Globalization has become a sort of fashionable buzz-word. It is quite often said but seldom with the same meaning. It is in fact one of those far-reaching concepts which are used by different people to explain facts which are of a completely different nature. However, its central strand indicates something new in the world affair which keeps eroding the national seats of power. It is something that is changing man's pre-occupation with territorially arranged state system and has initiated a process where the people, practices, norms, ideas, currencies, goods, services, information and institutions will transcend geographical barriers obliterating on its way the traditionally held state boundaries.
At present, the concept of globalization is used by the people to a number of fields or areas, These are:
(a) Economic aspect of globalization: possibly the first nation one relates to economic globalization is that of the ever-growing expansion of transponder financial flows and their impact upon the monetary and exchange policies of national economies. The effects of the financial dimension of globalization are some- what disputed. If the mobility of capital flows across boarders can be seen as an efficient way to allocate resources world-wide and to channel them to developing countries, their volatility and their possible use for speculative attacks against currencies are thought to pose new threats to the economic stability of countries.
(b) production aspect of globalization: Another aspect is the globalization of production. In the past as a general rule, all stages in the production of any specific goods were usually conducted in one country, and that goods was either locally consumed or exported. This is no longer true. The domestic contents of goods has diminished, and intermediate production stages now take place in different countries. Final products-specifically technology intensive ones-can hardly be considered to be "Made in" a given country.
(c) Free trade and global market: The changing business environment, the changes in communication technology, the political changes, encourage and facilitate the emergence of global business, transnational companies and the emergence of common markets around the world. Free trade agreements and organizations like European Union have given rise to enormous possible markets for a large number of companies.
(d) Foreign Direct Investment: Global Foreign Direct Investment (FDI) has also increased as a result of globalization. FDI rose from $ 68 billion in 1960 to $ 2.1 trillion in 1993, tripling between 1985 and 1993, showing a more rapid pace of globalization. The largest part of this investment was accounted for in the three major economic regions: US, Europe and Japan. The number of transnational corporations also increased immensely and rose from 7,000 to 37,000 from 1973 to 1993. In fact the perpetual quest to maximize accumulation of wealth / resources has always compelled geographic expansion in search of new markets, raw materials, source of cheap labour and so on.
(e) Political and socio-economical changes: Globalization has brought significant changes in the field of political and socio-economical condition of the countries. Since second world war, the world had witnessed the decline of the colonial power, the rise of democratization and the rise and fall of totalitarian, nationalistic and socialist regimes. The present world is more democratised than that of mid 20c.
(f) Poverty and globalization: Poverty is a world wide problem. Over on billion people in the world, most of them in Asia, Africa and Latin America today live in unacceptable conditions of poverty. poverty is inseparably linked to lack of access to or control over resources, including land, skills, knowledge, capital and social connections. Without these resources, people have limited access to institutions, markets employment and public services, And as a result, poor people remain poor for decade after decade. poverty has a worldwide effect and hampers development even of the developed countries. It is now a global problem rather than a problem of individual countries. So it has become the duty of the world community to work together for the alleviation of poverty.
Impact of globalization: Globalization has both positive and negative impact all over the world. But the impact is more significant and prominent on poor, developing countries, Economic globalization is linked to revolution in production patterns leading to a significant shift in the comparative advantages of nations. It has benefited mostly the consumers as well as the technologically advanced countries. The competitive position of a country relative of its others is determined more and more by the quality of its human resources, knowledge, science and technology applied to production methods. Abundant labour and raw materials are less and less a comparative advantage, to the extent they represent a diminishing share of the value added in virtually all products. This irreversible trend makes it unlikely for countries in the south to succeed solely on relatively cheap labour and on natural resources.
Globalization has increased the gap between rich and poor nation and even within the developing nations. An exposure to global market has magnified and multiplied domestic inequalities in a manner not experienced before. Income inequality has significantly increased throughout the third world countries. Permeable borders as a consequence of globalization has given rise to the spread of deadly and fatal diseases like AIDS. This has also resulted in increased trades and trafficking of drug. Cultural transformation, family disintegration etc, are also the result of globalization. There are many impacts of globalization that are coming to the light gradually.
Conclusion: It is true that globalization has produced a window of opportunity for more countries to join the mainstream of the world economy. The Asian tigers and even Japan are a case in point. But it is not full of benefits or blessings only. It has the hazards too and in the ultimate analysis no country is safe from the hazards of globalization. However, the benefits still outweigh the cost. We can conclude by quoting Ali Alatas, the Indonesian Foreign Minister, Globalization is by no means an evil force but it is a blind one, like the winds of change in the ocean of history, it can shipwreck us or carry us to our intended destination. The developed and the developing countries are all in the same boat. Out fate depends on how are work as a team in trimming the sails.
