Globalization -Boon or Bane?
Globalization which implies a shift towards more integrated and interdependent world
has long been an issue of debate among countries. Globalization according to some
economists is important and inevitable for the economic development of the world.
But others feel that it is a threat to employment. Environmentalists fear globalization
would result in deterioration in the environment and increase pollution.
The talks in the Uruguay round (1986-1994) resulted in the formation of World Trade
Organization (WTO), which brought down many international trade barriers. WTO
came into existence after amalgamation of GATT and other trade promotion groups.
The WTO is the chief arbitrator, which deals in trade related disputes between
countries and has contributed to the acceleration of globalization.
The rate of globalization has increased due to the abolition of barriers to both trade
and free flow of capital around the world. The abolition of barriers may generate
more wealth and theoretically raise the standards of living in the global economy.
Some East Asian countries that quickly integrated into the global economy saw rapid
growth in their economy and reduction in poverty. According to the World Bank, the
wages of 3 billion people living in globally integrated countries like China, India,
Hungary and Mexico rose, and the number of people in poverty declined.
The activities of multinational companies are based on the idea of globalization.
International marketers can take advantage of the huge world markets, increased
investment opportunities, easy capital inflows, cheap imports of raw materials,
technology, etc. However, some analysts believe that poor countries do not stand to
This caselet was written by Mylavarapu Vinaya Kumar, under the direction of D.G. Prasad, ICFAI
Center for Management Research. Caselets are intended to be used as a basis for class discussion rather