INTERNATIONAL BUSINESS ENVIRONMENT 

REPORT 

ON 

“GLOBALISATION IN INDIA, ONGOING 
DEBATE AND ECONOMIC IMPLICATION” 
          

SUBMITTED TO:­            SUBMITTED BY:­ 

PROF. S.K DUBEY          SAKSHI MALHOTRA  BM09182 

              SAKSHI SINGH  BM09183 

              SUPRIYA GUPTA  BM09219 

              UMANG KAPOOR  BM09229
             

                        

                        

                             
                            

                        
 CERTIFICATE
 

TO WHOM SO EVER MAY IT CONCERN 

This  is  to  certify  that  Sakshi  Malhotra,  Sakshi  Singh,  Supriya  Gupta  and  Umang 
kapoor  have  completed  the  project  report  titled  “GLOBALISATION  IN  INDIA, 
ONGOING DEBATE AND ECONOMIC IMPLICATIONS” under my supervision. To 
the best of my knowledge and belief this is their original work and this wholly or 
partially, has not been submitted for any degree of this or any other University. 

  2 
 DECLARATION 

We  hereby  declare  that  the  project  report  “GLOBALISATION  IN  INDIA, 
ONGOING  DEBATE  AND  ECONOMIC  IMPLICATIONS  in  International  Business 
and  Environment  is  being  submitted  by  the  Group  members  to  INSTITUTE  OF 
MANAGEMENT STUDIES, GHAZIABAD, is the result of our own work and efforts. 
It  has  not  been  published  in  any  magazine,  book  or  newspaper  yet.  All  other 
sources of information have been duly acknowledged. 

  3 
 ACKNOWLEDGMENT
 

It  is  an  opportunity  we  take  to  acknowledge  the  efforts  of  many  individuals  who 
helped  us  in  making  this  project  possible.  First  and  foremost,  we  would  like  to 
express our heartfelt appreciation and gratitude to our guide and facilitator of the 
course,  Prof.  S.K  DUBEY.  His  vision  and  execution  aimed  at  creating  a  structure, 
definition,  and  realism  around  the  course  of  International  Business  and 
environment fostered the ideal environment for us to learn and grow.  

This project is a result of his teaching, encouragement and inputs in the numerous 
meetings  he  had  with  us,  despite  his  busy  schedule.  He  has  helped  provide  us  the 
scope and direct our research in a manner to make it most beneficial to us and to 
the topic. 

We would also like to thank the Institute of Management Studies, Ghaziabad for 
providing  us  the  opportunity  to  do  a  project  in  International  Business  and 
environment. 

Last but not the least, we would like to thank the information technology without 
which this project wouldn’t have been possible. 

  4 
 TABLE OF CONTENT 

CONTENT PAGE NUMBER

ABSTRACT 6

INTRODUCTION 7

GLOBALISATION IN INDIA 9

HISTORICAL PHASES OF GLOBALISATION 12

PRO’S AND CON’S OF GLOBALISATION 13

IMPACT OF GLOBALISATION 18

DRIVES TOWARD GLOBALISATION 20

DIFFERENT ENTRY MODES 22

EFFECT OF GLOBALISATION ON

INDIAN ECONOMY 23

GLOBAL ISSUES

WTO AND DOHA ROUND 24

NEOLIBERALISM 30

ORGANISATIONS FOR FACILITATING GLOBALISATION 32

ON GOING DEBATE 33

RESPONDING TO GLOBALISATION 37

ACTIONS BY INDIA 38

CONCLUSION 42

REFERENCES 43

  5 
 ABSTRACT

Globalization is a term which is gaining immense importance in today’s world.The

inevitability of international business for organization is very well expressed by many

management experts. Globalization has gone through many historical phases. Many

reasons have facilitated its growth. Globalization has its impact on every sector of the

economy across the world. When a firm decides to enter the international arena it

must make a choice regarding different strategies to be adopted. Many MNC’s have

made their presence felt worldwide. The aim of every economy must be to go for

inclusive globalization, which will give equal opportunities to all the nations to

navigate the global seas. There are many global issues also related with the

globalization like WTO and DOHA round, Neoliberalism, and there are some trade

and economy related issues also. This report deals with all the aspects mentioned

herein.

  6 
INTRODUCTION

International business is a term which involves import and export of goods and
services manufactured and marketed by MNC are to source globally. It describes all
commercial transactions that take place between two or more countries for profit.
International business is the economic system of exchanging goods and services,
conducted between individuals and business in multiple countries. Differences in the
business environment between regions or nations may call for different business
strategies. A firm in international business encounters different sets of environment:

 Internal environment
 Domestic environment
 Foreign environment
 Global environment

The competence of a firm to do International Business depends on a number of

internal factors such as the emission and vision of the firm, the attitude, the people in
the organization, etc. domestic environment includes micro and macro environment.
Foreign environment refers to the environment of the relevant foreign market. And
the global environment refers to the global factors that are relevant to business such as
the WTO principles and agreements.

The term globalization can broadly be defined as the integration of regions, societies
and cultures across the globe through better communication and increased economic
interaction. In this chapter we will restrict it to mean the increased economic
integration of countries through the movements of goods, services, factors of
production, and ideas across international borders. Historically, India has had a lot of
restrictions on trade in goods and services as well as capital flows. These restrictions
have gradually been significantly reduced over time.

  7 
Ever since the term ‘globalization’ appeared for the first time in the second half of
twentieth century no other word has meant so many different things to different
people and has evoked as much emotions. The forces of globalization affect virtually
every country in the world. It has opened the door of many new opportunities as well
as formidable challenges.

All spheres of life–social, political, cultural and economic–have been subjected to

both the positive and negative elements of globalization. With all its promises on the
overall qualitative improvement of life and social harmony, some see it as the saviour
of universal peace and prosperity. On the other hand, rising mercury of its negative
elements some condemn it as a new kind of chaos. While everyone welcomes the new
opportunities that has emerged one cannot simply leave those negative elements
unattended. Therefore, the main task now is to analyze, understand and manage
globalization doing our best to harness its benefits and keep those negative
consequences at bay.

Broadly speaking, the term ‘globalization’ means integration of economies and

societies through cross country flows of information, ideas, technologies, goods,
services, capital, finance and people. Cross border integration can have several
dimensions – cultural, social, political and economic. In fact, some people fear
cultural and social integration even more than economic integration. Limiting
ourselves to economic integration, one can see this happen through the three channels
of

(a) trade in goods and services,

(b) movement of capital and

(c) flow of finance.

Besides, there is also the channel through movement of people.

  8 
GLOBALISATION IN INDIA

In early 1990s the Indian economy had witnessed dramatic policy changes. The idea
behind the new economic model known as Liberalization, Privatization and
Globalization in India (LPG), was to make the Indian economy one of the fastest
growing economies in the world. An array of reforms was initiated with regard to
industrial, trade and social sector to make the economy more competitive. The
economic changes initiated have had a dramatic effect on the overall growth of the
economy. It also heralded the integration of the Indian economy into the global
economy. The Indian economy was in major crisis in 1991 when foreign currency
reserves went down to $1 billion and inflation was as high as 17%. Fiscal deficit was
also high and NRI's were not interested in investing in India.

India’s attempt to tackle the problems of income inequalities has been going on since
independence under the centralized planning system. It, however, failed to provide the
necessary growth impetus to the poorer states to reduce regional disparities in any
meaningful manner in spite of four decades of economic planning.

In the post globalization era, considering the size and diversity of the country,
shrinking role of government would ultimately be a failure to achieve the set
objective. With the opening of economy, states with better infrastructure facilities,
better skill labour and work culture, investor friendly environment and more
importantly states which can reform themselves in accordance to the need of the
market oriented economy have attracted much of the private investment–both national
as well as foreign. These states have grown much faster than states which are not,
leading to widening disparities.This has posed a great challenge to academicians and
policy makers, even though globalization is an uneven process with unequal
distribution of benefits and losses, who must ensure the benefits of globalization be
distributed to all the regions/states of Indian union.

Secondly, to what extent the high growth rate achieved so far has been translated into
development for the well-being of its people? It is all the more necessary to ascertain
the magnitude of development because development shouldn’t be seen as mere
enhancement of national or personal income as it alone cannot serve the objective of
securing the socio-economic equality.

  9 
High growth rate achieved so far is a big accomplishment as the resources so
generated could be utilized for developmental purposes to meet the desired social
ends.4 It would, however, be highly injustice and misleading to interpret economic
growth and economic development synonymously, yet a popular cynicism among the
political circle in particular, as development covers much wider range and value. In
short, achievement of higher growth rate should be reflected in terms of quality of life
of the people.

The failure to realize the value of high growth is the main reason for the rejection of
‘shining India/feel good factor’ slogan of the ruling party in 2004 general election.
This implies that the higher growth rate achieved so far in the post globalization
period could not be translated in terms of improvement in the quality of life of the
common people. According to Sen any reform programme should consists of three
R’s–reach, range and a reason–which every responsible individual should analyze,
understand and act accordingly. The values of high growth often depend on what the
size, composition and nature of that growth do to the lives and freedoms of the people
involved.

STEPS TAKEN TO GLOBALISE THE ECONOMY

• Devaluation: The first step towards globalization was taken with the
announcement of the devaluation of Indian currency by 18-19 percent against
major currencies in the international foreign exchange market. In fact, this
measure was taken in order to resolve the BOP crisis.

• Disinvestment-In order to make the process of globalization smooth,

privatization and liberalisation policies are moving along as well. Under the
privatization scheme, most of the public sector undertakings have been/ are
being sold to private sector .

• Dismantling of The Industrial Licensing Regime At present, only six

industries are under compulsory licensing mainly on accounting of
environmental safety and strategic considerations. A significantly amended
locational policy in tune with the liberalized licensing policy is in place. No

  10 
 industrial approval is required from the government for locations not falling
within 25 kms of the periphery of cities having a population of more than one
million.

• Allowing Foreign Direct Investment (FDI) across a wide spectrum of industries

and encouraging non-debt flows. The Department has put in place a liberal and
transparent foreign investment regime where most activities are opened to foreign
investment on automatic route without any limit on the extent of foreign ownership.
Some of the recent initiatives taken to further liberalise the FDI regime, inter alias,
include opening up of sectors such as Insurance (upto 26%); development of
integrated townships (upto 100%); defence industry (upto 26%); tea plantation (upto
100% subject to divestment of 26% within five years to FDI); enhancement of FDI
limits in private sector banking, allowing FDI up to 100% under the automatic route
for most manufacturing activities in SEZs; opening up B2B e-commerce; Internet
Service Providers (ISPs) without Gateways; electronic mail and voice mail to 100%
foreign investment subject to 26% divestment condition; etc.

• Non Resident Indian Scheme the general policy and facilities for foreign direct
investment as available to foreign investors/ Companies are fully applicable to NRIs
as well. In addition, Government has extended some concessions specially for NRIs
and overseas corporate bodies having more than 60% stake by NRIs.

THE GROWING RELEVANCE OF GLOBALIZATION

The inevitable of globalization for organization is very well expressed by

management guru Peter Druckerin his management challenges for 21st century. “All
institution has to make global competitions a strategicgoal. No institution whether a
business, a university or a hospital can hope to survive let alone to succeed,unless it
measures up to the standards set by the leaders in its field, any place in the world.”

  11 
HISTORICAL PHASES OF GLOBALIZATION
1. The germinal phase (Europe, 1400-1750):
• Dissolution of Christendom and emergence of state
• Communities
• Catholic church
• European exploration of Africa, Asia and the Americas
• Colonialism
• Individual.

2. The incipient phase (1750-1875):

• Establishing of nation state
• Citizenship and passports
• International exhibitions and communication agreements

3. The take-off phase (1875-1925):

• First World War
• Mass international migration and restrictions thereon

4. The struggle for hegemony phase (1952-1969):

• League of Nations and UN
• Second World War
• Emergence of third World War

5. The uncertainty phase (1969-1992):

• Exploration of space
• World communities based on gender, ethnicity and race
• International relation more complex and fluid
• Global environment problem recognized
• Global mass media via space technology

  12 
PRO’S OF GLOBALIZATION
The gains from globalization can be analyzed in the context of the three types of
channels of economic globalization identified earlier.

1) Trade in Goods and Services

According to the standard theory, international trade leads to allocation of resources
that is consistent with comparative advantage. This results in specialization which
enhances productivity. It is accepted that international trade, in general, is beneficial
and that restrictive trade practices impede growth. That is the reason why many of
the emerging economies, which originally depended on a growth model of import
substitution, have moved over to a policy of outward orientation.

However, in relation to trade in goods and services, there is one major concern.
Emerging economies will reap the benefits of international trade only if they reach the
full potential of their resource availability. This will probably require time. That is
why international trade agreements make exceptions by allowing longer time to
developing economies in terms of reduction in tariff and non-tariff barriers. “Special
and differentiated treatment”, as it is very often called has become an accepted
principle.

2) Movement of Capital
Capital flows across countries have played an important role in enhancing the
production base. Capital mobility enables the total savings of the world to be
distributed among countries which have the highest investment potential. Under these
circumstances, one country’s growth is not constrained by its own domestic savings.
The inflow of foreign capital has played a significant role in the development in the
recent period of the East Asian countries.

3) Financial Flows
The rapid development of the capital market has been one of the important features of
the current process of globalization. While the growth in capital and foreign
exchange markets have facilitated the transfer of resources across borders, the gross
turnover in foreign exchange markets has been extremely large.
Some other gains are:

  13 
  The steady of cash flows into the developing countries decreases the dollar
difference.

 There is a worldwide market for the companies and for the people there is
more access to products of different countries.

 Increase in the production sector, due to worldwide market.

 Politics is emerging and the decisions taken are beneficial for the people
worldwide.
 Advancement in technology.

 Influx of information between two countries.

 Cross cultural communication between two countries.

 Decrease in brain drain.

 With globalization, there is a global market for companies to trade their

products and a wider range of option for people.

 Competition keeps prices low; as a result inflation is less likely to occur.

 Ecological imbalances melted out, governments of countries show concern

about each other.

  14 
CON’S OF GLOBALIZATION

On the impact of globalization, there are two major concerns. Under each major
concern there are many related anxieties.

1) Globalization leads to a more unequal distribution of income among countries

and within countries.

The argument that globalization leads to inequality is based on the premise that since
globalization emphasizes efficiency, gains will accrue to countries which are
favourably endowed with natural and human resources. The technological base of
these countries is not only wide but highly sophisticated. While trade benefits all
countries, greater gains accrue to the industrially advanced countries. This is the
reason why even in the present trade agreements, a case has been built up for special
and differential treatment in relation to developing countries. By and large, this
treatment provides for longer transition periods in relation to adjustment. However,
there are two changes with respect to international trade which may work to the
advantage of the developing countries:-

i) The industrially advanced countries are vacating certain areas of production.

These can be filled in by developing countries.

ii) International trade is no longer determined by the distribution of natural

resources.

With the advent of information technology, the role of human resources has emerged
as more important. Specialized human skills will become the determining factor in
the coming decades. Productive activities are becoming “knowledge intensive” rather
than “resource intensive”.

  15 
While there is a divide between developing and the advanced countries even in this
area – some people call it the digital divide - it is a gap which can be bridged. A
globalized economy with increased specialization can lead to improved productivity
and faster growth. What will be required is a balancing mechanism to ensure that the
handicaps of the developing countries are overcome.

Apart from the possible unequal distribution of income among countries, it has also
been argued that globalization leads to widening income gaps within the countries as
well. This can happen both in the developed and developing economies. The
argument is the same as was advanced in relation to unequal distribution among
countries. Globalization may benefit even within a country those who have the skills
and the technology.

The higher growth rate achieved by an economy can be at the expense of declining
incomes of people who may be rendered redundant. In this context, it has to be noted
that while globalization may accelerate the process of technology substitution in
developing economies, these countries even without globalization will face the
problem associated with moving from lower to higher technology. If the growth rate
of the economy accelerates sufficiently, then part of the resources can be diverted by
the state to modernize and re-equip people who may be affected by the process of
technology up gradation.

2) Globalization leads to loss of national sovereignty and countries are finding it

increasingly difficult to follow independent domestic policies. These two issues
have to be addressed both theoretically and empirically.

The loss of autonomy in the pursuit of economic policies. In a highly integrated

world economy, it is true that one country cannot pursue policies which are not in
consonance with the worldwide trends. Capital and technology are fluid and they will
move where the benefits are greater. As the nations come together whether it be in the
political, social or economic arena, some sacrifice of sovereignty is inevitable. The
constraints of a globalised economic system on the pursuit of domestic policies have
to be recognized.

  16 
3) Globalization leads to insecurity and volatility.

When countries are inter-related strongly, a small spark can start a large
conflagration. Panic and fear spread fast. The downside to globalization essentially
emphasizes the need to create countervailing forces in the form of institutions and
policies at the international level. Global governance cannot be pushed to the
periphery, as integration gathers speed.

Some other demerits are:

 It leads to competition for the small domestic players of company

 2.Globalization is causing Europeans to lose their jobs as work is being

outsourced to the Asian countries. The cost of labor in the Asian countries is
low as compared to other countries.

 There are experts, who believe that globalization is the cause for the invasion
of communicable diseases and social degeneration in countries.

 Poor countries are exploited by the richer countries where the workforce is
taken advantage of and low wages are implemented.

 It is becoming hard for the countries to ask their public to go through the pains
and uncertainties of structural adjustment for the sake of benefits yet to come.

  17 
 IMPACT OF GLOBALISATION ON DEVELOPING COUNTRIES
ESPECIALLY INDIA

The implications of globalisation for a national economy are many.

Globalisation 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 globalising 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.

India is Global:
The liberalisation of the domestic economy and the increasing integration of India
with the global economy have helped step up GDP growth rates, which picked up
from 5.6% in 1990-91 to a peak level of 77.8% in 1996-97. Growth rates have slowed
down since the country has still been able to achieve 5-6% growth rate in three of the
last six years. Though growth rates has slumped to the lowest level 4.3% in 2002-03
mainly because of the worst droughts in two decades the growth rates are expected to
go up close to 70% in 2003-04. A Global comparison shows that India is now the
fastest growing just after China.

This is major improvement given that India is growth rate in the 1970's was very low
at 3% and GDP growth in countries like Brazil, Indonesia, Korea, and Mexico was
more than twice that of India. Though India's average annual growth rate almost
doubled in the eighties to 5.9% it was still lower than the growth rate in China, Korea
and Indonesia. The pick up in GDP growth has helped improve India's global
position. 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.

  18 
Globalisation and Poverty:

Globalisation in the form of increased integration though trade and investment is an

important reason why much progress has been made in reducing and global inequality
over recent decades. But it is not the only reason for this often unrecognised progress,
good national polices , sound institutions and domestic political stability also matter.

Despite this progress, poverty remains one of the most serious international
challenges we face up to 1.2 billion of the developing world 4.8 billion people still
live in extreme poverty. But the proportion of the world population living in poverty
has been steadily declining and since 1980 the absolute number of poor people has
stopped rising and appears to have fallen in recent years despite strong population
growth in poor countries. If the proportion living in poverty had not fallen since 1987
alone a further 215million people would be living in extreme poverty today.

The growth of Indian economy very much depends upon rural participation in the
global race. After implementing the new economic policy the role of villages got its
own significance because of its unique outlook and branding methods.

Understanding the current status of globalisation is necessary for setting course for
future. For all nations to reap the full benefits of globalisation it is essential to create a
level playing field. President Bush's recent proposal to eliminate all tariffs on all
manufactured goods by 2015 will do it.

  19 
DRIVES TOWARDS GLOBALIZATION

Globalization started after World War II, but since the mid-1980’s it has improved
considerably globalization is driven by how much factors: one involves technological
advances that have lowered the cost of transportation, communication and
computation for a firm to locate different phases of production in different countries.
The other factors has to do with the increasing liberalization of trade and capital
markets: more and more governments are refusing to protest their economies from
foreign competition or influence through import tariffs and non-tariff barriers such as
import, export restraints and legal prohibitions.

An increase in interaction of national economic systems all over the world through the
growth in international trade, investment and capital flows is seen as a worldwide
drive toward globalization.

TECHNOLOGICAL ADVANCEMENTS FACILITATING GLOBALIZATION

Technological developments are considered as the main facilitator and driving force
of globalization. In this era of rapid technological advances, the business sector has
done well to adapt and exploit the enormous advantages of scientific and techno-
innovations to improve their operations and bottom-line. Technology gave birth to
several innovations in telecommunications such as the local and international direct
dial telephone system, fax machines, computers, and the Internet. These innovations
are used to improve the performance of business organizations in terms of operations
and marketing.

The world had become “flat” in terms of how information is shared and received; how
business and trade is done; and how people from different countries interact with each
other. Science and technology has broken down walls and divisions that have kept
many countries and people apart.

  20 
In the early days of globalization, people were afraid that it would usher in an era of
unprecedented monopoly and control over the world economy by a few powerful,
industrialized nations. After economic safety nets were put in place, it is now possible
for small countries to gradually penetrate the market of the larger, more advanced
nations.

The Internet has made it possible to communicate with other people and companies
across the oceans in real-time. It has enabled trouble-free communication during a
business meeting or in the middle of a business production process. Indeed, the
Internet and the phenomenon called globalization revolutionized the way business and
trade is done. The Internet and globalization gave birth to new industries such as
Business Process Outsourcing or BPO.

The BPO industry actually includes much business such as the contact center services,
accounting services, web-design, and other back-office services Time, distance, and
geography are fast becoming irrelevant when it comes to doing business due to
globalization and technological advancements. The good news is, these sweeping
changes have also helped companies to improve their profitability and expand their
market reach.

  21 
Once the firm has decided to enter the international arena it must make a choice regarding
the strategy to be adopted for organizing its foreign business activities.

DIFFERENT ENTRY MODES

 Exporting

Exporting is the most traditional and well established form of operating in foreign
markets. Exporting can be defined as the marketing of goods produced in one country
into another.

 Licensing
Licensing is defined as "the method of foreign operation whereby a firm in one
country agrees to permit a company in another country to use the manufacturing,
processing, trademark, know-how or some other skill provided by the licensor"

  22 
  Joint ventures
Joint ventures can be defined as "an enterprise in which two or more investors share
ownership and control over property rights and operation". Joint ventures are a more
extensive form of participation than either exporting or licensing

 Export processing zones (EPZ)

Whilst not strictly speaking an entry-strategy, EPZs serve as an "entry" into a market.
They are primarily aninvestment incentive for would be investors but can also provide
employment for the host country and thetransfer of skills as well as provide a base for
the flow of goods in and out of the country.

EFFECT OF GLOBALIZATION ON INDIAN ECONOMY

 India’s share in the world trade has risen to .86% in 2003 from .53% in 1991.
 Exporters are responding well to sweeping reforms in exchange rate and trade
policies.
 Exports now finance over 80% of imports.
 During 2001-2009 we had surplus in current account ranging between 07-08%
of GDP.
 Exchange rate for the rupee has remained almost steady.
 International confidence in India has been restored.
 Certain benefits have accrued to the Indian consumer in the form of large
variety of consumer goods, improved quality of goods.
 Markets have stared responding to the movements ahead. A fluctuation in the
U.S market or UK market has started affecting Indian market.
 The rating agencies which rate investment risks in countries for global
investors, have upgraded India’s rating.
 More and more companies are opening branch offices/subsidiaries in other
countries and are making their presence felt. Example: Asian paints, Tata’s,
Ranbaxy Infosys etc.

  23 
 GLOBAL ISSUES RELATED TO GLOBALISATION

 WTO Doha “Development” Trade Round Collapse, 2006

Why the WTO Doha Round Talks Have Collapsed – and a Path Forward

The collapse of the World Trade Organization (WTO) Doha Round on July 24, 2006,
came as no surprise. A decade into the WTO experiment, it is clear that the WTO
model of corporate globalization has not delivered the promised benefits of increased
economic prosperity, while economic, social, and environmental conditions have
worsened in many rich and poor countries alike. The collapse of the Doha Round
WTO expansion talks offers an extraordinary opportunity for a fundamental re-think
of the direction of the global economy.

To date, most press coverage of the Doha Round collapse has focused on the blame
game -- which countries' failure to make specific agricultural concessions is to blame.
But the under-recognized, but extremely important story is that the underlying cause
of the breakdown is the growing rejection of the WTO, and more broadly of the
corporate-led globalization model, by many people worldwide based on this model's
effects on their lives.

Since the Doha Round's 2001 launch, every deadline on issues from service sector
liberalization to industrial tariffs has passed. In 2004 half of the original Doha agenda
-- adding new foreign investor rights and limits on countries' competition and
procurement policies -- was simply jettisoned after the Cancun WTO summit
imploded. At issue throughout has been major differences regarding the WTO's
proper objectives and direction. Effectively, popular opposition is now a significant
counterforce pressuring many WTO member nations to reject the agenda pushed by
the world's largest multinational corporations, which traditionally have used the WTO
Secretariat and negotiators of the world's most powerful countries to write the rules of
the global economy in favor of expanding their profit margins.

  24 
The Doha Round was dubbed as a "Development Round." However, the actual texts
reveal an agenda aimed at expanding the scope of the existing WTO regime. Yet,
after a decade of damaging results, many people in the 149 WTO signatory nations
have made clear their opposition to more of the same. This was before the World
Bank dramatically revised downward its projections of Doha Round gains and
revealed that a long list of poor countries would be net losers under the likely
outcome. While U.S. and European editorials declared the Doha Round collapse as
disaster for the poor, social movements and NGOs representing the populations of
poor countries cheered.

Meager Projected Doha Round Gains for a Few and Net Losses for Many
The Doha Round was dubbed a "Development Round." However, the actual texts
reveal an agenda aimed at expanding the scope of the existing WTO regime. Given
the record of the WTO decade, proponents of the Doha Round agenda sought to
change the debate away from the WTO's performance and onto prospective future
gains. While initial projections by the World Bank were $832 billion, more recent
World Bank studies based on revised analysis found extremely limited possible gains
from a "Doha Round" overall.

The most likely Doha scenario the World Bank reviewed would yield benefits of only
$54 billion to the world by 2015, with developing countries receiving a meager 16
percent of those gains. These projections amount to a miniscule 0.14 percent of
projected developing country GDP by that year, or about 0.23 percent of world GDP.
Put another way, it is a little less than one cent per person per day to the developing
world, or about four cents per person per day to the world as a whole.

Worse, the new research revealed that under the "likely" Doha scenario, the Middle
East, Bangladesh, much of Africa and (notably) Mexico would actually face net
losses. These studies also showed that the alleged gains that are projected to accrue to
Brazil and India would be largely concentrated in those countries' agribusiness and
manufacturing industries respectively, while subsistence farmers -- a much, much
larger percentage of those populations -- would see tiny gains or net losses.

  25 
There are several key problems with the studies, however, in that they project gains
from agriculture and goods liberalization without taking into account many costs of
Doha implementation. First of all, the economic models used in the studies "assume
full employment." That means they capture alleged savings on consumer food prices
as gains, but fail to show a loss if millions of subsistence farmers, who represent
nearly half of the developing world, lose their livelihoods.

In addition, they fail to include the increased costs that consumers worldwide pay for
medicines due to pharmaceutical monopolies, which some economists estimate
outweigh the projected gains, even for the few developing country "winners." And
finally, the models fail to adequately take into account the loss in tariff revenue for
developing countries, which the United Nations Conference on Trade and
Development estimated would be 2 to 4 times the projected gains for developing
countries from the Doha WTO expansion. These flaws have rarely been mentioned in
media reports touting alleged "gains" for the poor.

The World Bank findings are key to understanding the current political dynamic
because many countries only reluctantly entered into WTO expansion talks at Doha in
2001 after being promised a "development" round aimed at rectifying imbalances left
over from the original 'Uruguay Round" multilateral negotiations that hatched the
WTO. Indeed, at the 2001 Doha WTO Ministerial, where the talks that have just
collapsed were started, a group of 100 developing nations had tabled an alternative
agenda for negotiations, called the Implementation Agenda, which consisted of
specific fixes needed to existing WTO terms.

The Implementation Agenda was the developing countries' counter-initiative after

they had rejected the "Millennium Round" WTO expansion agenda at the 1999
Seattle WTO summit. So while the media still refers, without attribution, to the
negotiations as a mechanism to help the poor, in fact those pushing WTO expansion
merely used the false promise of poverty reduction to get the talks launched, while
pursuing policies geared to fatten corporate profit margins.

  26 
The Way Forward: Saving Global Trade from the WTO

Taken together, the evidence points conclusively to a global shift away from the neo-
liberal corporate globalization model embodied by the WTO based on people's
experience of the model's failure. With the Doha Round's collapse, the story to be
written is about viable alternatives to the WTO - as well as to the bilateral or regional
trade agreements based on the same failed model.

Instead of pinning blame on specific countries, the focus of energy should be on how
the world's governments can develop a multilateral trade system that preserves the
benefits of trade for growth and development, while pruning away the many anti-
democratic constraints on domestic policy making contained in the existing WTO
rules. These rules are designed to create a world that operates as one single
homogenized global market rather than setting terms of trade between separate
nations with distinct priorities.

The critics of corporate globalization are for international trade between different,
unique countries or regions when it is mutually beneficial. To strike this balance
between promoting trade while respecting the laws and values of different countries,
some existing international rules and institutions need to be cut back, while others
need to be bolstered.

Currently, the WTO trumps all other international agreements. The WTO must be
scaled back so that the human rights, environmental, labor and other multilaterally
agreed public interest standards already enshrined in various international treaties can
serve as a floor of conduct for corporations seeking the benefits of global trade rules.
For instance, the International Labor Organization provides core labor standards;
there are more than 200 multilateral environmental treaties covering toxics, air
pollution, biodiversity and waste dumping; and the World Health Organization and
the U.N. Charter on Human Rights provide many standards on access to medicine and
food security.

  27 
 These are but a few of the rich alternatives being discussed everywhere but at the
WTO. The WTO experiment has failed. Replacing the overreaching WTO agenda
with fair rules aimed at facilitating trade between willing countries is the only way
forward.

Such change globally requires work form us living here in the United States. We can
start by building a majority in our elected leadership who understand that the
corporate globalization system implemented by the WTO has failed American
workers and farmers, failed the most basic tenants of democratic governance and
failed the world. Time is long overdue to change the way this policy is developed and
thus whose needs it serves. This will only happen through citizen activism.

Meeting Failed because US felt developing countries were not reciprocating on

trade concessions
Technically, the US was blamed for causing the collapse in July 2006, because it felt
that developing countries would not open markets in the same way that it was being
asked to open its and so it saw no point in continuing the talks. It wanted what would
seem like a fair deal: rich countries open their market, and poor countries do the same
in return. Without understanding context or history, this sounds just and equal.

However, as discussed throughout this site, global trade has always been unequal, in
favor of, dominated by, and influenced by, the rich countries. Hence, this “tit for tat”
reciprocation, would continue the unequal global trade—under the guise of equality.
The Doha “Development” Round, as it has been known, was nicknamed that way to
show that this round of trade negotiations were to favor poor countries’ ability to
develop and prosper from global trade, while acknowledging the unequal nature of
global trade, dominated by industrialized countries, at the direct expense of the
developing world.

  28 
 India’s commerce minister, Kamal Nath noted similar things:
This is a Development Round, completing it is extremely important but equally
important is the content of the Round. The content has to demonstrate new
opportunities for developing countries, primarily market access of developing
countries into markets of developed countries.

This Round is not for perpetuating the flaws in global trade especially in
agriculture, it’s not to open markets in developing countries in order for developed
countries to have access for their subsidized products to developing countries.
We say the Round should correct the structural flaws and distortions in the system,
and there should be fair trade, not only free trade. They [US] say “we want market
access and only if we get it the way we want it can we correct the structural flaws.”
There is no equity in that argument.

— Kamal Nath, quoted by Martin Khor, All Doha talks suspended at WTO as G6
Ministerial collapses, Third World Network, July 24, 2006 (Emphasis Added)

Trade issues expert, Martin Khor, also added: “Asked if the US and EU Ministers
were ‘shedding crocodiles tears’ when they said they were sorry for developing
countries that the talks had failed, Nath said those countries had got the whole concept
of the Round inverted, they that advocated ‘market access’ that would displace
millions of farmers, and this was a problem of their whole mindset. ‘This is not what
the Doha Declaration and the Hong Kong Declaration is about.’”

Failure Since The Doha Round Started In 2001

The failure was not just a sudden one. The history of the Doha round has been filled
with double-talk, with rich countries often demanding poor countries concede ground
in unfair ways, with poor countries occassionally taking a strong stance against these
demands, and the EU and US in particular driving for more open markets in poorer
countries, sometimes even blaming the poorer countries for failed talks, or calling
deals criticized as bad for the poor, as good for the poor.

  29 
  NEOLIBERALISM

Neoliberalism is promoted as the mechanism for global trade and investment

supposedly for all nations to prosper and develop fairly and equitably. Margaret
Thatcher’s TINA acronym suggested that There Is No Alternative to this.

This section attempts to provide an overview. First, a distinction is made between

political and economic liberalism. Then, neoliberalism as an ideology for how to best
structure economies is explained. Lastly, for important context, there is a quick
historical overview as to how this ideology developed.

Neoliberalism, in theory, is essentially about making trade between nations easier. It

is about freer movement of goods, resources and enterprises in a bid to always find
cheaper resources, to maximize profits and efficiency.

To help accomplish this, neoliberalism requires the removal of various controls

deemed as barriers to free trade, such as:
• Tariffs
• Regulations
• Certain standards, laws, legislation and regulatory measures
• Restrictions on capital flows and investment

The goal is to be able to to allow the free market to naturally balance itself via the
pressures of market demands; a key to successful market-based economies.

The main points of Neoliberalism includes:

• The rule of the market — freedom for capital, goods and services, where the
market is self-regulating allowing the “trickle down” notion of wealth
distribution. It also includes the deunionizing of labor forces and removals of
any impediments to capital mobility, such as regulations. The freedom is from
the state, or government.

• Reducing public expenditure for social services, such as health and education,
by the government

  30 
 • Deregulation, to allow market forces to act as a self-regulating mechanism

• Privatization of public enterprise (things from water to even the internet)

• Changing perceptions of public and community good to individualism and

individual responsibility.

Today then, neoliberal policies are seeing positives and negatives. Under free
enterprise, there have been many innovative products. Growth and development for
some have been immense. Unfortunately, for most people in the world there has been
an increase in poverty and the innovation and growth has not been designed to meet
immediate needs for many of the world’s people. Global inequalities on various
indicators are sharp. For example,

• Some 3 billion people — or half of humanity — live on under 2 dollars a day

• 86 percent of the world’s resources are consumed by the world’s wealthiest 20
percent

Joseph Stiglitz, former World Bank Chief Economist (1997 to 2000), Nobel Laureate
in Economics and now strong opponent of the ideology pushed by the IMF and of the
current forms of globalization, notes that economic globalization in its current form
risks exacerbating poverty and increasing violence if not checked, because it is
impossible to separate economic issues from social and political issues.

And as J.W. Smith has argued:

One cannot separate economics, political science, and history. Politics is the control
of the economy. History, when accurately and fully recorded, is that story. In most
textbooks and classrooms, not only are these three fields of study separated, but
they are further compartmentalized into separate subfields, obscuring the close
interconnections between them.

— J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy,
1994), p. 22.

  31 
MAIN ORGANISATIONS FOR FACILITATING GLOBALIZATION

 THE INTERNATIONAL MONTARY FUND

The IMF was organized in 1946 and commenced its operations in March, 1947.

The following are the major functions of the IMF:

1) It functions as a short term credit institution.

2) It provides machinery for the orderly adjustment of exchange rates.
3) It is a reservoir of the currencies of all the member nations.
4) It is a sort of lending institution in foreign exchange.
5) It provides machinery for international consultations.

 THE WORLD BANK

The international bank for reconstruction and development (IBRD) more popularly
known as the he World Bank was formed as a part of the deliberations of Bretton
Woods in 1945.

The main functions of the World Bank are:

1) To help its member countries in the reconstruction and development of their

territories.

2) To encourage private foreign investment and credit by providing guarantee of

repayment of the private investors.

3) To promote the long term balanced growth of international trade. The world trade
organization a powerful body which broadly aims at making this world a big village
where there is free flow of goods and service and where there’re no barriers to trade.

  32 
  WORLD TRADE ORGANIZATION

The WTO came into existence on 1st January, 1995.Following are the functions of
WTO:

1) The WTO shall facilitate the implementation, administration and operation of

world trade agreements.
2) The WTO shall provide the forum for trade negotiations among its member
countries.
3) The WTO shall handle trade disputes.
4) The WTO shall monitor national trade policies.
5) It shall provide technical assistance and training to developing countries.

ONGOING DEBATE ON GLOBALISATION

The current state of debate on globalization can be divided into two parts:

 One pertaining to the liberalization of capital flows,

 The other pertaining to trade liberalization.

In the debate on the liberalization of capital flows, the key question is whether to
make the rupee convertible on the capital account. This effectively means removing
all remaining restrictions on capital flows. There are, however, both pros and cons of
this sort of unfettered movement of capital across borders. As a result, we are going to
look at the economic theory and empirical evidence on this issue. It needs to be noted
that most of the empirical work on this issue is based on cross-country studies where
India may or may not figure in the dataset.

  33 
As far as the trade liberalization debate is concerned, there is general agreement
among economists and policymakers that free trade provides aggregate gains for a
country. However, free trade also creates winners and losers. Since the gains to the
winners tend to outweigh the losses to the losers, in principle, everyone can be made
better off. However, appropriate policies for redistributing the gains from trade may
not be in place. In this context, it becomes important to analyze the impact of trade
liberalization on direct outcomes of interest such as poverty, inequality,
unemployment, child labor etc., on which the political support for trade reforms
crucially depends. As is well known, trade reforms in many of the Latin American
countries have been reversed in response to public outrage over the adverse
distributional consequences of free trade.

FINANCIAL GLOBALISATION

Financial globalization has been blamed for the recent financial crises in Latin
America and East Asia. Upon closer examination one finds that the capital reversals
are associated mainly with short term bank loans which are recalled by foreign banks
in the face of an imminent crisis and are not rolled over. Therefore, the greater a
country’s exposure to short term foreign currency lending, the greater its propensity
for financial crises (see Rodrik and Velasco 2000 for evidence). Such reversals of
capital flows are very unlikely in the case of equity investments and even long-term
bond investments.

Therefore, to prevent the likelihood of a crisis, a country should rely more on equities
and long term debts rather than short-term borrowing. Rodrik and Velasco (2000) thus
argue that the ratio of short term debt to reserves is a good predictor of crisis, and
greater short term exposure predicts more severe crisis.

According to the Reserve Bank of India (RBI) the short term debt to reserves ratio for
India stood at 0.15 at the end of June 2009. This number is tiny in comparison to the
ratios in the East Asian countries prior to the financial crisis.This ratio suggests no
danger of an imminent financial crisis in India, however, it should be kept in mind
that the low ratio is mainly a result of restrictions on short term bank borrowing by
Indian businesses in foreign currency. The minimum maturity for external
commercial borrowing for Indian businesses is fixed at 3 years by the RBI. The short-
term debt comprises mainly trade credit.

  34 
In addition to the possibility of a financial crisis, capital account liberalization can
also impose costs through the appreciation of the local currency. A surge in capital
inflows can lead to an appreciation of real exchange rate, which in turn reduces the
profitability of the tradable sector relative to the non tradable sector of the economy.

If investment opportunities are mainly in tradable manufacturing, as opposed to non-

traded services, then the capital inflows could cause a decrease in investment via the
appreciation of the real exchange rate. Consistent with this hypothesis, Prasad, Rajan
and Subramanian (2007) find evidence that countries that finance more of their
investments with domestic saving grow faster. Gourinchas and Jeanne (2007) also
find that countries relying more on foreign capital have grown slowly.

In arguing against capital account liberalization and for improvement in domestic

financial institutions, Rodrik and Subramanian (2009) suggest that the latter can not
only increase the amount of savings available for investment, but can increase the
profitability of the tradable sectors by depreciating the real exchange rate. This would
spur investment and growth.

As far as the Indian experience is concerned, large inflows of capital have put an
upward pressure on the real exchange rate. The RBI has mostly adopted a policy of
sterilized intervention to prevent the real exchange rate from appreciating. Despite the
policy of sterilized intervention, the real effective exchange rate (REER) has
fluctuated over time. The REER appreciated by 12% between July, 2006 and July,
2007 and the exporters were compensated for the loss of competitiveness through
direct fiscal transfers. The REER has depreciated since 2007 and in October, 2009, it
was 10% less than its level at the end of 2007. However, the policy of sterilized
intervention has limitations. As pointed out by Prasad and Rajan (2008), the
accumulation of reserves through sterilized intervention effectively involves buying
low interest bearing securities from foreign governments financed by high interest
bearing domestic debt.

  35 
Given the high fiscal deficit in India, it is possible that access to foreign borrowing
may tempt the government into running larger deficits. As far as the improvement in
financial services is concerned, why not undertake direct reforms in the financial
sector rather than rely on capital mobility to indirectly improve financial institutions?
As well, the benefits of competition from the presence of foreign banks can be reaped
even without relaxing all capital controls by allowing Foreign Direct Investment
(FDI), an approach that has been followed in India. FDI needs to be distinguished
from portfolio investment because the former is a real transaction involving the
transfer of skills, technology etc. which is likely to have a positive effect on the host
country.

Since the beginning of 1990s, India has substantially liberalized its FDI regime .
Now, FDI is prohibited only in a handful of sectors/activities such as multi-brand
retail, atomic energy, lottery, betting and gambling.

There is considerable controversy over the speed of FDI liberalization in general and
its speed in the retail sector, real estate and banking in particular. The chief concern
of people opposed to rapid liberalization of FDI in these sectors, retail sector in
particular, is the massive labor displacement that a flood of FDI may cause. In the
absence of rapid job creation in the manufacturing sector, the well being of these
displaced workers will be adversely affected and can be a source of major social
instability. Since FDI is not permitted in multi-brand retailing in India, one cannot
replicate the studies on FDI in the retail sector done for other countries.5 However,
several domestic corporations like Reliance, Tata, and others have entered the
organized retail sector. It would be interesting to study their impact on jobs in the
retail sector to get a sense of what to expect from FDI.

Another controversial area from the point of view of FDI is agriculture. Since
agriculture is a state subject in India, any policy allowing FDI in agriculture needs to
be coordinated with the state government(s) involved. Finally, given the poor state of
infrastructure in India, attracting FDI for infrastructure development (education,
energy, roads, ports and airports) should be a policy imperative.

  36 
RESPONDING TO GLOBALIZATION: INDIA’S ANSWER

Globalization has become an expression of common usage. While to some, it

represents a brave new world with no barriers, for some others, it spells doom and
destruction. It is, therefore, necessary to have a clear understanding of what
globalization means and what it stands for, if we have to deal with a phenomenon that
is gathering momentum.

MEASURES TOWARDS GLOBALIZATION

To pursue the objective of globalization, the following measures have been taken:

1) Convertibility of rupee

The most important measure for integrating the economy of any country is to make its
currency fully convertible i.e., allow it to determine its own exchange rate in the
international market without any official intervention.

2) Import liberalization

As per the recommendation of the World Bank, free trade of all terms except negative
list of imports and exports has been allowed. In addition, import duties on a wide
range of capital commodities have been drastically cut down. India, being a member
of WTO has since April 2001, totally removed the quantitative restrictions on foreign
trade.

3) Opening the capital to foreign capital

The government has taken a number of measures to encourage foreign capital in

India. The foreign direct investment floodgates have been opened.

  37 
India’s Stance
At the outset it must be mentioned that opting out of globalization is not a viable
choice for India in this environment of growing globalization. An appropriate
framework must be evolved to wrest maximum benefits out of international trade and
investment. This framework should include

(a) making explicit the list of demands that India would like to make on the
multilateral trade system, and

(b) steps that India should take to realize the full potential from globalization.

Demands on the Trading System

Without being exhaustive, the demands of the developing countries on the multilateral
trading system should include

(1) establishing symmetry as between the movement of capital and natural persons,

(2) delinking environmental standards and labour related considerations from trade
negotiations,

(3) zero tariffs in industrialized countries on labour intensive exports of developing

countries,

(4) adequate protection to genetic or biological material and traditional knowledge of

developing countries,

(5) prohibition of unilateral trade action and extra territorial application of national
laws and regulations, and

(6) effective restraint on industrialized countries in initiating anti-dumping and

countervailing action against exports from developing countries.

  38 
The purpose of the new trading system must be to ensure “free and fair” trade among
countries. The emphasis so far has been on “free” rather than “fair” trade. It is in this
context that the rich industrially advanced countries have an obligation. They have
often indulged in “double speak”. While requiring developing countries to dismantle
barriers and join the main stream of international trade, they have been raising
significant tariff and non-tariff barriers on trade from developing countries. Trade
barriers impose a serious burden on the developing countries. It is important that if
the rich countries want a trading system that is truly fair, they should come forward to
reduce the trade barriers and subsidies that prevent the products of developing
countries from reaching their markets.

There have been protracted negotiations at WTO in reforming the trade system.
Admittedly, the tariff and non-tariff barriers are coming down. However, there are
apprehensions that the concerns of developing countries are not being addressed
adequately.

Actions by India
The set of measures that should form part of the action plan must relate to
strengthening India’s position in international trade.

1)India has many strengths, which several developing countries lack. In that
sense, India is different and is in a stronger position to gain from international trade
and investment. India’s rise to the top of the IT industry in the world is a reflection of
the abundance of skilled manpower in our country. It is, therefore, in India’s interest
to ensure that there is a greater freedom of movement of skilled manpower.

2) We should attempt to take all efforts to ensure that we continue to remain a

frontline country in the area of skilled manpower. India can attract greater foreign
investment, if we can accelerate our growth with stability. Stability, in this context,
means reasonable balance on the fiscal and external accounts.

  39 
3) Maintain a competitive environment domestically so that we can take full
advantage of wider market access. We must make good use of the extended time
given to developing countries to dismantle trade barriers. Wherever legislations are
required to protect sectors like agriculture, they need to be enacted quickly. In fact,
we had taken a long time to pass the Protection of Plant Varieties and Farmers’ Rights
Act.

4) Be active in ensuring that our firms make effective use of the new patent
rights. South Korea has been able to file in recent years as many as 5000 patent
applications in the United States whereas in 1986, the country filed only 162. China
has also been very active in this area. We need a truly active agency in India to
encourage Indian firms to file patent applications. In effect, we must build the
complementary institutions necessary for maximizing the benefits from international

trade and investment.

5) Voice our concerns. In cooperation with other developing countries modify the
international trading arrangements to take care of the special needs of such countries.
At the same time, we must identify and strengthen our comparative advantages. It is
this two-fold approach which will enable us to meet the challenges of globalization
which may be the defining characteristic of the new millennium.

6) India’s growth lies in improving productivity and efficiency. This has to

permeate all walks of our life. Contrary to the general impression, the natural
resources of our country are not large. India accounts for 16.7 per cent of world’s
population whereas it has only 2.0 per cent of world’s land area. The need for greater
efficiency in the management of natural resources like land, water and minerals has
become urgent. In a capital-scarce economy like ours, efficient utilization of our
capacity becomes even more critical. For all of these things to happen, we need well-
trained and highly skilled people.

  40 
Globalization and Technological changes

Changes in the foreign trade and foreign investment policies have altered the
environment in which Indian industries have to operate. The path of transition is, no
doubt, difficult. A greater integration of the Indian economy with the rest of the world
is unavoidable. It is important that Indian industry be forward looking and get
organized to compete with the rest of the world at levels of tariff comparable to those
of other developing countries. Obviously, the Indian Government should be alert to
ensure that Indian industries are not the victims of unfair trade practices. The
safeguards available in the WTO agreement must be fully utilized to protect the
interests of Indian industries.

Indian industry has a right to demand that the macro economic policy environment
should be conducive to rapid economic growth. The configuration of policy decisions
in the recent period has been attempting to do that. It is, however, time for Indian
industrial units to recognize that the challenges of the new century demand greater
action at the enterprise level. India is no longer a country producing goods and
services for the domestic market alone. Indian firms are becoming and have to
become global players. At the minimum, they must be able to meet global
competition. The search for identifying new competitive advantages must begin
earnestly. India’s ascendancy in Information Technology (IT) is only partly by design.
However, it must be said to the credit of policy makers that once the potential in this
area was discovered, the policy environment became strongly industry friendly.

  41 
 CONCLUSION

Globalization is the interaction, integration of all the economies of the world through
free trade treaties. The term “globalization” has quickly become one of the most
fashionable buzzwords of contemporary political and academic debate. It has
significantly enhanced the speeding up of development of all the economies. Its
impact has been on every person, company, organization, and economy globalization
is not merely an intensification of global interconnectedness brought about by market
forces and technological change. Rather, it is a worldview shaped by capital and
hegemonic power that aspires to establish a global system in line with the interests of
capital. Capitalism, as a market-oriented system of production, has an inherent
globalizing tendency. The financial crises affecting different countries have shaken
the confidence of the advocates of Globalization. Yet despite notable setbacks and
shaken confidence, the advocacy for globalization remains strong. There are many
organizations like the IMF, World Bank and WTO, which has facilitated
the growth of MNC’s and continuously provides full support to them.

  42 
 REFERENCES

 Bhagwati Jagdish: In Defense of Globalization: Oxford University Press, 2004

 Friedman, Thomas L: The World Is Flat, 2005
 Porter Michael and Ed: Competition in Global Industries: Harvard Business
School, 1986
 A fair Globalization (creating opportunity for all): Academic foundation, 2004
 Cherunilam.Francis: International Business Environment: Himalaya
publishing House, 2009-11-16 UNDP 2007 ANNUAL REPORT World Bank
development indicators 2003
 Special Report - The Global 2000," Forbes, April 2, 2008 Friedman, Thomas
L. (2005).
 The World Is Flat Yenijurt.Sengun: a literature review and integrative
performan
 http://www.globalissues.org/article/663/wto-doha-development-trade-round-
collapse-2006
 http://www.globalissues.org/article/39/a-primer-on-neoliberalism

  43