General Globalisation

GLOBALISATION

Dr. Ratnesh Chandra Sharma

MEANING OF GLOBALISATION

Globalisation means integrating the economy of a country with the economies of other countries under condition of free flow of trade and capital and movement of persons across borders.

Video-1.1 & 1

Institute of Technology and Science

DEFINATION OF GLOBALISATION

“Globalisation may be defined as a process associated with increasing openness growing economic independence and deepening economic integration in the world economy”



• IMF defines globalisation as, “The growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transaction in goods and services and of international capital flows and also through the more rapid and widespread diffusion of technology.”



• Charles W.L. Hill defines globalisation as, “The shift towards a more integrated and interdependent world economy. Globalisation has two main components- the globalisation of markets and the globalisation of production.”


FEATURES OF GLOBALISATION• Business Expand throughout the World.• No Barrier for Bought and Sold.• No Difference.• Free Flow of Technology between nations.• Entire World.• Feasibility and Viability.• Outsourcing.• Free movement of labour can take place.


SOURCES OF GLOBALISATION

• Technological advances.• Trade Liberalization.• Change in Institutions due to Technology. • Global agreement on Ideology.• Cultural Movement.


PROCESS OF GLOBALISATION(Ohame)

• 1st stage- Domestic company- Dealer• 2nd stage- Domestic company- Direct• 3rd stage- Domestic company becomes

International.• 4th stage- Become Autonomous• 5th stage- No Barriers.


ESSENTIAL CONDITIONS• Quotas and tariffs should be removed.• Freedom should be given to the Business and

Industries.• Complete Autonomy should provided to the

Public Sector to Compete with Private Sector companies.

• Administrative and governmental support is the pre-condition for the success.

• Rules & Regulations control of should be liberalized to encourage Globalization.


ESSENTIAL CONDITIONS

• Compititiveness based on Quality, Price , Customer Services etc. should be encouraged.• The Government should provide

adequate support in the form of Finance, Research & Development etc.• Money and Capital Market should be

developed.Institute of Technology and Science

ESSENTIAL CONDITIONS• Bureaucratic hurdles in the process

of globalisation should be removed.• The suitable globalisation strategies

and a global orientation on the part of the business firms are essential for globalisation.


The drivers of globalisation






Types/Components of Globalisation

• Globalisation of Markets• Globalisation of Production• Globalisation of Technology• Globalisation of Investment


Measures Taken for Globalisation

• Reduction of Import Duties• Encouragement of Foreign Investment• Encouragement of Foreign Technology

Agreement• New EXIM Policy• Reducing Custom Duty• Devaluation of Currency• Partial Convertbility• Long-Term Trade Policy


Average Tariff Rates on Manufactured Products

1913 1950 1990 2002France 21 % 18 % 5.9 % 4.0 %Germany

20 % 26 % 5.9 % 4.0 %

Italy 18 % 25 % 5.9 % 4.0 %Japan 30 % -- 5.3 % 3.8 %Holland 5 % 1 % 5.9 % 4.0 %Sweden 20 % 9 % 4.4 % 4.0 %UK -- 4% 5.9 % 4.0 %US 44 % 14 % 4.8 % 4.0 %

ADVANTAGES

• Increase in Competitive.• Access to Advanced Technology.• Access to Foreign Investment.• Reduction in Cost of Production.• Growth and Expansion.• Higher Volume of Trade.• Consumer Welfare.• Other Benefits.


DISADVANTAGE

• Threat to Domestic Industry.• Unemployment.• Threat to Democracy.• Economic Instability.• Disregard of National Interest.


Globalisation

Globalisation could involve all these things!

General Globalisation

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