Globalization Flashcards
(11 cards)
What is the role of MNCs in the globalization process?
- Multi-National Companies (MNCs) are looking for cheap locations for their production.
- Foreign investment in developing countries has been raising.
- A large part of the foreign trade is controlled by MNCs.
- More and more goods and services, investments and technology are moving between countries.
- MNCs, bring not only their products to a country but also the new business policies and cultures.
- Most regions of the world are in closer contact with each other than a few decades back by MNCs. Thus, MNCs are playing major role in the globalization process.
- MNCs are helping in increasing competitiveness among native companies. 8. Latest models of vehicles in different countries are introduced by the MNCs in the globalization process.
What are the various ways in which countries can be linked?
Besides the movement of goods, there is one more way in which countries can be connected. This is through the movement of people between countries. People usually move from one country to another in search of better income, better jobs or better education. In the past few decades, however, there has not been much movement of people between countries due to various restrictions.
How is information technology connected with globalization? Would globalization have been possible without expansion of IT?
-Information and communication technology has played a major role in spreading out production of services across countries.
-The development in the information and communication technology has facilitated to contact one another around the world, to access information instantly and to communicate from remote areas in much lesser time than before and at very low cost.
-Internet facility allows us to send instant electronic mail (e-mail) and talk (voice mail) across the world at negligible cost. In this way information technology is connected with globalization. No, Globalization would not have been possible without expansion of IT.
What do you understand by liberalization of foreign trade?
Liberalization of foreign trade means removing barriers or restrictions set by the government i.e. businesses are allowed to make decisions freely about what they wish to import or export
Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can be imported. This is known as quotas. Can you explain using the example of Chinese toys, how quotas can be used as trade barriers? Do you think this should be used? Discuss
If the Indian Government imposes quotas on Chinese toys then the supply of these toys in the Indian market would be limited up to the quota. Thus, Indian producers will face less competition because there is a little option for the Indian buyers to purchase Chinese-toys at cheaper prices and the demand for the Indian toys will increase. In this way, quota can be used as trade barrier. No, this should not be used now. Competition helps in improving the quality of the products at the same price and in diversifying their activities. So, Indian producers should compete with producers globally.
What do you understand by globalization?
-Globalization is the process of rapid integration or interconnection between countries.
-MNCs are playing a major role in the globalization process.
-Globalization means integrating or interconnecting the economy of a country with the economies of other countries under the conditions of free flow of trade, technology, capital, movement of people, etc across international borders.
What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
-The Indian government, after Independence, had put barriers to foreign trade and foreign investment.
-This was considered necessary to protect the producers within the
country from foreign competition.
-Industries were just coming up in the
1950s and 1960s, and competition from imports at that stage would not
have allowed these industries to come
up.
-Thus, India allowed imports of only essential items such as machinery, fertilizers, petroleum
etc.
-Note that all developed
countries, during the early stages of development, have given protection to
domestic producers through a variety
of means.
-Starting around 1991, some far reaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers
around the globe.
-It felt that competition would improve the performance of producers within the country since they would have to improve their quality. This decision was supported by powerful international organizations.
How would flexibility in labor laws help companies?
- Goods can be imported and exported easily and at cheaper rate.
- Foreign companies can set up factories and offices in that country.
- With the liberalization of trade, businesses are allowed to make decisions freely about what they wish to import or export
How has liberalization of trade and investment policies helped the globalization process?
Liberalization of trade and investment policies has helped the globalization process by making foreign trade and investment easier. Earlier several developing countries had placed barriers and restrictions on imports and investments from abroad to protect domestic production.
What are the factors that have enabled globalization?
(i) Technology: Rapid improvement in information and communication technology has been a major factor that has stimulated the globalization process. To access information instantly and to communicate from remote areas, devices such as telephones, mobiles and computers are very useful. Further, it has played a major role in spreading out production of services across countries. (ii) Liberalization: Liberalization of economy means to free it from direct or physical controls imposed by the government. In other words, removing barriers or re-strictions set by the government is what is known as liberalization.
What is G20?
The G20 or Group 20 is an intergovernmental forum comprising of 19 sovereign countries, the European Union and the African Union.
