globalization trade and development

8/3/2019 Globalization Trade and Development

1/16

GLOBALISATION TRADE

AND DEVELOPMENT

By Mohammad Ayaz Khan(E)15


2/16

GLOBALISATION

Definition:

The movement towards the expansion of economicand social ties between countries through the spread

of corporate institutions and the capitalist philosophythat leads to the shrinking of the world in economicterms.

Economists define it as the free movement of goods,

services, labor and capital across borders. World Bankdefines globalization as "Freedom and ability of individuals and firms to initiate voluntary economictransactions with residents of other countries"(Milanovic, B 2002).


3/16

GLOBALISATION

Globalisationcould involveall thesethings!

BELONGINGS OF GLOBALIZATION TRADE AND

DEVELOPMENT


4/16

THE BRIGHT SIDE OF

GLOBALIZATION


5/16

DEVELOPMENT AND INTEGRATION OF

ECONOMIES

The increasing reliance of

economies on each other

The opportunities to be able to

buy and sell in any country in

the world

The opportunities for labour

and capital to locate anywhere

in the world

The growth of global marketsin finance

Stock Markets are now accessiblefrom anywhere in the world!


6/16

DEVELOPMENT OF ECONOMIES

Made possible by:

Technology

Communication networks

Internet access

Growth of economic cooperation trading blocs

(EU, NAFTA,SAFTA etc.)

Collapse of communism

Movement to free trade


7/16

TRADE ?

Benefits of Trade:

Increased choice

Greater potential forgrowth

Increase internationaleconomies of scale

Greater employment

opportunities

Trade has led to massive increases in wealthfor many countries.


8/16

8 of 42

THE GLOBAL FREE-TRADE

The argument for free trade rests on the of

intuition:

Comparative advantage. A country enjoys a

comparative advantage in the production of a good

if the production of that good has a lower

opportunity cost than it would have if produced in

another country.


9/16

CORPORATE EXPANSION

Multi-nationalor trans-nationalcorporations (MNCs

or TNCs) businesses witha headquartersin one country but

with businessoperations in anumber of others.

No matter where you go in the world, certainbusinesses will always have a presence.


10/16

CORPORATE EXPANSION

Characteristics:

Expanding revenue

Lowering costs

Sourcing raw materials

Controlling key supplies

Control of processing

Global economies

of scale

Controlling supplies may be one reasonfor global expansion.


11/16

THE DARK SIDE FO GLOBALIZATION


12/16

TRADE ? Disadvantages

of trade:

Increase in gap betweenthe rich and the poor

Dominance of global tradeby the rich, northernhemisphere countries

Lack of opportunities forthe poor to be able to haveaccess to markets

Exploitation of workersand growers How far does trade help children?


13/16

CORPORATE DOMINATION Key Issues:

Damage to the

environment?

Exploitation of labour?

Monopoly power

Economic degradation

Non-renewable resources

Damage to cultures

Shell and Nikes activities havecome under severe criticismin some quarters.


14/16

ANTI GLOBALIZATION

MOVEMENTS

The establishment of the WTO in

1995 and subsequent protests led

to a large-scale anti-

globalization movement that is

primarily concerned with the

negative impact of globalization in

developing countries. Their

concerns range from environmental

issues to issues like democracy,

national sovereignty and the

exploitation of workers

Naomi Klein argues in her book No Logo,

anti-globalism can denote either a single

social movement or an umbrella term that

encompasses a number of separate social

movements such as nationalists and

socialists. In either case, participants stand

in opposition to the unregulated political

power of large, multi-national

corporations, as the corporations exercise

power through leveraging tradeagreements which in some instances create

unemployment, and damage

the democratic rights of citizen


15/16

OTHER ISSUES:

Accountability

of Global businesses?

Increased gap between rich and

poor fuels potential terrorist

reaction Ethical responsibility of business?

Efforts to remove trade barriers

Exploitation of child labor

Environmental degradation

Destruction of indigenous cultures

Destruction of small farmers

Genetically engineered foods

There are plenty of people who believe thatglobalisation is a negative development,protests at the G8 summits, pollution, povertyand concern over GM crops are just some ofthe issues.


16/16

Thank you

globalization trade and development

Documents