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TERM PAPER ON

Globalization
Submitted to
THE DEPARTEMENT OF COMMERCE

DYAL SINGH EVENING COLLEGE UNIVERSITY OF DELHI IN PARTIAL FULFILLMENT OF B.COM (Hons.) DEGREE (PAPER NO.XXXVII)

Under the supervision of: Dr.R.S.RANA READER IN THE DEPARTEMENT OF COMMERCE DYAL SINGH EVENING COLLEGE UNIVERSITY OF DELHI,DELHI

Submitted By: GAGAN CHOWDHARY BCOM (Hons.) FINAL YEAR ROLL NO.43

ACKNOWLEDGEMENT With profound respect and gratitude, I take the opportunity to convey my thanks to my Project Guide Prof, Dr.R.S.RANA for his able guidance, valuable opinions and healthy criticism, which have gone a long way in enabling me to complete this project successfully. In spite of being occupied with other assignments, he has been kind enough to guide and advice me at all stages.

Finally, I thank my college for its support and the facilities it has extended to us during the course of this project.

GAGAN CHOWDHARY

DECLARATION
This is to certify that the present work entitled, “GLOBALIZATION” submitted to the Departement of Commerce for Paper no. XXXVII is based on my understanding of the work and experience of the subject and has not been copied from public sources. My indebtness in other words has been duly acknowledged at relevant places.

GAGAN CHOWDHARY

CONTENTS Meaning of globalization History Modern globalization Measuring of globalization Effect of globalization Pro-globalization (globalism) Anti-globalization Impact of globalization on India. India is global Globalization and Poverty GDP growth rate Export and Import • Where does Indian stand in terms of Global Integration? • Consequences .

Night view of Shanghai. foreign direct investment. Globalization is often used to refer to economic globalization. This process is a combination of economic. Palmer of the Cato Institute defines "globalization" as "the diminution or elimination of state-enforced restrictions on . technological. migration. that is. capital flows. China Tom G. socio cultural and political forces. integration of national economies into the international economy through trade.Globalization Globalization (or globalisation) in its literal sense is the process of transformation of local or regional phenomena into global ones. and the spread of technology.

Early forms of globalization existed during the Roman Empire." Thomas L. reached the boundaries of the Parthian . He also argues that the pace of globalization is quickening and will continue to have a growing impact on business organization and practice. tracking the expansion of human population and the growth of civilization. and political forces have changed the world permanently. Friedman "examines the impact of the 'flattening' of the globe". and the Han Dynasty.exchanges across borders and the increasingly integrated and complex global system of production and exchange that has emerged as a result. History The term "globalization" has been used by economists since the 1980s although it was used in social sciences in the 1960s. and argues that globalized trade. The earliest written theoretical concepts of globalization were penned by an American entrepreneurturned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897. to describe the neoliberal form of economic globalization. the Parthian empire. Globalization is viewed as a centuries long process. that has accelerated dramatically in the past 50 years. for both better and worse. in a doctrinal sense. its concepts did not become popular until the latter half of the 1980s and 1990s. supplychaining. when the Silk Road started in China. however. outsourcing.[4] Noam Chomsky argues that the word globalization is also used.

when Muslim traders and explorers established an early global economy across the Old World resulting in a globalization of crops. colonization.empire. The Islamic Golden Age is also an example. when there was greater integration along the Silk Road. knowledge and technology. and Southern and Eastern Asia. whose task was to deal with the spices and to fix the prices of the goods. A wave of global trade. economies and cultures to a massive extent. as well as the Dutch East India Company (founded in 1602) and the Portuguese East India Company (founded in 1628). with two Kingdoms of the Iberian Peninsula . the British East . was the first major trade based form of globalization. and continued onwards towards Rome. In the 15th century. Portugal's global explorations in the 16th century. In the 17th century. and later during the Mongol Empire. when the Portuguese and Spanish Empires colonized the Americas. especially. globalization became a business phenomenon when the British East India Company (founded in 1600).the Kingdom of Portugal and the Kingdom of Castile. which is often described as the first multinational corporation. Eastern South America. particularly indigenous cultures. and enculturation reached all corners of the world. Global integration continued through the expansion of European trade in the 16th and 17th centuries. linked continents. trade. Globalization in a wider context began shortly before the turn of the 16th century. Globalization has had a tremendous impact on cultures. followed eventually by France and Britain. Portugal's exploration and trade with most of the coast of Africa. Portugal's Company of Guinea was one of the first chartered commercial companies established by Europeans in other continent during the Age of Discovery. was established. Because of the high risks involved with international trade. around the world.

creation of free trade zones with small or no tariffs Reduced transportation costs.India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization. elimination. British ideals and culture were imposed on other nations during this period. Reduction or elimination of capital controls Reduction. and the International Monetary Fund. barriers to international trade have been considerably lowered through international agreements . Since World War II. especially resulting from development of containerization for ocean shipping. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO). which led to a series of agreements to remove restrictions on free trade. and trade negotiation rounds. These institutions include the International Bank for Reconstruction and Development (the World Bank).GATT. or harmonization of subsidies for local businesses . Globalization was achieved by the British Empire (the largest empire in history) due to its sheer size and power. for which GATT is the foundation. Globalization has been facilitated by advances in technology which have reduced the costs of trade. have included: Promotion of free trade: Reduction or elimination of tariffs. originally under the auspices of the General Agreement on Tariffs and Trade (GATT).

patents granted by China would be recognized in the United States) Cultural globalization. a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness. was understood at first as a process of homogenization.1% of gross world product in 2001. These movements used the same new technologies to pursue their own goals more efficiently and to appeal for support from world opinion. individuality. Measuring globalization . The Uruguay Round (1984 to 1995) led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading.5% of gross world product in 1970 to 16.Restriction of free trade: Harmonization of intellectual property laws across the majority of states. 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. World exports rose from 8.g. driven by communication technology and the worldwide marketing of Western cultural industries. and identity. However. Supranational recognition of intellectual property restrictions (e. as the global domination of American culture at the expense of traditional diversity. with more restrictions. Other bilateral and multilateral trade agreements.

These center around the four main economic flows that characterize globalization: Goods and services. demonstrates that it can be measured in different ways. exports plus imports as a proportion of national income or per capita of population . Looking specifically at economic globalization. e. Japanese McDonald's fast food as an evidence of international integration.g.Globalization has had an impact on different cultures around the world.

the world's most globalized country is Belgium.Labor/people. The index measures the three main dimensions of globalization: economic. international research & development flows. Myanmar the Central African Republic and Burundi. e. economic restrictions. followed by Austria.[11] Effects of globalization Globalization has various aspects which affect the world in several different ways such as: . data on personal contact. broadband) As globalization is not only an economic phenomenon.g. weighted by population Capital. Sweden. e. social. The least globalized countries according to the KOF-index are Haiti.g. and political. motorcar. data on information flows. proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone. as detailed in Dreher.g. Data is available on a yearly basis for 122 countries. According to the index. the United Kingdom and the Netherlands. and data on cultural proximity is calculated. inward or outward direct investment as a proportion of national income or per head of population Technology. Gaston and Martens (2008). e. In addition to three indices measuring these dimensions. an overall index of globalization and sub-indices referring to actual economic flows. net migration rates. a multivariate approach to measuring globalization is the recent indexcalculated by the Swiss think tank KOF. inward or outward migration flows.

in part because of its strong and wealthy economy. and technology to rival the United States for the position of leading world power. WTO. or cartels of governments (e. the People's Republic of China has experienced some tremendous growth within the past decade. industry. World Bank.realization of a global common market. Economic .emergence of worldwide financial markets and better access to external financing for borrowers. based on the freedom of exchange of goods and capital. Informational . Financial .emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. With the influence of globalization and with the help of The United States’ own economy.some use "globalization" to mean the creation of a world government. the United States has enjoyed a position of power among the world powers.g. Particularly movement of material and goods between and within national boundaries.increase in information flows between geographically remote locations. Political . Simultaneous though not necessarily purely globalist is the emergence of under or unregulated foreign exchange and speculative markets. and IMF) which regulate the relationships among governments and guarantees the rights arising from social and economic globalization. If China continues to grow at the rate projected by the trends.Industrial . China will have enough wealth. then it is very likely that in the next twenty years. [12] Politically. there will be a major reallocation of power among the world leaders. Arguably this is a technological .

Some bemoan the resulting consumerism and loss of languages. telexes. Also see Transformation of culture.the most popular language is English About 75% of the world's mail. Cultural . and cables are in English. cross-boundary water and air pollution. such as climate change. adopt new technology and practices.the advent of global environmental challenges that might be solved with international cooperation. and the spread of invasive species. On the other hand. the desire to increase one's standard of living and enjoy foreign products and ideas. and increased availability of telephony and Internet.change with the advent of fibre optic communications.growth of cross-cultural contacts. Language . Approximately 60% of the world's radio programs are in English. companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition. economic development historically required a "dirty" industrial stage.Survival in the new global business market calls for improved productivity and increased competition. Due to the market becoming worldwide. About 90% of all Internet traffic uses English. Since many factories are built in developing countries with less environmental regulation. Ecological. advent of new categories of consciousness and identities which embodies cultural diffusion. globalism and free trade may increase pollution. and it is argued that developing countries . Competition . satellites. over-fishing of the ocean. and participate in a "world culture".

Facebook. Spreading of multiculturalism. Idol series. As the sponsors of the All-Blacks rugby team. causing reduction in diversity or even assimilation. Origami. Incorporation of multinational corporations in to new media. . Numa Numa. food) to other countries (often adapted to their culture). via regulation. through the export of Hollywood and Bollywood movies). Worldwide sporting events such as FIFA World Cup and the Olympic Games.g. and better individual access to cultural diversity (e. including illegal immigration Spread of local consumer products (e.should not. Others consider multiculturalism to promote peace and understanding between peoples.increased circulation by people of all nations with fewer restrictions.g. Some consider such "imported" culture a danger. since it may supplant the local culture. Sudoku. Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete. Greater international travel and tourism Greater immigration. Social(International cultural exchange) . leaving out a substantial segment of the Earth's population. and MySpace. Worldwide fads and pop culture such as Pokémon. be prohibited from increasing their standard of living. YouTube. Orkut. Accessible to those who have Internet or Television.

e. Crime importation and raising awareness of global crime-fighting efforts and cooperation. patents and world trade agreements. . Rapid growth and poverty reduction in China. But globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation.Technical Development of a global telecommunications infrastructure and greater transborder data flow. copyright laws. submarine fiber optic cable. India. using such technologies as the Internet.g. Legal/Ethical The creation of the international criminal court and international justice movements. has been a positive aspect of globalization. Globalization – the growing integration of economies and societies around the world – has been one of the most hotlydebated topics in international economics over the past few years. and wireless telephones Increase in the number of standards applied globally. there are also several negative occurrences that can only be the result of or major motivating factors that inspire some corporations to globalize. and other countries that were poor 20 years ago. communication satellites. Whilst it is all too easy to look at the positive aspects of Globalization and the great benefits that are apparent everywhere.

as well. In a business environment marked by globalization. Sweatshops It can be said that globalization is the door that opens up an otherwise resource poor country to the international market. management of diversity has become one of the primary issues of 21st-century business.Business Globalization has had extensive impact on the world of business. Internet access and e-commerce have brought small-scale coops in Third World nations into the same arena as thriving businesses in the industrialized world. in many poorer nations globalization is actually the result of the foreign businesses investing in the country to take advantage of the lower wage rate: even though investing. increases their wage rate. an opportunity is seen by large corporations to take advantage of the “export poverty” of such a nation. and visions of low-income workers hand weaving rugs on primitive looms that compete with rug dealers in major cities are not totally far-fetched. Today's workforces are characterized by greater diversity in terms of age. the world seems to shrink. Where the majority of the earliest occurrences of economic globalization are recorded as being the expansion of businesses and corporate growth. gender. and other businesses halfway around the world can exert as great an impact on a business as one right down the street. Globalization has affected workforce demographics. ethnic and racial background. by increasing the Capital Stock of the country. In fact. and a variety of other demographic factors. . Where a country or nation has little material or physical product harvested or mined from its own soil.

or export of sweatshop goods . In a digital sense. these core standards include no child labor. in the area of digital media (animations. There are factories set up in the poor countries where employees agree to work for low wages. According to Global Exchange these “Sweat Shops” are widely used by sports shoe manufacturers and mentions one company in particular – Nike. “The Decent Working Conditions and Fair Competition Act” is a legislation passed by the National Labor Committee in the USA. designing games). no forced labor. The legislation now suggests that companies are legally obligated to respect human and worker rights by prohibiting the import. Tiziana Terranova has stated that globalization has brought a culture of "free labour". There are several agencies that have been set up worldwide specifically designed to focus on anti-sweatshop campaigns and education of such. where it is often less glamorous than it may . Specifically. For example . it is where the individuals (contributing capital) exploits and eventually "exhausts the means through which labour can sustain itself". right to organize and bargain collectively. sale. hosting chat rooms.There are very strict standards set out by the International Labor Organization and any violations shall be banned from the US market. as well as the right to decent working conditions.One example used by anti-globalization protestors is the use of “Sweatshops” by manufacturers. Then if labour laws alter in those countries and stricter rules govern the manufacturing process the factories are closed down and relocated to other nations with more liberal economic policies. freedom of association.

a Chinese Gold Market has been established. capitalism. the ideas of free trade. enhances civil liberties and leads to a more efficient allocation of resources. where poverty rates have remained stagnant. with all . such as Sub-Saharan Africa. such as China. Economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources. especially among developing nations. compared to areas less affected by globalization.sound. and democracy are widely believed to facilitate globalization. where globalization has taken a strong foothold. Generally. In the gaming industry. Pro-globalization (globalism) Globalization advocates such as Jeffrey Sachs point to the above average drop in poverty rates in countries. Supporters of free trade claim that it increases economic prosperity as well as opportunity.

more employment. One of the ironies of the recent success of India and China is the fear that success in these two countries comes at the expense of the United States. but rather is a positive-sum opportunity in which improving technologies and skills can raise living standards around the world. O. dangerous. but would leave it to the free choice of those citizens via a democratic process. even worse. Proponents of laissez-faire capitalism. The difference from other globalists is that they do not define in advance any ideology to orient this will.C. should be followed by a phase of building global political institutions representing the will of world citizens. such as former Canadian Senator Douglas Roche. They believe that the first phase of globalization. higher output and a higher standard of living for those in developing countries. They see globalization as the beneficial spread of liberty and capitalism. say that higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are ends in themselves and also produce higher levels of material wealth. simply view globalization as inevitable and advocate creating institutions such as a directly-elected United Nations Parliamentary Assembly to exercise oversight over unelected international bodies.. Supporters of democratic globalization are sometimes called proglobalists. . this leads to lower prices. These fears are fundamentally wrong and.. Some. and some Libertarians. They are wrong because the world is not a zero-sum struggle. In general.countries involved in the trade benefiting. which was market-oriented..

In East-Asia. some critics argue that more detailed variables measuring poverty should be studied instead. At the same time.1 billion in absolute terms. so in percentage terms the number of such people in developing nations declined from 40% to 20% of the population. Percent age Demogra 198 198 198 199 199 199 199 200 Area Change phic 1 4 7 0 3 6 9 2 19812002 . With the greatest improvements occurring in economies rapidly reducing barriers to trade and investment. the percentage has decreased by 50. whereas worldwide statistics strongly support globalization: From 1981 to 2001.5 billion to 1. yet. according to World Bank figures. whereas poverty rates in other areas have remained largely stagnant.Supporters of globalization argue that the anti-globalization movement uses anecdotal evidence to support their protectionist view. the world population increased.1% compared to a 2. the number of people living on $1 a day or less declined from 1. The percentage of people living on less than $2 a day has decreased greatly in areas affected by globalization.2% increase in Sub-Saharan Africa. including China.

3 46.7 69.East Asia and Pacifi c Less than 57. Even in Sub-Saharan Africa.18% % % % % % % % 'SOURCE: World Bank.9 28.0 +5.1 25.9 16.3 50.8 28.6 24.5 24.9 -8.Less than 41.6 Saha $1 a day % ran Less than 73. the least developed region.8 53.7 38.9 11.4 ica $2 a day % % Sub.77% % % % % % % % 76. .8 76.1 75.8 Latin $1 a day % % Amer Less than 29.3 11.7 44. there are others disputing this.9 +2.1 76. it has been argued that improving absolute poverty is more important than relative inequality.7 11.0 45.6 45. Due to definitional issues and data availability. income inequality for the world as a whole has diminished.6 75. As noted below.3 Africa $2 a day % 46.94% % % % % % % Less than 9.6 44.1 76.25% % % % % % % 27.1 -80. The economist Xavier Salai-Martin in a 2007 analysis argues that this is incorrect. Regardless of who is right about the past trend in income inequality.4 -29. Poverty Estimates.6 30.6 67.7 10.3 40.7 -52.3 10.9 64. 2002 Income inequality for the world as a whole is diminishing.00% $2 a day % % % % % % % % 10.0 29. there is disagreement with regards to the pace of the decline in extreme poverty.8 44.1 23.4 29.1 74.6 15.0 74.5 8.76% $1 a day % % % % % % % % Less than 84.7 11. Life expectancy has almost doubled in the developing world since World War II and is starting to close the gap between itself and the developed world where the improvement has been smaller.

and telephones per capita. The proportion of the world's population living in countries where per-capita food supplies are less than 2.200 calories (9. Anti-globalization . Between 1950 and 1999. Women made up much of the gap: female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in 2000.200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s. global literacy increased from 52% to 81% of the world. Infant mortality has decreased in every developing region of the world. Feminism has made advances in areas such as Bangladesh through providing women with jobs and economic safety. There are increasing trends in the use of electric power. cars. Democracy has increased dramatically from there being almost no nations with universal suffrage in 1900 to 62.life expectancy increased from 30 years before World War II to about a peak of about 50 years before the AIDS pandemic and other diseases started to force it down to the current level of 47 years. The percentage of children in the labor force has fallen from 24% in 1960 to 10% in 2000. as well as a growing proportion of the population with access to clean water.5% of all nations having it in 2000. radios.

and egalitarianism. human rights. goods and beliefs. Anti-globalization may occur in order to maintain barriers to the international transfer of people. multinational corporations. encouraged by organizations such as the IMF or the WTO.Anti-globalization is a term used to describe the political stance of people and groups who oppose the neoliberal version of globalization. Podobnik states that "the vast majority of groups that participate in these protests draw on international networks of support. as Naomi Klein argues in her book No Logo anti-globalism can denote either a single social movement or anumbrella term that encompasses a number of separate social movements [34] such as Nationalists and socialists." . as the corporations exercise power through leveraging trade agreements which in some instances damage the democratic rights of citizens the environment particularly air quality index and rain forests as well as national government's sovereignty to determine labor rights. Moreover. participants stand in opposition to the unregulated political power of large. and they generally call for forms of globalization that enhance democratic representation. including the right to form a union. particularly free market degregulation. Some people who are labeled "anti-globalization" consider the term to be too vague and inaccurate . and health and safety legislation. “Anti-globalization" may also involve the process or actions taken by a state in order to demonstrate its sovereignty and practice democratic decision-making. In either case. or laws as they may otherwise infringe on cultural practices and traditions of developing countries.

one based on investor rights. even accept this term. in its more honest moments. Accordingly. and some. created by the New Economics Foundation. more rapid and extensive deterioration of the environment. inequality. in terms of the perceived unsustainable harm done to the biosphere. all occur as a result of the economic transformations related to globalization. though it is a term of propaganda that should be dismissed with ridicule. They challenge directly the metrics. refers to the "free trade agreements" as "free investment agreements" (Wall St. and look to other measures. unfortunately. No sane person is opposed ” . with the interests of people incidental. That is why the business press. The terms globalization and anti-globalization are used in various ways. injustice and the erosion of traditional culture which. a breakdown of democracy. the spread of new diseases. as well as the perceived human costs. increasing poverty and alienation"[40] which they claim are the unintended but very real consequences of globalization. such as poverty. Noam Chomsky believes that “ The term "globalization" has been appropriated by the powerful to refer to a specific form of international economic integration.Critiques of the current wave of economic globalization typically look at both the damage to the planet. They point to a "multitude of interconnected fatal consequences--social disintegration. Journal). the critics contend. such as GDP. advocates of other forms of globalization are described as "antiglobalization". miscegenation. such as the Happy Planet Index. used to measure progress promulgated by institutions such as the World Bank.

The abundance of cheap labor is giving the countries in power incentive not to rectify the inequality between nations. international integration. Exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor. Larger countries often subsidies their farmers (like the EU Agricultural Policy. there are also negative consequences because some countries try to save their national markets.that is. not private power systems. Surely not the left and the workers movements. The main export of poorer countries is usually agricultural goods.to globalization. that is. though economists question if consenting workers in a competitive employers' market can be decried as "exploitated". which lowers the market price for the poor farmer's crops compared to what it would be under free trade. companies from powerful industrialized nations are able to offer workers enough salary to entice them to endure extremely long hours and unsafe working conditions. the army of cheap labor would slowly disappear . If these nations developed into industrialized nations. globalization in a form that attends to the rights of people. Due to the lack of protections. which were founded on the principle of international solidarity . Critics argue that: Poorer countries are sometimes at disadvantage: While it is true that globalization encourages free trade among countries.

As a result unions hold less power over corporations that are able to easily replace workers. and have the option to not offer unionized jobs anymore. Milanovic remarks that "literally hundreds of scholarly papers on convergence or divergence of countries’ incomes have been . improved estimates of purchasing power parity indicate that developing countries are worse off than previously believed. It is true that the workers are free to leave their jobs. In December 2007. World Bank economist Branko Milanovic has called much previous empirical research on global poverty and inequality into question because.alongside development. The laid off unskilled workers are forced into the service sector where wages and benefits are low. but turnover is high. and possible even his/her family if their previous jobs were unavailable. Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition has caused a weakening of labor unions in the United States. The loss of these jobs has also contributed greatly to the slow decline of the middle class which is a major factor in the increasing economic inequality in the United States. this would mean starvation for the worker. according to him. This has contributed to the widening economic gap between skilled and unskilled workers. The shift to outsourcing: The low cost of offshore workers have enticed corporations to move production to foreign countries. but in many poorer countries. Families that were once part of the middle class are forced into lower positions by massive layoffs and outsourcing to another country. Unions lose their effectiveness when their membership begins to decline. often for lower wages.

in 7 out of 8 metrics. artists. both between and within nations. as well as environmental concerns in a more equitable way. peasant unionists. Global inequality was estimated at around 65 Gini points. The critics of globalization typically emphasize that globalization is a process that is mediated according to corporate interests. Some are reformist. possibly economists will revise calculations. One article from 2001 found that significantly. was contained in the . the so-called 'champagne glass' effect. believing globalization destroys national industry and jobs. A chart that gave the inequality a very visible and comprehensible form. anarchists. and typically raise the possibility of alternative global institutions and policies. and he also believed that there are considerable implications estimates of global inequality and poverty levels. One of the key points made by critics of recent economic globalization is that income inequality. . which they believe address the moral claims of poor and working classes throughout the globe. intellectuals. protectionists. whereas the new numbers indicate global inequality to be at 70 on the Gini scale. (arguing for a more moderate form of capitalism) while others are more revolutionary (arguing for what they believe is a more humane system than capitalism) and others are reactionary. is increasing as a result of these processes.published in the last decade based on what we know now were faulty numbers." With the new data. The movement is very broad including church groups. those in support of relocalization and others. national liberation factions. income inequality has increased in the twenty years ending 2001.

7% 2.e. 1989 Quintile of Population Income Richest 20% Second 20% Third 20% Fourth 20% Poorest 20% 82.3% 1. with the richest 20% of the world's population controlling 82. So globalization. relates to a multilateral political world and to the increase of objects. Americanization related to a period of high political American clout and of significant growth of America's shops.1992 United Nations Development Program Report. 1992 Human Development Report Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i. markets and object being brought into other countries.7% of the world's income.7% 11. a much more diversified phenomenon. . the rich) at the expense of the poor. which showed the distribution of global income to be very uneven.2% SOURCE: United Nations Development Program. + Distribution of world GDP.4% 1. markets and so on into each others countries.

against racism and against neo-liberalism". in 2003 and 2004 respectively. in India). It saw the participation of 60. Others would prefer that delegates concentrate their efforts on the coordination and organization of the movement and on the planning of new campaigns.000 delegates and ended with a huge demonstration against the war (1.000 people according to the organizers). Recently there has been some discussion behind the movement about the role of the social forums. It was here that the WSF's Charter of Principles was adopted to provide a framework for the forums. to make it more accessible to the populations of Asia and Africa. regional forums took place following the example of the WSF. The WSF became a periodic meeting: in 2002 and 2003 it was held again in Porto Alegre and became a rallying point for worldwide protest against the American invasion of Iraq. an occasion to make many people aware of the problems of globalization. The first European Social Forum (ESF) was held in November 2002 in Florence. However it has often been argued that in the dominated countries (most of .International Social Forums The first WSF in 2001 was an initiative of the administration of Porto Alegre in Brazil. In 2004 it was moved to Mumbai (formerly known as Bombay. The other two ESFs took place in Paris and London. Some see them as a "popular university". The slogan was "Against the war. In the meantime.000 delegates. The slogan of the World Social Forum was "Another World Is Possible". This last appointment saw the participation of 75. adopting its Charter of Principles.000.

Peak tariff rates are to be reduced to be reduced to the minimum with a peak rate of 20%.6 in 1996-97. The new policy regime radically pushed forward in favour of a more open and market oriented economy. Impact on India: India opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. insurance and other major sectors. in another 2 years most non-tariff barriers have been dismantled by march 2002. The Indian tariff rates reduced sharply over the decade from a weighted average of 72. The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations. India is committed to reduced tariff rates. ports. airports.5% in 1991-92 to 24.Though tariff rates went up slowly in the late nineties it touched 35. . roads.the world) the WSF is little more than an 'NGO fair' driven by Northern NGOs and donors most of which are hostile to popular movements of the poor. including almost all quantitative restrictions.1% in 2001-02. more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of foreign investors in telecom. Over the years there has been a steady liberalisation of the current account transactions.

When GDP is calculated on a purchasing power parity basis.6% in 1990-91 to a peak level of 77. The pickup in GDP growth has helped improve India’s global position.3% in 2002-03 mainly because of the worst droughts in two decades the growth rates are expected to go up close to 70% in 2003-04. Globalisation and Poverty: Globalisation in the form of increased integration though trade and investment is an important reason why much progress has been made in reducing poverty and global inequality over recent decades. Though growth rates has slumped to the lowest level 4. which picked up from 5. . Growth rates have slowed down since the country has still be able to achieve 5-6% growth rate in three of the last six years. But it is not the only reason for this often unrecognised progress.8% in 1996-97. Indonesia. Though India’s average annual growth rate almost doubled in the eighties to 5. This is major improvement given that India is growth rate in the 1970’s was very low at 3% and GDP growth in countries like Brazil. and Mexico was more than twice that of India. sound institutions and domestic political stability also matter. A Global comparison shows that India is now the fastest growing just after China. good national polices.India is Global: The liberalisation of the domestic economy and the increasing integration of India with the global economy have helped step up GDP growth rates.9% it was still lower than the growth rate in China. Consequently India’s position in the global economy has improved from the 8th position in 1991 to 4th place in 2001. Korea and Indonesia. Korea.

For example food processing and packaging are the one of the area where new entrepreneurs can enter into a big way. If the proportion living in poverty had not fallen since 1987 alone a further 215million people would be living in extreme poverty today. The areas like technological entrepreneurship. The growth of Indian economy very much depends upon rural participation in the global race.2 billion of the developing world 4.8 billion people still live in extreme poverty. It may be organised in a collective way with the help of co-operatives to meet the global demand. new prospects in rural areas and privatisation of financial institutions. GDP Growth rate: . The manufacturing of technology and management of technology are two different significant areas in the country. After implementing the new economic policy the role of villages got its own significance because of its unique outlook and branding methods.Despite this progress. India has to concentrate on five important areas or things to follow to achieve this goal. poverty remains one of the most serious international challenges we face up to 1. There will be new prospects in rural India. importance of quality management. But the proportion of the world population living in poverty has been steadily declining and since 1980 the absolute number of poor people has stopped rising and appears to have fallen in recent years despite strong population growth in poor countries. new business openings for small and medium enterprises.

oil seeds. Many Indian companies have started becoming respectable players in the International scene.572 and 38.The Indian economy is passing through a difficult phase caused by several unfavourable domestic and external developments.1%. tea and coffee are the other prominent products each of which accounts from nearly 5 to 10% of the countries total agricultural exports. The performance in the first quarter of the financial year is5. In 2000-01 Agricultural products valued at more than US $ 6million were exported from the country 23% of which was contributed by the marine products alone. Cereals (mostly basmati rice and non-basmati rice).8% and second quarter is 6.362 million respectively.4% during the past year growth in real GDP in 2001-02 was 5. Export and Import: India’s Export and Import in the year 2001-02 was to the extent of 32. Where does Indian stand in terms of Global Integration? . Agriculture exports account for about 13 to 18% of total annual of annual export of the country. Marine products in recent years have emerged as the single largest contributor to the total agricultural export from the country accounting for over one fifth of the total agricultural exports. Domestic output and Demand conditions were adversely affected by poor performance in agriculture in the past two years. The global economy experienced an overall deceleration and recorded an output growth of 2.4% as per the Economic Survey in 2000-01.

while formulating and evaluating its domestic policy cannot afford to ignore the possible . This is reflected in Interdependence in regard to trading in goods and services and in movement of capital.05% to . · India’s share of global trade is similar to that of the Philippines an economy 6 times smaller according to IMF estimates. As a result domestic economic developments are not determined entirely by domestic policies and market conditions. Rather. Over the same period China’s share has tripled to almost 4%. large part of east and far east Asia and eastern Europe. India under trades by 70-80% given its size. they are influenced by both domestic and international policies and economic conditions. It is thus clear that a globalising economy. · Consequences: The implications of globalisation for a national economy are many. Number of countries have a clear lead among them China. Globalisation has intensified interdependence and competition between economies in the world market.5% for Brazil.07% over the pat 20 years.India clearly lags in globalisation. Whereas FDI inflows into China now exceeds US $ 50 billion annually. Lets look at a few indicators how much we lag. It is only US $ 4billion in the case of India · Consider global trade – India’s share of world merchandise exports increased from .5% of GDP against 5% for China 5. · Over the past decade FDI flows into India have averaged around 0. proximity to markets and labour cost advantages.

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