy,
where
there is an extensive promotion of technological growth and inventions.
This requires new topics and concepts to be imported from abroad.
Employments in the export-oriented industries generally pay its
employees
approximately 15% more than the import-oriented jobs in a country.
One of the positive effects of Globalization is the smooth and speedy
transportation of people and commodities to different corners of the
world.
Globalization reduces cultural blockages and differences among
nations,
by encouraging fellow-feeling and mutual compassion.
Globalization
18
Disadvantages of Globalization:
Opponents of globalization point out to its negative effects. Some of
them are
listed below.
Developed nations have outsourced manufacturing and white collar
jobs.
That means fewer jobs for their people. This has happened because

manufacturing work is outsourced to developing nations like China

where
Globalization
19
the cost of manufacturing goods and wages are lower. Programmers,
editors, scientists and accountants have lost their jobs due to
outsourcing
to cheaper locations like India.
Globalization has led to exploitation of labor. Prisoners and child
workers
are used to work in inhumane conditions. Safety standards are ignored
to
produce cheap goods.
Job insecurity - Earlier people had stable, permanent jobs. Now
people
live in constant dread of losing their jobs to competition. Increased job
competition has led to reduction in wages and consequently lower
standards of living
Terrorists have access to sophisticated weapons enhancing their
ability to
inflict damage. Terrorists use the Internet for communicating among
themselves.
Companies have set up industries causing pollution in countries with
poor
regulation of pollution.
Fast food chains like McDonalds and KFC are spreading in the
developing
world. People are consuming more junk food from these joints which
has
an adverse impact on their health.
The benefits of globalization are not universal. The rich are getting
richer
and the poor are becoming poorer.

 Bad aspects of foreign cultures are affecting the local cultures

through TV
and the Internet.
Enemy nations can spread propaganda through the Internet.
Deadly diseases like HIV/AIDS are being spread by travellers to the
remotest corners of the globe.
Local industries are being taken over by foreign multinationals.
The increase in prices has reduced the governments ability to
sustain
social welfare schemes in developed countries.
There is increase in human trafficking.
Multinational Companies and corporations which were previously
restricted to commercial activities are increasingly influencing political
decisions.
Globalization has lead to environmental damage in India (as with
many
developing nations).Due to large-scale industrialization urban slums
have
formed, air and water pollution has dramatically increased.
Multinational
firms have exploited resources belonging to the country and lead to
land
degradation. Delhi for example is the 4th most polluted city in the
world.
Though foreign investment will promote economic development in
the
short term, the profits earned from the business venture move out of
the
Globalization
20
country. There is also a possibility that at times of recession investors
(in
portfolio investment) may withdraw their funds causing further
problems.

 Domestic resources such as labor maybe exploited by large

production
based firms. These firms may also abuse natural resources and use
them
inefficiently.
Domestic producer being overpowered my overseas giants, who
already
have competitive advantages over the domestic producers, and have
more funds to invest. This will lead to the closure of many domestic
owner
firms.
Concerns and Fears:
On the impact of globalization, there are two major concerns. These
may
be described as even fears. Under each major concern there are many
related
anxieties. The first major concern is that globalization leads to a more
iniquitous
Globalization
21
distribution of income among countries and within countries. The
second fear is
that globalization leads to loss of national sovereignty and those
countries are
finding it increasingly difficult to follow independent domestic policies.
These two
issues have to be addressed both theoretically and empirically.
The argument that globalization leads to inequality is based on the
premise that since globalization emphasizes efficiency, gains will
accrue to
countries which are favorably endowed with natural and human
resources.
Advanced countries have had a head start over the other countries by
at least

three centuries. The technological base of these countries is not only

wide but
highly sophisticated. While trade benefits all countries, greater gains
accrue to
the industrially advanced countries. This is the reason why even in the
present
trade agreements, a case has been built up for special and differential
treatment
in relation to developing countries. By and large, this treatment
provides for
longer transition periods in relation to adjustment. However, there are
two
changes with respect to international trade which may work to the
advantage of
the developing countries. First, for a variety of reasons, the industrially
advanced
countries are vacating certain areas of production. These can be filled
in by
developing countries. A good example of this is what the East Asian
countries
did in the 1970s and 1980s. Second, international trade is no longer
determined
by the distribution of natural resources. With the advent of information
technology, the role of human resources has emerged as more
important.
Specialized human skills will become the determining factor in the
coming
decades. Productive activities are becoming knowledge intensive
rather than
resource intensive. While there is a divide between developing and
the
advanced countries even in this area some people call it the digital
divide - it is
a gap which can be bridged. A globalized economy with increased
specialization
can lead to improved productivity and faster growth. What will be
required is a

balancing mechanism to ensure that the handicaps of the developing

countries
are overcome.
Apart from the possible iniquitous distribution of income among
countries,
it has also been argued that globalization leads to widening income
gaps within
the countries as well. This can happen both in the developed and
developing
economies. The argument is the same as was advanced in relation to
iniquitous
distribution among countries. Globalization may benefit even within a
country
those who have the skills and the technology. The higher growth rate
achieved
by an economy can be at the expense of declining incomes of people
who may
be rendered redundant. In this context, it has to be noted that while
globalization
may accelerate the process of technology substitution in developing
economies,
Globalization
22
these countries even without globalization will face the problem
associated with
moving from lower to higher technology. If the growth rate of the
economy
accelerates sufficiently, then part of the resources can be diverted by
the state to
modernize and re-equip people who may be affected by the process of
technology up gradation.
The second concern relates to the loss of autonomy in the pursuit of
economic policies. In a highly integrated world economy, it is true that
one
country cannot pursue policies which are not in consonance with the
worldwide

trends. Capital and technology are fluid and they will move where the
benefits
are greater. As the nations come together whether it be in the political,
social or
economic arena, some sacrifice of sovereignty is inevitable. The
constraints of a
globalised economic system on the pursuit of domestic policies have to
be
recognised. However, it need not result in the abdication of domestic
objectives.
Another fear associated with globalization is insecurity and volatility.
When countries are inter-related strongly, a small spark can start a
large
conflagration. Panic and fear spread fast. The downside to globalization
essentially emphasizes the need to create countervailing forces in the
form of
institutions and policies at the international level. Global governance
cannot be
pushed to the periphery, as integration gathers speed.
Empirical evidence on the impact of globalization on inequality is not
very
clear. The share in aggregate world exports and in world output of the
developing countries has been increasing. In aggregate world exports,
the share
of developing countries increased from 20.6 per cent in 1988-90 to
29.9 per cent
in 2000. Similarly the share in aggregate world output of developing
countries
has increased from 17.9 per cent in 1988-90 to 40.4 per cent in 2000.
The growth
rate of the developing countries both in terms of GDP and per capita
GDP has
been higher than those of the industrial countries. These growth rates
have been
in fact higher in the 1990s than in the 1980s. All these data do not
indicate that

the developing countries as a group have suffered in the process of

globalization.
In fact, there have been substantial gains. But within developing
countries, Africa
has not done well and some of the South Asian countries have done
better only
in the 1990s. While the growth rate in per capita income of the
developing
countries in the 1990s is nearly two times higher than that of
industrialized
countries, in absolute terms the gap in per capita income has widened.
As for
income distribution within the countries, it is difficult to judge whether
globalization is the primary factor responsible for any deterioration in
the
distribution of income. We have had considerable controversies in our
country
Globalization
23
on what happened to the poverty ratio in the second half of 1990s.
Most analysts
even for India would agree that the poverty ratio has declined in the
1990s.
Differences may exist as to what rate at which this has fallen.
Nevertheless,
whether it is in India or any other country, it is very difficult to trace the
changes
in the distribution of income within the countries directly to
globalization.
Indias Stance on Globalization:
What should be Indias attitude in this environment of growing
globalization? At the outset it must be mentioned that opting out of
globalization
Globalization
24

is not a viable choice. There are at present 149 members in the World
Trade
Organisation (WTO). Some 25 countries are waiting to join the WTO.
China has
recently been admitted as a member. What is needed is to evolve an
appropriate framework to wrest maximum benefits out of international
trade and
investment. This framework should include:
(a) Making explicit the list of demands that India would like to make on
the
multilateral trade system, and
(b) Steps that India should take to realize the full potential from
globalization.
Where does Indian stand in terms of Global Integration?
India clearly lags in globalisation. Number of countries have a clear
lead among
them China, large part of east and far east Asia and eastern Europe.
Lets look at
a few indicators how much we lag.
Over the past decade FDI flows into India have averaged around
0.5% of
GDP against 5% for China 5.5% for Brazil. Whereas FDI inflows into
China now exceeds US $ 50 billion annually. It is only US $ 4billion in
the
case of India
Consider global trade - India's share of world merchandise
exports
increased from .05% to .07% over the pat 20 years. Over the same
period
China's share has tripled to almost 4%.
India's share of global trade is similar to that of the Philippines,
an
economy 6 times smaller according to IMF estimates. India under
trades

by 70-80% given its size, proximity to markets and labour cost

advantages.
It is interesting to note the remark made last year by the Governor
of RBI.
Despite all the talk, we are now where ever close being globalised in
terms of any commonly used indicator of globalisation. In fact we are
one
of the least globalised among the major countries - however we look at
it.
As Amartya Sen and many other have pointed out that India, as a
geographical, politico-cultural entity has been interacting with the
outside
world throughout history and still continues to do so. It has to adapt,
assimilate and contribute. This goes without saying even as we move
into
what is called a globalised world which is distinguished from previous
eras
from by faster travel and communication, greater trade linkages,
denting of
political and economic sovereignty and greater acceptance of
democracy
as a way of life.
Consequences:
Globalization
25
The implications of globalisation for a national economy are many.
Globalisation has intensified interdependence and competition between
economies in the world market. This is reflected in Interdependence in
regard
to trading in goods and services and in movement of capital. As a
result
domestic economic developments are not determined entirely by
domestic

policies and market conditions. Rather, they are influenced by both

domestic
and international policies and economic conditions. It is thus clear that
a
globalising economy, while formulating and evaluating its domestic
policy
cannot afford to ignore the possible actions and reactions of policies
and
developments in the rest of the world. This constrained the policy
option
available to the government which implies loss of policy autonomy to
some
extent, in decision-making at the national level.
Globalization - A Controversial Topic:
Those who support globalization point out that free trade enables
companies from the rich industrialized countries to invest in poorer
countries,
Globalization
26
providing jobs to local citizens and improvements to infrastructure.
Many
multinational corporations now reduce labor costs by outsourcing
portions of their
business operations to countries such as India and China. This has
been
particularly true of the manufacturing sector.
Foreign companies also provide wealth to local economies in the form
of
foreign currency when they buy local products and services. In many
cases, they
have built schools, colleges and hospitals for the local residents,
enhancing the
quality of life.
Advocates also contend that globalization allows for the mixing of
people

and cultures, further enabling the sharing of ideas, experiences and

lifestyles.
People can experience foods and other products not previously
available in their
own country.
Overall, supporters of globalization argue that it has brought improved
standards of living and quality of life to several countries. They point to
examples
such as China. As a result of opening its markets to the world, Chinas
economy
can claim an increase in per capita personal income from $1,420 in
1980 to
$4,120 by 1999. In 1980, Americans earned 12.5 times as much as the
Chinese
per capita. By 1999, they were only earning 7.4 times as much.
Supporters cite globalization as having benefited countries in a number
of
ways, particularly poorer ones. For example, the percentage of people
in
developing countries living below $1 per day has halved in only 20
years; life
Globalization
27
expectancy in the developing world has almost doubled since WWII and
is
closing the gap with the developed world; between 1950 and 1999
global literacy
increased from 52% to 81%.
But globalization has equally vocal opponents. In recent times,
globalization has been blamed for a host of ills, including poverty in the
Third
World, job losses in industrialized countries and even the
Americanization of
other cultures.

Anti-globalists contend that it operates only in the interests of the

rich
nations and multinational corporations. They argue that such
corporations exploit
workers in the developing world, subjecting them to poor working
conditions in
sweat shops, and paying them salaries that they would not be
allowed to get
away with back home. They contend that the multinational profits are
repatriated
and little is invested in the communities whose labor and resources
they
consume.
These critics also say that the gap between the rich and poor nations is
growing, and that globalization has not benefited poorer countries.
Figures used
frequently to back their position come from a variety of sources,
including a
report from the United Nations Development Program. For example, the
gap in
incomes between the 20% of the richest and poorest countries has
grown from
30 to 1 in 1960 to 82 to 1 in 1995.
By the late 1990s, the fifth of the worlds population living in the
highestincome countries had:
86% of the worlds gross domestic productthe bottom fifth just 1%.
82% of world export marketsthe bottom fifth just 1%.
68% of foreign direct investmentthe bottom fifth just 1%.
74% of the worlds telephone linesthe bottom fifth just 1.5%.
These anti-globalists say this rising inequality is the result of market
forces. They say that given free rein, market forces give the rich the
power to add
to their wealth. Therefore, they argue that large corporations invest in
poor

countries only because they can take advantage of low wage levels or
so they
can access their natural resources.
The Future of Globalization:
Globalization
28
So what does the future hold? What will be the result of the
increasingly
interconnected state of the worlds nations?
While there are many opinions, there is only one source that can give
us
the true answerthe Holy Bible. In it, God accurately foretold the rise
and fall of
the major nations throughout history, including the Babylonian, MedoPersian,
Greek and Roman empires. He even prophesied the sudden rise of the
American and British people to world prominence.
And God has foretold todays fast-paced interconnected world and its
matchless advances in science and technology: But you, O Daniel,
shut up the
words, and seal the book, even to the time of the end: many shall run
to and
fro, and knowledge shall be increased.
The Bible states that, in the future, a union of ten nations (or groups of
nations) will arise, and replace America as the dominant world power. It
will
attack and defeat America and Britain, taking the survivors into
captivity. This
political, economic and military combine will be backed by a universal
false
church. It will become a world-leading trading bloc, possessing vast
riches and
trading all over the world in every product imaginableeven human
beings! This

politically influential religious entity, led by a charismatic figure, will

usher in a
temporary period of great wealth. Globalization will thrive during its
reign to levels
unseen in human historyprosperity will flourish, but not for all.
However, shortly after the rise of this ten-nation union, it will be
replaced
by a world-ruling super government that will usher in lasting peace,
prosperity
and security for all. Upon His triumphant Return, Jesus Christ will take
over all
the governments of men, and administer His governmentthe
kingdom of
Godthroughout the earth. At that time, the world will become truly
oneone
with God.
True globalization will occur, but according to Gods just standards. No
more inequality. No more poverty. No more exploitation. Peace will
abound.
What a wonderful picturesoon to become a reality!
Conclusion:
Globalization
29
The conclusion can thus be made, that despite globalization
contribution
to the increased levels of economic growth it did not contribute to the
improvement in the skewed distribution of income between developed
and
developing countries. The problem is the skewed distribution of income
can
mainly be attributed to the limited participations of the developing
countries in the
process of globalization. The implications of globalization for an
economy are too

many. Globalization has competition and interdependence between the

economies in the world market which reflects in the interdependence in
trading of
goods and services.
They are influenced by both, domestic and international policies and
also
by the economic conditions. So, it is very clear that a globalizing
economy, when
evaluating its domestic policies, cannot afford to ignore the possible
actions of
the policies and developments in the rest of the world, the option of
which is
available to the government in decision making at a national level. The
recent
experience is that the country must carefully choose a combination of
policies
that enables it to take the opportunity by avoiding pitfalls. United
States has been
the largest economy in the world from over a century but many major
developments have been taking place in the world economy since that
time
which has lead to shift the focus from US and other rich countries of
Europe to
the two Asian giant countries- India and China.
The experts of the economies and various other studies conducted
across
the world envisage India and China to rule the world in the 21 st
century. The
Indian economy was passing through a very difficult phase which is
caused by so
many unfavorable domestic and external developments. The largest
contributor
in the total agricultural exports is the marine products which account to
be the
total of the one fifth portions of the agricultural products. Oil seeds,
rice, coffee,

and tea are other prominent products which accounts in the total of the
agricultural products of about 10%.
India, which is now the fourth largest economy in terms of purchasing
power parity, may overtake Japan and become third major economic
power
within 10 years. The economic impact of globalization in Vietnam and
China
demonstrate that globalization can be beneficial to the growth of
developing
countries and can furthermore enhance the sovereignty of domestic
governments. While globalization can and does have negative side
effectssome multinationals do exploit their workers, domestic
institutions will
face more risk from capital flows, and the threat of social instability
may risethe
aims to trade are nonetheless supported by the majority of crosscountry
empirical data. While the manner in which developing countries can
best utilize
Globalization
30
international capital and markets should remain an issue of concern
and further
study, the claim that globalization is merely a source of problems is
unjustified
given the analysis of Vietnam and China. It was indicated in the paper
that it is
important to differentiate the concept of globalization from
internationalization
and regionalization.
It was also indicated that globalization had some specific effects on the
economies of the developing countries of Africa. It was indicated that
under
certain circumstances globalization can lead to higher unemployment
and an

increasing skewness in the distribution of income between developed

and
developing nations. Globalization can play and very important role in
solving the
development problems of Africa. If countries in Africa are prepared to
allow for
trade liberalization and follow stable macro economic policy it will
contribute to
the development of the respective countries. The role of NEPAD as the
solution
to the development problems of Africa has also been evaluated. It was
indicated
that the developed countries is in favor of the NEPAD initiative, if the
African
countries can adhere to the principles embedded in the NEPAD
documents. A
concern can be raised about the fact that international trade is only
favoring a
few nations in Africa. Future research will have to investigate ways to
promote
the economic development in all the African countries.
Therefore, one can evidently infer that Globalization means the
integration
of the economies of the world through uninhibited trade and financial
flows which
are through exchange of technology and knowledge. It has provided
developing
countries with a greater access to the markets and technology of the
developing
countries which has lead to a high living standard and a greater
productivity. We
come across the impact of globalization on developing countries in the
above
stated points which not only shows good but also bad impact of
globalization on
the countries especially developing countries. Globalization has
increased the

risks involved with it. Indian companies now have become respectable
countries
in International market. Agriculture went to 18% increase of the total
annual
export of the country. China and Vietnam also developed its economy
through
privatization and globalization. Thus, Globalization has played a very
important
role in every developed and developing country but mainly in
developing
countries. Though Globalization is very good for developing countries
but in few
places it has bad effects on those countries as well.
Globalization
31
Websites visited:
This report has been compiled after the collection and careful
scrutiny of information from the following websites:
www.economywatch.com/economicstheory/globalization/effects.html
www.buzzle.com/articles/negative-effects- of-globalization.html
www.business.mapsofindia.com/globalization/india-industry/
www.bizcovering.com/business-and- society/globalization-and- itsimpacton-india/
www.en.wikipedia.org/wiki/Globalization
www.imf.org/external/np/exr/Key/global.htm
www.globalpolicy.org/globalization.html
www.tradechakra.com/indian-economy/globalization.html
www.ris.org.in/Seminar_on_India_Globalization.htm
www.realtruth.org/articles/070223-001- globalization.html