Rahul Aryan Globalization
Globalization, as a concept fundamentally deals with flows. These flows could be of various kinds - ideas moving from one part of the world to another, capital shunted between two or more places, commodities being traded across borders, and people moving in search of better livelihoods to different parts of the world. The crucial element is the worldwide ‘inter-connectedness’, that is created and sustained as a consequence of these constant flows.
Globalization is a multi-dimensional concept. It has political, economic & cultural manifestations, and these must be adequately distinguished. It is wrong to assume that globalization has purely economic dimensions, just as it would also be mistaken to assume that it is a purely cultural phenomenon. The impact of globalization is vastly uneven; it affects some societies more than others & some parts of some societies more than others.
The term globalization has been increasing use since the mid-1980s and especially since the mid-1990s. In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade & transactions, capital & investments movements, migration & movement of the people & the dissemination of Knowledge.
Causes of Globalization:
Globalization has a strong historical basis, and it is important to view contemporary flows against this backdrop. Though several scholars place the origins of globalization in modern times, other trace its history long before the European age of discovery and voyages to the New World. Some even trace the origins to the 3 millennium BCE, in the late 19th century and early 20th century & the connectedness of the world's economies and cultures grew very quickly.
1.) While globalization is not caused by any single factor, technology remains a critical element. There is no doubt that the inventions of the telegraph & it`s posterity , that is the internet, or the telephones changing into mobile phones, in more recent times has revolutionized ‘communication’ between actors in different parts of the world.
2.) The advent of the ‘new economic order’, which has further escalated the demand of globalization to stay for a much longer period to come in the future. The exceeding population in this era of global village lifestyle has been demanding the commodities which earlier some societies were deprived of earlier, like the supply of natural gasses from the middle-east countries to the rest of the world, etc.
3.) ‘Improved technology’ which makes it easier to communicate and share information around the world, eg; ‘the internet’, etc.
4.) Growth of ‘multi-national companies’ (MNC`s) with a global presence in many different economies.
5.) Growth ‘global trading blocks’ which have reduced national barriers, e.g. European Union, NAFTA, ASEAN, etc.
6.) ‘Reduced tariff barriers’ encouraging global trade. Often this has occurred through the support of the ‘WTO’.
7.) Improved transport, making global travel easier. For example, there has been a rapid growth in air-travel, enabling greater movement of people and goods across the globe.
8.) ‘Global Trade Cycle’. Economic growth is global in nature. This means countries are increasingly interconnected, e.g. recession in one country affects global trade and invariably causes an economic downturn in major trading partners.
9.) ‘Increased mobility of labour’. People are more willing to move between different countries in search for work. Global trade remittances now play a large role in transfers from developed countries to developing countries.
A material change in the world situation was brought about by the current phase of process of globalization, starting from the early 1980s. This was the result of the objective factor of the modern technological revolution, as well the policies imposed on the rest of the world by major economic powers. Moder technological revolution has been most prominently evident in the fields of microelectronics, informatics, robotics, communications, biotechnology, space and new material sciences. It has among others, led to the globalization of the process and pattern of production, consumption, trade and distribution. It has also emerged as the most powerful driver of growth.
Globalization and it`s Promotion:
Globalization has also been promoted through economic pressures & political and security leverages. ‘Liberalization’ has been the principle policy prescription used to pave the path of globalization. The IMF, WTO and the World Bank are the principle international institutions used to promote it. The structural adjustment programmes of the IMF and the World Bank and WTO regimes like ‘Trade Related Aspects of Intellectual Property Rights’ (TRIPS), the ‘Trade Related Investment Measures’ (TRIMS) and the ‘General Agreement on Trade in Services’ (GATS), were basically designed to serve this purpose. Thus globalization came not only as a process but also as a project.
There is no denying the fact that globalization opened up immense opportunities for countries like ‘India’ to accelerate development by linking to the world economy. Integration with the major economies of the world provided vastly enhanced access to their markets, capital and technology. It could also help in upgrading skills, standards and technologies, thus making the weaker economies more competitive. It was, therefore, not surprising that India also became a part of the process of globalization.
The opportunities opened up by globalization also defined broadly the areas of concentration of modern development-oriented foreign policy. For instance, in India`s foreign economic policy, there is now greater emphasis on attracting more foreign direct investment, including foreign institutional investment; facilitating Indian investment and joint ventures abroad; enhancing earnings from services, particularly in the areas of tourism, media, entertainment, health care and education; and working in tandem with the private sector in the pursuit of India`s economic interest abroad.
Globalization and its negative aspects:
As globalization has progressed, it`s negative sides, generally referred to as its discontents, have come to the fore.
1.) It is now universally recognized that globalization has accentuated inequity between and within nations.
2.) It also favours the economically stronger over the weaker and further marginalizes those who are already at the margins of the economy.
3.) It also follows the principle of enhancing dependence, at least in the short and medium run, on major economic powers of the world. This can damage & come in the way of countries which are dependent, following a genuinely independent foreign policy. This is particularly true of the smaller and economically weaker nations of the world.
4.) It also closes the options of macroeconomic policymaking, limits and blunts instruments of monetary and fiscal policy, and engenders inertia and encourages soft options in these domains of macroeconomic policy making. Thus, conditions created by globalization can drive economies in crisis to utter ruin. This was demonstrated in the case of the meltdown of the economies of the South East-Asian countries in 1997 and the economic disaster in Russia in 1998.
5.) Cultural hegemony of the west over the rest is basically seen in every nook & corner of this globalised world, from clothing, food-diet, lifestyle, etc. Which to some sections of the society is very unethical in terms of the diminishing customs & cultures, that a section of the society used to enjoy earlier.
6.) Further, environmental challenges such as climate-change, cross-boundary water, air pollution, and over-fishing of the ocean are linked with globalization.
7.) The age of globalization has also witnessed the advent of terrorism, as the terrorists & the non-state actors, are also being benefitted from the use of various new technologies & gadgets of the weapons of mass destruction.
Globalization and it`s Impact:
1.) Relaxation of the boundaries & openness of the market.
2.) The era of Global Village, thanks to the means of global media, communications, mobility of labours, services, commodities & finished goods, etc.
3.) Countries are getting closer to each other in terms of economic, cultural or political developments, which are shaping in this 21st century world.
4.) Trade & Commerce has become very-very smooth, due to the end of the License System, that we have witnessed after the end of the Cold War days & rise of the multi-polar world order.
5.) As, Capital has become very easy to get or achieve, the role of MNC`s & FDI`s, are also seen playing a handful & decisive role in the strengthening process of globalization, to those countries, which are basically less developed countries.
6.) There is a decline in the role of the States, as the role of the MNC`s & FDI`s are increasing day by day, the role of the governmental institutions & the State is also deteriorating. The interferences of the State in the matters of the market is checked by the MNC`s, FDI`s & FII`s.
7.) The decreased role of the Customs & Excise Duty, etc.
8.) The Boundaries of the countries have become invisible & instead, opened to each other countries, so as to increase the role of Import & Export or the EXIM policy, practiced by the as many countries as possible, to survive in this ‘age of Globalization’.
Therefore, the challenges that globalization poses for foreign policy is not only to help in taking advantage of the opportunities opened up by it, but also in coping with its discontents. After, witnessing the death of the Communism, & the disintegration of the USSR, it is the only option left in today`s world so as to strengthen the economies. Thus, we became a part of this ‘GLOBAL VILLAGE’ & also closer to each other.