Globalization: An Insight

Posted on August 23, 2012 in Business and Economy

By Reeti Mahobe:

On a closer look, as a concept, Globalization has existed for past several decades only undergoing changes in the ways it has been perceived at different points of time. Beginning from that of colonial exploitation to the then wave of independence and economies getting into a shell, making this phenomenon of globalization non-existent, to the “era of dependence” (dominance of First World countries and dependence of Third World economies on them) later on giving way to “interdependence of economies” that gave the fillip to bring back the thrust on globalization. While now, that its driven mostly by mutual needs of diverse economies, it signalled an end to “era of hermit economies” marking a transformation of economy from inward looking to that of outward looking.


Divergent views have been presented as reaction to it. While extreme opponents charge it with ruination of indigenous arts and crafts, impoverishment and threat to environment while those supporting it give arguments claiming it to be the harbinger of world peace and prosperity and a blessing at times of a domestic calamity. It is observed in simple words as the integration of domestic economy with that of world economy.

The need for globalization was felt on account of seeking of greater technological investment, better quality of both goods and services and knowledge sharing. The course that it follows mainly involves a growing international trade of goods and services and increasing strategic cooperation with world economies. Another significant way towards globalization is that of Foreign Direct Investment (FDI) as well as Financial Institutional Investors (FIIs) and foreign portfolio investment. These allow increased capital inflows and outflows while also introducing the newer technologies, better quality goods and services and providing newer avenues for employment.

The international organizations and institutions such as World Bank, IMF and WTO are encouraging to adopt it. This was so in the case of India too, when BOP crisis ridden India, took over the path of New Economic Policy in 1991. It was herein when the two terms of ‘liberalization’ and ‘privatization’ became the watchwords. These two are many a times used interchangeably as both are ‘conducive’ to each other. The recently talked about FDI in retail, insurance or aviation sector are few others in this row.

Globalization seemingly an economic term has more to itself than this. It is rather a complex set of processes and impacts politically, economically, technologically and culturally. Thus we come across related terms such as ‘global village’. While the ‘positives’ of globalization may be manifold it would be unfair and unwise to ignore the risks involved. It could on hand soar up the profits of one company operating globally while on the other hand it may worsen the condition of ‘poor’ and unskilled in primarily third world economies. Such an under employment has been termed as structural unemployment. It may also be a threat to long lived tradition. Under the sheets risks also include the fears of ‘security system’ being plagued.

In today’s world we cannot remain secluded and with increasing population and developing economy we cannot afford to escape it. Its rather supposed and preferable that we must allow processes of ‘globalization’ to work smoothly with the conditions applied that our ‘indigenous arts’ are not compromised. Rather using this as an opportunity to establish its excellence elsewhere, like for an instance, one may experience it at ‘Delhi Haat’ where foreign visitors appreciate what’s ours and highlight the same in international platform.

Further we must tighten up our security measures so as to avoid any loopholes and also try to be at par with competitive levels and have a sound human resource skill development programme which would help in smoother switch to newer technologies and thus avoid ‘unemployment’. For the purpose, we also ought to have better ventures in ‘research and development’. In the scenario of coalition politics, we need to communicate the policies in a more comprehensive manner to the people as well as to the parliamentarians outlining the strategies that may be adopted to clarify and remove their ‘fears’. Global slowdown has also raised the suspicion which could be overcome through a proper ‘economic cushioning facility’ and also have positive effect on investor sentiments with an enabling environment. Globalization has become the way of life, if targeted and careful measures taken to eliminate the dangers, it would be even better.