Q . How is information technology connected with globalisation?
- Information and communication technology is closely connected with globalisation.
- In recent times, technology in the areas of telecommunications, computers, internet has been changing rapidly.
- Telecommunications facilities such as telegraph, telephone including mobiles, fax have brought the world closer. Now people can contact around the world easily
- These developments are used to access the information instantly and communicate in the remote areas.
- Computer and internet have entered in almost all the fields. Internet allows one to share information on almost everything.
- We can send instant e-mail and talk through voice-mail across the world at almost negligible cost
Liberalisation of foreign trade and foreign investment policy
- Tax on imports is an example of trade barrier.
- It is called a barrier because some restriction has been set up.
- Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.
- The Indian government, after Independence, had put barriers to foreign trade and foreign investment.
- This was considered necessary to protect the producers within the country from foreign competition.
- Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up.
- Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum etc.
- Note that all developed countries, during the early stages of development, have given protection to domestic producers through a variety of means.
- Starting around 1991, some far reaching changes in policy were made in India.
- The government decided that the time had come for Indian producers to compete with producers around the globe.
- It felt that competition would improve the performance of producers within the country since they would have to improve their quality.
- This decision was supported by powerful international organisations.
- Thus, barriers on foreign trade and foreign investment were removed to a large extent.
- This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.
- Removing barriers or restrictions set by the government is what is known as liberalisation.
- With liberalisation of trade, businesses are allowed to make decisions freely about what they wish to import or export.
- The government imposes much less restrictions than before and is therefore said to be more liberal.
Q. “The impact of globalisation has not been uniform”. Explain this statement.
- Let us observe the impact of MNCs on domestic producers and the industrial working class to verify the truth behind this statement.
- Small producers of goods such as barriers, capacitors, plastic toys, tyres, dairy products and vegetable oil have been hit hard by the competition from cheaper imports.
- Also, due to the growing competition, the workers are hired on flexible wages.
- This has reduced their job security.
- Though efforts are there now to make globalisation ‘fair’ for all since it has become a worldwide phenomenon.
Q. How has liberalisation of trade and investment policies helped the globalisation process?
- Earlier, several developing countries had placed barriers and restrictions on imports and investments from abroad to protect domestic production.
- Nevertheless, to improve the quality of domestic goods, these countries have therefore removed those barriers.
- Thus, Liberalisation is leading to a further spread of globalisation because now business companies are allowed to make their own decisions on imports and exports.
- This has led to a deeper integration of national economies into one business as a whole.
Q. How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.
- Ans. Foreign trade provides opportunities for both producers and buyers to reach beyond the markets of their own countries.
- Goods travel from one country to another which creates competition among producers of various countries as well as options for buyers.
- Thus foreign trade leads to integration of markets across countries.