The development of the world economy at the end of the last century gave rise to the phenomenon of so-called globalization.
The globalization of the economy is a significant increase in the mutual dependence of countries as a result of growing international trade in goods and services, increased international financial flows, the movement of labor and scientific and technical cooperation. As a result of all this, a new quality of relations between countries arises, namely: the mutual penetration of economies, their gradual loss of national characteristics, the formation of the so-called megaeconomics - “economies of economies”.
The modern process of globalization is prepared by all the previous development of society. But in the last third of the 20th century, a global economic space began to take shape (thanks to the scientific and technological revolution in the field of communications and information exchange).
The globalization of the economy is explained by the following prerequisites:
1) The activities of the governments of different countries are aimed at integrating national economies by liberalizing trade, the capital market, labor migration , etc.
2) Information and communication technologies go through a stage of rapid development due to the worldwide use of the Internet.
Globalization of the economy gives rise to the following forms of economic and political interaction:
1) The free trade zone, which provides for the rejection of trade quotas.
2) The customs union, in which not only there are no quotas, but also common customs tariffs are applied.
3) The common market is the absence of quotas, common customs tariffs, plus the free movement of resources (primarily labor) between the participating countries.
4) An economic union is a common market plus a coordinated economic policy of the governments of individual countries.
5) Full integration is the observance of all conditions of the economic union, supplemented by unification - the implementation of a common economic policy.
A special form of manifestation of globalization is offshore zones. They represent a separate territory or even a whole country, within the borders of which the capitals of other countries receive tax benefits and the ability to carry out various financial transactions in any currency. In the modern world, there are more than a hundred offshore zones.
The Consequences of Globalization: Pros and Cons
The process of globalization is a very controversial phenomenon of the modern world, as it has both positive and negative sides.
Positive effects:
- Higher and more stable average global economic growth rates are achieved;
- the average standard of living is increasing, and consumer choice (the list of available goods and services) is becoming more diverse;
- significant financial resources are mobilized for the implementation of vital projects for people around the world - the prevention of diseases, overcoming the consequences of environmental disasters, etc .;
-modern technologies are becoming available not only for the most developed countries, but also for the entire world community.
With all its obvious advantages, the globalization of the economy also carries threats, especially to countries with low levels of development.
- The economies of individual countries are beginning to lose their distinctive features, the dependence of their development on the international economic order is growing. Full integration into the global economy threatens to lose the ability of the government to run its own country. This threat primarily affects countries that are economically and politically weak. Developed, however, begin to dictate the conditions of the game and determine the global economic environment.
- There are prerequisites for the occurrence of specific conflicts - cultural, legal, philosophical. What is considered the norm for people of one culture will be absolutely unacceptable and hostile to other peoples. International business, actively working in different countries, must adapt and take into account the characteristics of each national culture.