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GLOBALI$ATION,G$T &
ANTI-GLOBALI$ATIONPresentation By:
Mohd Nor Syafiq bin Abdul Majid 2012822138Nur Sakinah binti Mat Zaki 2011989339Naim Yusree bin Mohamed Idris 2011598475
Presented For:
Global Business Issues (GBI 795)
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INTRODUCTION & OVERVIEW
Globalization
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Definitions of Globalization
The worldwide movement toward economic, financial, trade,and communications integration
Globalization implies the opening of local andnationalistic perspectives to a broader outlook of an interconnectedand interdependent world with free transfer of capital, goods,and services across national frontiers
However, it does not include unhinderedmovement of labour and, as suggested bysome economists, may hurt smaller or
fragile economies if applied indiscriminately
Source: businessdictionary.com
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Definitions of Globalization
Joseph Nye and John Donahue:Globalism is a state of the world
involving networks of
interdependence at multicontinentaldistances.
World Bank: Globalization is thegrowing integration of economiesand societies around the world.
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Views from Economists
Rodrik: Globalization may come at the expenseof developing more responsible educational,
health, and social security networks
Amartya Sen: Third world development must beunderstood. Policies should focus on health
and education, not simply GDP
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Views from Economists
Immanuel Wallerstein: Criticizesglobal capitalism and his analysis isrenowned by the anti-globalizationmovement
James TobinGovernments
should intervene in the economyin order to stabilize output and
avoid recessions
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People Say About Globalizations
Economic Globalization caused several social ills today such as deterioration ofenvironment worldwide (global warming), third world debts, animal rights, childlabour and anarchism
Target anti-globalization WTO (free trade), IMF (bank loans while the countrieswere in crisis), and World Bank (long term loans)
Exploitation of world poor, workers and environment
It make easier for the rich companies act withless accountability
Countries individuals culture are becomingoverpowered by Americanization. (MacDonald and Star buck, Wal-Mart)
Globalization target profit
Anti-Globalization saw what were and will happening in the world and fights forglobaljustice
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Globalization Pros
Worldwide Market For Companies And The People Productivity growth among countries that produces
goods and services in which they have a comparative advantage
More access to products of different countries
Open Economy Spurs Fresh Innovative Ideas From Abroad
More influx information between two different countries
Cross cultural mix of ideas, in time adopt favourable idea
World Power
Politics merging that is beneficial for everyone
Minimizing compartmentalized powers
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Globalization Pros
Supporters of globalization points out the economic theory ofcomparative advantage
Mainstream economists argue that standard of living can increase
through free trade
The outcomes is not always successful. Constant debate aboutpolicies and tradeoffs
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Globalization Cons
Job Lost Due to imports or productions shift abroad
Service and white-collar jobs Vulnerable to operations relocatingoffshore
Western Employees Lose their competitive advantages companies build advanced
factories in low wage countries, making them just as productive andthus shifting quality to other countries
Fear of losing job, companies operating under pressure
Face pay-cut demands from employers, which often threaten toexport jobs
Corporations
Threat of corporate take-over, a lot of power through globalization
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GST
Goods and Service Tax
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Introduction on GST/VAT
GST which is also known as VAT (Value Added Tax) in manycountries is a multi-stage consumption tax on goods and services
GST is proposed to replace the current consumption tax i.e. the sales
tax and service tax (SST)
GST is levied on supplies of goods or services purchased andincludes most products, except certain politically sensitive essentialssuch as groceries, residential rent, and medical services, and
services such as financial services
End-users pay this tax on all liable goods and services directly, in thatthe purchase price of goods and services includes GST
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Countries ImplementingGST or VAT
No. Region No. of Country
1 ASEAN 7
2 Asia 19
3 Europe 534 Oceania 7
5 Africa 44
6 South America 11
7 Caribbean, Central & North America 19
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ASEAN (7 Countries)
No. CountryGDP Per Capita
(World Bank, 2011,USD)
Year ofImplementation
Initial Rate(%)
CurrentRate (%)
1 Indonesia 3,495 1984 10 10
2 Thailand 4,972 1992 7 7
3 Singapore 46,241 1993 3 7
4 Philippines 2,370 1998 10 12
5 Cambodia 897 1999 10 10
6 Vietnam 1,407 1999 10 10
7 Laos 1,320 2009 10 10
Source: Official Web Malaysia GSTLast Updated : 24/1/2014 16:41
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How does GST work
After registration, businesses must charge GST at the prevailing rate
This GST that they charge and collect is known as output tax,which has to be paid to Inland Revenue Board (IRB)
GST incurred on business purchases and expenses (includingimport of goods) are known as input tax
Businesses can claim input tax if conditions for claiming are satisfied
This credit mechanism ensures that only the value added is taxed ateach stage of a supply chain.
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1. Manufacturer Pays GST to Customs for imports
Import value = $100Import GST paid = 7% X $100=$7 (input tax to claim from IRB)
Charges and collects GST for sale of toys to retailer
Selling price to retailer = $200GST charged to retailer = 7% X $200 = $14 (output tax to pay IRB)
2. Retailer Pays GST to Manufacturer
Purchase value = $200GST paid = 7% X $200=$14 (input tax to claim from IRB)
Charges and collects GST for sale of toys to end consumer
Selling price to end consumer = $300GST charged to end consumer = 7% X $300 = $21 (output tax to pay IRB)
3. End-consumer Pays GST to Retailer
Purchase value = $300GST paid = 7% X $300=$21
End consumer is not GST-registered. Therefore, he cannot claim GST paid on his purchase from
IRB.
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The differencebetween output tax and input tax is the net GSTpayable to or refundable from Inland Revenue Board
Example 1:
Output tax to be paid = $30Input tax to be claimed = $10 (i.e. input tax less than output tax)Net GST payable to IRB = $20
Example 2:
Output tax to be paid = $10Input tax to be claimed = $30 (i.e. input tax more than output tax)Net GST refundable from IRB = $20
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Various benefits from GSTImproved Standard of Living
Used for development purposes for social infrastructure like health facilities and institutions,educational infrastructures and public facilities to further improve the standard of living
Lower Cost of Doing Business
Under the current system, some businesses pay multiple taxes and higher levels of tax-on-tax(cascading tax). With GST, businesses can benefit from recovering input tax, thus reducing costof doing business
Nation-Building
More funds can be channeled into nation-building projects for progress towards achieving a highincome nation
Fairness and Equality
With the GST, taxes are levied fairly among all the businesses involved, whether they are in themanufacturing, wholesaling, retailing or service sectors
Enhanced Delivery System
GST will be administrated in a fully computerized environment, therefore speeding up thedelivery, especially for refund claims. This makes it faster, more efficient and reliable
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Increase Global Competitiveness
Prices of Malaysian exports will become more competitive on the global stage as no GST isimposed on exported goods and services, while GST incurred on inputs can be recovered along thesupplies chain. This will strengthen our export industry, helping the country progress even further
Enhanced Compliance
The current SST has many inherent weaknesses making administration difficult. GST system hasin-built mechanism to make the tax administration self-policing and therefore will enhancecompliance
Reduces Red Tape
Under the present SST, businesses must apply for approval to get tax-free materials and also forspecial exemption for capital goods. Under GST, this system is abolished as businesses can offsetthe GST on inputs in their returns
Fair Pricing to Consumers
GST eliminates double taxation under SST. Consumers will pay fairer prices for most goods and
services compared to SST
Greater Transparency
Unlike the present sales tax, consumers would benefit under GST as they will know exactly whetherthe goods they consume are subject to tax and the amount they pay for
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INFORMATION IN BRIEF
Anti-Globalization
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What is Anti-Globalization
Term used to describe the political stance of people andgroups who oppose certain aspects of globalization in itscurrent form
Considered by many to be a social movement, while othersconsider it to be an umbrella term that encompasses a numberof separate social movements
Participants are united in opposition to Political power of largecorporations Trade Agreements that undermines theenvironment and labour rights.
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Anti-GlobalizationMovement
Developed in the late 20th century
Seeks to protect the worlds population and ecosystem from whatthey believe to be the damaging effects of globalization
It includes diverse and sometimes opposing understandings of theglobalization process, and incorporates alternative visions,strategies and tactics.
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Anti-GlobalizationMovements
J18 (June 18, 1999) - London, UK Eugene, Oregon
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Seattle/N30(Battle ofSeattle)
Occurred at WTO meeting inSeattle on November 30,1999
5,000 protesters blockeddelegates entrance to WTOmeetings in Seattle
Protesters forced thecancellation of the openingceremony and lasted thelength of the meeting untilDecember 3
Over 600 protesters werearrested
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GenoaJuly 18-20,2001 (The battle ofGenoa)
Occurred at G8 summitin Genoa , Italy, in 2001
Biggest anti-globalization gatheringin history, 300,000protesters against theG8 meeting in Genoa,Italy
Carlo Giuliani waskilled and severalhundreds of protesterswere injured
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Environmental
Global warming issues
Biodiversity lost
Species extinction
Pollution
Why Anti-Globalization
Developing countries depend uponagriculture and this will particularly beeffected by global warming
Developed countries exportinghazardous waste to developingcountries
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Economical
Exploitation of third world country resources
February 26 2007 Starbucks Vs. Ethiopian Coffee
Plead for Starbucks support to trademark 3 of its coffees in U.S.
1lb beans average price $1.45 (-) generator fuel (-) bank interest(-) labour (-) transports = less than $1
2432 Ethiopian farmer $0.55 a day
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Cultural
Local and minority cultures arediminishing
Western influences engulf
developing countries Global expansion McDonalds
100 countries
Serves 50 million people daily
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Women and Children
Majority of sweatshops employ female
3 major issues subjected to workers
Wal-Mart 60,000 plus suppliers in 70 countries
Child labour as Ages 4
Nike factories in Pakistan
1996 12-year-old Tariq
Stitching Soccer Balls $0.60 a day 45+ balls
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Human Rights
Other issues arise correlating with sweatshops
Wal-Mart
Code of Conducts and human rights is promoted to the public, butnot regulated or implemented on workers. Strictly their interest is notthe welfare of others, instead, their generating profits
Nike
In Pakistan it is clearly documented that child labour is against thelaw, but the government carries lack of willingness to do
anything about it The Pouty Bratzdolls factory in Southern China
Working 94 hours a week, $0.17 cents paid to workers for makingeach doll at $19 retail price in US. More than 120 million Bratz dollssold in US since 2001
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Social
The unequal wealth distribution worldwide
The gap between the developed countries and the third worldcounties (i.e. technology)
The gap between the poor and rich
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Can All Countries Benefit fromGlobalization?
Establish international monitoring system
Domestic
each country should build up a system that can integrate into theglobal market
protectionism in the domestic market International
International institutions should reform to fit into the needs of theglobalization, such as IMF, World Bank, UN
Be more responsible for all the countries, rather than some or
few countries Be more transparent and be monitored by member
countries from third world
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Enhance Corporations Between Countries And Regions
Make free trade free and fair for both developing and developedcountries
Eliminate or reduce the trade barriers
Get more countries involved into the global market Equal and balance development in the global market
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Q & A
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