"Globalization" started many years ago in the early 15th century, much before the 'Age of Exploration' or the 'European Age of Discovery' when humans interacted over long distances to explore the America, Asia, Africa and Oceania. The Silk Road, interlinking international trade routes for Asia, Africa and Europe was built over the Central Asia by the Han dynasty in 114 BC. This ancient road opened regular international movement of goods, service and people among many countries linked to this road. Trade on Silk Road contributed immensely in the development of the civilization in Indian subcontinent, China, Europe, Persia, and Arab. It carried and enriched the connecting countries with various technologies, philosophies, culture and religions through trade and exchange. Thus, 'globalization' is nothing new because for centuries people and corporations have invested in enterprises in other countries. Many of its current features were even clearly evident before the outbreak of the First World War in 1914.
'Globalization' approached its modern form very recently when Roland Robertson used this term first time in 1983. He used it to refer the process of trade and commerce in a borderless world market, expanded through increased connectivity and mutual interdependence. 'Globalization', the great idea of the 20th century, actually lacks any exact definition. It characteristically involves the following main types of changes.
It magnifies the free flow or interconnectedness on investment, capital, culture, trade, migration, etc. International boundaries mostly become domestic matters. It is a definite movement towards the free transfer of capital, goods and services in a borderless world with some controls on the movement of labor to protect some delicate economies (for example, skilled labor, brain drain, etc). The producers and manufacturers plan to produce where it is convenient to produce and most profitable to sell. They are not rooted anymore to any fixed homeland like before. It has resulted in many businesses setting up or buying operations in other countries. Here an American or British Company may plans to produce at Thailand or China to sell at European or some other growing or developed markets. Because, by this way, he can produce the same quality goods at the cheapest cost and sell it at some place where he can fetch maximum revenue. This is the main benefit of 'globalization' in simplest form. An American company instead of employing high salaried back office or customer support staff can get the same quality of service through Indian BPO at one tenth costs. It is a process by which the states become interdependent on one another in many spheres of life. It is also a process that unites people of the world into one unit with common characteristics.
The International Monetary Fund has identified four main features of 'Globalization'. They are:
• Trade or goods exchange economy between countries and transaction through agreement between buyers and sellers;
• Movement of capital, investment, technologies, inventions and innovations
• Movement or migration of people; and
• Distribution of knowledge.
The main advantages of 'globalization' may be summarized as follows:
• Globalization has helped to bring economic progress to many rising economies through the inflow of foreign capital and employment to the countries.
• The different resources of different countries are optimally utilized.
• Consumers get wider choice of products to choose from at competitive prices.
• Producers, manufacturers, investors and service providers get access to wider markets.
• It promotes understanding, stronger trade ties, peace and goodwill among many countries.
• Adverse impact of fluctuating production in agriculture in one area can be avoided.
• Spread of technology, reduces international poverty, different world cultures become homogeneous (both positively and negatively).
'Globalization' is supposed to bring economic, social and political unification through massively increased trade and cultural exchange, freer movement of capital, goods, and services. But, it is often complained that it helps to create more wealth in developing countries and fails to close the gap between the world's poorest countries and the world's richest. It is never free from criticism. Globalization is viewed by many as a threat to the world's cultural diversity. It is also often criticized on the following grounds.
• The developed countries can suppress the growth of poorer countries by dictating unjustified terms. It operates mostly in the interests of the richest countries. It fails to increase overall welfare.
• Depression or adverse impact of economy in a country can instigate adverse reaction across the globe like communicable diseases. If the economy of one country collapses, it is likely to ripple through the system, pulling many other countries together.
• The risk of diseases also being transported more freely unintentionally with people traveling and migrating from one place to the other.
• Many indigenous products or local brands or businesses in poorer countries may go bankrupt. It is a direct attack on local tiny and small industry.
• Globalization consumes finite resources more quickly. Increased production, industrialization, deforestation has worsened the level of pollution and climate change.
• Globalization relocates jobs and investment spending from developed countries to the developing countries.
• It encourages reliance on other countries for essential goods and services.
• It reduces the importance of nation state. Sub-state or suprastate institutions like G8, International Criminal Court, WTO, replace national functions with international agreements.
'Globalization' is a double edged sword. Although it brings much growth at global level but fails to address the underlying concerns of the poor. Despite its benefits it has given rise in much conflict in regard to equality. It has benefited a small percentage of people but harmed many others more in number. Globalization, a complex concept, often provokes heated debates. Its efficacy depends on the government role of a country and its policy.