GLOBALIZATION AND GOVERNMENT RELATIONS 6
Globalizationand Government Relations
Globalizationand Government Relations
Globalizationis defined as the rising interdependence among nations brought aboutby the growing incorporation and diffusion of finance, ideas,technology, people and trade in a single international marketplace(Lechner, 2009). The key components of integration are flow ofinvestments between borders and international trade. Globalizationhas dominant cultural, economic, social, and political dimensions. Anumber of global institutions including the World Bank, theInternational Monetary Fund (IMF) and the World Trade Organization(WTO) have endeavored to generate a free global market (Reuvid &Sherlock, 2011). The current paper investigates the roles played bythese institutions in the acceleration of globalization. Driven byvarious factors such as technological innovation, transportationsystems, political and social reforms, as well as growth oftransnational conglomerates, globalization has highly acceleratedespecially in the current time.
TheWorld Bank is one of the international organizations that have playeda key responsibility in speeding up globalization (Reuvid &Sherlock, 2011). To start with, the World Bank is the main financierof most developing nations. It focuses on institutional building,lasting investment projects, as well as poverty, environmental andsocial problems to promote development among member countries(Finance Train, 2012). As a result, the World Bank extends loans toits members to enable economic development. Through these loans,nations take part in building transportation systems, power plants,technological development, dams, among other infrastructure projects(Lechner, 2009). Technological innovation has simplified and speededcommunication with partners, employees, as well as suppliersthroughout the globe. Improvements in transportation systems havefacilitated cheap and fast movement of products from one country tothe other.
Onepillar of the World Bank is facilitating and financing trade, andtransport logistics (Finance Train, 2012).It aims at reducing thecosts linked with transporting products along global supply chains.Such costs include import costs which have a direct effect on theprices of goods. It means that poor nations can obtain goods andservices at reduced prices.
TheWorld Bank endeavors in making global institutions and traderegulations more accommodating for less developed nations, and thishas a direct effect on their needs (Finance Train, 2012).In order toachieve this role, the World Bank helps governments eradicatenon-tariff and tariff barriers and encourage market integration(Lechner, 2009). It also analyses the effects of policies applied bykey developed nations and global trade regulations on developingnations. Lastly, it supports global collaboration on trade associatedregulatory development, particularly on services policies.
TheInternational Monetary Fund (IMF)
Establishedin 1944, the main role of IMF is making currency exchange easy forits members to enable them take part in international trade (FinanceTrain, 2012).It promotes financial and exchange stability. Thisstability prevents cases of highly priced goods and services that mayact as a hindrance to global trade. The IMF concentrates on theoperation of the international monetary system in order to attainthis role. It has been evidenced that trade is one of the key factorsspeeding up globalization in the present time (Reuvid & Sherlock,2011).
TheIMF also focuses on maintaining continuous economic growth byadvocating sound macro-economic policies. It does this by providingcapacity building to member nations. The IMF builds stronginstitutions essential for effective macro-economic management. Ithelps in the creation of joint systems of payments for transactions(Finance Train, 2012). This facilitates transactions among nationsinvolved in international trade. The IMF also promotes globalmonetary cooperation, facilitating the growth and development oftrade.
TheWorld Trade Organization (WTO)
TheWTO’s main responsibility is to lay down rules and regulations togovern international trade. Member countries are required to abideby such rules while performing cross-border trade. The WTO aims atpromoting free trade, as well as removing barriers to trade such astariffs, duties, and quotas. It is beneficial especially fordeveloping nations, as it enables them to participate in globaltrade. The result is increased integration.
TheWTO has implemented the “most favored nation” regulation (Reuvid& Sherlock, 2011). The purpose of the rule is to preventdiscrimination of foreign goods by member nations. In the presenttime, the global economy has become more and more integrated ashigher share of goods is being sold oversees. It has been evidencedthat, one-forth of the products produced globally is exported(Finance Train, 2012).Transnational corporations have also beenestablished to facilitate cross-border trade.
Theinstitution also takes part in trade negotiations. It entailsagreements on services, products, as well as intellectual property.The WTO concentrates on making certain that all member nations arecommitted in lowering trade barriers as a way of facilitatinginternational trade (Lechner, 2009). Such agreements are reviewed bythe institution on a regular basis. In its role of building tradecapacity, the WTO facilitates trade involvement especially from thedeveloping countries (Finance Train, 2012). It boosts theiropportunities and supports their capability. The institution alsoimplements technical standards among developing nations (FinanceTrain, 2012). It achieves this by providing annual courses aimed atdeveloping infrastructural and skills requirements.
FinanceTrain (2012). Roleof International Organizations (IMF, World Bank and WTO).Retrieved fromhttp://financetrain.com/role-of-international-organizations-imf-world-bank-and-wto/
Lechner,F. J. (2009). Globalization: The making of world society (1sted). Singapore: Utopia Press Pte. Ltd.
Reuvid,J. & Sherlock, J. (2011). International trade: An essentialguide to the principles to the principles and practice of export(1st ed.). Delhi: Kogan Page Publishers, Inc.