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Sunday, May 30, 2004
A compelling case for globalisation byJagdish BhagwatiIn his latest book,"In defense of globalisation", taking the long view, he maintains that globalization is transforming the world’s economic and social structure for the better.Bhagwati defines globalization as the “integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flows of workers and humanity generally, and flows of technology.”He discusses globalization’s cultural and technological aspects, which critics contend are turning the planet into a homogenized “McWorld,” but focuses on the free trade and employment objectives of economic globalization and the politically charged arenas where all these contending forces come into play.Perhaps the most salient point of Bhagwati’s observations is that globalization must be understood in terms of “the rules of the game.” Corporations invest funds or build factories in countries in the hope of bettering their competitive advantage. But in doing so, these companies are often subject to manipulation by political leaders who have varying agendas. Some may welcome investment but discourage imports while others favor the free trade orientation which Bhagwati maintains is the best course. Each country has unique circumstances, and multinational corporations must adapt to them.Bhagwati argues convincingly that removal of trade barriers will promote greater levels of economic growth. This will trigger a rise in the income, consumption level and living standards of poor nations willing to take the risk of lowering tariffs, engaging in export driven commerce and cooperating with multinationals. For Bhagwati, economic globalization is an “active, pull-up strategy” rather than an example of the notorious “trickle down” theory from the 1980’s.
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