Is Globalization/Liberalization an opportunity or threat and why? by Disha Chaudhry

Is Globalization/Liberalization an opportunity or threat and why?

What is Globalization and liberalization? To start this essay, the definition of these two terms holds sheer importance. As there are many intellects rapidly increasing in this world, people’s perceptions and meanings of things also vary. Therefore, the universal meaning of Globalization and Liberalization needs to be taken into consideration.

Globalization is the free movement of goods, services and people across the world in a seamless and integrated manner. In other words, when countries that were hitherto closed to trade and foreign investment open up their economies and go global, the result is an increasing interconnectedness and integration of the economies of the world. Further, globalization also means that countries liberalize their visa rules and procedures so as to permit the free flow of people from country to country.

Liberalization means relaxation of various government restrictions in the areas of social and economic policies. Liberalizing trade policy by the government that is removal of tariff, subsidies and other restrictions on the flow of goods and services between countries is also termed as liberalization.

The government of India has adopted several measures of liberalization. Some of these measures are as under:

·        Relaxation in foreign exchange regulation Act

·        Import duty on export related capital goods

·        Limit for foreign equity increased to 51%

·        Basic telecommunication services opened to private sectors

·        Allow private investment in the private sector

·        Five year tax holiday to new industrial unit set up in backward areas

The liberalization of India’s economy was adopted by India in 1991. Facing a severe economic crisis, India approached the IMF for a loan, and the IMF granted what is called a ‘structural adjustment’ loan, which is a loan with certain conditions attached which relate to a structural change in the economy. Consequently India's position in the global economy has improved from the 8th position in 1991 to 4th place in 2001 (when GDP is calculated on a purchasing power parity basis).

I personally feel that Globalization and Liberalization is an opportunity, rather than a threat. First of all, it increases the capital available to developing countries, which potentially increases their ability to grow faster than if they have to rely exclusively on their own resources. Cities like Chennai, Bangalore, Hyderabad, NOIDA, Gurgaon, Gaziabad, Pune, Jaipur, Indore and Ahmedabad have risen in prominence and economic importance, become centers of rising industries and destination for foreign investment and firms.

The implications of globalization for a national economy are many. Globalization has intensified interdependence and competition between economies in the world market. This is reflected in Interdependence in regard to trading in goods and services and in movement of capital. As a result domestic economic developments are not determined entirely by domestic policies and market conditions. Rather, they are influenced by both domestic and international policies and economic conditions. It is thus clear that a globalizing economy, while formulating and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world. This constrained the policy option available to the government which implies loss of policy autonomy to some extent, in decision-making at the national level.

Globalization and women:
Globalization increases employment opportunities and economic independence. It has given women power they lacked in the past- the power to end the system that breeds poverty, exploitation and oppression to some extent to the elite group. Prospects of higher education which is affordable, economically and socially are also more accessible in nature. With changing attitudes towards women, more egalitarian set of gender relationships are created. There is a reduction in gender inequalities; this strengthens their networks to offer mutual support and resources. Positive approach to economic and cultural migration will facilitate women to be exposed to better prospects at the international level. Although these points of view are bias, let us still take into consideration the negative impact of globalization on women.

The rate at which women are sold as sex slaves increases. According to CIA report in 1991, each year “50,000 women are brought into the U.S.A to work in sex industries with no free will of the women, themselves.” With male migration on the increase from rural to urban sectors, the women have to bear the triple burden of caring, farming and paid employment in the rural sector.

Globalization can be a boon or a bane. To use it to our advantage, we must make sure social evils like the ones mentioned above do not exist. This can be done through thorough checks between borders, speculation of the goods being shifted through countries, and so on. Our world is large, but with globalization and liberalization we become more connected. We must simply make sure no one takes advantage of this.

For over a century the United States has been the largest economy in the world but major developments have taken place in the world economy since then, leading to the shift of focus from the US and the rich countries of Europe to the two Asian giants- India and China. Economics experts and various studies conducted across the globe envisage India and China to rule the world in the 21st century. India, which is now the fourth largest economy in terms of purchasing power parity, may overtake Japan and become third major economic power within 10 years.