3. Globalisation Flashcards
Globalisation
Process of increasing interaction and integration between people, companies, and governments around the world
Causes of globalisation
Technology: Technological advances, such as the rise of information and communication technologies
Trade: The increase in foreign trade and world markets has contributed to globalization
Transportation: The increased speed of transportation, such as the development of container ships and planes
Globalization in India
India was an exporter of primary goods and aw materials and a consumer of finished goods during British Rule
After independence, India decided to make things themselves rather than relying on others
Some advances were made in certain areas, critical sectors such as health, housing and primary education did not receive the attention they deserved. India had a fairly sluggish rate of economic growth
Erosion of state capacity
Political Consequence of globalisation
The ability of a government to perform its functions
Due to market-driven priorities, competition, norms, etc.
Positive effects of globalisation
Economic growth
Access to new cultures
Lower prices
Spread of technology and innovation
Lower prices due to globalisation
Globalization has increased global competition, which has driven prices down and created a larger variety of choices for consumers
Economic growth due to globalisation
Globalization has led to increased trade and investment, which has boosted economic growth and development
Negative effects of globalisation
Income inequality
Loss of culture
Environmental Degradation
Income inequality in globalisation
Globalization can lead to uneven wealth distribution, where the world’s richest countries continue to dominate world trade
Increase the wage gap between high-skilled and low-skilled workers
Outsourcing for cheap labour
Elephant Graph
Fair trade
Creates more equitable trade relationships for producers and workers, particularly in developing countries
Fair Trade case study: Football
To what extent do transnational cooperations and multinational cooperations selling footballs give a fair amount of share of money earned by products sold to workers in Pakistan creating the footballs and people at the end of the supply chain during the 21st century?
Fair Trade case study- Chocolate
To what extent do transnational and multinational cooperations selling chocolate give a fair amount of share of money earned by products sold to cacao workers in Ghana and people at the end of the supply chain during the 21st century?
Free trade
Trade policy that allows the unrestricted buying and selling of goods and services between countries.
Absence of trade barriers, such as tariffs, quotas, and duties
Impact of trade on producers
Benefits:
Efficiency: Trade can encourage companies to become more efficient to compete with foreign producers.
Knowledge transfer: Trade can lead to the transfer of skills and knowledge.
New products: Trade can lead to the introduction of new products
Negatives:
Loss of sales: When a firm buys a cheaper foreign product, the domestic producer loses a sale.
Dislocation: Firms and industries that can’t adjust to more efficient foreign producers may face dislocation.
Impact of trade on consumers
Lower prices: Consumers can buy products at lower prices because countries specialize in producing goods and services where they have a comparative advantage.
Greater variety: Consumers have access to a wider range of products and services from around the world.
Improved quality: Competition from international trade encourages companies to improve the quality of their products.
Access to new technologies: Consumers are exposed to new technologies, designs, and features in products and services.
Increased employment: Global trade can open the door for greater employment growth.
Negative:
Higher prices
Tariffs and trade barriers can increase the price of imported goods, which consumers pay. For example, if the price of steel increases due to tariffs, consumers will pay more for products that use steel.
