Globalization is something that cannot be stopped. It is a phenomenon that started gradually, and it is set to continue. It is not a new phenomenon. It is a process that has seen the world being interconnected through different systems. There has been interconnectedness, and the world has shrunk especially in terms of space and time. The world feels small, and the distances between countries feel smaller too as compared to how it was. Globalization has been felt in many areas be it politics, economy, technology and many other frontiers. The world has been thrown into globalization, and we can say that it has accelerated a lot of the growth in the world today. Globalization is happening fast, and people are replacing nationalism with globalization. People have seen the importance that is attached with globalization, and they have embraced it fully. Globalization has made the world be like a single village that can be accessed within a day.
Thanks to technology, we can now communicate with someone in America like we are having a face to face chat. Globalization has created a lot of business opportunities, and today we share the same cup of coffee just like the people in America thanks to the globalization of businesses. Today, the same cup of coffee served in America, is the same served in Tokyo, Cape Town, Shanghai and many areas. Businesses are no longer local but have gone international. Globalization has opened up borders and allowed free movement of both people and money. This means that more countries are now working together for the common good of the people. It cuts across national boundaries, through globalization there is free movement of people and goods, information, ideas, ideologies, and many other things.
One of the greatest dimensions of globalization that has happened is economic globalization. It is no longer a secret that globalization has worked so much on economic aspects of the world today. Globalization has been felt in free trade, privatization, deregulation and liberalization. It can be looked up as modernization that is speeded up. Through economic globalization, the monetary and fiscal policies are dominated by a lot of movements in the international financial markets, and this reduces the autonomy in terms of economy of nation-states. Economically, globalization has taken the world as a single unit and marketing has been enhanced. There are a lot of open and free markets which enhance free trade that experiences less regulatory obstacles. The economies surpass boundaries, and this leads to integration into international markets. The key issue here is to probe ourselves and ask questions that can make us understand it more. What has the economic dimension of globalization led to in the world that has seen the growth of the world economy? What spurs the growth of economy in terms of free trade and other limits? What role has the international financial institutions played in the growth of the economy today?
It is not a myth that globalization has had an impact on all spheres of the universal life, but looking at the impact on the economic dimension we see an area that has had a lot of changes thanks to globalization. The dimension is far more prominent than any other area. The economic dimension has had changes in a lot of its spheres. There has been the breaking down of the barriers in national economic activities, the spread of trade especially internationally, financial and production of activities as well as the growing power of the transnational companies that are establishing markets in new areas. The emergence of international financial institutions has also had an influence in this dimension. All these factors have contributed to the growth of new economies and creation of an impact in economic activities all over the globe. All these have been due to the impact that globalization has had on the economic dimensions of the universe.
The introduction of speed and extent of foreign investment has had a lot of influences on the instant flow of capital in the whole world. Many multinational companies have moved into new markets where they have found cheap labour, even the people themselves move to different areas where they get new jobs hence exposing themselves to different cultural worlds. It gives the model of free world market that does not have any restrictions and allows mobility. There has been a mass culture that has seen the world encompass the society. With new neo-liberal thinking, the world market has to efficiently fulfil its duties especially to allocate the functions that will guide the flow of goods, services, capital, and labour. This can be seen as moving the neo-liberal market model especially of the domestic economy into the world market. This means that people and enterprises have been moved from the nation-state constraints. These nation-constraints always have a limitation to the free flow of goods, services, and knowledge.
The economic dimension has been explained in terms of the ever-increasing interconnectedness as well as interdependence of the enterprises that is offered through the world market. This comes from the aspects of world trade, foreign investments, a consumer market that is world-wide, concentration of the markets as well as international labour migration. The major characteristics of the economic globalization include the free trade and free flow of money (Georgiou, 2015, pp. 365-370). The international economy today is no longer divided into separate national economies. This means that we are moving away from the national economy into an international economy. The economy is no longer divided vertically, but there is a horizontal division. There has been the replacement of the physical boundaries. The emergence of the free markets all over the world has set the world into a new structure in terms of the marketing policies.
Finances come in to represent a mechanism that binds the diversified structures that creates a vital network. This sees new structures in terms of prices of all goods, services and establishment of equities. Central to globalization is the aspects of direct investments and international trade. This is made possible by the removal of the barriers that happen in production, the information as a result of the ongoing progress in technology, and the domination of the utilitarian ideology (Georgiou, 2015, pp 365-360). With advancement in information technologies and fast information that is transferred at low costs, there is the creation of an image that represents global knowledge of the economic players in terms of the business environment. The development of transnational companies has had greater impacts to the trending globalization. These companies dominate economically in new territories and most of these countries financial systems have become part of the transnational financial structures.
With economic internationalization, we have seen many of the multinationals growing with this trend. What has played the biggest role herein is the international financial institutions like the International Monetary fund (IMF) and the World Bank. This means that the functioning market system is far much pronounced in individualism of the players. The institutions have spurred a lot of growth in terms of economy and have seen the advancement in terms of the financial services
Globalization has enhanced the issue of free flow of trade and services. This can be seen in terms of the establishment of World Trade Organization (WTO) which is an institution that has enhanced and improved trading in the world today. The introduction of the multilateral trading system and end of national economies has greatly helped and influenced the economic activities. There has been a lot of globalization of financial markets which has been done through the introduction of foreign direct investment. Something else that interests the analysis is the integrated production and functioning of multinational companies. This has seen the enhancement of liberalization especially in terms of investment. Infrastructural development, other aspects like Trade-related Intellectual Property Rights
We can say that liberalization is whereby there has been reduction in restrictions especially in areas that touch on economic and social aspects. This can be looked at in terms of trade liberalization or liberating the capital markets. This is what is called the neo-liberalism and has had a lot of influence on the economy today (Georgiou, 2015, pp. 350-365). The freeing up of markets and reduction in terms of the roles that governments play in issues to do with ownership and control of the means of production has seen a major revolution in terms of policies that have had an influence on the dimension. Markets have been freed up and the boundaries being removed.
We can say that globalization is a form of a complex connectivity. The growth in interconnectedness and interdependencies has characterized the modern life. There has been intensification of the life, and the economies of the world have had their share of influence. The world has seen a shift in terms of the world economy and this shift has had a lot of influences. With the aspects of Foreign Direct Investment, the impact on the economic growth has seen tremendous and positive aspects. The major characteristics of the economic globalization include the free trade and free flow of money (Morita, Takatsuka and Yamamoto, 2015, pp. 492-498). The international economy today is no longer divided into separate national economies. This means that the growth that has been experienced is a true testimony of the influence that globalization of the economy.
As much as the issue of globalization has had a lot positive influences, there have also been negative issues. This may have been seen in terms of accumulation of wealth. The world today is experiencing a lot of wealth that is in just few hands. The aspects of globalization have seen this accumulation of wealth and today as it stands almost 79% of the total wealth is owned by less than one billion people in the world. This can be seen as a result of the process of globalization. This means that as much as there has been opening of boundaries, the free trade has benefited few people across the world. The opening of new frontiers in business has seen the concentration of just but a few multinational corporations opening all over the world. These multinationals are the ones that get the benefit.
Morita, T., Takatsuka, H. and Yamamoto, K. (2015). Does Globalization Foster Economic Growth?. Japanese Economic Review, 66(4), pp.492-519.
Georgiou, M. (2015). Economic Growth, Economic Freedom, Globalization and Entrepreneurship. SSRN Electronic Journal, pp.350-398.
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