Globalization -Boon or Bane?
Globalization which implies a shift towards more integrated and interdependent world has long been an issue of debate among countries. Globalization according to some economists is important and inevitable for the economic development of the world. But others feel that it is a threat to employment. Environmentalists fear globalization would result in deterioration in the environment and increase pollution.
The talks in the Uruguay round (1986-1994) resulted in the formation of World Trade Organization (WTO), which brought down many international trade barriers. WTO came into existence after amalgamation of GATT and other trade promotion groups. The WTO is the chief arbitrator, which deals in trade related disputes between countries and has contributed to the acceleration of globalization.
The rate of globalization has increased due to the abolition of barriers to both trade and free flow of capital around the world. The abolition of barriers may generate more wealth and theoretically raise the standards of living in the global economy. Some East Asian countries that quickly integrated into the global economy saw rapid growth in their economy and reduction in poverty. According to the World Bank, the wages of 3 billion people living in globally integrated countries like China, India, Hungary and Mexico rose, and the number of people in poverty declined. The activities of multinational companies are based on the idea of globalization. International marketers can take advantage of the huge world markets, increased investment opportunities, easy capital inflows, cheap imports of raw materials, technology, etc. However, some analysts believe that poor countries do not stand to This caselet was written by Mylavarapu Vinaya Kumar, under the direction of D.G. Prasad, ICFAI Center for Management Research. Caselets are intended to be used as a basis for class discussion rather than to illustrate...