Globalisation - Challenges and Opportunities

INTRODUCTION

Globalization has become the need of the day for every country in the world - be it small or great nation, developed or developing countries, globalization, which began as early as 1980, has stimulated a result of technological progress in transport and communication and the selection of large developing nations to take the necessary improvement of investment climate and to be open to international trade and investment. The most encouraging aspect is that for the first time, poor nations are looking for with the desire and commitment to exploit the potential and opportunities of their enormous work to penetrate world markets for manufactured products and services. Since the beginning of globalization, produces witnessed an increase from less than 25 percent to 80 percent. The largest contributor to this increase is made out by Brazil, China, Hungary, India and Mexico.

GLOBALIZATION AND INDIAN ECONOMY

24 nations in the developing world, covering 3 billion people have doubled their ratio of trade to income over the past two decades. The countries that globalization is committed at a faster rate have increased their income per capita from 1 percent in the decade of the 60s 3 per cent in the decade of the 70s, 4 percent in the decade of ' 80, and 5 per cent in the decade of the '90s.

According to the World Bank, the last decade, the number of poor in the world (excluding China) grew by over 100 million. Another study found that during 1990-1998, 36 countries had an average annual growth of 2.3 percent, 34 countries experienced growth of 1.9 per cent and 39 countries had no growth with 15 countries posing a falling standard of living.

The World Bank believes that the impact of growth on poverty has varied according to the pattern of investment. For example, in India, a growth rate given is to halve poverty in some states from four to five times as much as in others. The states that have invested heavily in education and health has seen a much higher rate of poverty reduction. This view has been adopted by almost all donors to deliver their aid to developing countries.

The policies of free trade and investment continue to be under attack from many quarters, as the realities of the developing world are not taken into account. Under attack are also blatant hypocrisy and double standards that govern the behavior of rich countries to poor countries.

The developing world has not received a fair share of benefits because the rich countries have not kept their part of the agreement reached in the Uruguay Round, whereby they have agreed to reduce subsidies to their agriculture by 36 percent in exchange for lower tariffs on agricultural imports from developing countries. While developing countries have reduced their tariffs by 50 percent, subsidies of rich countries have remained unchanged.

Similarly, developed countries agreed to phase out the Multi-Fibre Agreement protectionist by 2005, but 30 percent of textile and apparel skills to face significant restrictions in 2004. The average tariff on these goods is 11 percent, which is three times as high as in other industrial products. South Asia alone loses $ 2 billion annually due to these rates.

Agriculture and woven together account for 70 percent of exports of the poor world. Developing countries lose about $ 100 billion a year due to export subsidies in rich countries and trade barriers. In rich countries, tariffs on goods from poor countries are four times higher compared to goods from rich countries. If poor countries goods have free access to rich country markets, and if you then remove all the subsidies, would add $ 1.5 billion by 2015 and the income of poor countries, and lift 300 million people from the ranks of the poor .

Why India has been lagging behind?

Generally it is said that India has failed to globalize its economy and, therefore, the true fruits of globalization have not been picked up by the common man. Development economists of India made two arguments in this regard. First, the inability of Indian economy to contain budget deficits resulting in stagnation of the economy. Secondly, the failure to reform the structure of the Indian economy so that sustainable growth is assured in the future. These issues are far-reaching effect on the globalization of Indian economy. There are two emerging parameters on the basis of failure of which could be judged. In the first place, a relatively small components exports away from agricultural to sophisticated artifacts. Secondly, decreasing the inflow of foreign direct investment.

During the year 1990-91 ie, pre-liberalization, agriculture contributed 24 percent of total exports of India. The share of sophisticated manufactured goods was 21.8 percent and the remainder is to say 54.2 percent of light was produced. On the other side of it, in the year 1999-2000, the relative share of agriculture was 17 percent (down 7 percent). The relative share of sophisticated manufactured goods amounted to 29.8 percent (up 7 percent). The relative share of light manufactured goods remained at 54.2 percent. This means that during a period of ten years there has been only 7 per cent increase of manufactures sophisticated and could be concluded that there was no appreciable degree of globalization of Indian economy.

Added to this, if these trends are compared with the economic transformation in East Asia during the period under review, India is nowhere and proves to be a 'glimpse'. The main factor attributed to this trend is the significant role played by foreign companies and joint promotion of India's exports during the reporting period.

Foreign direct investment (FDI), one of the most vital tools for the globalization of the Indian economy, is partly responsible for the failure of globalization, India. This is because FDI inflows to India exceeded a level of $ 3.3 billion compared with a minimum need at least $ 10 billion a year. India is considered a country inveterately hostile to FDI in India in comparison to the total FDI approved. However, from the 1991-2001 only 21.7 percent was the actual inflow India. This is due to the lack of initiation and correct implementation of the reforms 'second generation'. These reforms relate to market factors and administrative system under which companies must work.

Indian economy has also failed to connect to the global economy. And 'advisable for the Indian economy to attract investment not only in strategic industries, but also to simple industries. China has done the right thing by inviting investments in industries simple.

The point of view other than the globalization of the Indian economy is that the globalization of the Indian economy is a 'blessing'. A better alternative is not to opt for the process of globalization, but to go out and evolve an appropriate framework to get the maximum benefits from the existing international trade and investment situation. In this regard, it has become essential to understand the gains and losses on one side and study the benefits and dangers on the other.

There is an urgent need for cooperation with other developing nations to bring about the desired change in the existing international trade. At the same time, India needs to identify and strengthen its comparative advantages. This would result in the spirit of responding to the challenges of globalization. India has miles to go and reap the benefits of globalization for all its inhabitants. The globalization of the Indian economy must be based on the assumption of equality of opportunity for all.

CHALLENGES AND OPPORTUNITIES '

It 'true that the present world gives no option other than to participate in the process of globalization, we must together with other developing countries, find ways and means for establishing policies and programmers that actually help poor countries and more poorest of these nations. We must fight for a more just and equitable world order and develop the strength and unity to resist the imposition of unequal treaties and discriminatory trade policies. India signed the WTO agreement, but the Indian industry and business environments today are not fully aware of the commitments made by the country.

Actually, the problem with globalization is that some may benefit, and the majority may be worse. As such, it is necessary that the government takes an active part in managing and dealing with it. In recent times, an important aspect of globalization has been the outsourcing of jobs, especially hi-tech jobs from developed countries like America to developing countries like India. This has been beneficial to America as we now can specialize in areas of competitive advantage of skilled labor and advanced technology. E ', however, argued that today America is producing fewer engineers, for example, India or China and may also be some disadvantages due to poor training or other such factors. But then, this disadvantage is more than offset by wage differentials, causing unemployment, American engineers.

This is how America must face the challenges of adapting to globalization and at the same time, be more sensitive to the situation of developing countries. No wonder, globalization can also boomerang, limiting the growth in developed countries in case the workers are unemployed or their living conditions become worse because of outsourcing.

Moreover, the main driving forces of globalization today is the market and return on investment. Only countries with high growth prospects and attractive returns were processed within the fold of global trade and investment flows. Developing countries attract only 30 per cent of global investment flows, but only 20 developing countries attract more than 85 percent of total flows of FDI and 94 per cent of the investment portfolio. Globalization has thus eluded the rest of the developing countries in spite of drastic liberalization of their economic policies.

You can also say that as a result of globalization, there was great concentration of activities within certain geographical boundaries such as Asia Pacific Economic Cooperation Forum (APEC) and the European Union (EU) and this has widened the gap between rich and poor countries. The income gap between the 20 per cent of world population in countries with higher income and lower 20 per cent of world gross domestic product (GDP), the second represents only one percent. And there is no guarantee that greater liberalization in developing countries contribute to reducing this gap.

As part of the trade reforms, tariff and non tariff barriers were lowered gradually. Agreement in India with WTO rules has brought the country to remove quantitative restrictions on the number of entries from April 2003 and the free import of various items was allowed.

Without doubt, the impression has gone bad that many are due to economic globalization. Furthermore, it is believed that increased cross-border trade adversely affect the Indian economy. Moreover, Indian companies are afraid they are going to be easy targets for acquisition by foreign companies. There may be an element of truth in these perceptions, but not everyone can be real.

It 'also true that the liberalization of trade and investment have increased capital flows and the resulting competition also leads to greater economic growth. The evidence suggests that open economies have prospered better than those economies that have adopted practices for protection, as in the case of many of the economies of Southeast Asia.

Therefore, India is expected to grow to take advantage of the opportunities of globalization. Indian Affairs can not live perpetually behind protective barriers. It 's necessary to push the Indian companies in global competition and to break their lethargy. To withdraw from globalization would be a missed opportunity.

No wonder then, however, a first-class network infrastructure must be provided for the Indian industry and business so that they become effectively competitive in the global market. Along with this, any law relating to labor and production must be changed, while some new must be introduced taking into account the global standards that must be achieved. Certainly, these and other problems leaving it unattended, you can not expect that the Indian industry and businesses will be able to properly address global challenges.

No less interesting is the fact that large corporations enjoy sufficient financial cloud for eroding the regulatory powers of the nations, and trample the rights of individuals to determine their future. Considering that post-colonialism had held the promise of a world order and globalization equlitarian would provide economic equality between nations, the reality is otherwise. In the post-globalization world we live in today, inequality is increasing.

He says the idea behind globalization is free market capitalism. As the Cold War, globalization also has its own set of economic rules that revolve around opening deregulation and privatization of economic activities. In the era of globalization, we are all connected as you reach for the internet, but none is totally responsible. If the defining perspective of the Cold War was the division, was the integration to globalization. Once a country makes the leap into the system of globalization, its elites seek to position themselves in a global context.

The financial sector reforms have been particularly significant and banks are redirecting its strategy to compete with international players. The insurance sector was opened only recently and the forces of competition are already coming into play. Industrial license has been more or less abolished and the role of private capital has been improved in several areas.

Furthermore, in corporate sector in India some kind of discontinuity is visible as global competition is knocking at their doors. Foreign investments are sometimes viewed with suspicion, yet they seem to be crucial for the modernization. Now is the time when we should aim at making the Indian companies as global companies with the vast pool of skilled labor and skills available in the country. The aim should be to develop the Indian brand and products that are recognized throughout the world.

However, this requires restructuring on a scale that has been filed so far, as the economy and corporate sector are concerned. The level of performance would not need to be supported by constant innovation, cost reduction and improved quality. It should be recognized that as a result of globalistion, free roaming throughout the global economy by multinationals has encouraged many developing countries to liberalize at great speed. Therefore, mergers and acquisitions have eroded competition and monopolistic trends developed, which vitiates all the fruitful results of a global environment.

India should Capitalizing on its strength

Understanding the current state of globalization is needed to prepare the ground for the future. The main point is that globalization is still an evolving concept, and until now has been shaped largely by the rich and powerful countries to claim their benefits in the areas of manufacturing, services and finance. The developing countries were not able to provide a benefit much from their primary strengths in agriculture and work as they should. Although India has taken the initiative to echo this concern into Cancun agenda, this topic is still his attention right back.

It should be noted that developing countries are not homogeneous. Each country has its unique strengths, weaknesses and concerns, and everyone needs to frame its policies accordingly. For India to protect its market share because of gains from the globalization process, it needs to capitalize on its strengths.

India is the second largest country and largest democracy in the world. His record on freedom of speech, association and worship is quite impressive. And 'well-developed legal and financial institutions and infrastructure, and a large industrial base and sophisticated science. Its higher education system is large and capable of achieving excellence.

The most important force in India is its well-trained man power, but which is surplus English-speaking and pro-Western. It also has a large surplus of low-skill labor and unskilled. India gains could be huge if it were allowed to export this labor freely. There were also other important economic, political and social.

1. International trade tends to grow between labor sending and receiving countries.
2. When the number of immigrants from a country / region becomes significantly large and / or economically powerful, they tend to become a political force in their new country.
3. Out sourcing is designed to encourage people to get education and learn about other countries. As a result, outsourcing can become a powerful force significantly to the spread of education.

CONCLUSION

During 1990 and 2003 the volume of world trade has increased and high-income countries and middle were able to increase their share in world trade. This has happened mainly due to the opening of economies and globalization. In addition, middle-income countries have invited more foreign direct investment during the period. In contrast to this, the GDP per capita of low-income countries has increased marginally. Economic inequality has widened between different income groups. Therefore it may be tempting to conclude that globalization has not arrived up to low-income countries. In other words, globalization has been confined to developed countries and developing countries could participate in the process.

However, globalization should not be blamed for losing share of low-income countries. These countries suffer from internal problems such as rapid population growth, infrastructure bottlenecks, weak financial market conditions and so on. Increased access to globalization and its benefits require that developing countries first put in place a conducive environment necessary to ensure higher yields and larger markets for foreign investors. To get a share of global capital, technology and production, developing countries must improve their social institutions and economic reforms through administrative, legislative and judicial.

Globalization should not be thought of as a solution to everything. It merely provides opportunities. Those who take advantage, flourish and those that do not sink. Globalization should not produce equal results, but produces equal opportunities for people with the right mindset. So developing countries should focus on economic restructuring building market supporting institutions and the creation of effective regulatory mechanisms.

Left to their own countries with low income can not travel long distances. What we really need is international assistance and a support mechanism to facilitate their participation in the globalization process. The challenge now is to make globalization to global prosperity by developing unbundled. The critical need in this context are the collective and cooperative actions that should be implemented by all countries of the world and in particular those developed.