Chapter - 4
" Globalisation "
❇️️ Globalization :-
๐นGlobalization to harmonize the economy of one 's country with the economies of other countries of the world.
️ ❇️ Liberalization :-
๐นLiberalization The process of removing barriers and restrictions by the government is called liberalization.
️ ❇️ Privatization :-
๐นSelling public sector companies to the private sector in a phased manner.
️❇️ MNCs :-
๐นA company that controls production in more than one country.
️ ❇️ INVESTMENT :-
๐นThe money spent in the purchase of assets such as land, building, machines and other equipment is called investment.
️ ❇️ Foreign Investment :-
๐นThe investment made by multinational companies is called foreign investment.
️ ❇️ Free trade :-
๐นWhen trade between two countries takes place without any restrictions, it is called free trade.
❇️️ World Trade Organization (W.T.O.) :-
๐นIts purpose is to liberalize international trade. ️
❇️ WTO Main Objective :-
๐นTo liberalize foreign trade. Launched on the initiative of developed countries. Determines the rules related to international trade. Forces developing countries to remove trade barriers. Developed countries have unfairly maintained trade barriers.
❇️ World Bank: -
๐นWorld Bank International organization providing financial assistance to its member countries.
️❇️ SEZ :-
๐นTo attract foreign companies for investment by providing additional facilities in a particular area. ️
❇️ Connecting the world's production to each other: -
๐นMultinational companies establish production units at the same place which is close to the market, where skilled and unskilled labor is available at low cost and government policies are favorable. The money invested by them is called foreign investment.
๐นSometimes they produce jointly with the local companies of these countries. Provides funds for additional investment to local companies and the latest technology of production. Sometimes spreads the production by buying local companies. Places production orders to small producers. Especially clothing, footwear and sporting goods.
❇️ Methods of establishing control over production or production by multinational companies :-
๐นTo produce jointly with local companies. Joint production also provides the local company with additional investor funds and the latest technology of production. Buying out local companies and then expanding the production. Ordering production to small producers.
๐นMNCs are exerting influence on production at remote locations, by using local companies for supply through partnerships with local companies and by closely competing with or purchasing local companies, thereby intertwining production at distant locations .
❇️ How does foreign trade integrate markets?
๐นForeign trade provides opportunity to the producers to reach the markets outside the market of their own country. Importance of goods produced in another country expands the options before the buyers.
๐นThe producers of two countries can compete even though they are away from each other, due to which the price of the same commodity starts to be the same in two markets.
❇️ Factors that make globalization possible :-
๐นDevelopment of technology Improvement in transportation Information technology Telecommunications and communication satellites Elimination of barriers by the government Internet.
❇️ Impact of globalization :-
๐นFor consumer : More choices, products than ever before of excellent quality, low price and relatively high standard of living.
๐นNew employment opportunities.
๐นLocal companies supplying raw materials to multinational companies prospered.
๐นMany top Indian companies have emerged as MNCs like: Tata Motors, Infosys, Ranbaxy Asian Paints etc. ️
❇️ Efforts for equitable globalization :-
๐นFair globalization will provide opportunities for all. The policies of the government should be to provide protection to all. The government can ensure that there is proper implementation of labor laws and workers get their rights.
๐นThe government can make agreements with the World Trade Organization for equitable rules. May form alliances with developing countries with common interests.
❇️ Effect of Globalization in India :-
๐นConsumers have benefited from better competition between local and foreign producers.
๐นConsumers have more choices than ever before and they are now benefiting from the excellent quality and low cost of many products.
๐นForeign investment has increased.
๐นNew jobs have been created in industries and services.
๐นTop Indian companies have benefited from increased competition and raised their production standards by investing in the latest technology and production systems.
๐นEnabled large Indian companies to emerge as MNCs.
๐นNew opportunities have been created for the service provider companies, especially the companies with information and communication technology. ️
❇️ Trade barriers and their importance :-
๐นThose rules and laws which restrict the import and export of countries.
๐นThe government can use trade barriers to increase or decrease foreign trade and to decide what types of goods should be imported into the country in quantity. ️
❇️ Special Economic Zone :-
๐นEstablishment of such industrial areas by the Central and State Governments to attract foreign companies for foreign investment in India where world class facilities - electricity, water, road, transport, storage, entertainment and educational facilities are available. .
