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Monday, December 13, 2010

Impact of Globalization on Social Harmony

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 The relaxation of restrictions, usually in areas of social and economic policies is called as Liberalization. Most often this term is applied to economic liberalization like trade liberalization or capital market liberalization. The Economic Liberalization is often associated to privatization. However, the two terms are quite separate from each other.

Sometimes a government imposes restrictions on some economic activities. Such a policy of the government is called as Policy of Restrictions. Sometimes the government removes some of those restrictions. This policy of removing some restrictions is called as the Policy of Liberalization. In fact, any economic system is never made free from restrictions. However, many times Private Economic Activities remain free from restrictions. The Government of India adopted the Policy of Economic Liberalization on 24 July, 1991.

            There are two components of Liberalization-
(i)     to allow the private sector to run those activities restricted earlier only to the Public Sector, and
(ii)   to relax all the rules and regulations restricting the growth of the Private Sector. For example: there were some materials that were not allowed to be manufactured by a private sector enterprise without the permission of the government. But, now the restrictions have been lifted up for most of the goods except alcohol, cigarettes, hazardous chemicals, Industrial Explosives, drugs and pharmaceuticals and electronic aerospace.

Under Liberalization, the private sector has been made free from many regulations like- Industrial Licensing, price regulation and distribution, investment by large business companies etc.

The emergence of a global society in which economic, political, environmental, and cultural events in one parts of the world quickly come to have significance for people in other part of the world, is called as Globalization.

The term Globalization was used for the first time in the year 1944 but in economics, it is in regular use only since 1981.The term was widely used for the first time in 1983 in the “Harward Business Review” by Theodore Levitt in his article entitled “Globalization of Markets”. Currently, globalization is an umbrella term used for a complex series of economic, social, technological political and cultural changes around the world.

The Globalization is marked by-
(i). Advances in communication, Transportation and Information Technology;
(ii). Growing Economic, Political, Technological and Cultural connections among individuals, communities, business and governments around the world.

The Globalization incorporates growth of multinational companies and Transnational companies (TNCs). Multinational companies (MNCs) are business systems that function in many countries. Translational companies are business concerns that function in the global markets. The world trade and finance in globalization are regulated by international institutions.

The Globalization has following components-
(a).  Reduction of Trade Barriers: In globalization, trade barriers are reduced so as to allow free flow of goods to the international markets.
 (b). Free flow of Technology: Globalization creates an environment through which free flow of technology takes place from country to country.
(c). Free movement of Labour: Globalization creates an environment that allows labour to move anywhere in the world.

The word harmony means: a state of peaceful existence and agreement. In the context of society it relates to peaceful living conditions and healthy relations among people. In the age of globalisation all these ideal conditions have gone far away from human societies due to increasing poverty, pains, growing inequality, depletion of resources, global dissemination of many killer diseases, violation of human rights, mixing of cultures, erosion of ethnic identity, increasing criminal behaviour etc. Some other implications of globalization for societies are mentioned below.
1.      Many institutions involved in the system of globalization have not taken the interests of poor nations, the working class and the environment into account.
2.      The fair trade theorists argue that unrestricted trade benefits those who have more financial leverage at the expense of the poor.
3.       The global migration of people created by globalization has become a controversial issue.
4.      Globalization has created inequalities in living standards of people. According to a report more than 80 countries had lower per capita income at the end of 1990s than they had at the end of 1980s. By the late 1990s the 20 percent of the world’s people living in highest income countries had 86 percent of the world’s income.

5.      In the globalized economy some countries have become too poor to function at even a minimum standard of basic competence. Their economic activities are often linked to criminal behaviour. People in these countries often remain engaged in smuggling, extortion of various kinds and trade in illegal drugs. Governments of such countries remain unable to stop illegal activities as a result of which these countries become sanctuaries of terrorists, foreign criminals and mercenary forces that conduct raids into neighbouring countries.

6.      Globalization is encouraging violation of human rights. For example many developing countries are establishing Special Economic Zones (SEZ) and Free Trade Zones. ‘With the enactment of SEZ Act-2005, the idea is catching on like wildfire in India’. Investors are given special benefits in these zones and the special benefits violate human rights in many ways. In many cases, instead of degraded and infertile land, agricultural or green lands are allotted to these investors. It is causing migration and hunger to poor farmers who loose their land and livelihood.

7.      The financial liberalization is causing financial crises in many of the world’s economies instead of increasing economic stabilities.

8.      Globalization is creating various environmental problems on the global scale. The UN’S Intergovernmental Panel on Climate Change predicts that by the year 2100 the temperature of the earth could rise by 1.4 to 5.8 Celsius degrees. This Global Warming is due to pollutants emitted by industries principally found in developed and industrialized countries, and also due to the depletion of forests during the acquisition of land. As we know, globalization is encouraging industrialization and depletion of resources at a fast speed.

9.     Improvements in transport in the age of globalization have encouraged the dissemination of many killer diseases across the world. The poor people of the world remain unable to buy costly medicines for their treatment as the cost and availability of those medicines are restricted through patents.

Key words : globalization, liberalization, economy, U.N., patents

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