What is globalisation ?(Vivian Choy, Economic Expert)In the economical aspect, globalisation is the process whereby the world community integrates as a common economic system. First and foremost, the economy makes up the most part of globalisation, and as mentioned in
the article, ‘the first phase of globalisation is to integrate economically most of the populations of the world’. World trade is a means of globalisation and through globalisation, jobs and business opportunities are spread all over the world, increasing the level of competition and so people who want to remain competitive in their respective sectors will have to go for courses to continually improve themselves, thus upping the standards of the working people, who will produce better work and this is beneficial to the world in not just the economic aspect.
In the first phase of globalisation, a global market is created and a market equilibrium is obtained. While countries with weak currencies make imported goods unaffordable, foreign investments and the setting up of businesses will make these less economically developed countries more competitive. Globalisation can increase the level of exportation and with this imports can also be increased, thus the economy will also be boosted. However, one drawback of this is that if the bath follows up the movement of stronger currencies, it will become less competitive against the other currencies and this will reduce foreign investment but increase imports, and during a crisis when the bath moves down, imports are increased with higher prices, thus the demand is reduced because people cannot afford them, and this will lead to the closing down of more local businesses.
One way in which currency volatility can be prevented is through the possibility of multi non convertible currency for less economically developed countries, because multi currency economy will isolate the non-competitive part of the economy, and the country will not be able to progress as a whole nation. Multi currency would be a rational protection against the crisis of economical globalisation.
