Question

Q1: What factors have contributed to the rise of globalization? Why haven’t its effects been consistent in all nations?

Q2: Have the effects of globalization been positive or negative? Explain.

Answer 1

Ans 1: there are many factors that led to the rise of globalization some of them are listed below:

1) expansion of capital flows between the countries in the world.

2) removal of trade barriers contributed to rise in imports/exports.

3) deeper market penetration by foreign capital has increased the competitiveness in the market.

4) Failure of closed economies in the world like collapse of USSR, led to the belief that a country cannot remain cut-off and grow at a fast rate.

5) Privatization of companies lead to more competitiveness and low priced product.

6) companies went from national to transnational to multi national which increased global linkage between countries.

7) High technology product has reached to the mass market segment which led to more demand and supply.

8) Economies of Scale lead to better utilization  of resources like manpower, land or capital which further increased globalisation.

9) Specialisation of skilled labour increased the movement of peoples from one country to other which led to increase in business and globalisation.

Now, the effect of globalisation is not consistent in all nations because:-

1) Different economic situations prevailed in different nations so the result of globalisation is not same everywhere.

2) Many nations didnt open their market fully instead they did it in phases.

3) sudden opening of trade barriers lead to closure of local companies because of entrance of large corporates which took the advantage of higher capital, lower price, better technology.

4) the already better off nations got the advantage than the small economies which couldnt cope up with huge inflow or outflow of foreign capitals leading to large debts.

Ans 2. Effect of globalisation have largely been positive due to the factor which has been mentioned in the earlier question. The increase in foreign trades, exchange of labour skills, and various other factors led to the linkage between countries. The world have now become a global village. therefore, the increase in economic indicators of a major country had also lead to the increase in economic indicators of other countries. Altough, we have also seen that the recession of 2007-08 has led to the spill-off effect to other globalised countries. still, we could see that due to the effect of globalisation, counties like india and china grew rapidly and hence increased their presence and value in global platforms. This increased inter dependency among nations have created a global forum which resulted in tackling of global problems like global warming, terrorism etc. Yes, there were few negative effects which have also been discussed in the second part of first question, but all those effects are temporary in nature. In long term due to the linkage of globalised countries, these negative effects can largely be neutralised through proper economic strategy taken by the respective governments.