Short Essay on Globalisation and Openness of National Economy

Degree of globalisation is characterised by the openness of national economy. Its sustainability of growth in the global set-up calls for macro-economic stability and structural reforms as the prerequisites. Stability is actually a moving and not a rigid equilibrium situation in a dynamic economy.

For generalised gains of globalisation, however, stability of cross-border financial flows is essential with a moving target since financial market is a dynamic phenomenon.

The world economy is still much away from being genuinely integrated. As a matter of fact:

1. The financial markets of the global economy are not yet truly integrated.

2. Product markets in global economy are still substantially segmented from each other (The Economist, 1999).

3. In the emerging globalisation process, product and capital market are becoming increasingly integrated, with greater ‘mobility. However, labour market still lacks sufficient international mobility, and has retained their rational characteristics. Language, cultural barrier, heterogeneous educational background and training and immigration forces have contributed much in keeping labour markets less mobile and disintegrated in the wake of rising trend of the global economy.

Besides, intensive and extensive working of the existing global agencies such as UNCTAD (United Nations conference on Trade and Development), UHEP (United Nations Environment Program) USAID (United State Agency for International Development) WRI (World Resource Institutions) GRID (Global Resources Information Development) WHO (World Health Organisation) WTO (World Trade Organisation) the regional blocs such as ASEAN and SAARC should establish their Regional-oriented agencies to strengthen their cooperation in improving in sustaining the globalisation tie and process of their members, initiating a START (System for Analysis Research and Training) on Globalisation process and growth will be great help to the developing nations.

Along with, institutional solutions, the problems should be allowed to be tackled, by the market forces. Market or global issues deserving continuous attention and international co-operation are:

Eradication of poverty and narrowing the quit of economic inequality among the nations is a pre-condition for global sustainable development (see WCED – The Brundtland Report, 1987:3). Many global problems are enrooted to the inequalities among the rich and poor nations in access to resources; hence, there is an urgent need to recast international economic relations for sustaining the globalisation problem world over.

Developing nations need compliance to effective implementation of international financial norms, standards and codes such as, the Basel Core Principles for banking supervision, Principles of seqrities Regulations, International Association of Insurance Supervisor’s Insurance Supervisory Principles,

Transparency in Monetary and Financial Policies, Good Governance for the overall stability of the individuals and global financial systems, to name a few. Macroprudential analysis is also crucial in this regard. (See, Huang and Kal Wajid, 2002)

“Globphobia ” (i.e., negative opinion that, globalisation will leads to intensification of poverty and inequality is unjustified, rather globalisation can save as a powerful catalyst for poverty reduction by providing poor nations with opportunities to the growing, integrated world markets, technologies and knowledge management required for faster economic growth with equity.

Uneven globalisation has conferred large benefits to the rich nations. Of course, a renewed commitment to liberalisation is necessary but not a sufficient condition for making globalisation works for the poor. Increased participation in world trade, blended with positive economic and social policies holds the keys for the diverse groups at poor nations in the global economic set up. All the globalising developing countries have to be resorted to the greater openness cautiously and attentively engage in wide ranging socio economic reforms (see Dollah and Kraan, 2002).

Developing poor nations should seek their cautions stand in the process of globalisation. In order to spur growth and reduce property, they need efficient formal and informal institutions in support of growing market activity.

A new look to globalisation process and policy framework in the new capitalist order of the WTO is required for providing greatest voice to the nations; these have been marginalised far by the globalisation forces.

Justice, fairness and freedom hold the key for sustainability of global growth and prosperity in the year to follow. It this is attentively recognised by the champions of the WTO, its new capitalist order of globalisation proven envisioned in the current century is to be least-feared and resisted by the developing economies.

Globalisation can not be the sustained without peace and security all over the world. This necessitates reduction in poverty and inequalities among the nations and peoples. “Gaps” – knowledge gaps, technological gaps, managerial gaps, development gaps – have to the minimal. Discussion must be focussed on how to do this in an optimum way. Findings of solutions to the global problems are just not enough. We need to find modes of effective implementation and result-orientation as well.

Focus is needed on steps, such as:

1. Debt-relief for the heavily debt-ridden countries.

2. Social safety nets.

3. Increased social expenditures for the uplifting of the poor strata in several countries.

4. Improvement in public health programmes in low income and middle income countries for the bettef health condition the poor.

5 Rich nations must allocate 1 per cent of their GNP on global development aids/assistance.

6. Developed countries should become more open and broad minded for importing from poor countries as an incentive to facilitate their participation and share in the global economy.

7. Provide life savings drugs as lower costs.

8. Provide education/training to the knowledge washer liberally and a lower charge to poor nations.

9. Narrow down the institutional goal in the world economic and financial systems. Strong and effective global governance need to be established.

Globally oriented issues such as environmental protection, labour rights, mobility, and fundamental human rights deserve primary attention for sustainability of the globalisation process and prospects. Developing an attitude of universal brotherhood novel international community should be evolved in the process of globalisation.