Globalization

Globalization may be defined as a primarily economic

phenomenon, which involves increasing interaction and integration
of national economic systems. This leads in turn to growth in
international trade, investment and capital flows. Moreover, there is
a rapid increase in cross-border social, cultural and technological
exchanges because of the phenomenon of globalization. After the
adoption of globalization, the country
began to experience rapid economic growth, as markets opened for
international competition and investment. The concept of
Globalization infers that the globe is a single unit which functions as
one when it comes to decision-making. In other words, Globalization
implies the free movement of goods, services and capital throughout
the world. Globalization involves the opening up of national
economies to global markets. Thus globalization affected each and
every sector of the economy including the banking sector.
Globalization led to the overall development of the banking
sector industries. The arrival of foreign and private banks with their
superior, sophisticated technology-based services forced Indian
Banks also to follow the same by going in for the latest technologies
so as to meet the threat of competition. It also led to the development
of Software Packages for Banking Applications in India. Due to this,
even those who opposed computerization in government and banks
changed their perspective and within a few years our country became
a superpower in Information technology. The entire banking sector
has undergone a restructuring during recent years as a result of
recent developments. The Information Technology revolution has
made it possible to provide ease and flexibility in operations to
customers thus making life simpler and easier. Rapid strides in
information technology have, in fact, redefined the role and structure
of banking in India. Further, due to exposure to global trends,
customers - both
Individuals and Corporate are now demanding better services with
more products from their banks. The financial market has turned into
a buyer's market. Banks are also coping and adapting with time and
are trying to become one-stop financial supermarkets. The market
focus is shifting from mass banking products to class banking with the
introduction of value added and customized products.
 After globalization, the Indian banking system has become
dependent on the global system. Thus, if any problem arises in the
global system, it will also affect the Indian banking system. Thus, this
over dependence on foreign economy may cause various problems.
One of the other matters of concern is the matter of ownership and
control. In the near future, India will be forced to apply the norms of
developed countries to the Banking Industry. Consequently, many
Indian banks (including some of the biggest) will show very poor
return ratios and dozens of banks will go bankrupt.
Thus, globalization has both positive and negative effect on the
banking sector of the economy.
Globalization
Globalization describes an ongoing process by which regional economies, societies, and
cultures have become integrated through a globe-spanning network of communication and
execution. The term is sometimes used to refer specifically to economic globalization: the
integration of national economies into the international economy through trade, investment,
capital, migration, and the spread of technology. However, globalization is usually recognized as
being driven by a combination of economic, technological, sociocultural, political, and biological
factors. When used in an economic context, it refers to the reduction and removal of barriers
between national borders in order to facilitate the flow of goods, capital, and services and labor...
although considerable barriers remain to the flow of labour.
History:
 The Islamic Golden Age was an important early stage of globalization,
when Jewish and Muslim traders and explorers established a sustained economy across the Old
World resulting in a globalization of crops, trade, knowledge and technology. Globally significant
crops such as sugar and cotton became widely cultivated across the Muslim world in this period,
while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture
 The 19th century witnessed the advent of globalization approaching its modern
form. Industrialization allowed cheap production of household items using economies of
scale, while rapid population growth created sustained demand for commodities.
Globalization in this period was decisively shaped by nineteenth-century imperialism.
 In late 2000s, much of the industrialized world entered into a deep recession. Some
analysts say the world is going through a period of deglobalization after years of
increasing economic integration. Up to 45% of global wealth had been destroyed by the
global financial crisis in little less than a year and a half.
Effects of Globalization
The effects of Globalization are manifold, affecting various aspects of the world economy to
bring about overall financial betterment.
The effects of Globalization exert intense influence on the financial condition as well as the
industrial sector of a particular nation. Globalization gives birth to markets based on industrial
productions across the world. This in turn, widens the access to a diverse variety of foreign
commodities for consumption of the customers, owing to the marketing strategies undertaken by
different corporations.
 In d u st ri a l - emergence of worldwide production markets and broader access to a range of
foreign products for consumers and companies. Particularly movement of material and goods
between and within national boundaries. International trade in manufactured goods increased
more than 100 times
 Financial - emergence of worldwide financial markets and better access to external
financing for borrowers. Worldwide structures grew more quickly than any transnational
regulatory regime, the instability of the global financial infrastructure dramatically increased,
as evidenced by the financial crisis.
 Economic - realization of a global common market, based on the freedom of exchange of
goods and capital. The interconnectedness of these markets however meant that an economic
collapse in any one given country could not be contained.
 Political - some use "globalization" to mean the creation of a world government which
regulates the relationships among governments and guarantees the rights arising from social
and economic globalization. Politically, the United States has enjoyed a position of power
among the world powers, in part because of its strong and wealthy economy. With the
influence of globalization.
 Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and
identities which embodies cultural diffusion, the desire to increase one's standard of living
and enjoy foreign products and ideas, adopt new technology and practices, and participate in
a "world culture
 Social - development of the system of non-governmental organizations as main agents of
global public policy, including humanitarian aid and developmental efforts.
 Technical-Development of a Global Information System, global telecommunications
infrastructure, Increase in the number of standards applied globally
 Religious-The spread and increased interrelations of various religious groups, ideas, and
practices and their ideas of the meanings and values of particular spaces.
The negative effects of globalization:
Opponents of globalization point out to its negative effects. Some of them are listed below.
 Globalization has led to exploitation of labor.
 Job insecurity. Earlier people had stable, permanent jobs. Now people live in constant
dread of losing their jobs to competition.
 Terrorists have access to sophisticated weapons enhancing their ability to inflict damage.
Terrorists use the Internet for communicating among themselves.
 Companies have set up industries causing pollution in countries with poor regulation of
pollution.
 Bad aspects of foreign cultures are affecting the local cultures through TV and the
Internet.
 Enemy nations can spread propaganda through the Internet.
 Local industries are being taken over by foreign multinationals.
The Positive effects of Globalization:
 Forces businesses to compete on a global scale. This allows the market place to really
work and gives consumers a better advantage. No long will businesses be able to corner markets
because politicians protect them. They'll now to compete with foreign businesses that may or may
not be able to do business more efficiently.
 Countries move to market sectors that they are better at. This simply means that the labor
in a country is going to do what it's best at. There is no need for Americans to do
manufacturing when someone inChina can do it better. Our labor is better served doing
something beneficial.
 Everyone grows more prosperous. Just look atChina and India.Before globalization they
were very poor countries. The standards of living were extremely bad. These countries
having mega economic booms. People that could never afford a car are now getting them
 Globalization in the era since World War II has been driven by advances in
technology which have reduced the costs of trade, and trade negotiation rounds,
originally under the auspices of GATT, which led to a series of agreements to remove
restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create the
World Trade Organization (WTO), to mediate trade disputes and set up a uniform
platform of trading. Other bi- and trilateral trade agreements, including sections of
Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA)
have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.
The world increasingly is confronted by problems that can not be solved by
individual nation-states acting alone. Examples include cross-boundary air and water
pollution, over-fishing of the oceans and other degradations of the natural environment,
regulation of outer-space, global warming, international terrorist networks, global trade
and finance, and so on. Solutions to these problems necessitate new forms of cooperation
and the creation of new global institutions. Since the end of WWII, following the advent
of the UN and the Bretton Woods institutions, there has been an explosion in the reach
and power of Multinational corporations and the rapid growth of global civil society.The
Global scenario group, an environmental research and forecasting organization, views
globalization as part of the shift to a Planetary Phase of Civilization, characterized by
global social organizations, economies, and communications. The GSG maintains that the
future character of this global society is uncertain and contested.
Measuring globalization
Looking specifically at economic globalization, it can be measured in different
ways. Goods and services, e.g. exports plus imports as a proportion of national income or
per head of population .Labor/people, e.g. net migration rates; inward or outward
migration flows, weighted by population .Capital, e.g. inward or outward direct
investment as a proportion of national income or per head of population
Technology, e.g. international research & development flows; proportion of populations
(and rates of change thereof) using particular inventions (especially 'factor-neutral'
technological advances such as the telephone, motorcar, broadband)
To what extent a nation-state or culture is globalized in a particular year has until most
recently been measured employing simple proxies like flows of trade, migration, or
foreign direct investment, as described above. A multivariate approach to measuring
globalization is the recent index calculated by the Swiss Think tank KOF. The index
measures the three main dimensions of globalization: economic, social, and political. In
addition to three indices measuring these dimensions, an overall index of globalization
and sub-indices referring to actual economic flows, economic restrictions, data on
personal contact, data on information flows, and data on cultural proximity is calculated.
Data are available on a yearly basis for 122 countries. Myanmar the Central African
Republic and Burundi.

Measuring Attitudes to Globalization

Measurement of attitudes toward globalization were sought after in a 2003
worldwide globalization study. The study focused on teenagers' perceptions towards
globalization and globalism, because soon they will be the adults living out the results of
today's policy. The study examined the thesis of: Teenagers are natural globalists &
Teenagers are afraid of globalization. The sample for this study included two hundred
teenagers between the ages of 14 and 18, from New York, Lebanon, Azerbaijan, and the
Philippines. The locations were urban. There was a survey administered with input from
Gene Ellis, a professor (Wirtschaftswissenschaft Seminar) at the Eberhard Karls
University of Tuebingen, and global consulting principal, economist, and former World
Bank employee Andrew Mack.
Topics of globalization and globalism were grouped into sub-categories.
Globalization categories included immigration, trade, and diplomatic relations. Globalism
included consumption, personal freedoms, technology, and culture.
The results of the research suggested that both American teenagers and international
teenagers are natural globalists and are largely in favor of globalization. Teenagers in
New York had higher levels of support for globalization than globalism. International
teens were more globalists. Importantly, all teens were very positive towards technology,
cultural exchange, trade, consumption of international goods, and immigration.
The study suggested that the future of international technology, trade, and culture
will depend on bringing the concepts of globalization and globalism together. More so,
the Internet seems to be one of the most important tools in linking teenagers globally and
this suggests that this sort of communication should be developed around the world at a
faster rate. Finally, it was suggested that the future of culture and trade will depend on the
rate of technological progress.
Pro-globalization (globalism)
Supporters of free trade point out that economic theories of comparative
advantage suggest that free trade leads to a more efficient allocation of resources, with all
countries involved in the trade benefiting. In general, this leads to lower prices, more
employment and higher output.Libertarians and other proponents of laissez-faire
capitalism say higher degrees of political and economic freedom in the form of
democracy and capitalism in the developed world are both ends in themselves and also
produce higher levels of material wealth. They see globalization as the beneficial spread
of liberty and capitalism.

Supporters of globalization argue that the anti-globalization movement uses

anecdotal evidence to support their protectionist view; whereas worldwide statistics
strongly supports globalization:The percentage of people in developing countries living
below US $1 (adjusted for inflation and purchasing power) per day has halved in only
twenty years, with the greatest improvements coming in economies rapidly reducing
barriers to trade and investment; yet, some critics argue that more detailed variables
measuring poverty should instead be studied.
Life expectancy has almost doubled in the developing world since WWII and is
starting to close the gap to the developed world where the improvement has been smaller.
Infant mortality has decreased in every developing region of the world. Income inequality
for the world as a whole is diminishing. Democracy has increased dramatically from
almost no nation with universal suffrage in 1900 to 62.5% of all nations in 2000.
The proportion of the world's population living in countries where per-capita food
supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the
mid-1960s to below 10% by the 1990s.Between 1950 and 1999, global literacy increased
from 52% to 81% of the world. Women made up much of the gap: Female literacy as a
percentage of male literacy has increased from 59% in 1970 to 80% in 2000.[13]
The percentage of children in the labor force has fallen from 24% in 1960 to 10% in
2000.
There are similar increasing trends for electric power, cars, radios, and telephones
per capita, as well as the proportion of the population with access to clean water.
However, some of these improvements may not be due to globalization, or may be
possible without the current form of globalization or its perceived negative consequences,
to which the self-styled 'global justice movement' objects.
Some pro-capitalists[citation needed] are also critical of the World Bank and the
IMF, arguing that they are corrupt bureaucracies controlled and financed by states, not
corporations. Many loans have been given to dictators who never carried out promised
reforms, instead leaving the common people to pay the debts later. They thus see too little
capitalism, not too much. They[citation needed] also note that some of the resistance to
globalization comes from special interest groups with conflicting interests, like Western
world unions. José Bové, one of the leaders of the movement, also represent French
farmers, who are protected from competition from the developing world by high tariffs
and receive very large subsidies from the European Union.