Модуль 2. Россия в эпоху глобализации. Проблемы глобализации

Text 1. Living in the Global World

Globalisation can be described as a process by which the people of the world are unified into a single society and function together.

The term "globalisation" has been used by economists since the 1980s. However, globalisation existed even during the Roman Empire, when the Silk Road started in China. The Islamic Golden Age is also an example, when Muslim traders and explorers established an early global economy across the Old World.

In the 17th century, globalisation became a business phenomenon when the British East India Company, which is often described as the first multinational corporation, was established. Because of the high risks involved with international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies. Globalisation was achieved by the British Empire due to its size and power. British ideals and culture were imposed on other nations during this period.

Globalisation, since World War II, is largely the result of planning by economists, business interests, and politicians. Such institutions as the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund came into existence. Globalisation has been facilitated by advances in technology which have reduced the costs of trade originally under the auspices of the General Agreement on Tariffs and Trade (GATT), and the World Trade Organisation (the WTO).

Globalisation has various aspects which affect the world in several different ways such as:

• Industrial - emergence of worldwide production markets;

• Financial - emergence of worldwide financial markets;

• Economic - realization of a global common market, based on the freedom of exchange of goods and capital;

• Political - creation of a world government (the WTO, the World Bank, and the IMF) which regulates the relationships among governments;

• Informational - availability of telephony and the Internet;

• Language - About 75% of the world's mail, telexes and cables are in English. Approximately 60% of the world's radio programmes are in English. About 90% of all Internet traffic is using English;

• Competition - survival in the new global business market calls for improved productivity and increased competition;

• Cultural - the growth of cross-cultural contacts; the desire to increase one's standard of living and enjoy foreign products and ideas, to adopt new technology and practices, and to participate in the "world culture";

• Ecological- the advent of global environmental challenges such as climate change, water and air pollution. However, as many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution;

• Social - international cultural exchange;

• Technical - development of a global telecommunications infrastructure using such technologies as the Internet, communication satellites and mobile phones;

• Legal/Ethical The creation of the international criminal court and international justice movements.

Globalisation is the growing integration of economies and societies around the world It is one of the most hotly-debated topics in international economics today.

Answer the Questions:

1. What is globalisation?

2. When did the early forms of globalisation appear?

3. Why was the British East India Company described as the first multinational corporation?

4. What factors facilitated globalisation?

5. How did globalisation affect the world?

6. What principals is the global market based on?

7. What international organisations regulate the relationships among governments?

8. What ecological problems does globalisation rise?

9. What technical innovations did globalisation bring?

10. What language is considered to be the language of the global world?

Text 2. Multinationals of Today

A multinational corporation (MNC) or a transnational corporation (TNC) is a corporation or an enterprise that manages production or delivers services in more than one country.

Very large multinationals have budgets that exceed some national GDPs (gross domestic product). Multinational corporations can have a powerful influence in local economies as well as the world economy.

Many MNCs are very large in relation to the national income of the countries in which they are located. This means that it is not as easy for the host governments to enforce national laws on MNCs. Generally speaking, governments want to get investment from these MNCs because they generate jobs and incomes. Other benefits include training of local workers. Technology transfer is also a positive motivation.

In a highly competitive world, companies seek to reduce their costs as much as possible. The prospect of a foreign company setting up in a country where labour is cheap is attractive both for the company and the host country's government. Multinational corporations can be divided into three broad groups according to the configuration of their production facilities:

• Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products (example: McDonald's);

• Vertically integrated multinational corporations manage production establishments in certain countries to produce products that serve as input to its production establishments in other countries (example: Adidas or Nike);

• Diversified multinational corporations manage production establishments located in different countries that are neither horizontally nor vertically nor straight, nor non-straight integrated (Microsoft or Siemens).

Answer the Questions:

1.What is a multinational corporation?

2. What budgets do large multinationals have?

3. Why can multinational corporations have a powerful influence in local economies?

4. What do local governments want from multinational corporations?

5. What benefits of multinationals can you name?

6. What do companies seek in a highly competitive world?

7. How can multinational corporations be divided?

8. How does a horizontally integrated multinational corporation organise its business?

9. What is a vertically integrated multinational corporation?

10. What type of companies are Microsoft and Siemens?

Text 3. Russia in the Global World

Russia is part and parcel of the global world, whether we are talking about the economy, media or cultural development. Russian business is beginning to take part in all global initiatives. The great advantage of globalisation is that it increases competition. However, Russian companies and firms have to be careful and have to order their affairs so that they can really compete in a global market. Otherwise it can be overweighted by a large number of disadvantages.

The first is that globalisation can hurt the local government’s ability to deal with issues like welfare, benefits, wages and taxes mainly because the multinational is able to say to the Government, -‘Look, unless you lower your taxes on us, we’ll be moving off to South East Asia or Latin America’, and so on. And so it takes out of the hands of the government the ability to control their own welfare systems and provide a decent infrastructure for their people. However, the situation is not so bad now, as there are some regulations between Russian government and multinationals. But more and more in recent years companies have started to rule the roost.

The other problem is one of unemployment. As companies want to improve their profitability, they’re going to be looking for the low-cost, low-wage centres. And we are just about to see a major change in the global economy because of the addition of China and India to the global labour market. There are great advantages in this, but there are a lot of problems as well, because China and India are going to provide a skilled population. Also, they’re going to provide fairly good infrastructure for the companies that are going to go out there. So we’re going to see a flight of capital from the country which is going to be sudden and dramatic. If it is too sudden and is not managed properly, we could find very severe problems in the future.

Answer the Questions:

1. Is Russia a feed tank or part and parcel of the global world?

2. What is the main advantage of globalisation?

3. Why should Russian business be careful dealing with multinationals?

4. What are the main disadvantages of globalisation?

5. What ability does globalisation take out of the hands of the local governments?

6. What problems does globalisation cause?

7. What are companies going to do to improve their profitability?

8. What countries have recently joined the global labour market?

9. What major changes can we see in the global economy?

10. What kind of population are China and India going to provide?

Text 4. Anti-globalism

Generally, the ideas of free trade, capitalism, and democracy have greatly facilitated globalisation. Supporters of democratic globalisation are sometimes called pro-globalists. They believe that the first phase of globalisation, which was market-oriented, should be followed by a phase of building global political institutions representing the will of world citizens.

The term anti-globalisation in its turn is used to describe the political stance of people and groups who oppose the neo-liberal version of globalisation. Anti-globalisation may involve the process or actions taken by a state in order to demonstrate its independence in decision-making. Anti-globalisation may occur to put brakes on the international transfer of people, goods and ideology.

Critics of the current wave of economic globalisation typically speak about the damage to the planet, and such things as increased poverty, inequality, injustice and the erosion of traditional culture. The main export of poorer countries is usually agricultural goods. It is difficult for these countries to compete with stronger countries that subsidise their own farmers.

The next aspect is exploitation of foreign workers. The abundance of cheap labour is giving the countries in power the incentive not to rectify the inequality between nations. It is true that the workers are free to leave their jobs, but in many poorer countries this would mean starvation for the worker.

The economic gap between skilled and unskilled workers is also growing very fast. Families that were once part of the middle class are forced into lower positions by massive lay-offs. It also means that people in the lower class have a much harder time climbing out of poverty because of the absence of the middle class as a stepping stone. Weak labour unions hold less power over corporations that are able to easily replace workers, often for lower wages.

The anti-globalism movement is very broad, including church groups, national liberation factions, workers, intellectuals, artists, protectionists, and others. One of the key points made by critics of recent economic globalisation is that income inequality, both between and within nations, is increasing as a result of these processes. Americanization is often regarded as a wicked part of globalisation aimed to significant growth of America's shops, markets and other objects being brought into other countries.

Answer the Questions:

1. How are supporters of democratic globalisation called?

2. What is the second phase of globalisation?

3. What does the term anti-globalisation mean?

4. What motives for anti-globalisation acts can you name?

5. What do critics of the current wave of economic globalisation usually say?

6. Why is it difficult for poorer countries to compete with stronger partners?

7. Why is exploitation of workers especially strong in the developing countries?

8. How can globalisation expand the gap between skilled and unskilled workers?

9. What groups and parties support anti-globalisation movement?

10. What do anti-globalists mean by "Americanization"?​