GROUP # 1

1. Definition of Globalization
2. History of Globalization
3. Dimensions of Globalization
4. Pros & Cons of Globalization
5. Impact of Globalization on Labour Market
6. Impact of Globalization on Pakistan
economy
Globalization has many definitions, but
generally it refers to various global
interconnections
The interconnections exist across a
variety of human activities
• Economic
• Social
• Political
• Cultural
• Biological
 Globalization can be described as a process
by which people of the world are unified into
a single society and functioning together.
 It is a combination of economic,

technological, socio cultural and political

forces.
 We often use as an economic globalization

which national economies become the

international economy.
 Economists have used “Globalization” since
1981
 Some believed that it stated before 16th

century
 The extend of globalization largest in the

time of Portugal
 It’s viewed as a centuries long process
 Globalization came into business since the
establish of Dutch East India Company, the
first multinational company
 Globalization develops rapidly in the last 50

years
 19th Century is the first era of Globalization
 The increasing reliance
of economies on each other
 The opportunities to

be able to buy and sell

in any country in the world
 The opportunities for

labour and capital to

locate anywhere in
the world
 The growth of global

markets in finance
Stock Markets are now accessible
from anywhere in the world!
 Three main dimensions of globalization:

i. Economic Dimensions of Globalization

ii. Socio-cultural Dimensions of Globalization
iii. Political Dimensions of Globalization
 Economic globalization is one of the most
frequently used in discussions of
development, trade, and IPE.
 It is a process by which the economies of

the world become increasingly integrated,

leading to global economy and,
increasingly, global economic policymaking,
for example, through international agencies
such as WTO, IMF, and WB.
 Social globalization means processes whereby
many social relations become relatively delinked
from territorial geography, so that human lives are
increasingly played out in the world as a single
place.
 Cultural globalization refers to an emerging “global
culture”, in which people more often consume
similar goods and services across countries and
use of common language.
 Examples: Coco-Cola, Mc Donald and use of
English.
 In political studies globalization ideas have
been significant in thinking about ideology
and in political behaviour in terms of issue
areas such as ecopolitics and human rights.
 In terms of the environment and human
rights clear evidence of the need for global
codes of conduct.
 With globalization, there is a global market for
companies to trade their products and a wider
range of options for people, to choose from among
the products of different nations.  
 Developing countries benefit a lot from
globalization, as there is a sound flow of money
and thus, a decrease in the currency difference.
 To meet the increasing demands that follow
globalization, there is an increase in the production
sector. This gives loads of options to the
manufacturers as well.
 Competition keeps prices relatively low, and as a
result, inflation is less likely to occur.
 The focus is diverted and segregated among all the
nations. No country remains the single power head;
instead there are compartmentalized power
sectors. The decisions at higher levels are meant
for the people at large.  
 Communication among the countries is on the rise,
which allows for better understanding and broader
vision.
 As communication increases amongst two
countries, there is interchange of cultures
as well. We get to know more about the
other's cultural preferences.
 As we feed to each other's financial needs,

the ecological imbalance is also meted out.

Governments of countries show concern
about each other
 Globalization is causing Europeans to lose their
jobs as work is being outsourced to the Asian
countries. The cost of labor in the Asian countries
is low as compared to other countries.
 The high rate of profit for the companies, in Asia,
has resulted in a pressure on the employed
Europeans, who are always under the threat of the
business being outsourced.
 Companies are as opening their counterparts in
other countries. This results in transferring the
quality of their product to other countries, thereby
increasing the chances of depreciation in terms of
quality.
 There are experts who believe that globalization is
the cause for the invasion of communicable
diseases and social degeneration in countries.
 The threat that the corporate would rule the world
is on high, as there is a lot of money invested by
them.
 It is often argued that poor countries are exploited
by the richer countries where the work force is
taken advantage of and low wages are
implemented.
 The term “globalization” is so overused that it is
not clear what it means.
 Economists would think about things like trade,
factor mobility and diffusion of technology
 Other discussants (trade unions, environmentalists,
development lobbyist, consumer groups, human
right activists, religious groups…) often seem to
talk about (alleged) increased power of large
companies and “Americanization”
 One of the main topics is the impact on labor
market
 (1) Demand for labor shifts inward in capital

abundant countries
 (2) the demand curve becomes more elastic

(change in wage rate creates now larger

impact on quantity of employment, i.e.
production can be moved abroad)
Assume that higher labor standards are
imposed (creates a new cost) → supply curve
shifts upward → wages increase, employment
decrease
• The more elastic the demand the more
employment decreases, wages decrease and
the larger share of the cost is paid by
employees
 Growth Rates of GNP
Data shows that in 1947 real GNP per capita was Rs.
1,476 which has multiplied three and a half fold to
Rs. 5,128 in 2001.
 Within five years, the maximum tariff rate declined
55 percentage points from 150 percent in 1988 to
95% in 1992, reducing the effective import duty
rate from 38.4% to 30.3%. By 2001, the maximum
tariff rate dropped further to 35% -------- about
one-fifth of the 1998 level -----and the effective
duty rate to 13 percent ----- about one third of
the 1988 level.
 Pakistan has also made substantial progress
in eliminating or reducing non-tariff
barriers to trade: at present, there are only
32 products on the negative list and import
of 28 products is restricted for health and
safety regions.
 Pakistan provides a variety of incentives
including income and sales tax concessions,
exemption from customs duty on imported
intermediate inputs and capital goods, and
easy access to credit facilities.
 Other export promotion measures include
provision of loans to exporters at
concessional rates of interest through the
export finance scheme
 the decline in import growth is significantly
greater than in export growth.
 In 1999-00 export growth rate was 10.2 and

import rate 9.3 and in 2001-01 is 7.4 and

4.1.
 Thus despite increase in growth rate of
output, trade and FDI. The unemployment
rate, increased from an average of 3.5%
during 1981-90 to 5.7% during 1991-2000,
went up further to 6.7 percent in 2000-01
 The anti-globalization
movement developed
in the late 20th century
to fight the
globalization of
corporate economic
activity and the free
trade with developing
nations that might
result from such
activity.
 Is globalization beneficial for the economy or
not?
 Does it cause Prosperity or Impoverishment?
 What will be the future results of

globalization?
 Can globalization be eliminated from the

economy?