The Different Facets Of Globalization And Their Manifestations

Globalization is manifested in four interrelated developments:

• The increase in the international exchange of goods and services, and despite all the restrictions therein, the movements of human resources;
• The internationalization of production and real investments;
• The increased integration of financial markets;
• The relative high degree of policy convergence among countries.

The statistical evidence on these developments is truly impressive. In the trade area, the ratio of international trade to the GDP of practically all countries has more than doubled over the last two decades. Trade has substantially outpaced the growth of the GDP in all but very few years over the past twenty- five years. A major new phenomenon is the size of services in total trade, in particular financial services.

In the exchange of human resources, the movement of labour across international borders, legally or illegally, together with the growth of immigration from poor to rich countries has reached such levels that immigration has become an explosive political issue in all the recent political campaigns of Western Europe. Even in the US, a traditional country of immigration, the increased scale of economic immigration is beginning to be a standard feature of political campaigns and is heavily exploited by politicians in quest of electoral gains. In the finance arena, businesses have increased their recourse to international sources as testified by the increased volume of floatation of foreign bond; the increased issuance of international bonds in the Euro markets, and the increased international lending in direct and indirect forms. Moreover, big companies have substantially increased their stock listings on the various public exchanges. The financial institutions, led by banks, have become truly international not only in doing international financing like their predecessors have done since the nineteenth century, but in addition, by locating in various countries through some times outright establishment or acquisition of local banks. On both the assets and liability sides of their balance sheets, banking is now international: loans and deposits are denominated in different currencies originating from and going to different points of the globe.