Page 343 - DPOL202_COMPARATIVE_POLITICS_AND_GOVERNMENT_ENGLISH

Comparative Politics and Government

Notes liberalization-their concern justifiably is to work in concert at the multilateral level and under the
WTO regime to reshape the globalization process. In doing so, the less developed countries have
evolved common strategies to realize their goals. As has been mentioned on specific issues such as
TRIPS, TRIMS, trade in services, tariffs on industrial goods etc. the less developed countries have
collectively placed their views in the successive WTO meetings. Though me outcome of these
negotiations have not been as yet encouraging, these meetings at least have brought the less developed
countries to come together and present what would be described as the shared responses. Admittedly
the task ahead for the less developed countries is daunting. Yet, given the ‘rule-based’ trade regime
that has come into being under the auspices of the WTO the less developed countries will have to put
their efforts in evolving new rules of the game.
Components of Globalization

The components of globalization include GDP, industrialization and the Human Development Index
(HDI). The GDP is the market value of all finished goods and services produced within a country’s
borders in a year, and serves as a measure of a country’s overall economic output. Industrialization
is a process which, driven by technological innovation, effectuates social change and economic
development by transforming a country into a modernized industrial, or developed nation. The Human
Development Index comprises three components: a country’s population’s life expectancy, knowledge
and education measured by the adult literacy, and income.

The degree to which an organization is globalized and diversified has bearing on the
strategies that it uses to pursue greater development and investment opportunities.

The Economic Impact on Developed Nations

Globalization compels business to adapt to different strategies based on new ideological trends that
try to balance rights and interests of both the individual and the community as a whole. This change
enables businesses to compete worldwide and also signifies a dramatic change for business leaders,
labor and management by legitimately accepting the participation of workers and government in
developing and implementing company policies and strategies. Risk reduction via diversification
can be accomplished through company involvement with international financial institutions and
partnering with both local and multinational businesses.
Globalization brings reorganization at the international, national and sub-national levels. Specifically,
it brings the reorganization of production, international trade and the integration of financial markets.
This affects capitalist economic and social relations, via multilateralism and microeconomic
phenomena, such as business competitiveness, at the global level. The transformation of production
systems affects the class structure, the labor process, the application of technology and the structure
and organization of capital. Globalization is now seen as marginalizing the less educated and low-
skilled workers. Business expansion will no longer automatically imply increased employment.
Additionally, it can cause high remuneration of capital, due to its higher mobility compared to labor.
The phenomenon seems to be driven by three major forces: globalization of all product and financial
markets, technology and deregulation. Globalization of product and financial markets refers to an
increased economic integration in specialization and economies of scale, which will result in greater
trade in financial services through both capital flows and cross-border entry activity. The technology
factor, specifically telecommunication and information availability, has facilitated remote delivery
and provided new access and distribution channels, while revamping industrial structures for financial
services by allowing entry of non-bank entities, such as telecoms and utilities.
Deregulation pertains to the liberalization of capital account and financial services in products, markets
and geographic locations. It integrates banks by offering a broad array of services, allows entry of
new providers, and increases multinational presence in many markets and more cross-border activities.

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