Thursday, October 30, 2008

Is Globalization a Myth? Part II

In response to my first article I got a lot of interesting comments. Most emphasis was on trade and economics. It was best summed up by the following by Michael Manos, PE, PMP,

Are companies going to continue to push the global boundaries to find talent and economic advantages....yes!” “Are we looking at a world with no boundaries and a common set of laws; No!” ”The world is complicated with different cultures, geography and political history. The interests of agricultural countries are far different from the wishes of fully industrialized areas. Much of that difference has to do with the geographical and cultural differences of those particular areas. Those differences are not going to change.”

In the current context, Globalization is about economics and economic upliftment of the dispossessed by cross border investment. It is not about cultural assimilation. Even the pace of the current pace of globalization finds people equally divided in their opinions.

Going further, in a BBC World Service Poll in February 2008, the following was highlighted:

In 22 out of 34 countries around the world, the weight of opinion is that "economic globalization, including trade and investment," is growing too quickly. On average one out of two (50%) hold this view, while 35 percent say globalization is growing too slowly.

For most people world wide Globalization is all about trade, economics and investment and its effect on their day to day life. While there is a lot of understanding of global trade, perceptions vary from peoples on economic standpoint and its effects on them. For people hit by the loss of manufacturing jobs in the US, its not a great thing. For people whose lifestyles are threatened and traditional ways of life endangered, it’s also not a great thing. For those seeing prosperity touching their lifes, it’s a great thing.

In the economic sense “Globalization” has been in existence since mankind started living in fixed communities. We have seen trade between the early civilizations of the Nile (Egypt), Tigris-Euphrates (Babylon) or Indus (India). Other civilizations have also been engaged in trade like China, Greece and the Roman empires. The Arabs in fact were instrumental in the spread of a lot of scientific and literary content through their trading activities. The spread of European empires in the 18th and 19th century boosted globalization due to their reach and importance for extraction of raw materials from the colonies. In fact the 19th century was sometimes called “the first era of globalization”. However the First World War brought about a brief halt in Globalization.

After the First World War, and the collapse of; and redistribution of colonies, we saw the world economies in a system of flux. The period between the First and Second World wars saw the Great Depression and hyper inflation in Germany. Economic discontentment and the unfair conditions prompted by the Versailles Agreement for War reparation were some of the reasons for the rise of Fascists Forces.

The end of the Second World War saw the signing of the Bretton Woods agreement, to establish rules for economic and financial relations. This was partially due to the push of Cordell Hull the US Secretary of State between 1933 and 1944 who propounded that a liberal international economic system would help in maintaining a durable peace. The Bretton Woods agreement helped establish the IMF and the World Bank.

Globalization has seen its highs and lows as per economic and political realities of the times. The current economic tsunami has proved one thing, Globalization is not a myth, in the sense we are all very much interconnected.

That globalization will find fewer cheerleaders today is self evident, as countries scramble to erect firewalls to protect their economies. However part of the solutions is also going to be coming from a concerted effort by all the major economies of the world and not just by the G8, but by the participation of the G20 as well.

Globalization is definitely not a myth; however it is not a reality either.

Answers on Linkedin:

http://www.linkedin.com/answers/international/internationalization-localization/INT_INZ/345792-564729

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