Globalisation and Global economy
Trade has always been an important factor to link civilisations with each other so that they can coexist while allowing each other to benefit from the exchange of goods and ideas. Form the time civilization started there was a need to connect with the contemporaries to fill the deficiency in terms of military equipment, important elements, natural fuel and also items of luxury from international trade, as we take the example of the trade between Indus Valley and Mesopotamian civilization. But it was only restricted between one or two groups and not the whole world at once. With the advancement of automobile technology for last-mile communication and other mediums of travel, railways and aeroplanes have made travelling long-distance easier and faster, also with more stable governments in most countries the security of goods and returns increased. This created a global scenario of world trade which we now call it as Globalisation.
Definition
According to the United Nations, the term Globalisation means,” Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, the flow of international capital and wide and rapid spread of technologies ”
During the medieval periods, each country was looking for opportunities to expand and conquer not only for political and strategic reasons but also to expand its market. India was a far well off nation with a booming international textile trade, this created a lot of influx of money in its economy and also increased the number of skilled people with sufficient jobs and setting up of Guilds which created a stable market for their buyers and provided a safe atmosphere in the nation so further expansion towards to the north was not recommended. While in Europe trade between the nations was low due to their feudal lords, so a desperate need of a market was needed, this lead the Europeans to start exploring the east and far west regions for trading opportunities which then lead to trading ports and finally into becoming their colonies which served as their market in the course of industrialisation sitting up factories like mushrooms in every part of Europe and selling the pieces of stuff to their colonies which was a form of forced trade ad an earlier more tainted form of Globalisation.
The requirement of countries to become a part of Globalisation came after the rise of the Nazis and German forces invading Poland and other nations. This created a scenario where each country involved had something to lose, even countries which were not involved suffered like the Bengal famine of 1943. After the war governments, various nations found out that modern times every country is interlinked and for the progress of any nation, opening its market was useful and big guns like the USA supported this and included many nations in this ideology. While other major world power the USSR had other plans to not engage in global trade and created its own net of commune, while other countries with socialist economy had free trade with few of the nation but not at an international level. All the things changed after the fall of USSR and rise of capitalist mentality, which opened the gate to explore and extract goods and ideas internationally, which was also helped by the dotcom movement which helped any person of any nation to connect at a global scale. This created a situation where every country is linked in every term, and policymakers have to take into considerations every action, as it may lead to a global phenomenon affecting the nation.
Global Economy
With Globalisation came Global economy, which means “worldwide economic activity between various countries that are considered intertwined and thus can affect other countries negatively or positively”, economies of all nations which is considered as one large an individual economy.
The economy does not only deal with the exchange of goods but also the affect on the value of currencies, dealing with neighbouring nations and its geopolitical effects, the race to become a developed nation for many and building the international organisation to fulfil a certain goal, all these and many other situations affect a nation as an individual and also the world economy at large as with an increase in technology data has become easy to manage and analyze which makes every act committed by a nation more transparent than ever, which in the long run can affect a nation be it develop or developing nation positively or negatively.
Countries can have dominance in the world economy and exert their power in making international decisions or global laws, these soft powers help in the proper regulation of the world economy, making it easier of any nation irrespective of its size or military might sustain itself. Countries like Monaco are very small in size and military might but have money in their economy and also per capita wise they exert their policymaker focus on their taxation aspects and international tourism to make plans, while countries like China which has a high GDP but with a huge population the per capita wise it gets defeated, while its government focuses on its cheap labour market and producing low-end products in bulk, these things drive its financial structure, as the USA does when pumping a great share of its GDP in defence making a global dominance in military might, while countries lie Djibouti survive by allowing major nations to set up military camps in their nations.
The global economy is a huge market which is hungry for product, labour and services, while each country is playing its card to stay in the global race and sustain its economy. This creates a scenario of balance where one country is benefiting the other which is then providing to another nation by taking its product. This helps in maintaining world peace as every nation becomes important and stability provides for a good market to grow.