GLOBALIZATION

(SEMESTER FALL-2022)

BY:

AMIMA KHAN

19011515-029

BS-Political Science (7th)

Submitted to:

Sir Usman

Department of Political Science and IR

UNIVERSITY OF GUJRAT
Introduction:

Globalization is the process by which ideas, knowledge, information, goods and services spread
around the world. In business, the term is used in an economic context to describe integrated
economies marked by free trade, the free flow of capital among countries and easy access to foreign
resources.

Globalization, as it is known in some parts of the world, is driven by the convergence of cultural and
economic systems. It increased interaction, integration and interdependence among nations. The more
countries and regions of the world become intertwined politically, culturally and economically, the
more globalized the world becomes.

Globalization Works:

In a globalized economy, countries specialize in the products and services they have a competitive
advantage in. This generally means what they can produce and provide most efficiently, with the least
amount of resources, at a lower cost than competing nations. If all countries are specializing in what
they do best, production should be more efficient worldwide, prices should be lower, economic
growth widespread and all countries should benefit

Policies that promote free trade, open borders and international cooperation all drive economic
globalization. They enable businesses to access lower priced raw materials and parts, take advantage
of lower cost labor markets and access larger and growing markets around the world in which to sell
their goods and services.

Importance of globalization:

Globalization changes the way nations, businesses and people interact. Specifically, it changes the
nature of economic activity among nations, expanding trade, opening global supply chains and
providing access to natural resources and labor markets.

Changing the way trade and financial exchange and interaction occurs among nations also promotes
the cultural exchange of ideas. It removes the barriers set by geographic constraints, political
boundaries and political economies.

With fewer restrictions on trade, globalization creates opportunities to expand. Increased trade
promotes international competition. This, in turn, spurs innovation and, in some cases, the exchange
of ideas and knowhow. In addition, people coming from other nations to do business and work bring
with them their own cultures, which influence and mix with other cultures.

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Concept of G20?

The G20, or Group of Twenty, is an international forum that aims to foster international cooperation
by addressing global economic issues, such as  financial stability and climate change. The G20 is
made up of 19 countries and the European Union, including most of the world's largest economies.

Types of Globalization: Economic, Political, Cultural

There are three types of globalization.

1. Economic globalization. Here, the focus is on the integration of international financial markets

and the coordination of financial exchange. Free trade agreements, such the North American Free
Trade Agreement and the Trans-Pacific Partnership are examples of economic
globalization. Multinational corporations, which operate in two or more countries, play a large
role in economic globalization.

2. Political globalization. This type covers the national policies that bring countries together
politically, economically and culturally. Organizations such as NATO and the UN are part of the
political globalization effort.

3. Cultural globalization. This aspect of globalization focuses in a large part on the technological

and societal factors that are causing cultures to converge. These include increased ease of
communication, the pervasiveness of social media and access to faster and better transportation.

These three types influence one another. For example, liberalized national trade policies drive
economic globalization. Political policies also affect cultural globalization, enabling people to
communicate and move around the globe more freely. Economic globalization also affects cultural
globalization through the import of goods and services that expose people to other cultures.

Examples of Globalization

1. Intergovernmental organizations. Globalization has made it possible for international

organizations to be created through treaties between many different countries. Examples include the
European Union, the United Nations, the World Bank, the World Trade Organization (WTO), and the
International Monetary Fund (IMF).

2. Intergovernmental treaties. Many governments across the world have engaged in treaties or trade
policies to make it easier for international investment and trade. These treaties, called free-trade

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agreements, include the North American Free Trade Agreement (NAFTA) and the Comprehensive
Economic and Trade Agreement (CETA).

3. Multinational corporations. A multinational corporation is an organization that does business in

many different countries. Globalization is the reason that multinational businesses exist. For example,
globalization allows major US corporations to sell their products to Mexico, Europe, and China.

Benefits of Globalization
Globalization can benefit a country’s economy in many ways:

 Increases economic growth. By increasing the international exchange of goods,

technological advances, and information, globalization increases economic development for
any country participating in the global economy. An increase in economic growth means
better living standards, higher incomes, more wealth in a country, and, often, less poverty—in
short, the overall well-being of a country.
 Makes production more affordable. A global market allows businesses wider access to
production opportunities and consumers, meaning that there are more goods available at a
wider range of price points.
 Promotes working together. When different countries come together to engage in trade and
investments in a global financial market, they become interdependent and often come to rely
on one another for certain goods and services.
 Brings opportunities to poorer countries. Globalization allows companies to move their
production from high-cost locations to lower-cost locations abroad—this means bringing jobs,
information technology, and other economic opportunities to countries with fewer resources.
Disadvantages of Globalization
While it can benefit nations, there are also several negative effects of globalization. Cons of
globalization include:

 Unequal economic growth. While globalization tends to increase economic growth for many
countries, the growth isn’t equal—richer countries often benefit more than developing
countries.
 Lack of local businesses. The policies permitting globalization tend to advantage companies
that have the resources and infrastructure to operate their supply chains or distribution in
many different countries, which can hedge out small local businesses—for instance, a local
New York hamburger joint may struggle to compete with the prices of a multinational burger-
making corporation.

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  Increases potential global recessions. When many nations’ economic systems become
interdependent, the likelihood of a global recession increases dramatically—because if one
country’s economy starts to struggle, this can set off a chain reaction that can affect many
other countries simultaneously, causing a worldwide financial crisis.
 Exploits cheaper labor markets. Globalization allows businesses to increase jobs and
economic opportunities in developing countries, where the cost of labor is often cheaper.
However, overall economic growth in these countries may be slow or stagnant.
 Causes job displacement. Globalization doesn’t result in an increased number of jobs;
rather, it redistributes jobs by moving production from high-cost countries to lower-cost ones.
This means that high-cost countries often lose jobs due to globalization, as production goes
overseas.
References

Velocity Global. (2020, March 30). Globalization Benefits and Challenges. Velocity

Global. https://velocityglobal.com/blog/globalization-benefits-and-challenges/

Lutkevich, B. (2021, July 15). globalization. CIO. https://www.techtarget.com/searchcio/definition/

globalization

youmatter. (2020, October 6). What is Globalization? Examples, Definition, Benefits and
Effects. Youmatter. https://youmatter.world/en/definition/definitions-globalization-definition-
benefits-effects-examples/

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