Globalization Seminar Daraius

8/11/2019 Globalization Seminar Daraius

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GLOBALIZATION

Presented By:

Daraius Variava

Seminar In Economic Policy

Date: 14th June 2014

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What is globalization?

Globalization is the acceleration and intensification ofinteraction and integration among the people, companies,and governments of different nations.

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This process has speeded up dramatically in the last two decades as

• Technological advances make it easier for people to travel•Communication•Conduct Business internationally.

Two major recent driving forces are advances in telecommunications infrastructure and the rise of the internet.

In general, as economies become more connected to other economies, they have notonly increased opportunity but also increased competition



History of globalization

• The term globalization appeared in 60’s

• 100,000 years ago the process of globalization started withmigration. The principal agents of globalization were soldiers (and

sailors), traders, preachers and adventurers

• Alexander the great, Marco Polo, Ibn Batuta, Ganghis khan etc

• Then there were the religious preachers Christian missionaries,

Muslim Sahabas, Buddhist monks used to preach religion globally

• Because of these global preaching both these religions areconsidered to be global religions with millions of followers

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History (Contd) – Ancient Routes

• Ancient routes like the silk route/ silk road, the GT road etchave played an important role in linking the worldtogether.

• Ancient routes like silk route were used to transport silk,spices, tea

and precious stones and

jewellery

• Spices found their way

from Asia to Europe, while

luxuries entered the Asian market.

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History – The Slave trade

• the increase in trade the demandfor labours such as miners andfarmers increased.

• The need for miners and laboursresulted in ‘Slave Trade’

• slaves were taken to thedeveloped world via vessels andwere tortured to death for notobeying orders. Theses Africanswere not considered humansbecause of there colour whichresulted in a racial genocide. Thewhites even changed their nameso that their cultural heritage isdestroyed.

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History – Opium War

• In early 19th century the decreasing supply of silver led the British to replace itwith Indian opium for trading with china.

• the Chinese got hooked

• Chinese rulers placed regulations on imports and arrested British traders

• Imperial Chinese opposition to the drug trade led to the Opium War- the first warof globalization

• Opium War 1839-42

• Chinese got defeated

• Ceded Hong Kong to Britain

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History - Role of East India

Company

• East India Company became the first

Multinational and helped colonize the British

empire. The world economy integrated

• The British are considered to be the first to

make foreign direct investments (FDI). TheseFDI’s were in the form of colonial investments.

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History - Industrial Revolution

• The process of globalization got boost with

the introduction of steam engines, steam

ships and aircrafts reducing distances andtravel cost.

•The globalization process got further boostfrom Telegraphs, telephones, radios and

television which helped wire the world.

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• The pro-globalization lobby argues that globalization bringsabout much increased opportunities and competition for

almost everyone.

• The anti-globalization group argues that certain groups ofpeople who are deprived in terms of resources are notcurrently capable of functioning within the increased

competitive pressure that will be brought about by allowingtheir economies to be more connected to the rest of theworld.

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Institutions that Govern

Globalization Are• Three main institutions govern globalization: IMF, World

Bank and WTO

• World Bank devoted to eradicate poverty

• IMF to maintaining global stability

•

The World Trade Organization – is a entity (which currently has 144 members) that was set up to

formulate a set of rules to govern global trade and capital flows throughthe process of member consensus, and to supervise their membercountries to ensure that the rules are being followed.

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• Important anti-globalization organizations

include environmental groups

–

like Friends of the Earth and Greenpeace; – international aid organizations like Oxfam;

– third world government organizations like the

G77; business organizations and trade unions

whose competitiveness is threatened by

globalization

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Important anti-globalizationorganizations



Types of Globalization

1. Economic Globalization

2. Political Globalization

3. Cultural Globalization

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Economic Globalization

• No national economy is an island now. To varying degrees, national

economies influence one another. One country which is capital-

rich invests in another country which is poor. One who has better

technologies sells these to others who lack such technologies.

– requires that capitalism be accepted globally. This would require

significant restructuring and changes to the existing laws and practices in

many countries

• Thus, globalization is predominantly an economic process involving

the transfer of economic resources form one country to another.

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Economic Globalization

• MNC’s from the developed world have started tosetup production in the developing countries becauseof cheap labour & resources to gain competitiveadvantage in the international market.

– There are currently over 88,000 multinationals

– while the developing countries benefit from the transferof technology and management skills.

• Mergers and acquisitions are taking place to increasethe competitiveness.

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• Economic Globalization is achieved through progressive changes inlaws and policies governing how countries exchange goods.

• GATT and WTO have ensured that countries reduce their tariff and

non-tariff barriers so that the goods can flow freely betweencountries.

• Economic integrations refers to FTA’s like NAFTA & EU are consideredto be the future of how trade will take place.

– Abolishing of custom tariffs

Economic globalization

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Pakistan’s Trade Profile (WTO)

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Pakistan’s Trade Profile (WTO)

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Political Globalization

• Since long, efforts have been on to bring the whole world underone government. Governance for the matters like; global warming,de-regulation of trade and nuclear proliferation

• Political globalization take place above the state through political

integration schemes such as the European Union

• And through organizations UN such as the International MonetaryFund, the World Bank and the World Trade Organization have beenthe efforts in that direction. It is believed that the world under onegovernment will be safer and freer from conflicts.

• The member-states remain sovereign, but they have to fulfillobligations and commitments, to be part of concernedinternational organizations and groupings.

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Political Globalization

• Current integrations – European Union (27 countries)

– African Union (54)• to rid the continent of the remaining traces of colonization;

•

promote unity and solidarity among African States;• to intensify cooperation for development

• to safeguard the sovereignty and territorial integrity of MemberStates and

• to promote international cooperation within the framework of theUnited Nations.

• future confederation's goals include the creation of a free tradearea, a customs union, a single market, a central bank, and acommon currency thereby establishing economic and monetaryunion. The current plan is to establish an African EconomicCommunity with a single currency by 2023

– Union of South American Nations (12) 25

http://en.wikipedia.org/wiki/Free_trade_area

http://en.wikipedia.org/wiki/Customs_union

http://en.wikipedia.org/wiki/Single_market


http://en.wikipedia.org/wiki/Central_bank





http://en.wikipedia.org/wiki/Economic_and_monetary_union





http://en.wikipedia.org/wiki/African_Economic_Community










http://en.wikipedia.org/wiki/Central_bank







Globalization and Imperialism

the domination of a powerful country over a lesspowerful country

also lead to invasions, occupations

– Imperialism has existed for centuries now,

– previously it was the britisher’s colonizing the globe.

– now its US the sole super power dominating others witheither political force or the military force



The U.S.

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Sinceindependence

1776

• At war

• Close to 100wars since1776

Since 2001

• Beeninvolved in

atleast 3wars

• Afghanistan,Iraq & busybombardingPakistan

Plus it is…

• ThreateningIran, North

Korea,Pakistan andSyria forinvasion

•Playing a world police role

•Drone attacks in Pakistan

• Afghanistan and Iraq invasion etc

Globalization andImperialism



Pakistan and Political Globalization• US influences the political and economic

decision making in Pakistan ( for example)

– Forcing Pakistan to sign Tajikistan Afghanistan

Pakistan gas pipeline (2010)• instead of Iran Pakistan gas pipeline which was less costly

and less time consuming

• the project offers a way to further isolate Iran

– Forced Pakistan to hand over Gwadar to SingaporePort Authority built by Chinese Engineer’s

• didn’t want China to get access to hot waters.



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Cultural Globalization

• Arts, beliefs, institutions, and all otherproducts of human work and thought.Culture; although intangible can be imported

or exported.

• Homogenization of world culture

–most dominant cultures are becoming larger andmore dominant at the expense of many others.

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• Culture exported/transmitted through – Literature and publications (Popular books have international markets

Harry Potter has readers almost all over the world)

–

Entertainment (English movies are seen almost in all countries. Western pop music has become popular in developing countries.)

– Social Interaction

– Food (fast food culture McDonald's, Starbucks etc etc)

– Education (our education promotes consumerism, capitalism,materialism with little focus on ethics and religion. Our books arewritten by foreign authors and gurus and these gurus are quoted inevery literature and research work because they are consideredinfallibles or superior to our national experts or gurus.)

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• Language – English has become the global language

•

Many governments around the world have attemptedto protect their native cultures by imposing bans onwhat they declare to be foreign cultural intrusions.

– in Canada's French speaking province of Quebec ,

provincial regulations stipulate that any sign containingEnglish posted by a business must also post the same textin French in letters at least twice the size of the English text.

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Advantages

• Increased free trade between nations

• Increased liquidity of capital allowing investors in developednations to invest in developing nations

• Corporations have greater flexibility to operate across borders

• Increased flow of communications allows vital information tobe shared between individuals and corporations greater ease

and speed of transportation for goods and people

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Advantages

• Greater interdependence of nation-states

• Reduction of likelihood of war between developed nations

• Transfer of technology from Developed world to theDeveloping world

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Disadvantages

• LOSS OF HIGHER PAYING JOBS (Unemployment): For developedeconomies, globalization means a loss of higher paying jobs ascompanies seek the cheapest skilled labor at the lowest cost.

• CHEAP LABOUR MAY NOT HAVE SAME SKILL The new workers innew counties may not have the same skill levels as the workersthey replaced. In that case, product quality suffers.

• FOREIGN LABOUR MAY BE EXPLOITED BY PAYING LESS A real

threat exists that workers in less developed countries might beexploited by foreign companies. These companies are attemptingto make the maximum profit and probably won’t pay or treatworkers as well as they do in their home country.

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• Media is controlled by a handful corporations,mostly western affecting the culture of thehome country.

– Spread of materialistic and capitalistic lifestyles

•Western countries have pushed poorercountries to eliminate trade barriers while

keeping barriers to their economy.

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• No Significant Expansion in Trade: Pakistan’s expansion in trade

has not been as spectacular as that of some of the other

countries.

– Pakistan’s share in the world merchandize exports has fallen from 0.15 to0.13

– Liberalization policies in the 90’s did not have positive impact on PK

economy decline in the GDP growth rate, from 6.1% in the 1980’s to

4.5% in the 1990s

• INTEREST IN REAL ESTATE PROJECTS There has been a growing interestfrom overseas investors in real estate projects in Pakistan . While this

could provide some benefit in terms of employment opportunities and

increased demand for construction material, investment of this nature

does not involve any transfer of technology.

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Globalization for Pakistan



• LTERACY RATE In Pakistan the literacy rate is 54.9% (as per UNICEF’sreport dated Dec 27th 2013). According UNESCO, out of 221countries who allocate more in their budgets for education Pakistanis on 180th position.

• INSUFFICIENT HEALTH FACILITIES General health opportunities arebarely adequate for a common citizen – expensive private clinics areincreasing.

• POVERTY HAS INCREASED ,World Bank has also failed Sustainable

employment opportunities have decreased and people underpoverty line have increased immensely. The number of poor in thecountry has risen from 60 to 77 million since 2007 because of foodinflation (Food Crisis in Pakistan: Real or Artificial, October 16, 2008)

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Globalization for Pakistan



Recommendations

• COLLABORATION & COORDINATION There is a need for acoordinated and collaborative effort among the South Asiancountries to expand trade in the region.

• SHIFT FROM AGRI TO INDUSTRIAL PRODUCTS Pakistan needsto diversify its export base and shift from primary agriculturalproducts to more value added and industrial products.

•

ATTRACT FDI’S Similarly, direct foreign investment is crucial forresource mobilization. It is therefore, strongly recommendedthat the government of Pakistan must attract foreign directinvestment by giving them various incentives.

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• NEED TO UPGRADE HUMAN DEVELOPMENT (health, education,

employment)The most compelling factor for Pakistan to derive

benefits from globalization is to upgrade its human

development. Unfortunately this has been an area of neglect by

successive governments over a long period of its history.

• In fact, this underdevelopment of human capital is the single

most daunting challenge facing Pakistan at present.

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Conclusion

• Although Globalization has a power to do enormous good and the potential to enricheveryone in the world, particularly the poor.

• POOR HAVE NOT BENEFITED But unfortunately the poor has not benefited with theprocess of globalization. There is an enormous cost associated with the continuingglobal instability.

• Western countries have pushed poorer countries to eliminate trade barriers

• EFFECTIVE ALLOCATION & UTILIZATION RESOURCES The developing countries canbenefit form globalization if effective allocation and utilization of resources are ensured

• Using resources effectively countries like Pakistan must focus on its competitiveadvantage

• However the economic benefit must not come at the expense of culture andsovereignty of nation

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The search for magic formula to turn poverty in to prosperity failed

– 1.4 billion people in developing countries live on $1.25 a day or less.(IFADRural Poverty Report 2011)

– Rural areas account for three out of every four people living on less than $1.25a day. (Human Development Report, 2007/2008)

– 22,000 children die each day due to conditions of poverty. (UNICEF State ofthe World's Children, 2010)

Globalization can be a positive f orce but only if these institutionsdramatically alter the way they operate requires vigilance,

transparent mechanisms

and the rule of law 46

http://www.ifad.org/rpr2011/report/e/rpr2011.pdf



http://hdr.undp.org/en/reports/global/hdr2007-2008/


http://www.unicef.org/rightsite/sowc/pdfs/SOWC_Spec%20Ed_CRC_Main%20Report_EN_090409.pdf




































Sources

• WTO

• Pakistan Trade Profile

• http://www.unicef.org/infobycountry/pakistan_pakistan_statistics.html

• http://unctad.org/en/PublicationsLibrary/wesp2014pr_en.pdf

• http://www.wto.org/english/res_e/statis_e/its2013_e/its13_world_trade_dev_e.pdf

• http://en.wikipedia.org/wiki/Political_union#Mixed_unions

• http://en.wikipedia.org/wiki/African_Union#Economy

• http://en.wikipedia.org/wiki/European_Union#Governance

• http://en.wikipedia.org/wiki/2011_military_intervention_in_Libya

• http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/columns/06-Mar-2012/politics-of-iran-pakistan-gas-pipeline

• http://en.wikipedia.org/wiki/Iran%E2%80%93Pakistan_gas_pipeline

• http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/12-Sep-2012/pew-supports-handing-over-gwadar-port-to-china

• http://pakobserver.net/detailnews.asp?id=172588

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http://www.wto.org/english/news_e/pres00_e/pr175_e.htm

http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=PK&Language=E

http://www.unicef.org/infobycountry/pakistan_pakistan_statistics.html

http://unctad.org/en/PublicationsLibrary/wesp2014pr_en.pdf

http://en.wikipedia.org/wiki/Political_union


http://en.wikipedia.org/wiki/African_Union

http://en.wikipedia.org/wiki/European_Union

http://en.wikipedia.org/wiki/2011_military_intervention_in_Libya

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/columns/06-Mar-2012/politics-of-iran-pakistan-gas-pipeline


http://en.wikipedia.org/wiki/Iran%E2%80%93Pakistan_gas_pipeline

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/12-Sep-2012/pew-supports-handing-over-gwadar-port-to-china


http://pakobserver.net/detailnews.asp?id=172588

http://pakobserver.net/detailnews.asp?id=172588






























http://en.wikipedia.org/wiki/Iran%E2%80%93Pakistan_gas_pipeline


























http://en.wikipedia.org/wiki/2011_military_intervention_in_Libya

http://en.wikipedia.org/wiki/European_Union

http://en.wikipedia.org/wiki/African_Union






http://www.unicef.org/infobycountry/pakistan_pakistan_statistics.html

http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=PK&Language=E

http://www.wto.org/english/news_e/pres00_e/pr175_e.htm



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Globalization Seminar Daraius