Free Essay

Globalisation & Economic Development: India and Australia

In: Social Issues

Submitted By hearteu
Words 1089
Pages 5
Globalisation refers to the increasing level of economic integration between countries, leading to the emergence of a global market place or a single world market. Globalisation has played an important part in the economic development of countries around the world but has also led to increased damage to the environment. To illustrate this, India and Australia will be used as examples.

India's economic development strategies built up a number of problems over the period 1965 to the late 1980s. A key problem was declining investment expenditure from an average growth of 5% to 3.7% over the course of two decades and the fact that the government sector was spending much more than it taxed. In response to this, the Indian government of Narasimha Rao in 1991 introduced significant reforms in the Indian economic system by following globalisation trends across the world and making India a more active participant in the global economy. India began to move away from 'self-reliance' as it liberalised its protection policies e.g. reducing tariffs. India became more involved in global capital markets which brought in funding and capital as well as intellectual knowledge. India's currency was floated in 1991 which resulted in significant depreciation of the rupee (approximately 20%). This made its exports more competitive, provided cheaper labour for foreign companies and encouraged foreign investment.

INSERT FLOATING CURRENCY GRAPHS

Since 2000 the Indian economy achieved higher rates of economic growth than those of the 1990s. Not only has economic growth been extremely strong, levels of investment are very strong with much of the investment being private sector investment. However, widespread discontent was present in the lagging rural areas where infrastructure is ineffective or non-existent and standards of living remain very poor. Although economic growth has occurred, poverty and unequal distribution of wealth is an issue that globalisation has not addressed. Globalisation has not improved lifted living standards in two-thirds of the country. The table below highlights the regional differences in income in Modern India.

TABLE

Five large states average less than US$1 per day per person – roughly the international poverty line. Urban Indians such as those in Delhi are affording a better standard of living. Data has shown that there is a significant living standard gap opening up between substantial groups within India.

The ramifications of rapid economic development in India on the environment have been critical. Strong economic growth has caused various environmental negative externalities. Tragedy of the commons is occurring because the price mechanism does not account for the wider social costs borne by all of society. With cost of environmental degradation at US$80 billion or 5.6% of GDP in 2009, the environment could become a major constraint in sustaining future economic growth. Deforestation, especially in the Himalayan watershed areas increases the risk of flooding. Due to uncontrolled dumping of chemical and industrial waste, fertilisers and pesticides, 70% of the surface water in India is polluted. Air pollution caused by car emissions and industries is rising rapidly. Scientists have analysed that air pollution has become so severe that yields of crops are being cut by almost half. Particle pollution from the burning of fossil fuels has serious health consequences amounting up to 3% of GDP. A World Bank study has found that there are low-cost policy options that could significantly reduce environmental damage without compromising long-term growth objectives. The report states that “on the other hand, failure to act at the current rates of environmental degradation could constraint long-term productivity and hence growth prospects.

Australia and Globalisation
Australia’s trade policies since the 1980s have been geared towards opening domestic industries to the global market. In 1983 the Australia financial system was deregulated and foreign exchange controls removed. That same year the Australian dollar was floated. Financial deregulation led to much greater accessibility of Australian firms to world capital markets and reduced the cost of exports. Australia’s increasing integration with global capital markets has led to rapid growth in foreign exchange turnover with increased trading of the Australia dollar. The major structural change in the Australian economy between 2003 and 2010 was the impact of the global resources boom, which led to rising commodity prices for mining exports and a large improvement in terms of trade, helping to increase the value and volume of mineral exports. With greater internationalisation of the Australian economy, exports and imports of goods and services as a percentage of GDP rose form 12% in the mid 1980s to 23% in the 2000s.

Australia has recorded over 20 years of consecutive economic growth. However there is a trade-off between economic growth and development.

INSERT GRAPH

Economic growth and development involve the exploitation of natural resources. Through activities such as agriculture, mining, manufacturing and commercial and residential development, many natural environments and ecosystems are damaged, sometimes permanently. In the long term, the economy is unable to sustain growth if the environment is degraded and quality of life is also reduced as human health and the health of ecosystems are compromised.

In Australia land and soil degradation have been problematic particularly in farming areas which have been subject to overuse or misuse of irrigation in the Murray-Darling Basin, causing issues such as soil erosion and salinity. In the Murray-Darling Basin water flows have so reduced by agriculture that it is under threat for use by current and future generations. In order to rectify this, the government has spent billions.
In order to curb Australia’s greenhouse gas emissions particularly by the mining industry that contribute to global warming, the Federal government in 2012 introduced a tax on carbon emissions. The tax aimed to internalise the externalities associated, requiring the firms and companies responsible to pay for some of its costs to the environment. Unfortunately the Australian environment is exploited heavily by ‘free-riders’, who contribute to economic growth but benefit without contributing to the cost of supplying a clean, sustainable environment. An example is a fishing company that benefits from clean oceans without paying the cost of cleaning up ocean pollution.

Despite the negative nature of economic development on the environment, in our increasingly globalised world with many countries experiencing rapid economic growth, the price mechanism fails to account for these environmental impacts and due to the characteristic of the environment being a public good, it creates opportunities for free rider behaviour and avoidance of environmental responsibility. If environmental exploitation continues, intergenerational equality would not be achieved and economic growth and standard of living will also not be sustainable.

Similar Documents

Premium Essay

Globalisation

...Economic globalisation Globalisation has largely benefited the Australian economy. Australia has an abundance of natural resources that our population of 20 million people cannot use, therefore we sell the surplus to other countries that have a demand for the resources, giving us a world market of over 6.5 billion people. Australia's main exports have come from our primary industry, that is, raw materials such as minerals and produce. Our primary industry accounts for approximately 50 percent of our exports and includes coal, uranium, and iron ore as well as other minerals; cereal, such as wheat and rice; and meat and animal products, such as beef and wool. The other 50 percent of our exports are secondary goods and tertiary services. Secondary goods are those that have been processed or manufactured, such as machinery and food products, while tertiary exports are services, including education and tourism. See image 2 Australia imports a number of primary, secondary and tertiary products and services. Crude petroleum makes up the bulk of the primary imports, while computers and cars make up the majority of the secondary goods we import. Most of our tertiary imports are travel-related, including travel, transportation and insurance. See image 3 Importation has negatively affected some local industries. The hardest hit industries are secondary, such as manufacturing, because the cost of labour in Australia is quite high due to our higher standard of living compared to......

Words: 1813 - Pages: 8

Premium Essay

Globalisation

...can participate to set up, acquire, merge industries, invest in equity and shares, sell their products and services in India. Therefore, globalisation should not be considered in isolation, but should be considered in totality with liberalisation of the industrial policy towards lifting of trade control and restrictions, influence of trade block and simultaneous privatisation. Global market treats the world as a single market. With the advent of information technology and its strategic application, the world is focussed as a global village and all traders are therefore globalised. The Earlier (pre 1990s) concept: Before 1990s India followed a patch of restricted trade. Such restrictions were that certain products would not be allowed to be imported as they were manufactured in India. For example, General Engineering goods, Food items, toiletries, Agricultural products etc. were in the banned list of import. Some other kinds of products which were produced in restricted quantity in the country or are expensive and categorised as luxuries were subjected to heavy import duty to make them costlier in order to dissuade flow of foreign exchange and give protection to local producers. For example, VCR, Music sets, Air-conditioners, Computers etc., these items were subject to 150% import duty. Globalisation in India: In the 1990s due to change in world economic order and...

Words: 1535 - Pages: 7

Premium Essay

Globalisation

...Economics task: Globalisation STUDENT NUMBER=20257806 WORD COUNT (including footnotes) =1,705 Globalisation is the process integrating economies into an international economy through an increase in trade, investment, technology, finance and labour. Globalisation has impacted greatly on the economy of India which is the 7th largest economy in the world and the 2nd most populus. India recently opened it’s economy in the last decade from a closed market in 1991.Globalisation has certain impacts on the economy which include economic convergence, economic growth & development, quality of life, distribution of income and wealth. There have been strategies put in place to promote economic growth and development which include. International Convergence International convergence is the tendency of economies becoming more similar in the ways they operate, their consumption patterns, structure of output, economic performance and government systems. The impact of this is an increase in trade dependency with economies formed open and deregulated markets as well as an increase in trade. A positive impact from increased trade is greater efficiency in resource allocation for NIE such as India. Indian exports have grown more than 25% per year to over $100 billion in 2006. (1)It has also led to an increase in level of output as GDP growth for India in 2007 was 9%. (2). As Indian companies began trading on the world market they were forced to become more......

Words: 2088 - Pages: 9

Premium Essay

The Effects of Globalisation on Australia

...“The Effects of Globalisation on Australia” Economic, Social, Cultural, Environmental and Political Word Count: 1,638 Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Economic 5 Social 7 Cultural 9 Environmental 10 Political 11 Conclusion 12 References 13 Executive Summary The effects of Globalisation on Australia can be disseminated into a number of different categories. For the purposes of this report five major categories including Economic, Social, Cultural, Environmental and Political have been explored and summarised but is by no means exhaustive. The overall effects and impact of globalisation on Australia may well be positive to the general population, but there will always be those who are disadvantaged, and those who have increased advantages. In this report the authors attempt to separate the above mentioned elements and treat them individually. It should be noted however that it is extremely difficult to do so as many issues interact and overlap with some or all of the elements of globalisation, as globalisation has been in existence since the stone-age. “Just as the concept of globalisation is contested and multifaceted so are the choices available to citizens and governments.”[i] Introduction How one views ‘the effects of globalisation on Australia’ will very much be determined if one defines globalisation in its broader sense or otherwise. Globalisation seems to be the catch phrase of the 21st......

Words: 2370 - Pages: 10

Premium Essay

Globalidsation in India

...the impact of globalisation on domestic business environment of India By Kru Question 5: Critically evaluate the impact of globalisation on domestic business environment of India Abstract This report will discuss the impact that India has had through globalisation, and how it has affected domestic business environment of India. The report will also include theories on globalisation and a PEST analysis showing the factors affecting economic growth on domestic business environments. And how the economy have been structured and adjustments for essential for growth of the economy. To improve India’s economy they would need to improve vastly on health care, because it is one of the main issues that are bring the economy down, as poverty is rising. They can do this by creating more jobs in the healthcare and working alongside with the government, to help with funding more. Another way is by investing money to improve water supplies. This can have a positive impact on India, as it would provide citizen with better living standards and therefore would have a positive effect on business and globally. By letting other nations to help with the water system, can have a long term impact on globalisation on domestic business environment of India, because there would have built a positive relationship with other nation. 1. Introduction In today’s tuff economical crisis, the term “globalisation” has......

Words: 2833 - Pages: 12

Premium Essay

Negotiation

...technical report series present data and its analysis, meta-studies and conceptual studies, and are considered to be of value to industry, government and researchers. Unlike the Sustainable Tourism Cooperative Research Centre’s Monograph series, these reports have not been subjected to an external peer review process. As such, the scientific accuracy and merit of the research reported here is the responsibility of the authors, who should be contacted for clarification of any content. Author contact details are at the back of this report. National Library of Australia Cataloguing in Publication Data Dwyer, Larry. Megatrends underpinning tourism to 2020: analysis of key drivers for change. Bibliography. ISBN 9781920965525. 1. Tourism - Economic aspects - Australia. 2. Tourism - Social aspects - Australia. 3. Tourism - Political aspects - Australia. 4. Tourism - Environmental aspects - Australia. 5. Tourism - Australia. I. Cooperative Research Centre for Sustainable Tourism. II. Title. 338.47910994 Copyright © CRC for Sustainable Tourism Pty Ltd 2008 All rights reserved. Apart from fair dealing for the purposes of study, research, criticism or review as permitted under the Copyright Act, no part of this book may be reproduced by any process without written permission from the publisher. Any enquiries should be directed to: General Manager Communications & Industry Extension, Amber Brown [amber.brown@crctourism.com.au] or Publishing Manager, Brooke Pickering......

Words: 40109 - Pages: 161

Premium Essay

Globalisation

...Question: How does Globalisation affect you as an International Business Student? 1.0 Introduction I’d like to begin this discussion by first asking a few questions. What is globalisation? What does a global world mean? Is it the fast movement of people which means greater interaction? Does it simply mean that due to internet revolution and other technological advances the world is now a village? Does globalisation represent the consumer and open up markets worldwide to their choice and preference? Does it mean countries are free to trade with each other without red tape and other barriers and tariffs? Though the precise definition of globalisation is still unavailable a few definitions worth viewing, Stephen Gill: defines globalisation as the reduction of transaction cost of transborder movements of capital and goods thus of factors of production and goods. Guy Brainbant: says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC's, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution. As an international business student globalisation has opened up the world to me. The world is now on my fingertips, I am able to use the world’s resources, learn from fortune 500 companies. I am able to interact with international leaders who would otherwise......

Words: 2068 - Pages: 9

Free Essay

Understanding India, Globalisation and Health Care Systems

...Open Access Understanding India, globalisation and health care systems: a mapping of research in the social sciences Ramila Bisht1*, Emma Pitchforth2 and Susan F Murray3 Abstract National and transnational health care systems are rapidly evolving with current processes of globalisation. What is the contribution of the social sciences to an understanding of this field? A structured scoping exercise was conducted to identify relevant literature using the lens of India – a ‘rising power’ with a rapidly expanding healthcare economy. A five step search and analysis method was employed in order to capture as wide a range of material as possible. Documents published in English that met criteria for a social science contribution were included for review. Via electronic bibliographic databases, websites and hand searches conducted in India, 113 relevant articles, books and reports were identified. These were classified according to topic area, publication date, disciplinary perspective, genre, and theoretical and methodological approaches. Topic areas were identified initially through an inductive approach, then rationalised into seven broad themes. Transnational consumption of health services; the transnational healthcare workforce; the production, consumption and trade in specific health-related commodities, and transnational diffusion of ideas and knowledge have all received attention from social scientists in work related to India. Other themes with smaller......

Words: 11974 - Pages: 48

Free Essay

Hynudai

...Research project: Hyundai globalisation strategy Executive summary The following report maps out Hyundai Motor Corporation’s (HMC) internationalisation strategy from its creation in 1967 to the current period. This strategy can be chronologically divided into four phases according to HMC’s objectives and rationale for expansion at different stages of its existence. From the research carried out, it appears that HMC’s choices of specific internationalisation patterns at different stages essentially stemmed from: The dynamics of the relationship between HMC, the Hyundai business group and the South Korean economic and political environment; Political, social and nationalistic incentives deriving from the specificities of Chaebol management and later the influence of the Asian crisis on this management and decision taking processes; Korea’s initial factor dotation, i.e. the prevalence of certain factors over others which pushed the company to seek knowledge and resources abroad at a very early stage; The replication of Japanese strategies (Nissan, Mitsubishi, Toyota). - Due to the complexity of HMC’s environment, strategy over time cannot be illustrated using a single internationalisation framework. The report therefore discusses two different frameworks – namely Porter’s diamond and Dunning’s eclectic paradigm – to analyse the company’s strategy at different stages of its international development. 2 06/06/2013 Research project: Hyundai globalisation......

Words: 4207 - Pages: 17

Premium Essay

Industrial Relations

...Globalisation 1 Lecture/Chapter Topics • Chapter Introduction • Definition of Globalisation • Emergence of Global Institutions • Driving Forces of Globalisation • Changing Characteristics of Global Economy • Globalisation Debate • Managing in Global Marketplace Definition of Globalisation • • Globalisation: the trend towards a more integrated global economic system Effects of globalisation can be seen everywhere, for example: – – – – the cars people drive the food people eat the jobs people have the clothes people wear Definition of Globalisation • What is Globalisation? – Globalisation refers to the shift towards a more integrated and interdependent world economy. • Facets of Globalisation – Globalisation of Markets – Globalisation of Products – Emergence of Global Institutions Definition of Globalisation • The Globalisation of Markets – – The historically distinct and separate national markets are merging into one huge global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge in some global norm. Examples of consumer products:  Prada fashions, Sony Playstation video games, McDonald’s hamburgers (US), Nescafe coffee (Switzerland), Nokia mobile phones (Finland), IKEA furniture (Sweden) Definition of Globalisation • Globalisation of Production – Sourcing goods and services from different locations around the globe in an attempt to take......

Words: 2058 - Pages: 9

Free Essay

Asx and Sgx Development

...On the 8th of April, the Australian Treasurer, Wayne Swan rejected the proposed merger of the Australian Stock Exchange and the Singapore Stock Exchange. Mr Swan has stated two important considerations in the rejection – the unemployment rate will rise rapidly in Australia and Singapore government control of the ASX. Indeed, the federal government officially blocked the $US8.4 billion deal which was a right decision in terms of the strength and stability of Australia’s financial system. However, other oppositions might say that we just lost a great opportunity to access global capital markets. They believed that we have to move towards globalisation to be more open-minded. It is undeniable that one government decision could be attracted two different views by the members, like everything else; it has its own benefits and harms. As Mr Swan said that the deal was not right enough to grow Australia’s role as a financial services hub in Asia and therefore it was only be justified if there were very substantial benefits to our nation. He treated the deal as a takeover by SGX, not a merger exchange group as well as the Australia’s financial sector would have become a subsidiary to a competitor in Asia. The consequence of this merger would have breached our principal in maximizing our national interest. He believed that the deal would not provide a gateway to Asian capital flows as SGX has limited flows to the rest of Asia, which is not necessary to enter into SGX financial market......

Words: 1791 - Pages: 8

Premium Essay

Comparative Hrm

...Comparative HRM: China and Australia * Introduction Over the last few decades, as a rising number of globalisation of business transactions and organisations are seeking to develop and operate in foreign markets, the need for comparative human resource management studies are increased (Brewster & Mayrhofer (eds.) 2012), there are a lot of differences in HRM in different countries and regions, such as institutional culture, organisational structures, recruitment and development and relation of employee (Crystal & Iles 2013). The comparative human resource management provides a better understanding of different national settings on the management task (Hollinshead 2010). Two countries from different institutional and legal systems which are China and Australia will be comparatively analysed in this essay. Firstly, the overview of both countries and culture dimensions will be analysed. Secondly, three HR features will be outlined respectively include culture, organisational structures, and the content of Human Resource Management. in addition, a critical evaluation will be given for how and why these features in these two countries developed in the way that they have. Moreover, a comparative analysis of how HRM has developed in each country will be given, as well as that approach to HRM. * Background and Different Culture between China and Australia The study of the influences of culture is a key role in HRM (Brewster & Mayrhofer (eds.) 2012). Moreover, due...

Words: 4835 - Pages: 20

Premium Essay

Case

...Bipolarity 17 Chapter 3 US Hegemony in World Politics 31 Chapter 4 Alternative Centres of Power 51 Chapter 5 Contemporary South Asia 65 Chapter 6 International Organisations 81 Chapter 7 Security in the Contemporary World 99 Chapter 8 Environment and Natural Resources 117 Chapter 9 Globalisation 135 Chapter 1 The Cold War Era OVERVIEW This chapter provides a backdrop to the entire book. The end of the Cold War is usually seen as the beginning of the contemporary era in world politics which is the subject matter of this book. It is, therefore, appropriate that we begin the story with a discussion of the Cold War. The chapter shows how the dominance of two superpowers, the United States of America and the Soviet Union, was central to the Cold War. It tracks the various arenas of the Cold War in different parts of the world. The chapter views the NonAligned Movement (NAM) as a challenge to the dominance of the two superpowers and describes the attempts by the non-aligned countries to establish a New International Economic Order (NIEO) as a means of attaining economic development and political independence. It concludes with an assessment of India’s role in NAM and asks how successful the policy of nonalignment has been in protecting India’s interests. The end of the Second World War led to the rise of two major centres of power. The two pictures above symbolise the victory of the US and......

Words: 52386 - Pages: 210

Premium Essay

Development of Financial Reporting in the 21st Century

...Development of Financial Reporting in the 21st Century Globalisation of Financial Reporting (IFRS and IAS) In the 15 years since the start of the 21st century there has been many dramatic changes in the financial world. These dramatic changes included the collapse of some of the world's largest corporations , many of whom were making fraudulent financial reports at the time of their demise (such as Enron Corporation and WorldCom) , the downfall of one of the worlds “Big Five” accounting firms ; Arthur Anderson (which was directly related to the Enron scandal) and an economic collapse that resulted in many national economies suffering hugely. However despite these dramatic changes, nothing has been more significant than the rapid acceptance of International Financial Reporting Standards (IRFS) across the globe. This means that companies from all over the world are beginning to adhere to a single set of global accounting standards. This wide acceptance of IFRS has stemmed from globalisation. Globalisation is the process by which companies begin to trade on an international scale and spread their influence globally (e.g NIKE & McDonalds) , often having numerous headquarters across the world. What is IFRS? International Financial Reporting Standards are designed to be used as a universal language for conducting business across the world, their goal is for company accounts to be coherent across all international borders. The concept......

Words: 572 - Pages: 3

Premium Essay

Impact of Globalisation on Indian Economy

...The new economic reform, popularly known as, Liberalization, Privatization and Globalization (LPG model) aimed at making the Indian economy as fastest growing economy and globally competitive. The series of reforms undertaken with respect to industrial sector, trade as well as financial sector aimed at making the economy more efficient. With the onset of reforms to liberalize the Indian economy in July of 1991, a new chapter has dawned for India and her billion plus population. This period of economic transition has had a tremendous impact on the overall economic development of almost all major sectors of the economy, and its effects over the last decade can hardly be overlooked. Besides, it also marks the advent of the real integration of the Indian economy into the global economy. This era of reforms has also ushered in a remarkable change in the Indian mindset, as it deviates from the traditional values held since Independence in 1947, such as „self reliance” and socialistic policies of economic development, which mainly due to the inward looking restrictive form of governance, resulted in the isolation, overall backwardness and inefficiency of the economy, amongst a host of other problems. This, despite the fact that India has always had the potential to be on the fast track to prosperity. Now that India is in the process of restructuring her economy, with aspirations of elevating herself from her present desolate position in the world, the need to speed up her economic......

Words: 4444 - Pages: 18