Globalization of the economy - advantages and threats

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 the growth in the scale of international trade in goods and services, the strengthening of international financial flows, labor movement 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, the gradual loss of their national characteristics, the formation of the so-called megaeconomy - the "economy of economies".

The modern process of globalization has been prepared by all previous development of society. But in the last third of the 20th century, the global economic space began to form (thanks to the scientific and technological revolution in the field of communications and the exchange of information).

The globalization of the economy is explained by the following prerequisites:

1) The activities of governments of different countries are aimed at integrating national economies through trade liberalization, the capital market, labor migration , etc.

2) Information and communication technologies pass through a stage of rapid development due to the worldwide use of the Internet.

The globalization of the economy generates the following forms of economic and political interaction:

1) Free Trade Zone, which provides for the waiver of trading quotas.

2) The Customs Union, which not only lacks quotas, but also applies uniform customs tariffs.

3) The common market is the absence of quotas, unified customs tariffs, plus the free movement of resources (primarily labor) among member countries.

4) The Economic Union is a common market plus a coordinated economic policy of the governments of individual countries.

5) Full integration is compliance with all conditions of the economic union, supplemented by unification - the conduct of a common economic policy.

Offshore zones are a special form of manifestation of globalization. They represent a separate territory or even a whole country within which the capitals of other countries receive tax incentives and the ability to carry out various financial transactions in any currency. In the modern world there are more than one hundred offshore zones.

The consequences of globalization: "for" and "against"

The process of globalization is a very contradictory phenomenon in the modern world, because it has both positive and negative sides.

Positive consequences:

- Higher and stable average world economic growth rates are achieved;

- the average standard of living rises, and the consumer choice (the list of available goods and services) becomes more diverse;

- significant financial resources are mobilized for the implementation of vital projects for people around the world - prevention of diseases, overcoming the consequences of environmental disasters, etc .;

- Modern technologies become available not only for the most developed countries, but for the entire world community.

With all the obvious advantages, globalization of the economy carries threats, especially in countries with a low level of development.

- The economies of individual countries are beginning to lose their distinctive features, their development depends on the international economic order. Full integration into the world economy threatens the loss of the government's ability to manage its own country. This threat concerns, first of all, countries that are weak economically and politically. Developed also begin to dictate the conditions of the game and determine the global economic environment.

- There are prerequisites for the emergence of specific conflicts - cultural, legal, worldview. What is considered the norm for people of the same culture will be absolutely unacceptable and hostile to other peoples. International business, actively working in different countries, must adapt and take into account the peculiarities of each national culture.