Globalization Is Not a New Process - Research Paper Example

Globalisation Is Not a New Process Table of Contents Introduction 3 Discussion 4 Critical Analysis about Globalisation Is Not a New Process 4 Conclusion 11 Introduction Globalisation can be delineated as economic integration of varied aspects that have the potentiality to develop opportunities along with creating barriers with respect to sustainable development. The ongoing process of globalisation tends to link different perspectives of people, society and countries together. The interconnection of people along with the transfer of culture, knowledge and other policies beyond boundaries of any country has certainly resulted in the creation of a global village. This positively influenced and minimised the barriers with respect to national and international boundaries. The process of globalisation depends on trade and financial flows that have the potential to bind different economies of the world. Additionally, the advancements in information technology and mass media also contributed equally in reducing the barriers persisting amid different nations (Warrier & Wunderlich, n.d.). According to the report of UNESCO (2010), globalisation is not a new procedure, as it existed since the commencement of the Second World War that not only restricted economic development but also affected the people living in then respective societies. Globalisation has become one of the critical issues in the 21st century because of the increased level of technological advancements. From an economic perspective, globalisation has the potential to bring change in the world by ways of promoting free trade, maximising the flow of capital between nations and augmenting the extent of investments. The improved relations between several countries thus facilitated economic growth, as new markets have been developed and increased their scope of maintaining long-term sustainability due to the procedure of globalisation (Mrak, 2000; Warrier & Wunderlich, n.d.). In relation to the above context, the essay intends to discuss critically globalisation to be not a new process in this contemporary era. Discussion Critical Analysis about Globalisation Is Not a New Process The process of globalisation can be related to making wide interactions amid various individuals and nations. The process not only affects international trade but also makes extensive impact on the investment level and other related elements that have the potential to develop an economy. The process of globalisation is not new because people are engaged in trade and other allied activities since past centuries. The buying and selling of goods is such a process, which has already existed from past several years. For instance, the existence of the Silk Road that connected Europe, China and other Asian nations indicates the prevalence of trade relations in early middle ages (Tisdell & Sen, 2004). Additionally, it indicates the fact that people were engaged in the process of buying, selling and trade markets from early ages. Since the commencement of World War II, the concept of globalisation has been rapidly advancing. The demand for varied products during that period was high and due to the unavailability of required goods, people were engaged more in developing trade relations with one another. The increased importance of globalisation in this present day context is associated with enhanced economic activity as well as indicating improved foreign direct investments. The improved trade relations create more opportunities for foreign investments that in turn are followed by industrial revolution. The industrial revolution thus certainly has resulted in contributing positively towards refurbishing the process of globalisation (Bourguignonc et al., 2002; Warrier & Wunderlich, n.d.). There lay certain facts, which indicate that globalisation is not a new procedure. In this regard, one of such facts could be ascertained as that the level of gross domestic product (GDP) and foreign investments of worldwide economy has improved over the years except in the case of recession. During the period of Second World War, globalisation was duly considered to be a rapid process due to the implementation of “General Agreement on Tariff and Trade (GATT)” and other technological advancements. Moreover, globalisation was also considered to be a trend, which led to regionalism. In the year 1990, the impact of regionalism had made drastic changes in the world economy. Additionally, the implementation of the “Free Trade Agreement (FTA)” played a decisive role in integrating varied financial indicators, which can be related with the globalisation procedure. The introduction of different trade policies has proved to be effective in terms of globalisation in the form of minimising trade barriers that are useful for the growth of an economy in long run (Urata, 2002). The reduction in trade barriers has certainly facilitated free movement of goods, which raised and enhanced worldwide economic growth. The features of globalisation that can be associated with the Second World War remark that the process is not new. The post war period was marked by the introduction free market in economy, which in turn offered opportunities for expansion in terms of trade and improved investments. The development of free trade market had also facilitated the flow of goods, which made increased demand for imported products. Furthermore, the involvement of the respective governments of varied nations has reduced barriers in terms of commerce and trade. The increased opportunity of trade between different nations facilitated the development of different industrial sectors and establishment of factories. The development of new foreign markets as well as involvement of business partners can be witnessed over the years due to the process of globalisation. The improvement in technologies is viewed to be one of the crucial factors, which is closely related to globalisation (Mrak, 2000; Warrier & Wunderlich, n.d.). Moreover, the improvement in information technology has also influenced economic development by following the procedure of globalisation. However, the impact of globalisation is controversial, as it has the potentiality to raise the living standards of the individuals by enhancing their respective economic development (Kolk & Pinkse, 2008; The World Bank Group, n.d.). The process of globalisation existed since early 19th century, which was marked as the period of industrial revolution and trade liberalisation. The period 1800 to-1913 indicates rapid development in globalisation process due to remarkable improvements made in global trade and reduction in transportation costs. Specially mentioning, the establishment of global trade during that period improved the trade relations between different nations. On the other hand, the reduction in transportation costs enabled the flow of goods amid various countries throughout the globe. In addition, the development of railways and other means of transport had certainly made the export and import activities more flexible. Globalisation is not a new process because its first stage had continued till the outbreak of the Second World War. The economic crisis, which occurred during the conduct of the two World Wars, was the major cause for the termination of globalisation process. Such economic crisis had imposed a negative impact on the flow of goods and capital, which in turn, reduced the growth of economy (Godart et al., 2012; The World Bank Group, n.d.). The end of World War II resulted into the establishment of International Monetary Fund and other different trade policies that were effective in reducing any sort of trade barriers persisting amid different countries. The flow of goods as well as capital had a positive impact on the developing economies. Moreover, the changes in technology during the post war period certainly improved communication and increased the space for market that in turn implied positive impacts of globalisation on the economic growth. The establishment of distinct international institutes including World Trade Organisation (WTO) has proved to be useful for promoting free trade between different nations. Globalisation has positively affected the economies of different Asian countries including China and Singapore. From a different perspective, it can be further argued that all the developing economies are not involved in the same (Urata, 2002; Warrier & Wunderlich, n.d.). For instance, fall in oil prices in early 1980s had affected the trade relations, as a result of which, the share of oil exporters got reduced at large. This indicates the fact that globalisation process involves opportunities as well as challenges that are likely to have negative impacts on an economy. The implementation of free trade policy after the Second World War had proved to be beneficial for world economy because of increased access to producers of different countries. Apart from this, the approach increased better access to technology of other countries, which in turn imposed a positive impact on financial positions of an economy. The globalisation process also increased the level of market competition, as the producers are more willing to specialise in producing a wide assortment of products (Morrison, 2011; Urata, 2002). The changes in pattern of trade are found to be different amid developed and developing nations throughout the globe. In such case, the execution of a free trade policy and the development of various governmental institutions have proved to be beneficial, as they have facilitated trade between such countries. It can be apparently observed that the share of overall exports had increased in early 1995, which indicates the fact that globalisation has a positive influence on trade relations. However, the negative impacts of globalisation can be analysed from the evidence of having fall in prices of raw products in early 1990s. This fall in the prices of primary products as compared to the manufactured goods affected the overall exports and imports level at large. This indicates that globalisation is not a single process, but is associated with different other activities that possess the potentiality of developing worldwide economy (Urata, 2002; The World Bank Group, n.d.). The period of 19th century signified major improvements in technology with respect to transportation that positively influenced international trade. In addition, the change in transportation costs had also positively influenced the import and the export activities. The costs of transport continued to fall till the 20th century. Moreover, increase in inter-war tariff rate during the post war period also influenced trade relations with respect to globalisation process. The industrial revolution was one of the major factors for the development of industrial capitalism, which got influenced by globalisation (Dicken, 2014). According to Ateşc (2008), globalisation process is dependent on several factors that are mainly linked with trade and economic liberalisation. It has been further argued in this context that globalisation is related to the notion of liberalism. However, globalisation is related to a number of areas, as a result of which certain factors are often being underestimated. The end of 16th and 17th century was marked by political changes that caused modernisation. Apart from these, the economic as well as social changes during that period also affected industrial revolution (Mrak, 2000). The industrial revolution caused the integration of world economy and different regions were dependent on each other in order to maintain trade relations. Industrial revolution was one of the driving forces behind capitalist economy with respect to the globalisation process. Apart from industrial revolution, other factors could be related to globalisation as well that include colonisation, development of trade relations between different nations and most vitally resettlement of individuals from Europe (Pinkse & Kolk, 2012; Lane, 2012). In addition, the reduction in transportation costs was also found to be effective in maintaining trade relations between different nations. The industrial revolution was followed by price insurgency because of increased demand for goods and services. The increase in population was the major cause for expansion of demand, which certainly increased the level of production and thus made the industries to demand more labour force. The emergence of new manufacturing sector has increased employment opportunity, which proved to be effective towards growing worldwide economy (Dicken, 2014; Urata, 2002). The globalisation process is dependent on certain important factors that encompass the global market along with maintaining proper balance between different nations and individuals. Therefore, it can be analysed from these facts that globalisation is not a new phenomenon but exists since the outbreak of the World Wars (Mrak, 2000). The globalisation process has positive as well as negative implications on an economy. From the above discussion, it can be estimated that the implementation of different trade policies by the respective governments of the nations has reduced trade, due to which economic growth process has become faster. Moreover, the established international institutions had reduced the power of local nations. On a further note, improvements in technology were another factor that positively influenced the globalisation process (Lane, 2012). It has been further argued that financial instability is the other factor that has the potential to affect the economies of developing nations. The capital market has remained open till the early 20th century because the governing authorities of different nations were unable to manage the flow of capital. In mid 90s, global financial crisis and fall in prices of the products have drastically affected the process of globalisation. Despite the financial crisis, a number of developed economies have maintained the inflow of foreign capital for the purpose of ensuring long-term growth (The World Bank Group, n.d.). Notably, the international migration in early 20th century had resulted in the reduction in wage gap, as a result of which the rate of wages for unskilled labour had changed. During 1890s, the huge level of migration of people had resulted in making changes in the respective markets for varied products and/or services. Thus, it is evident that change in the flow of capital and migration of people have largely affected the process of globalisation at large. Globalisation is often regarded as an integration procedure, which cannot be duly considered as a new phenomenon in this modern world (Lane, 2012; Mrak, 2000). Conclusion From the above analysis and discussion, it is apparent that globalisation is not a new process, as this existed since the period of World War I or II. The analysis relating to the above stated context has been mainly made with respect to post World Wars and the positions of economy. The existence of globalisation in post-war period indicates that the process is not new. Globalisation process not only improves the trade relations between nations but also positively contributes to economic development. It is worth mentioning that the post-war period had raised the demands for goods and services and therefore the introduction of globalisation process proved to be much beneficial with respect to integration. The improvement in trade relations between different nations was measured in terms of economic growth. During the post-war period, the fall in transportation costs enabled easy movement of goods and services between different economies throughout the globe. Justifiably, the existence of the Silk Route in middle age indicates the existence of trade relations even during the war period. Additionally, the formation of different trade institutes such as WTO and improvements in technology were certain imperative factors responsible for the growth of economy that relate to the globalisation process. The free trade agreements have reduced the trade barriers between countries, which eventually raised the overall value of export and import. Additionally, migration of people from European nations as well as the occurrence of financial crisis in 90s affected the price of products, which could also be associated with the globalisation process. Thus, in conclusion, it can be affirmed that globalisation is a continuous and not a new process, which can be justified from the above discussed facts. References Ateşc, D., 2008. Industrial Revolution: Impetus behind The Globalization Process. Abstract. [Online] Available at: http://www2.bayar.edu.tr/yonetimekonomi/dergi/pdf/C15S22008/31_48.pdfC [Accessed May 07, 2015]. Bourguignonc, F. et al. 2002. Making Sense of Globalization. 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