Problems and factors of globalization

Globalization describes a process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade. It’s the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. Globalization – strengthen the interdependence of national economies, interlocking social and economic processes taking place in various regions of the world and encourage firms to find the best of conditions.

Factors of globalization:
1. Economic factors – the concentration and centralization of capital, the growth of large industrial and financial groups that are increasingly transcending national borders, carrying out activities around the world.
2. Political factors – national borders are gradually losing their value, are becoming more transparent, strengthened by liberal trends, market deregulation and goods.
3. International Events:

  • 1985. – Adoption of the European Act, which proclaimed freedom of movement of goods, services, people and capital;
  • 1986. – Conference on GATT tariff reduction and reduction in trade restrictions,
  • 2000 – Europe – common house, the single currency.

4. Technical factors – the Internet, communication and transport etc.
5. Social factors – weakening the role of traditions, customs and social relationships, increased mobility of people.

Globalization problems:
1. Differences between socio-economic systems;
2. State intervention and protectionist policies;
3. Exchange restrictions, currency fluctuations;
4. Traditional conflicts;
5. Ideological inconsistency;
6. Religious restrictions.

Positive sides of globalization:
1. Economics of scale production;
2. Deepening international division of labour;
3. More efficient allocation of financial resources;
4. General increase of crease in the world.

Negative sides of globalization:
1. Unequal distribution of befits;
2. Potential regional and global instability through the interdependence of national economics worldwide;
3. Deindustrialization of economy;
4. Transfer of production facilities in countries with low wages;
5. Increasing the gap in wages of skilled and less skilled workers, increase of unemployment among the latter.

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