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Globalisation And Regionalism: The Process Of Globalization Vs. Regionalism

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Globalisation vs Regionalism
By-Devika Rajeev
Introduction
The advent of international trade has helped economies all over the world. Be it a developed country which is looking for the best option in terms of skilled and unskilled labour, natural resources etc, or a developing country looking to increase employment opportunities, investments etc. Not only has this helped economies, but has helped to share popular culture around the globe. This started with the process of globalisation but recently there is increasing trend of regionalism in place. Even though technically both lead countries to open up it’s economies for trade there are some important differences between the two which will be identified here.
Globalisation
Even though it is
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Officially Globalisation can be defined as the “process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.”2 But if it’s that simple then why are some countries so reluctant in opening up their borders ?Today globalisation is much more controlled and there are many organisations present and active to help countries achieve globalisation. One of the main elements of the process of globalisation is the process of “Laissez Faire” or free trade. According to this principle, it is believed that the best option for countries is to engage in free trade and that state interaction should be kept to minimum. Economic principles like theory of Absolute Advantage and theory of
Competitive Advantage explain the concept of free trade and support that minimum state intervention is the best for any nation. But this does not always stand true. In theory free trade is the perfect model, but when a country opens up its economy to foreign competition there are cases when the local business suffers. Many a times the case is such that local small and medium producers are unable to compete with the large MNCs and have to close down
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The big players of the world invest capital into the developing countries in order to set up plants, factories and industries thus not only affecting employment in that sector but in related sectors as well. This usually leads to an overall growth of the economy. Also consumers get a far more varied choice of goods and services at competitive prices. Countries in the middle east with their large expat population or even the Silicon Valley where a lot of work is outsourced to countries like India are the best suited examples of the success stories of Globalisation.
But Globalisation would not be so encouraged, if not for the many international organisation who control and regulate it. The WTO, UNCTAD, ITC, to name a few, makes sure that the trade between member countries is regulated, free and fair. Their main aim is to provide trade related technical assistance to trade. These organisations understand that all the countries in the world do not have the same resources and competency and hence use their expertise to help maintain a balance of trade to make sure that everyone gets the benefits of Globalisation. The main agenda of these organisations is to protect weaker economies to be part of the process
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