Essay on Globalisation: Evolution and its Status in India!
Globalisation, as we understand it in the present context, has resulted from the information and technology revolution.
This started from 1985, with more efficient and economical communication systems. By the mid-1990s, the use of email as a tool for communication was becoming widespread. This was accompanied by introduction of systems of electronic transfer of funds.
This facilitated and encouraged the mobility of capital between countries. It was possible to transfer millions of dollars from one country to another in a fraction of a second. In order that globalisation should succeed, it was necessary for all countries, especially the developing ones, to open or reduce trade barriers.
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Hence, institutional financial institutions like the International Monetary Fund (IMF) and GATT, replaced in 1995 by the WTO, were pressurising countries like India, China and others in South and South-East Asia with high economic growth to be more receptive to foreign direct investments.
There was also a move to liberalise labour laws by arguing that laws that granted permanence of employment and social protection would be detrimental to industrial growth. Industrialists from outside would hesitate to invest because while it might be easy to start an industry it would be difficult to weed out labour if costs increased.
The World Bank (WB) which emerged as the main supplier of financial inputs to enable countries to cope with problems of globalisation laid emphasis on privatisation of assets and strongly recommended that the role of the public sector and of the government in economic activities in general should be reduced. It issued a slogan that governments should only govern and not get involved in productive activities. These should be left to the able hands of private enterprise, including international corporations.
Globalisation has other dimensions as well and several positive aspects. First of all, the information and technology revolution and the easy accessibility of the Internet have made transmission of information much faster. As the IT industry expanded, costs were reduced.
Image Source: jessmc.global2.vic.edu.au/files/2009/02/wordle-globalisationluke.jpg
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We may recall that when mobile phones were introduced in India, they were costly and call charges were high, sometimes as much as Rs 12 per minute. At that time, only the financially better-off sections could afford mobile phones, which became a status symbol for them. However, within a few years, the rates were slashed, and today usage of mobile phones has expanded to remote villages, and even the poorer sections of the working class can afford them. Farmers in far-flung areas can get information about where to market their products through mobile connections.
Some companies regularly supply information to farmers on prices, weather, costs of inputs, etc., by short message service, or SMS, if they become members at a nominal fee. The spread of satellite television too has enabled news and entertainment to be disseminated in all parts of the country.
Prices of consumer goods have fallen considerably, in addition to other goods such as cars, TV sets and so on. This has been a result of opening up of the markets which enabled imported, affordably-priced goods for the domestic market.
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This made Indian producers reduce the costs of their products in order to compete. Moreover, this form of competition provided alternative choices to the consumers. This in turn reduced costs while improving quality as consumers became more conscious and discerning.
On the employment front, globalisation has contributed to improving the situation. Opening up of the economy has led to the emergence of new types of enterprises. For example, the Internet and the media revolution have given rise to several opportunities in these sectors, right from low-paid jobs such as running and repairing cable TV connections, to technical jobs in television and computers.
It has given rise to a host of actors, news readers, commentators and advertising professionals. The burgeoning courier services have enabled young people to get employed as courier agents. The multiplicity of organisations is mainly responsible for the availability of a large number and variety of jobs.
However, there are adverse aspects of globalisation that need to be considered. For globalisation to be effective, it was necessary to change the existing framework of laws and nature of production in developing countries, which had protected markets (e.g., India, China, the then Soviet Union, other socialist countries, etc.).
It was necessary to structurally change the nature of employment and the key sections of the economy that were developed and maintained through a regime of protection. Thus, in India, there was strict control over import of goods, and imported luxury goods were either banned or taxed heavily.
The developed countries realised that these protected economies had large markets which needed to be tapped. Hence, if globalisation was to be sustained, it was necessary for all countries to go in for structural adjustments.
Thus, developing countries like Vietnam, Cambodia and the former socialist states which used to observe economic protectionism went in for restructuring and opening up of their markets to developed countries. These would include foreign direct investments as well as goods and services.