The term “globalization” describes the increased mobility of goods, services, labour, technology and capital throughout the world. Although globalization is not a new development, its pace has increased with the advent of new technologies, especially in the area of telecommunications. (canadianeconomy.com, 2002)
As India enter the new Millennium, they should frankly assess where they are vis-a-vis other countries in terms of numerous indicators, such as growth, steadiness and poverty. India is admittedly a big economy. In per capita terms, however, they are among the slightest in the world, irrespective of the measure. In 1999, India’s GNP stood at US $ 442.2 billion and ranked 11th in the world. What each Indian on an average could get from this total was US $ 450.
That every successive administration in the last decade has eventually conceded to globalization suggests that heedless of how different political formations package their policies in advance of the elections, there is a strong and very vocal procurement for globalization in India. This is because for some sections of Indian society and the Indian Diaspora, globalization has come as something of an El Dorado. India's growth rate has been more than doubled since the early 1980s—from 1.5 percent per capita to 3.7 percent. Their experience is conceivably enough to dismiss the collective doom elsewhere. The second counter-argument is that India has experienced the finest integration with the world economy that has managed to grow fastest and reduce poverty the most. India and a few other high performers are the key exposition for the pro-globalization argument. The intended message is that India has the best shot at lifting themselves out of poverty.
“As already noted by several analysts, as Indian industry has become more globally competitive, it has learnt to manufacture more with fewer people. As a result, much of the growth in industrial output has been achieved through the more intensive applications of advanced machinery and labor-saving tools. In and of itself, this is a sign of considerable progress. However, it does have important social consequences. It means that demand for industrial labor has not increased at the same rate, and there have not been concomitant increases in industrial job opportunities. With industrial employment barely keeping up with the increase in population, future increases in personal consumption in the urban areas will be heavily restrained by lack of increases in overall purchasing power.” (Economic Growth and Social Well-Being)
Multinational firms and financial enterprises have been thriving in setting the agenda of multilateral trade negotiations as they have been quick to see the link between improved market access abroad and raised profits at home. Cross-border labor flows, by contrast, usually have not had a well-defined patronage in the advanced countries. Rules on foreign workers have been at ease only in those rare instances where there has been fierce procurement from special interests.
Media outlets who expect globalization to increase advertising revenues have also been ardent defenders of globalization. Most of the major India businesses anticipated much higher allocations for marketing and advertising campaigns in order to persist with in the globalized Indian economy. Some estimate that the advertising industry has been one of the fastest developing industries in India as much as 25-30%. Another result of globalization has been a huge increase in salaries of senior managers, accountants, lawyers and public relations personnel working for MNCs or their local competitors. For the IT-literate, job opportunities have been plenty, and there are also openings to live and earn abroad.
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For the English-speaking upper middle-class, this has come as a blessing. With greater access to disposable income, the seduction of consumerism becomes hard to contest, and the necessity for unrestricted globalization eventually follows the temptation for new and ever more precocious consumer goods. This new and more prosperous class of Indian consumers associates India's headway with the accessibility of the latest automobile models and consumer goods. The local accessibility of imported European cosmetics and fashions, imported drinks and confectioneries have all become meaningful to those who have enough disposable income to buy such items.
Globalization has other defenders too. Importers have a powerful monetary welfare in a globalized economy. But so do exporters reliant on imported parts and machinery. Industrialists with interests in ports, shipping, international warehousing and other presence of international trade and commerce may also see globalization as favorable to their sectors of the economy. Indian industrialists who have so far failed to initiate in research and development and are missing the battle for market share are also becoming responsive to globalization in the fond hope of partnering with an MNC that will empower them to steady or enlarge their fading business ventures. Although these sections of society are in numerical terms a very small minority in the country, they are able to exercise ample authority on account of their financial punch. Their voices are far more likely to be heard in the Indian media, and they are much more likely to be able to control consequential political settlements in the country.
Take the theme that globalization brings in new technology. On a judicious basis, globalization indeed brings in new technology and opposition to globalization is not parallel to becoming technologically detached from the rest of the world. But today, almost no advocate of globalization is calling for being choosy. For instance, Coca-Cola and Pepsi were cherished into the country even though they offered little in terms of new technology. Cosmetic manufacturers and manufacturers of designer label clothes have also brought about little new technology of any effect.
The same can be said of advertising companies and manufacturers of consumer stable goods like soap, detergent, toothpaste, cereals etc. And although there has been notable investment in the manufacture of automobiles and consumer goods, the capital equipment and the assembly lines for their production is not local. Barely any design and development work takes place in India. And in many instances, all that transpire is the local assembly of knocked-down kits. So far, globalization in India has not been equivalent to an all-around technological upgradation of Indian design and manufacturing.
Advocates of globalization have often made the assertion that globalization rather than destroy Indian industry would instead stimulate the growth of new industry and cause India's economy to grow faster. Other than India's IT companies and selected MNCs, the vast majority of Indian stocks have gained from such highly volatile FDI flows.
It will take a lot of work to make globalization's rules friendlier to poor nations. Leaders of the advanced countries will have to stop dressing up policies vindicated by special interests at home as responses to the needs of the poor in the developing world. Remembering their own history, they will have to provide room for poor nations to evolve their own strategies of institution-building and economic catch-up. For their part, developing nations will have to stop looking to financial markets and multilateral agencies for the formula of economic growth. Perhaps most difficult of all, economists will have to learn to be more modest.
Economic Growth and Social Well-Being
Are Economic Growth Rates always indicative of Standards of Living?
“Economic Concepets: Globalization”, 29-07-2002, http://canadianeconomy.gc.ca/english/economy/globalization.html
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