Globalisation Globalisation is a process that allows greater interaction among countries, persons and businesses around the world, leading to development of the global economy. It is manifested by political, social, cultural and technological integration of individuals, societies and economies all over the world (Boudreaux, 2008, p. 1). To a large extent, globalisation results into the harmonisation of international laws and policies. For example, each country formulates its own trade policies regarding taxation and tariffs. With the influence of globalisation, different countries are able to work to have identical policies in order to trade efficiently with each other.
According to Institute on Globalisation and Food Systems, (2005, p. 67), the process of globalization is brought about by the linearization of international trade paving way for corporations to pursue larger markets. In addition, globalisation has been brought about by the huge advances in infrastructure, communication and transportation. It means that all actors around the world are able to participate in global relations under common rules. Several agreements including the World Trade Organization (WTO) agreements provide the rules for trade, labour relations, environmental care, sanitary and food safety compliance among others.
When a government signs them, it is ruled by the agreements. In many cases, this leads to revision of already existing national policies so as to conform to the agreements (Sapru, 2008, p. 503). One indicator of the extent of globalisation is volume of international transactions occurring per day. Currently, there is a flow of $ 1.2 trillion flowing through the New York currency markets every day. At the same time, the volume of international stock market transactions per day exceeds that amount.
Benefits of globalisationAccording to the Institute on Globalization and Food Systems, (2005, p 67), the globalisation process has numerous benefits. Some of these benefits are listed below: Globalisation greatly helps to increase communication among people around the world on a more permanent basis and at much lower costs. Presence of internet services recently has led to stronger corporate and personal relations. It helps them to advertise products and service, to acquire knowledge and obtain entertainment among other benefits. Through development of new technology, financial transactions are made more quickly at much less charges.
This facilitates business since it enables international flow of funds, which supports the international economy. Globalisation has enabled the tourism business to grow significantly. This is due to the fact that tourists are able to find more information about sites and new opportunities more easily since it is readily available. Through advancement in technology, firms of any size and from any location are able to practice agro-tourism and ecotourism. Globalisation has increased mobility of technological innovation including those for agriculture and agro-forestry. It is now possible to purchase materials, tools, equipment, seeds, vegetative tissues, and embryos by internet or mail and pay for them by electronic cards or card transfers.
The advent of new technology which has been a factor in globalisation has led to increased foreign direct investment. This has resulted into higher competition by businesses globally and has enabled international business to thrive. With the support of sound economic policies and technological advancements, many countries have been able to realize high growth rates in their economies. For example, India has had a continued economic growth rate of 8% and more or above per year recently (WTO, July 2008). There has been an increase in the international flow of goods and services caused by the relaxation of trade barriers and compliance with common rules. Countries that have adopted liberalized economic policies have seen a reduction in the levels of poverty due to the associated wider market for local goods and services. Newer technologies in research, IT and production lead to a reduction in the costs of production and increase in levels of sales.
In addition, this leads to an increase in the level of skills possessed by the labour force (WTO, July 2008). Due to the increase in flow of goods across borders, consumers are able to get better products at lower costs.
This helps to mitigate the effects of inflation to a nation. Costs of globalisation