GLOBALISATIONInternational Business Case Study Academic Presentation

INTRODUCTION

In the words of Dr. Aqueil Ahmed,“ Globalization should serve the human needs rather than the greed of the strong at the expense of the weak.”

It can be called as a large scale social, political, economic and technological changes that have contributed to the development of an interconnected and interdependent global system.

Globalization leads to the economic growth of the country and has the much potential to create a boundary free world.

Summary

The Arabian nomads carried out long distance trading activities with the help of camels. They traded silk and spices in Far East.

Chinese sold silks in the south and central Asia. Market rights as well as trading privileges were secured by

Hanseatic League in England for goods in the year 1157. Foreign trade licenses were introduced by Japan to prevent

piracy and smuggling in the year 1592. Dutch East India Company is established in the year 1602. The

company declares bankruptcy in 1799 because of a rise in competition in free trade.

The French constructed military forts during the eighteenth century. These forts acted as trading and communication ports for trade of fur.

In the year 1946, the Bretton Woods System was introduced. This international economic model was introduced to stop wars and depressions.

In 1947, as many as 23 nations give their consent to the implementation of GATT (General Agreement On Tariffs And Trade).

Formation of Zangger Committee takes place in 1971. It was set up with a view of interpreting nuclear goods in perspective of international trade.

International trade of nuclear goods was moderated by Nuclear Suppliers Group or NSG, which was established in the year 1974.

NAFTA was formed on 1st January, 1994.

On 1st January, 1995, the World Trade Organization or the WTO came into being to promote free trade between various nations.

Globalization and International Trade

Global trade is the exchange of raw materials, goods and services across the geographical borders of countries across the globe.

Foreign trade got its first impetus from the industrial revolution in the late eighteenth and early nineteenth century. Rapid development in transportation facilities resulted in a surge in international trade in the twentieth century.

Today, international trade has taken the form of outsourcing and multinational companies (companies that have a presence in several countries).

Globalization and International Trade

The Ratio of World imports to Gross World Product (GWP) has increased to 7% in 1938 to about 10% in 1970 to over 18% in 1996.

FDI has increased to $2.2 million in 1970 to $154 million in 1997 in developing countries.

The technological development and modern day communication act as a catalyst as foster to globalization .A telephone call from USA to britain of duration 3 min costs $12 in 1946 whereas now the cost is around 30-40 cents.

India and Globalization

India, the largest democratic nation in the world has undergone a huge transition in the last five decades.

The economic growth rate of india was 3% per annum in the beginning of the post independence has reached its current rate of economic growth of 7-8% per annum.

It is indeed a remarkable achievement and the country has made best use of its liberalization measures initiated in the early 1990s.

Advantages (Strength & Opportunities)

Enhances the economic growth of the country.

Increase in the Global and International trade in developing countries.

Globalization has enhanced the technological development and modern day communication.

Creates boundary-free world

Permits access to cheap, rapid and reliable communication across the world.

Plays the important role in the integration of the capital markets.

Disadvantages (Weakness & Threats)

Unplanned and incautious steps of liberalization may result in economic vulnerability of the nations.

Creation of the single world currency (US Dollar) in 1900 by the Gold Standard Act it created imperialistic position of stature.

Increase of inequality among developed and developing nations.

The Case Study

1. Discuss the type of contribution required from developed nations to integrate low-income nations into the global economy.

To start with The World Bank and IMF can be converted into global cooperatives with all nations as share holding members. None would be eligible for loans without having invested at least a minimum amount in shares.

Traditional national industries should be protected by WTO regulations instead of being gobbled up by multi-national corporations in the name of free trade.

These were the few contributions that I feel as are required from the developed nations to integrate low-income nations into the global economy.

The Case Study

2. Suggest some measures that can reduce poverty in developing countries.

Mobilizing local and global resources to procure food and medicine with the help of organizations like WHO and UN’s Food and Agricultural organization.

Global consciousness through mass education.

These are the two measures that I can suggest to reduce poverty in developing countries.

Thank You.

Thank you for showing so much patience.Now I humbly invite your questions on the topic.

By,Ashutosh JhaPGDM 3rd SEMReg. No. : 4016