Английский язык. Практический курс для решения бизнес-задач - Нина Пусенкова

Источник: Ведомости, 06.10.05

Lesson 24

Globalization

Read and translate the text and learn terms from the Essential Vocabulary

Globalization

Globalization is the worldwide technological, economic and cultural change brought about by expanding facilities for communications and interdependency between isolate cultures. Dramatically increased international trade and finance have established a medium wherin deeper cultural exchanges have taken place, greatly increasing the impact of global issues at the local scale.

In economic context, the term refers to the effects of trade, particularly trade liberalization (or the «free trade»). More broadly, the term refers to the overall integration, and resulting increase in interdependence among global actors.

It is useful to distinguish economic, political, and cultural aspects of globalization, although all three aspects are closely intertwined. The other key aspect of globalization is changes in technology, particularly in transport and communications, which are creating a global village.

«Globalization» can mean:

Globalism that contrasts with economic nationalism and protectionism.

Complex connectivity, where more and more places are being connected in new ways. Arjun Appadurai identified five types of global connectivity:

– Ethnoscapes: movements of people (tourists, immigrants, refugees, and businessmen).

– Financescapes: global flows of money, often driven by interconnected currency markets, stock exchanges, and commodity markets.

– Ideoscapes: the global spread of ideas and political ideologies.

– Mediascapes: the global distribution of media images.

– Technoscapes: the movement of technologies around the globe.

Cultural globalization means attempts to erode the national cultures of Europe, and subsume them into a global culture whose members will be much easier to manipulate through mass media and controlled governments.

Economic globalization refers to four different flows across boundaries: flows of goods/services, people, capital, and technology. The IMF defines globalization as «the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, freer international capital flows, and more rapid and widespread diffusion of technology».

In the field of management, globalization is a marketing or strategy term that refers to the emergence of international markets for consumer goods characterized by similar customer needs and tastes enabling, for example, selling the same cars or soaps or foods with similar ad campaigns to people in different cultures. This usage is contrasted with internationalization which describes the activities of multinational companies dealing across borders in either financial instruments, commodities, or products that are extensively tailored to local markets.

Many use the term «corporate globalization» or «global corporatization» to highlight the impact of MNCs and the use of legal and financial means to circumvent local laws and standards, in order to leverage the labor and services of unequally-developed regions against each other.

The spread of capitalism from developed to developing nations.

Globalization History

It is a history of increasing trade between nations based on stable institutions that allow firms in different nations to exchange goods with minimal friction.

The term «liberalization» means the combination of laissez-faire economic theory with the removal of barriers to the movement of goods. This led to specialization of nations in exports, and the pressure to end protective tariffs and other barriers to trade. The period of the gold standard and liberalization of the 19th century is often called «The First Era of Globalization». Based on the Pax Britannica and the exchange of goods in currencies pegged to specie, this era grew along with industrialization.

The «First Era of Globalization» has broken down in stages beginning with the World War I, and then collapsed with the crisis of the gold standard in the late 1920s and early 1930s’s. Countries that engaged in that era of globalization prospered and goods, capital and labour flowed remarkably freely between nations.

Globalization in the era since World War II has been driven by Trade Negotiation Rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on «free trade». The Uruguay Round led to a treaty to create the World Trade Organization to mediate trade disputes. Other bilateral trade agreements, including Europe’s Maastricht Treaty and the North American Free Trade Agreement, have also been signed aimed at reducing tariffs and barriers to trade.

Characteristics

Globalization has become identified with a number of trends, most of which have developed since World War II.

Economically:

– Increase in international trade at a faster rate than the growth in the world economy.

– Increase in international flow of capital including FDI;

– Erosion of national sovereignty and national borders through international agreements leading to organizations like the WTO and OPEC.

– Development of global financial systems.

– Increase in the share of the world economy controlled by MNCs.

– Increase of economic practices like outsourcing by multinational corporations

Culturally:

– Greater international cultural exchange.

– Spreading of multiculturalism, and better individual access to cultural diversity.

– Greater international travel and tourism.

– Greater immigration.

– Spread of local foods such as pizza and Indian food to other countries.

Development of a global telecommunications infrastructure and greater transborder data flow.

Increases in standards applied globally; e.g. copyright laws and patents.

Formation or development of a set of universal values.

The push for an international criminal court and international justice movements.

Some argue that even terrorism has undergone globalization, with attacks in foreign countries that have no direct relation with the own country.

Barriers to international trade have been considerably lowered since World War II through international agreements such as GATT. Particular initiatives carried out as a result of GATT and the WTO have included:

Promotion of free trade

Of goods:

– Reduction or elimination of tariffs; construction of free trade zones.

– Reduced transportation costs, especially from development of containerization for ocean shipping.

Of capital:

– reduction or elimination of capital controls.

– Reduction, elimination, or harmonization of subsidies for local businesses

Intellectual property restrictions

Anti-globalization

Various aspects of globalization are seen as harmful by public-interest activists as well as strong state nationalists. Critics claim that the results of globalization have not been what was predicted when the attempt to increase free trade began, and that many institutions involved in the system of globalization have not taken the interests of poorer nations, the working class and the environment into account.

Fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.

Many activists see globalization as the promotion of a corporatist agenda, which is intent on constricting the freedoms of individuals in the name of profit.

The Southeast Asian financial crises in 1997, that began in the relatively small economy of Thailand but quickly spread to Malaysia, Indonesia, South Korea and eventually was felt all around the world, demonstrated the new risks and volatility in rapidly changing globalized markets. The IMF’s subsequent ‘bailout’ money came with conditions of political change (i.e. government spending limits) attached and was viewed by critics as undermining national sovereignty in neo-colonialist fashion.

Pro-globalization (Globalism)

Supporters of democratic globalization consider that the first phase of globalization, which was market-oriented, should be completed by a phase of building global political institutions representing the will of world citizens.

Supporters of free trade point out that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting from lower prices, higher employment and output.

Libertarians say higher degrees of political and economic freedom produce higher levels of material wealth.

Advocates of globalization say that statistics strongly support globalization:

The percentage of people in developing countries living below US$1 per day has halved in only 20 years.

Life expectancy has almost doubled in the developing world since WWII and is starting to close the gap to the developed world where the improvement has been smaller. Child mortality has decreased in every developing region of the world. Income inequality for the world as a whole is diminishing.

Democracy has increased dramatically from almost no nation with universal suffrage in 1900 to 62.5% of all nations in 2000.

Between 1950 and 1999, global literacy increased from 52% to 81%.

There are similar trends for electricity, cars, radios, and phones per capita.

Measurement of Globalization

To what extent a nation-state or culture is globalized in a particular year has until most recently been measured employing simple proxies like flows of trade, migration, or FDI. A more sophisticated approach to measuring globalization is the recent index calculated by the Swiss think tank KOF. The index measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal contact, data on information flows, and data on cultural proximity is calculated. According to the index, the world’s most globalized country is the USA, followed by Canada, the United Kingdom, and France. The least globalized countries according to the KOF-index are Burundi, Belize, and Sierra Leone.

Source: Wikepidia

Essential Vocabulary

1. medium n – средство, способ

2. trade liberalization – либерализация торговли

3. free trade – свободная торговля

4. «global village» – «глобальная деревня»

5. protectionism n – протекционизм

protectionist a – протекционистский

6. refugee n – беженец

7. сurrency market – валютный рынок

8. сommodity market – товарный рынок

9. сross-border transaction – международная операция

10. diffusion n – распространение

diffuse v – распространять

11. multinational company (MNC) – многонациональная компания (МНК)

12. tailor v – зд. подгонять под конкретные нужды

13. circumvention n – обман, хитрость, обход

circumvent v – обмануть, обойти, перехитрить, расстроить (планы)

14. protective tariff – протекционистский тариф

15. specie n – золотые и серебряные монеты или слитки

16. auspices n.,pl – эгида, покровительство

17. General Agreement on Tariffs and Trade (GATT) – Генеральное соглашение о тарифах и торговле (ГАТТ)

18. Uruguay Round – Уругвайский раунд

19. World Trade Organization (WTO) – Всемирная торговая организация

20. Maastricht Treaty – Маастрихтский договор

21. North American Free Trade Agreement (NAFTA) – Североамериканское соглашение о свободной торговле

22. Organization of Petroleum Exporting Countries (OPEC) – Организация стран – экспортеров нефти (ОПЕК)

23. copyright law – закон об авторских правах

24. free-trade zone – зона свободной торговли

25. capital control – контроль движения капитала

26. bailout n – спасение, выручка

bail out v – спасать, выручать

27. life expectancy – продолжительность жизни

28. mortality n – смертность

mortal a – смертный; смертельный

29. suffrage n – право голоса, избирательное право, голос (при голосовании)

30.literacy n – грамотность

literate a – грамотный

31. think tank – «мозговой танк»

Exercise 1. Answer the following questions.

1. What does globalization mean in general? 2. What aspeсts does the economic globalization include? 3. What does globalization mean in management terms? 4. What are the key milestones in the history of globalization? 5. What economic trends are connected with globalization? 6. What initiatives contributed to the partial removal of barriers to international trade? 7. What are the arguments of the opponents to globalization? 8. What statistical data do advocates of globalization use to support their views? 9. How is globalization measured?