Globalisation Vs Neoliberalism

Globalisation is a process or system of integration and interconnection of national economies with the end and intent to encourage trade, enhance economic growth, increase capital flows and reduce poverty. Reduced costs of transportation and communication and revolution in technology have played an enormous role in globalising the world. However, the dynamics of globalisation and realities of global interdependencies are complex and have not achieved the desired results. Although driven by economic activity, globalisation has an impact on the social, cultural and political aspects of a nation. Globalisation is beneficial for a country’s growth and development, however, the present form of globalisation, which is shaped by a series of political

The economic theory of neoliberalism is based on the premise that government cannot create economic growth or provide social welfare. It is the private companies, private individuals and the unhindered markets that are best able to generate economic growth and social welfare. The philosophy of neoliberalism is supported by powerful nations and transnational corporations. Transnational corporations that have subsidiaries in several countries, control much of the world’s investment capital and have access to international markets. Neoliberalism is the updated version of the liberal economics of the 18th and 19th centuries that supports the philosophy that unlimited competition in a free market is the best way to organise an economy because it forces everyone to perform with maximum efficiency. The neoliberal measures include privatization, deregulation of the economy, liberalization of trade and industry, massive tax cuts, reduction of public expenditure, downsizing the government, removal of controls on global financial flows. Also known as “free market economy”, it advocates the elimination of tariffs on imports and removal of barriers on trade and capital flow between nations. Globalization is governed by the three important international institutions i.e. World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO). These international institutions play a significant role in

Joseph E. Stiglitz. The present set of rules that govern globalisation are not fair as they favour the powerful nations. Politics has shaped globalisation in a manner that is prejudicial to the poor countries in the world. The international economic organisations promote a neo-liberal agenda and policies which is supported by western governments and transnational corporations. These institutions are unaccountable for their action and undermine third world democracy. Further, there is lack of effective participation by third world countries in the activities of these institutions as they are largely dominated by the West. This form of globalisation is not desirable. These international institutions must be reformed in order to make them accountable, to increase transparency in negotiations and adopt a democratic decision making