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Is Globalisation ending or changing? Pros & Cons of Globalisation for Developed & Developing Nations

Is Globalisation ending or changing? Pros & Cons of Globalisation for Developed & Developing Nations

Relevance

  • GS 1 || Indian Society || Globalization || Dimensions of Globalization

Introduction

  • Some praise globalization for opening borders and connecting cultures and politics. Others blame it for disrupting local economies and eliminating jobs. The fact is that globalization has been around since ancient times, and it is fully integrated into different aspects of modern life.
  • As a consumer, your clothing, foods, and electronic gadgets are often produced by multinational companies located around the world. And as an investor, afinancial advisor could help you diversify your portfolio with emerging market funds and other foreign investments.

What Is Globalization?

  • Globalization is defined as a process that moves businesses, organizations, workers, technology, products, ideas, and information beyond national borders and cultures.
  • Supporters say that this is making countries more interdependent on free trade. But critics maintain that it is also concentrating wealth in the corporate elite, disrupting industries and making local economies more vulnerable.
  • This process has roots in ancient civilizations that traded for valuable commodities that were unavailable in their homelands. But today, it’s seen how large corporations similarly thrive as multinational businesses with offices and supply chains stretching around the globe.

Advantages of Globalisation

  • In India, as in other parts of the world, people have grown accustomed to the benefits of globalization. Access to global products, the transformation of consumer and business technologies, and falling barriers to trade and travel have redefined life over the last 20-30 years.
  • That “phase” of globalization appears to be over. The dominant narrative now in political circles, corporate boardrooms, and the mainstream media is that nationalism and protectionism are on the rise, and globalization is in retreat.
  • Globalization Broadens Access to Goods and Services 
    • It’s hard to argue with the point that globalization makes more goods and services available to more people, often at lower prices. If you have disposable income and you’re buying a product that comes from abroad, you’re benefiting from globalization to some extent. Business owners also benefit by having access to a bigger market for their goods and services.
  • Globalization Can Lift People Out of Poverty
    • The argument that globalization has lifted people in developing countries out of poverty is somewhat controversial because opinions differ as to the quantity and quality of the jobs created by globalization.
    • But the general wisdom is that globalization has increased job opportunities in capital-scarce, labor-rich countries, i.e. developing countries.
  • Globalization Increases Cultural Awareness
    • Globalization’s defenders say it has increased cross-cultural understanding and sharing.
    • A globalized society boosts the rate at which people are exposed to the culture, attitudes, and values of people in other countries. That exposure can inspire artists, strengthen ties between nations, and dampen xenophobia.
  • Information and Technology Spread More Easily With Globalization
  • Art and culture aren’t the only things that spread more easily in a globalized society. The same goes for information and technology.
    • Example –Rise of mobile banking in Kenya or the practice of micro-lending. Civil society groups can look to other countries for inspiration and good ideas can spread more easily.
    • Companies that have learned to thrive in this increasingly connected world have built large global businesses at astonishing speeds. Uber, for example, penetrated more than 80 countries in just six years.
    • Netflix launched its streaming service in 2010 and has expanded to more than 190 countries in less than seven years, while the augmented-reality game Pokémon Go was being played in over 125 countries and generated nearly $1 billion in revenue just six months after its launch.

Disadvantages of Globalisation

  • Globalization may be viewed as having brought both global opportunities as well as challenges forcing humanity to some extent to become one single entity, thus affecting the local identity With regards the challenges of our time, it is said that individuals across continents increasingly undergo a dilemma that affects their very local identities.
  • Increasing Inequality
    • The general complaint about globalization is that it has made the rich richer while making the poor poorer.
    • The UN Development Program reports that the richest 20% of the world’s population consumes 86% of the world’s resources while the rest 80% consumes just 14 percent.
  • Globalization Hasn’t Protected Labor, Environmental, or Human Rights
    • In theory, globalization can be an opportunity to spread values and practices like environmentalism and labor rights throughout the world. In practice, that spread has been slow and imperfect.
    • For example, rather than exporting the labor protections that a company might have to abide by in the U.S., it might follow lower standards in another country where labor is not protected.
    • Some argue that globalization has caused a “race to the bottom” in which companies actively seek the countries with the weakest labor and environmental protections and the lowest wages.
    • And while globalization has increased the flow of goods, services, and capital, there are still plenty of tax havens, meaning that much of the value added by globalization is not captured and redistributed by governments.
  • Suppression of liberal democracy:The malaise of slow economic growth, wealth inequality, and rising unemployment provided a perfect breeding ground for political leaders to appeal for nationalism as the solution to political and economic ills.
    • The economic rise of China under an authoritarian regime also raised doubts over the efficacy of liberal democracy in solving pressing domestic challenges.

The local identity has been subsumed by the global identity which can be depicted by- 

  • Loss of traditional modes of entertainment like dramas and puppetry for Netflix and Western music.
  • Change in tastes in the younger generation concerning cuisines. For example, Traditional snacks are being replaced by McDonald’s and other such global chains.
  • Change in value systems from respect to elders to everyone being called by their name in a corporate setting and predominance of individual identity over collective identity.
  • Replacement of handlooms and Khadi by Global brands like Reebok and Armani.
  • Local artifacts and art traditions are losing market due to competition from cheap western made goods.
  • The clothing such as dhoti, kurta, saree which represent traditional identity is facing a challenge from the Western concept of Jeans, t-shirts, skirts, etc.

Blend of Global and Local- GLOCAL

  • However, there is an emergence of a mixture of both global and local identity which is creating a GLOCAL identity. This can be seen in the form of Indo-Western fusion in dressing style, McAloo Tikki, burgers instead of traditional beef burgers, Barbie dolls with sarees, etc.
  • The fusion of Indian and western concepts in clothing and music is manifested in the form of a good amalgamation of Indian as well as western identity.
  • Rising Gideolisation i.e. Globalisation Localisation has been witnessed all over the world. For example, Mcdonalds’ have recently started avoiding pork and beef in India mainly because of the Indian value system.
  • Also, yoga which is an Indian Philosophy is being appreciated all over the world.
  • Identity, therefore, becomes a central aspect of the capacity-building process in which both local and global elements need to be harmonized. The identity construct needs to be inclusive, incorporating the diversity of current social distinctions as well as placed in a framework that encompasses the entire world. Such a construct might be global identity, the perception of being mutually linked with humanity.

Conclusion

  • Globalization isn’t ending, it’s changing. What we are witnessing is the emergence of a new global economy, an economy without borders propelled by digital rocket boosters.
  • Advanced digital manufacturing systems (“Industry 4.0″), for example, are enabling businesses to alter their global production and distribution networks by making it feasible to operate smaller, more flexible facilities closer to customers, instead of concentrating production in large plants in countries with low labour costs.
  • Given its enormous potential for economic gains, it would be a waste to categorically repudiate the phenomena of Globalisation. Instead, there is a need for a better understanding of Globalization’s effects and the interplay of its economics with other issue areas.

Mains model Question

  • Globalization, which was once the preeminent dynamic integrating the world, now appears to be a spent force.” Examine the situation critically.