GLOBALIZATION

Definition: Globalization can be explained as a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation, and trade.
Salient features of Globalization:
 Globalization is the reduction and removal of barriers between nations in order to facilitate the flow of goods, capital, services and labour.
 Globalization phenomena started in the late nineteenth century.
 Negative integration is the breaking down of trade barriers or protective barriers such as tariffs and quotas.
 The removal of barriers can be beneficial for a country if it allows for products that are important or essential to the economy.
 Globalization has been facilitated by improvement in technology reduced costs of trade, and trade negotiation rounds, Under GATT.
 GATT has led to a series of agreements to remove restrictions on free trade.

Initiatives to promote free trade by GATT and WTO:
 Elimination of tariffs.
 Creation of free trade zones.
 Reduction, elimination, or harmonization of subsidiaries for local businesses.

Positive effects of Globalization:
 New markets for Trading.
 Technological Progress.
 Multinationals providing competition to domestic companies.
 Greater Mobility of Human Resources across Countries.
 Greater Outsourcing of Business Processes to Other Countries.
 Boom in the financial (banking) sector of Pakistan.
 Globalization resulted in the emergence of worldwide financial markets and better access to external financing.

Negative effects of Globalization:
 An opportunity in richer countries drives talent away from poorer countries.
 Globalization has badly affected the environment of the whole world.
 It is becoming increasingly difficult to maintain food security.
 The world recession also affected Pakistan’s economy because of having trading agreements with other countries.
 Poverty and globalization moves in an opposite direction and it has negative correlation.
 Technology & globalization has a right relationship, interaction between different countries leads to advancements in technology.