What are the economic consequences of globalization?
● Globalization has a major effect on the economic front of the globe.
● The narrow view of globalization in economic terms will refer to the role of International Institutions like IMF and WTO and the role they play in the formulation of economic policies across the world.
● However, in a broader sense of economic globalization, there are many other factors other than these international institutions.
● Economic globalization includes greater economic flows among different countries of the world.
● Some of these are voluntary and some of them are forced by international Institutions and powerful countries.
● Globalization has involved greater trade in commodities.
● The restrictions imposed by different countries on allowing the imports of other countries have been reduced.
● Similarly, the restriction on the movement of capital across countries has also been reduced.
● This allows the investors of the rich countries to invest their money in countries other than their own including the developing countries where they might expect better returns.
● It has also lead to the flow of Ideas across countries. For example internet and computer-related services.
● Globalization has however not led to a very significant increase in the movement of people across the globe.
● The developed countries have formulated visa policies to ensure that citizens of other countries do not take away the jobs of the citizens of their own country.
● Globalization has led to the formulation of a similar set of economic policies adopted by the government of different countries which has led to the generation of vastly different outcomes.
● Economic globalization has created an intense division of opinion all over the world.
● The people who were concerned about social justice are worried about the extent of state withdrawal caused by the process of economic globalization.
● They feel that only a small section of the population is gaining from that globalization.
● They want the government to create institutional safeguards and create social safety nets to minimize the negative effects of globalization on the economically weaker sections of society.
● Many movements across the world feel that such measures are not sufficient and have called for a halt to force economic globalization to stop.
● They feel that it would lead to danger for the poor countries and the people living within these countries.
● Advocates of economic globalization argue that it generates greater economic growth and well being for a larger section of the society when there is deregulation.
● It allows each economy to do what it does best and benefit the entire world.
● They feel that economic globalization is inevitable.
● The moderate supporters of globalization say that it is a challenge that can be responded intelligently without accepting it uncritically.
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