Globalization: Key Points

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Globalization Key Points

• It is coming to an already divided world and may
  have the effect of accentuating those divisions
  in some places, or it may offer unique access to
  the global marketplace for all. The fact that
  something is global does not mean it has the same
  effect everywhere.

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Globalization Key Points

• Globalization will be particularly difficult for
  inward looking or protectionist economies such as
  predominated in Latin America and India and the
  former Soviet Union for a long time.
• In contrast, East Asia has developed the Tigers
  on the basis of export-led growth, for which
  globalization should be beneficial--though very
  competitive

3
Globalization Key Points

• For globalization to succeed, it needs openness,
  and is the next stage in the opening of the world
  economy begun by GATT, the WTO etc. The economic
  principle behind globalization is comparative
  advantage.
• It is the result of the increasing integration of
  economies around the world, and acquisitions and
  mergers are part of the business response to
  increased scale that comes with globalization

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Globalization Key Points

• However, we shall have to consider whether
  globalization can be bad for some states whether
  there are winners and losers whether the game
  is stacked in favor of those who are already
  winners and what price we have to pay for the
  new global economy--is it (a) inevitable? (b)
  progress?

5
Globalization Key Points

• The IMF recognizes four principal components of
  the process of globalization
• 1. The growth of international trade--the global
  marketplace
• 2. The ease and size of capital movements
• 3. The movement of people to where they are mose
  needed
• 4. The free spread of knowledge, information and
  technology.

6
Globalization Remaining Questions

• Though openness has increased the value of world
  trade more than otherwise would have been the
  case, the gap between rich and poor countries,
  and between rich and poor in rich countries is
  growing
• How does globalization relate to the formation of
  Trade clubs among, particularly, the richer
  nations?

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Globalization Remaining Questions 2.

• Do we have the appropriate institutions and
  instruments to manage a world based on
  globalization?
• The burden moves from sovereign law to
  international law
• What are the sanctions for rogue states who
  operate outside the norms, or organizations
  beyond the control of states?

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Globalization Remaining Questions 3

• Many of the institutions that become increasingly
  prominent in a globalizing world are largely
  unaccountable to the general public. These are
  institutions such as the World Bank, the WTO, the
  IMF and, you might say, even the European Union.
• This, we refer to, as the Democratic Deficit of
  globalization

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Globalization Remaining Questions 4

• What does this process do for differences that
  people consider important, and wish to retain?
• For instance, the question of cultural
  domination by the West and by the English
  language. Is this the reason for the rise of,
  for instance, militant Islam, al-Qaeda?
• We must not forget other aspects of globalization
  such as the environment (e.g. Global Atmospheric
  Change)