What is Globalization?

According to International Monetary Fund, Globalization refers to the increasing integration of

economies around the world, particularly through trade and financial flows. The term sometimes also
refers to the movement of people (labor) and knowledge (technology) across international borders. In
addition, there are also broader cultural, political and environmental dimensions of globalization.

The four basic aspects of globalization identified by the International Monetary Fund are

 Trade and transactions,

 Capital and investment movements,
 Migration and movement of people and the
 Dissemination of knowledge

Further, environmental challenges such as climate change, global warming, cross-boundary water, air
pollution, and over-fishing of the ocean are also linked with globalization.

Globalization as an Opportunity

1. Globalization is a key to future world economic development

a. Greater Opportunity: Global markets offer greater opportunity for people to tap into
more and larger markets around the world. It means that they can have access to more
capital flows, technology, cheaper imports, and larger export markets.
b. Cross-cultural Integration: Liberalized nations offer multiple avenues for higher
education, tourism and jobs to the immigrants of different countries resulting in cross
culture Integration.
c. Prosperity: Globalization has helped lift hundreds of millions to escape poverty over the
past decades. Populous countries like China and India have enjoyed phenomenal
growth, improved standards of living, life expectancy, literacy and employment rates.
d. Outward-oriented policies brought dynamism and greater prosperity to much of East
Asia, transforming it from one of the poorest areas of the world 40 years ago.
e. According to International Monetary Fund, 20th century saw unparalleled economic
growth, with global per capita GDP increasing almost five-fold.
f. Competition: One of the most visible positive effects of globalization is the improved
quality of products at competitive price. As the domestic companies have to fight out
foreign competition, they are compelled to raise their standards and customer
satisfaction levels in order to survive in the market.
g. Foreign investment: Multinational corporations are a result of globalization. They
occupy a central role within the process of globalization as evidenced through global
foreign direct investment inflows.
h. Technological Innovation. Increased competition from globalization helps stimulate
new technology development, particularly with the growth in FDI, which helps improve
economic output by making processes more efficient.
i. Global Challenges: Globalization helped attenuate the major environmental challenges
we are experiencing today. Some national and international agreements such as UN
Framework Convention on Climate Change, The Kyoto Protocol etc. aim to attenuate the
negative effects of globalization on the environment.
 2. Globalization is inevitable and irreversible.
a. Economic globalization is an irreversible process due to the growing demands in every
facet of globalized markets from both developed and developing nations and economic
policies of various nations have suppressed the impetus for their own economies to
move forward thus debunking theory of economic globalization as a primarily
irrevocable phenomena.

Source:

 https://www.imf.org/external/np/exr/ib/2000/041200to.htm
 http://alliance-corporate.net/insights-overview/globalization-/index.html