Advantages and Disadvantages of Globalization Some Advantages Some Disadvantages

Increased free trade between nations Increased liquidity of capital allowing investors in developed nations to invest in developing nations Corporations have greater flexibility to operate across borders Global mass media ties the world together Increased flow of communications allows vital information to be shared between individuals and corporations around the world Greater ease and speed of transportation for goods and people Reduction of cultural barriers increases the global village effect Spread of democratic ideals to developed nations Greater interdependence of nationstates Reduction of likelihood of war between developed nations Increases in environmental protection in developed nations

Increased flow of skilled and nonskilled jobs from developed to developing nations as corporations seek out the cheapest labor Increased likelihood of economic disruptions in one nation effecting all nations Corporate influence of nationstates far exceeds that of civil society organizations and average individuals Threat that control of world media by a handful of corporations will limit cultural expression Greater chance of reactions for globalization being violent in an attempt to preserve cultural heritage Greater risk of diseases being transported unintentionally between nations Spread of a materialistic lifestyle and attitude that sees consumption as the path to prosperity International bodies like the World Trade Organization infringe on national and individual sovereignty Increase in the chances of civil war within developing countries and open war between developing countries as they vie for resources Decreases in environmental integrity as polluting corporations take advantage of weak regulatory rules in developing countries

Meaning and debate: The International Monetary Fund defines globalization as the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology. Meanwhile, The International Forum on Globalization defines it as the present worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments. While notable critical theorists, such as Immanuel Wallerstein, emphasize that globalization cannot be understood separately from the historical development of the capitalist world-system the different definitions highlight the ensuing debate of the roles and relationships of government, corporations, and the individual in maximizing social welfare within the globalization paradigms. Nonetheless, it is clear that globalization has economic, political, cultural, and technological aspects that may be closely intertwined. Given that these aspects are key to an individual's quality of life, the social benefits and costs brought upon them by globalization The economic aspects stressed in globalization are trade, investment and migration. The globalization of trade entails that human beings have greater access to an array of goods and services never seen before in human history. From German cars, to Colombian coffee, from Chinese clothing, to Egyptian cotton, from American music to Indian software, human beings may be able to purchase a wide range of goods and services. The globalization of investment takes place through Foreign Direct Investment, where multinational companies directly invest assets in a foreign country, or by indirect investment where individuals and institutions purchase and sell financial assets of other countries. Free migration allows individuals to find employment in jurisdictions where there are labor shortages. Critics of free trade also contend that it may lead to the destruction of a country's native industry, environment and/or a loss of jobs. Critics of international investment contend that by accepting these financial schemes a country loses its economic sovereignty and may be forced to set policies that are contrary to its citizen's interests or desires. Moreover, multinational companies that invest in a country may also acquire too much political and economic power in relation to its citizens. Finally, migration may lead to the exploitation of workers from a migrant country

and the displacement of workers from a host country. Critics of globalization also contend that different economic systems that either augment or supplant globalization may maximize social welfare more efficiently and equitably. The political aspects of globalization are evidenced when governments create international rules and institutions to deal with issues such as trade, human rights, and the environment. Among the new institutions and rules that have come to fruition as a result of globalization are the World Trade Organization, the Euro currency, the North American Free Trade Agreement, to name a few. Whether a government is to consciously open itself to cross-border links, is the central question of this aspect. Social activist and non-profit organizations such as Amnesty International and Greenpeace are also becoming more global in scope. Some of these organizations take issue with the economic and political aspects of globalization as they fear that economic interests either subvert the nation state in its ability to protect its citizens from economic exploitation, or support governments that violate the human rights of their citizens. Cultural global ties also grow through globalization as news ideas and fashions through trade, travel and media move around the globe at lightning speed. Global brands such as Coca-Cola, Nike & Sony serve as common reference to consumers all over the World. An individual in China enjoys the same soft drink as an individual in Puerto Rico--at opposite ends of the globe. However, these ties may also cause strains: for example Western Ideas of freedom of expression may clash with Islamic views on Religious tolerance. And if not strains, critics contend this is really an imposition of cultural imperialism in order to preserve economic interests. The other aspect of globalization is the revolutionary change in technology, particularly in transport and communication, which ostensibly creates a global village. In 1850 it took nearly a year to sail around the World. Now you can fly around the world in a day, send an email anywhere almost instantly, or be part of the 1.5 billion viewers watching the final match of the World Cup. Transportation costs have come down as result of technological advances that make foreign markets more accessible to trade. Tuna caught in the North Atlantic may be served the next day at a Sushi restaurant in Japan. Finally, billions of dollars in assets and currencies are exchanged daily around the globe by electronic means at virtually no cost. Globalization spreads everything.

Nature and existence of globalization: There is much academic discussion about whether globalization is a real phenomenon or only an analytical artifact (a myth). Although the term is widespread, many authors argue that the characteristics attributed to globalization have already been seen at other moments in history. Also, many note that such features, including the increase in international trade and the greater role ofmultinational corporations, are not as d Some authors prefer the term internationalization rather than globalization. In internationalization, the role of the state and the importance of nations are greater, while globalization in its complete form eliminatesnation states. So, they argue that the frontiers of countries, in a broad sense, are far from being dissolved, and therefore this globalization process is not happening, and probably will not happen, considering that in world history, internationalization never turned into globalization (the European Union and NAFTA are yet to prove their case). Some maintain that globalization is an imagined geography; that is, a political tool of ruling neo-liberalists, who are attempting to use certain images and discourses of world politics to justify their political agendas. Writers of books such as No Logo claim that by presenting a picture of a globalized world, the Bretton Woods institutions can demand that countries open up their economies to liberalization under Structural Adjustment Programmes that encourage governments to fund privatization programmes, ahead ofwelfare and public services. Characteristics: Globalization / internationalisation has become identified with a number of trends, most of which may have developed since World War II. These include greater international movement of commodities, money, information, and people; and the development of technology, organizations, legal systems, and infrastructures to allow this movement. The actual existence of some of these trends is debated. Economically o Increase in international trade at a much faster rate than the growth in the world economy o Increase in international flow of capital including foreign direct investment o Creation of international agreements leading to organizations like the WTO and OPEC o Development of global financial systems o Increased role of international organizations such as WTO, WIPO, IMF that deal with international transactions o Increase of economic practices like outsourcing, by multinational corporations Culturally o Greater international cultural exchange, o Spreading of multiculturalism, and better individual access to cultural diversity, for example through the export ofHollywood and Bollywood movies. However, the imported culture can easily supplant the local culture, causing reduction in diversity through hybridization or even assimilation. The most prominent form of this is Westernization, butSinicization of cultures also takes place. o Greater international travel and tourism o Greater immigration, including illegal immigration o Spread of local foods such as pizza, Chinese and Indian food/Pakistani Food to other countries (often adapted to local taste) o World-wide Fads and Pop Culture such as Pokemon, Sudoku, Numa Numa, Origami, Idol series, YouTube,MySpace, and many others.

Increasing usage of foriegn phrases. Example... "Amigo" and "Adios" are Spanish terms many non-speaking spanish people in the US understand, Most Americans understand some French, Spanish or Japanese without actually knowing the language. Development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites and telephones Increase in the number of standards applied globally; e.g. copyright laws and patents Formation or development of a set of universal values The push by many advocates for an international criminal court and international justice movements (see the International Criminal Court and International Court of Justice respectively). It is often argued that even terrorism has undergone globalization, with attacks in foreign countries that have no direct relation with the own country.

Barriers to international trade have been considerably lowered since World War II through international agreements such as theGeneral Agreement on Tariffs and Trade (GATT). Particular initiatives carried out as a result of GATT and the WTO, for which GATT is the foundation, have included: Promotion of free trade o Of goods: Reduction or elimination of tariffs; construction of free trade zones with small or no tariffs Reduced transportation costs, especially from development of containerization for ocean shipping. o Of capital: reduction or elimination of capital controls o Reduction, elimination, or harmonization of subsidies for local businesses Intellectual property restrictions o Harmonization of intellectual property laws across nations (generally speaking, with more restrictions) o Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the US)

Liberalisation
Liberalisation means the opening up of markets within and between countries to promote "free trade", i.e. reducing barriers to trade such as tariffs (import and export duties) and other forms of regulation. Liberalisation also, in many circumstances, means freedom to exploit, due to this reduction in regulations and standards that are universally adhered to. Basic Assumptions That free trade, competition, and the laws of supply and demand will regulate the market sufficiently well to provide economic growth, employment and prosperity for all. Inefficiency will be reduced, as companies have to be efficient to stay competitive. Participation in the global economy is expected to raise living standards in poor countries as MNC investment brings jobs, monetary income and an increase in consumer goods. "Comparative advantage", a theory which states that nations should specialise in producing what they are best at, and that they should then trade with other nations. Export-orientated growth should be encouraged. Basic Problems Quite clearly, liberalisation has not brought prosperity or employment for all. This may be partly because it has not been applied fairly but it is also because not everyone starts on an equal footing. In a world with reduced trade barriers, small companies cannot hope to compete fairly with the economic might, technical expertise and marketing power of huge Multinational Corporations (MNCs). Thus true competition gives way to monopolisation in many cases.

Practical Advantages An obvious attraction of an FTA is that members obtain preferred access to the markets of other members. As noted above, this may not produce optimal outcomes in the long term. It depends on the overall impact of the arrangements and other concurrent trade policies. Trade agreements set rules for regulating trade and trade-related activity as well as incorporating commitments to remove trade barriers. The record has shown that members of trade agreements can also secure agreements in FTAs for rules that confer advantages upon their trading partners and reduce trade irritants and restrictions that could not otherwise be secured from multilateral trade agreements. Box 3.1 below sets out some benefits secured by the North American Free Trade Agreement (NAFTA) USA, Canada and Mexico and ANZCERTA Australia and New Zealand that were not available under the multilateral rules of the WTO or its predecessor, the GATT. These details are drawn from the comparative analysis of WTO, NAFTA and ANZCERTA set out in Annex 7. Practical disadvantages of FTAs FTAs only confer economic advantages when they are negotiated with countries which are significant trading partners. The relatively modest level of trade with some

prospective partners has in the past been one factor deterring the Australian Government from pursuing individual FTA proposals. FTAs also increase the complexity of the international trading system and can raise transaction costs for business. For example, complicated rules of origin are required to prevent third country product entering via the other party. With different rules negotiated under different agreements, enforcement of these rules and compliance with them by business can be a complicated task. Business also has to take into account the different dispute settlement mechanisms as well as different standards regimes and other harmonisation arrangements. The negotiation of RTAs is resource intensive and there can be an opportunity cost in devoting resources to bilateral or regional, as opposed to multilateral. The NAFTA agreement, for example, was over one thousand pages long and required the establishment of more than two dozen committees and working groups.

PRIVATISATION: Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (the state or government) to the private sector (businesses that operate for a private profit) or to private nonprofit organizations. In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement. [1] The term "privatization" also has been used to describe two unrelated transactions. The first is a buyout, by the majority owner, of all shares of a public corporation or holding company's stock, privatizing a publicly traded stock, and often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint stock company. Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (the state or government) to the private sector (businesses that operate for a private profit) or to private nonprofit organizations. In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement.[1] The term "privatization" also has been used to describe two unrelated transactions. The first is a buyout, by the majority owner, of all shares of a public corporation or holding company's stock, privatizing a publicly traded stock, and often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint stock company. ADVANTAGES OF PRIVATISATION Privatisation places the risk in the hands of business or Private Enterprise. Private enterprise is more responsive to customer complaints and innovation. The Govt. should not be a player and an umpire. Privatisation provides a one off cash boost for Govt. This can be spent on Hospitals etc... Privatisation leads to lower prices and greater supply. Competition in privatization increases differentiation. Disadvantages of Privatisation 1. Privatisation is expensive and generates a lot of income in fees for specialist advisers such as banks. 2. Public monopolies have been turned into private monopolies with too little competition, so consumers have not benefited as much as had been hoped. This is the main reason why it has been necessary to create regulators (OFWAT, OFGAS etc). This is an important point. It partly depends on how the privatisation took place. For example, the railways were privatised in bit of a rush and there might have been other ways to do it so that more competition was created. It partly depends on the market. Some markets are 'natural monopolies' where competition is difficult. For example, it would be very wasteful and expensive to build two sets of track into Liverpool Street just to create some competition. Natural monopolies create a special justification for public ownership in the general public interest. 3. The nationalised industries were sold off too quickly and too cheaply. With patience a better price could have been had with more beneficial results on the government's revenue. In almost all cases the share prices rose sharply as soon as dealing began after privatisation. 4. The privatised businesses have sold off or closed down unprofitable parts of the business (as businesses normally do) and so services eg transport in rural areas have got worse. 5. Wider share ownership did not really happen as many small investors took their profits and didn't buy anything else.