Question

3. “The phenomenon of globalisation has given rise to major benefits and costs for countries and companies in the contemporary world economy.” Discuss this statement by considering the following questions:
a) What are the major trends underlying contemporary globalisation?
b) What do supporters of globalisation see as its major benefits for countries and international firms? What do critics see as the major drawbacks and disadvantages with globalisation for international firms and countries?
c) What is protectionism, and what techniques do countries adopt to protect themselves from the adverse effects of global trends, and the behaviour of international businesses and other countries?

Answer 1

Contemporary globalization is defined as the core idea of globalization and defined in terms of accelerating and inclusion of technological, cultural, religion, economic and political integration. This defines the economic globalization is not only the profit loss or comparative advantages, but it also defines the political and cultural collusion internationally and brings out the best output where all will be in a better off situation.

The trend which is now in the focused part of contemporary globalization are:

a) change in the trend of production and labor market in terms of technology, in terms of product verity, in terms of change in demand of the product, change in skill, and preserving skill.

b) rapid change in technology that put pressure on the production and distribution unit to match the competition.

c) the overall issue which is more concerned for all is climate change, which works as the whole process and game-changer.

b)

Advantage of contemporary globalization:

i) larger market, specialization benefits, extracting economies of scale.

ii) faster change in technology and innovation

iii) more pressure on the domestic firm in terms of productivity to compete with the outside world.

Disadvantages of contemporary globalization:

i) uneven distribution of prosperity, which will indicate only a few economies at the end will be beneficial and others are just following them.

ii) adaptability and adjustment process may not match with the speed of technological advancement in the globe.

iii) Open trade may look as the advantage but in a real sense, it is a burden on the domestic country who's purchase depends on a foreign country and it made the domestic country's paralyzed and dependent. in long term, it may force them to low their voice.

c) Protectionism is a government policy to protect its domestic producer from international trade losses. it put some specific restrictions to protect the domestic economy. Tariffs, import quotas, product standards, and subsidies are some of the primary policy tools a government can use in enacting protectionist policies. these will protect the domestic economy to an extent but these are not full-proof measures to handle the pressure of globalization.