Topics: Economics, Macroeconomics, World Bank Pages: 14 (4745 words) Published: March 21, 2013

Globalization is not a single concept that can be defined and encompassed within a set time frame, nor is it a process that can be defined clearly with a beginning and an end. Furthermore, it cannot be expounded upon with certainty and be applicable to all people and in all situations. Globalization involves economic integration; the transfer of policies across borders; the transmission of knowledge; cultural stability; the reproduction, relations, and discourses of power; it is a global process, a concept, a revolution, and “an establishment of the global market free from sociopolitical control.” Globalization encompasses all of these things. It is a concept that has been defined variously over the years, with some connotations referring to progress, development and stability, integration and cooperation, and others referring to regression, colonialism, and destabilization. Despite these challenges, this term brings with it a multitude of hidden agendas. An individual’s political ideology, geographic location, social status, cultural background, and ethnic and religious affiliation provide the background that determines how globalization is interpreted. In 1995, Martin Khor, President of the Third World Network in Malaysia, referred to globalization as colonization. Concurrently, Swedish journalist Thomas Larsson, in his book The Race to the Top, The Real Story of Globalization (2001) stated that globalization: “Is the process of world shrinkage, of distances getting shorter, things moving closer it pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit, with somebody on the other side of the world” “Globalization is a process that encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities’’.

Economic globalization
Economic globalization takes many forms. It may involve trade between individuals or businesses in one country with those of another. Globalization of this sort is as old as recorded history. Ancient coastal tribes traded with those in the mountains and deserts, each gaining prized goods they could not otherwise have enjoyed. Today, we take for granted the fact that much of what we consume or use originated elsewhere, often in a strange foreign land. Or businesses may decide to produce their products not only at home but also in other countries, either to evade the tariffs or quotas of countries where they wish to sell their products, or to cut their costs of production by, say, hiring cheaper labor. Then globalization involves the bundling together of financial capital, technology, and other strategic inputs in order to transfer them as direct foreign investment (hereafter, direct investment) in another country. Direct investment implies control over the assets transferred abroad. Foreign investments that don't involve control are called foreign portfolio equity investments (hereafter, portfolio investment). They are more likely to be made by financial institutions or investors like pension funds, insurance companies or investment trusts, which are interested only in a return on their investments commensurate with the risks they are taking. If returns fall or risks rise, portfolio investment is much less dependable than direct investment as a source of longer-term finance for a country's development. The activities of transnational corporations are a still deeper form of globalization. They coordinate their activities with many entities throughout the world, producing in many places with complex networks of production and finance. This form of globalization has recently been named "alliance capitalism," in order to stress the growing importance of strategic alliances between business entities, as businesses search for ways to protect their competitive advantages and global market positions.

Governments also compete for economic advantage globally. They often...
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