GLOBALISATION

WHAT IS GLOBALISATION?

Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalisation has increased the production of goods and services. The biggest companies are no longer national firms but multinational corporations with subsidiaries in many countries.

Impact of Globalisation in India

*Greater competition among producers - both local and foreign producers has been of advantage to consumers. *There is greater choice before these consumers who now enjoy improved quality and lower prices for several products.* Foreign investment has increased.

FACTORS THAT HAVE ENABLED GLOBALISATION

TECHNOLOGY: Rapid improvement in

technology has been one major factor that

has stimulated globalisation process. Due

to technology there has been

improvements in various fields as in :

1. TRANSPORTATION TECHNOLOGY.

In past fifty years this technological improvements has led

to faster delivery of goods across long distances at lower

caste. Containers for transport of goods have led to huge

reduction in port handling costs, increased the speed with

which goods can reach markets.

Airlines: the cost of air transport has fallen, this has

enabled much greater volumes of goods being

transported by airlines.

2. INFORMATION AND COMMUNICATION TECHNOLOGY:

IT, has played a major role in spreading out production of services across countries.Remarkable improvements have in the areas of telecommunications,

computers &internet.Telecommunications: facilitated by the satellite communication devices,

facilities as telegraph, telephone including mobiles, fax are used to contact around the world, to access the information instantly& to communicate in the remote areas.Computer and internet: computers have entered in almost all the fields. Internet allows one to share information on almost every thing, we can send instant email and talk through voice-mail across the world at almost negligible cost.

MNC’S—Multi National Corporations

It is a company that owns or controls production in more

than one nation. MNC’s set up offices & factories for

production in the regions where they can get cheap labour

and other resources.

This is done so that the cost of production is low and the

MNC’s can earn greater profits. Many MNC’s have wealth

exceeding the entire budgets of the developing countries ,

with such enormous wealth they have immense power &

influence.

FACTORS/ CONDITIONS TO SET UP A MNC

MNC’s set up production where it is close to the markets. where there is skilled labour available at low costs. where the availability of other factors of production is assured. They look for the government policies that look after their interests.INVESTMENT: The money that is spend to buy assets such as land, building, machines and other equipment is called investment. The investment made by MNC’s is called foreign investment.

VARIOUS WAYS IN WHICH MNC’s ARE SPREADING THEIR PRODUCTION:

There are variety of ways in which MNC’s are spreading their production and interacting with local producers in various countries across the globe. They do this by various means:By setting up partnerships with local company.. By closely competing with

local companies or buying them -the most common route for MNC investments is to buy up local companies and to expand production. With their huge wealth they can easily do so.. By using local companies for supply Large MNC’s in developed countries place orders for production with small producers .Eg., garments, footwear, sports item etc. The products are supplied to MNC’s which then sell these under their brand names ti the customers. As a result, production in these widely dispersed locations is getting interlinked. MNC’s are exerting strong influence on production at these distant locations.

MNC’S are playing major role in the Globalisation process.

MNC’s have been looking for locations around the world , which

would be cheap for their production As a result of greater foreign

investment and greater foreign trade,has been greater integration

of production and markets across countries. More and more

goods and services, investments and technology are moving

between the countries. Most regions of the world are in closer

contact with each other than a decade back Foreign investment in

the countries has been rising. Foreign trade between the countries

has been rising.

WORLD TRADE ORGANISATION

World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade.Started at the initiative of the developed countries, WTO establishes rules regarding international trade,and sees that these rules are obeyed.149 countries of the world arecurrently members of the WTO (2006).Though WTO is supposed to allow free trade for all, in practice, it is seenthat the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forcedthe developing countries to remove trade barriers.

STRUGGLE FOR A FAIR GLOBALISATION

Since globalisation is now a reality, the question is how to make globalisation more ‘fair’?Fair globalisation would create

opportunities for all, and also ensure that the benefits of globalisation are shared better. The government can play a major role in making this possible. Its policies must protect the interests, not only of the rich and the powerful, but all the people in the country.