Globalization

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GLOBALIZATION
“The greatest challenge we face today is to ensure that globalization becomes a positive force for all the world's people, instead of leaving billions of them behind in squalor. Inclusive globalization must be built on the great enabling force of the market, but market forces alone will not achieve it. It requires a broader effort to create a shared future, based upon our common humanity in all its diversity .” From the Millennium Report

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Of the world's six billion people, 1.2 billion live in extreme poverty, or on an income of roughly US $1 a day or less. Just under 3 billion people live on $2 a day or less. Industrialized countries, with 19 per cent of the world's population, account for 71% of global trade in goods and services, 58 per cent of foreign direct investment, and 91% of all Internet users. More than US$1.5 billion is now exchanged on the world's currency markets each day. Foreign investment topped US$400 billion in 1997, seven times the level, in real terms, of the 1970s. Between 1983 and 1993, cross-border sales of US Treasury bonds increased from $30 billion to $500 billion per year. International bank lending grew from $265 billion in 1975 to $4.2 trillion in 1994. The world's 200 richest people more than doubled their net worth in the four years before 1998, to more than $1 trillion. The assets of the top three billionaires total more than the combined GNP of all the least developed countries with their 600 million people.

Globalization—An unstoppable force?

There was a time when Coca-Cola was the hallmark of a global company, selling its soft drink in virtually every country, in virtually every language. But now the world is used to MacDonald’s selling hamburgers in Moscow, Beijing and Karachi, while Toyota pick-up trucks roam the African Sahel, and Sony televisions occupy a central location in homes worldwide. This is the golden age for business, commerce and trade. Never before in the history of the world has there been such an opportunity to sell as many goods to as many people as there is right now. It’s not just big companies that are in on the explosion—although they may dominate. Instant information and communications have allowed indigenous people in Guyana to market handmade hammocks through the Internet, and even the fifty or so people living on remote Pitcairn Island can sell their handicrafts anywhere. With instant information and communication, virtually everything is available to anyone, anywhere. Markets are now global and many corporations are often richer and more powerful than many countries. There has always been trade between countries and societies, but never on a scale close to today's levels. A combination of reduced trade barriers, financial liberalisation and a

technological revolution have completely changed the nature of business in virtually all of the industrialized countries. • • • The countries of the world are exporting ten times the amount they did in 1950, and more money—more than $1.5 trillion a day—now moves across borders. In 1973, that figure was only $15 billion. More people are travelling than ever before, with 590 million going abroad in 1996, compared to about 260 million in 1980. More people are making international telephone calls than ever before, and are paying less. A three minute phone call from New York to London cost $245 in 1930—in 1990 it cost just $3.

Globalization does not stop there. With the Internet and state-of–the-art telecommunications, sales and technical representatives based in India can answer customer questions in the United States. Back-office insurance jobs can be located thousands of miles from company headquarters, in different parts of the country, in different countries, and on different continents. More trade, more markets, more business, more information, more jobs, more opportunities. This is the promise of a globalized world. The tide of globalization has...
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