Question

examining the global elements that impact national sovereignty.

• Illustrate how globalization impacts sovereignty.
• Examine the major drivers of globalization and their effects on national sovereignty.

Define the concept of sovereignty.

Answer 1

DEFINITION OF SOVEREIGNTY-

Sovereignty is defined as the authority or power of a country to control and govern its own government.

IMPACT OF GLOBALIZATION ON SOVEREIGNTY-

With economic globalization, there are various policies introduced in a country which limits its authority to determine its own policies and outcomes to some extent. It has been observed that in many developed countries, after globalization, various policies like restrictions and regulations of markets, devaluation of the domestic currency, nationalization of home industries have led to restrictions on the power of the state.

MAJOR DRIVERS OF GLOBALIZATION AND ITS EFFECTS ON NATIONAL SOVEREIGNTY-

The major drivers of globalization are - international trade, technological development, and international investment. However, it affects the national sovereignty of a country as well.

1. Globalization is driven by international trade as the countries connect with each other through trade on a global level.

• Effect- Trade regulations and restrictions are increased, domestic industries are restricted

2. International Investment includes Foreign Direct Investment (FDI), Foreign Portfolio Investments (FPI) and various other investments on the international level.

• Effect- Domestic currency devaluation is one effect. Companies and MNCs set up as FDI can exercise their power in their country and the country cannot interfere beyond a certain extent.

3. Technological Development helps the country in various ways by advancements in infrastructure, transportation, trade communication, etc.

• Effect- Employment reduces as labor is replaced by machines. The economy can reduce unemployment only to a certain extent.

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