Globalisation (LAQs)

Social | 9. Globalisation – LAQs:
Welcome to LAQs in Chapter 9: Globalisation. This page contains the most Important FAQs for Long Answer Questions in this Chapter. Each answer is provided in simple English, with a Telugu explanation, and formatted according to the exam style. This will support your preparation and help you secure top marks in your exams.


LAQ-1 : In what ways is an MNC different from other companies?

For Backbenchers 😎

Multinational Companies (MNCs) are big businesses that work in many countries, have lots of money, and offices all over the world. They buy and sell things across borders and can afford to do big things.

Local Companies, on the other hand, stay in their home country, mostly spend money there, and have smaller pockets. They do business mainly in their own country and get most of their stuff from there.

So, MNCs are like global giants, while local companies are more like neighborhood shops.

మన తెలుగులో

బహుళజాతి కంపెనీలు (MNCలు) అనేక దేశాలలో పని చేసే పెద్ద వ్యాపారాలు, ప్రపంచవ్యాప్తంగా చాలా డబ్బు మరియు కార్యాలయాలు ఉన్నాయి. వారు సరిహద్దులు దాటి వస్తువులను కొనుగోలు చేస్తారు మరియు విక్రయిస్తారు మరియు పెద్ద పనులను చేయగలరు.

స్థానిక కంపెనీలు, మరోవైపు, వారి స్వదేశంలో ఉంటాయి, ఎక్కువగా అక్కడ డబ్బు ఖర్చు చేస్తాయి మరియు చిన్న పాకెట్లను కలిగి ఉంటాయి. వారు ప్రధానంగా వారి స్వంత దేశంలో వ్యాపారం చేస్తారు మరియు అక్కడ నుండి వారి వస్తువులను చాలా వరకు పొందుతారు.

కాబట్టి, MNCలు గ్లోబల్ జెయింట్స్ లాగా ఉంటాయి, అయితే స్థానిక కంపెనీలు పొరుగు దుకాణాల వలె ఉంటాయి.

Introduction

In the business world, two primary types of companies are Multinational Companies (MNCs) and local companies. Each has distinct characteristics and operational scopes.

What is an MNC (Multinational Company)?

  1. Working in Many Places: MNCs operate offices or factories in multiple countries.
  2. Money Matters: Invest in businesses across various countries.
  3. Offices Everywhere: Establish presence in different parts of the world.
  4. Big Wallets: Generally have substantial financial resources.
  5. Selling and Buying: Engage in international trade, selling and buying across borders.
  6. Getting Stuff: Acquire resources globally, often at more competitive prices.
  7. Examples: Well-known MNCs include Adidas, Amazon, and Coca Cola.

What are Local Companies?

  1. Staying Home: Operate primarily within their home country.
  2. Money Stays Home: Investments and expenditures are mostly domestic.
  3. Offices Close By: Offices or shops are limited to their own country.
  4. Money Matters: Tend to have smaller financial resources compared to MNCs.
  5. Selling and Buying: Conduct trade mainly within their own country.
  6. Getting Stuff: Source most resources domestically, which can sometimes be costlier.
  7. Examples: Local stores or brands, like certain milk or grocery brands.

Summary

In essence, Multinational Companies (MNCs) operate across multiple countries with significant financial strength, while local companies primarily focus on their home country, often with more limited resources. This guide outlines the basic differences between large international businesses and those operating solely in one country.


LAQ-2 : Distinguish between foreign trade and foreign investment.

For Backbenchers 😎

Foreign trade is like countries buying and selling stuff to each other. It helps businesses grow and brings countries closer.

Foreign investment is more about putting money into another country’s businesses or projects. It’s like helping them to grow and make more money in the long run. It’s a bit like planting seeds for the future.

మన తెలుగులో

విదేశీ వాణిజ్యం అనేది దేశాలు ఒకదానికొకటి వస్తువులను కొనుగోలు చేయడం మరియు విక్రయించడం లాంటిది. ఇది వ్యాపారాలు వృద్ధి చెందడానికి మరియు దేశాలను మరింత చేరువ చేయడానికి సహాయపడుతుంది.

విదేశీ పెట్టుబడి అనేది మరొక దేశం యొక్క వ్యాపారాలు లేదా ప్రాజెక్ట్‌లలో డబ్బు పెట్టడం. ఇది వారు ఎదగడానికి మరియు దీర్ఘకాలంలో మరింత డబ్బు సంపాదించడానికి సహాయం చేయడం లాంటిది. ఇది భవిష్యత్తు కోసం విత్తనాలను నాటడం లాంటిది.

Introduction

In the realm of international business, there are two main avenues through which countries interact: foreign trade and foreign investment. Each has distinct characteristics and impacts on global commerce.

What is Foreign Trade?

  1. Trading Globally: Involves buying or selling goods and services to other countries.
  2. Moving Stuff: Entails transporting products or services from one country to another.
  3. Buying and Selling: Comprises both imports (what a country buys) and exports (what it sells).
  4. Benefits for Buyers and Sellers: Enables businesses to reach broader markets and allows consumers to access diverse products, often at competitive prices.
  5. Making Money: Engaging in trade with multiple countries can lead to increased revenue and market expansion.
  6. Bringing Countries Together: Facilitates stronger connections between nations through mutual commerce.

What is Foreign Investment?

  1. Putting Money in Another Place: Involves investing in assets like buildings or equipment in another country.
  2. Moving Money: Focuses on the transfer of capital, rather than physical goods, across borders.
  3. Different Ways to Invest: Includes direct investments in businesses (Foreign Direct Investment, FDI) or buying stocks in foreign companies.
  4. Why Invest?: Aims to introduce new technology, capital, and resources to the local businesses in the host country.
  5. Planning for the Future: The primary objective is long-term financial gain.
  6. Boosting the Local Economy: Foreign investments can significantly enhance the economic growth of the host country.

Summary

In simple terms, foreign trade is about countries engaging in the exchange of goods and services, while foreign investment involves investing capital in business ventures or assets in another country. Both play pivotal roles in how countries interact and cooperate in the global business landscape.


LAQ-3 : What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers? (OR) Why Indian government removed barriers or foreign trade and investment.

For Backbenchers 😎

In the past, India put up barriers to protect its own businesses and industries from foreign competition. They did this to help local companies grow and control important goods.

But in 1991, they changed their approach. They decided that competing with foreign companies would actually make Indian products better. So, they started removing these barriers and letting foreign businesses come in and trade freely. This shift was a big change in India’s economic policy.

మన తెలుగులో

గతంలో, భారతదేశం తన సొంత వ్యాపారాలు మరియు పరిశ్రమలను విదేశీ పోటీ నుండి రక్షించుకోవడానికి అడ్డంకులు వేసింది. స్థానిక కంపెనీలు వృద్ధి చెందడానికి మరియు ముఖ్యమైన వస్తువులను నియంత్రించడంలో సహాయపడటానికి వారు దీన్ని చేసారు.

కానీ 1991లో వారు తమ విధానాన్ని మార్చుకున్నారు. విదేశీ కంపెనీలతో పోటీ పడడం వల్ల భారతీయ ఉత్పత్తులు మరింత మెరుగవుతాయని వారు నిర్ణయించుకున్నారు. కాబట్టి, వారు ఈ అడ్డంకులను తొలగించి, విదేశీ వ్యాపారాలు ప్రవేశించడానికి మరియు స్వేచ్ఛగా వ్యాపారాన్ని అనుమతించడం ప్రారంభించారు. ఈ మార్పు భారతదేశ ఆర్థిక విధానంలో పెద్ద మార్పు.

Introduction

The Indian government’s stance on foreign trade and investment has undergone significant changes since independence. Initially, barriers were established to shield the economy, but in 1991, a paradigm shift occurred, leading to the removal of these barriers.

Reasons for Putting Barriers to Foreign Trade and Investment

  1. Protecting Domestic Industries in the 1950s and 1960s:
    To safeguard nascent industries against strong foreign competition, the government implemented barriers.
  2. Control of Essential Goods:
    Limited importation to crucial goods like petroleum, machinery, and fertilizers, managing what entered the country.

Reasons for Removing Barriers to Foreign Trade and Investment in 1991

  1. Improving Indian Producers:
    Belief that competition with foreign companies would enhance the quality of Indian products.
  2. Policy Changes:
    The government altered regulations to enable Indian companies to compete internationally.
  3. Support from International Organizations:
    Global support facilitated this transition.
  4. Free Trading and Foreign Companies:
    Opening up to foreign businesses by reducing barriers, promoting free trade.

Summary

The approach of the Indian government towards foreign trade and investment evolved from a protectionist outlook to one of openness and competition. Initially, the focus was on shielding domestic industries from international competition. However, by 1991, with the aim of spurring improvement and competitiveness in Indian businesses and under the encouragement of global entities, barriers were dismantled. This shift marked a significant turn in India’s economic policy and global integration.


LAQ-4 : “The impact of globalisation has not been uniform.” Explain this is statement. (OR) Explain the impact of globalisation on Indian companies.

For Backbenchers 😎

Globalization in India has brought both benefits and challenges. Urban consumers, especially wealthier ones, have access to more products at better prices. However, small producers and less skilled workers may struggle due to competition from bigger global companies. Some local companies have grown and created more jobs by supplying materials to these global industries. Also, Indian companies have improved with modern technology and foreign partnerships. The IT and service sectors have seen significant growth. So, globalization affects different groups and sectors in various ways in India.

మన తెలుగులో

భారతదేశంలో ప్రపంచీకరణ ప్రయోజనాలు మరియు సవాళ్లు రెండింటినీ తీసుకువచ్చింది. పట్టణ వినియోగదారులు, ముఖ్యంగా సంపన్నులు, మెరుగైన ధరలకు మరిన్ని ఉత్పత్తులకు ప్రాప్యత కలిగి ఉన్నారు. అయినప్పటికీ, పెద్ద గ్లోబల్ కంపెనీల పోటీ కారణంగా చిన్న ఉత్పత్తిదారులు మరియు తక్కువ నైపుణ్యం కలిగిన కార్మికులు ఇబ్బందులు పడవచ్చు. ఈ ప్రపంచ పరిశ్రమలకు మెటీరియల్‌ను సరఫరా చేయడం ద్వారా కొన్ని స్థానిక కంపెనీలు పెరిగాయి మరియు మరిన్ని ఉద్యోగాలను సృష్టించాయి. అలాగే, ఆధునిక సాంకేతికత మరియు విదేశీ భాగస్వామ్యంతో భారతీయ కంపెనీలు మెరుగుపడ్డాయి. ఐటీ, సేవా రంగాలు గణనీయమైన వృద్ధిని సాధించాయి. కాబట్టి, ప్రపంచీకరణ భారతదేశంలోని వివిధ సమూహాలను మరియు రంగాలను వివిధ మార్గాల్లో ప్రభావితం చేస్తుంది.

Introduction

Globalization is the process of increasing interdependence and interaction between countries. In India, globalization has brought varying changes, benefiting some groups while posing challenges for others.

  1. Benefits for Urban Consumers: Urban consumers, especially the wealthy, have gained access to a wider range of high-quality products at often cheaper prices, enhancing their standard of living.
  2. Challenges for Small Producers and Workers: Small-scale producers and less skilled workers have struggled due to intense competition from larger global companies, leading to potential job losses and reduced profits.
  3. Gains for Local Companies and Employment: Some local companies providing materials to larger industries, which have established themselves due to globalization, have experienced significant growth, leading to more job opportunities in the area.
  4. Improvements in Indian Companies:
    • Many top Indian companies have embraced modern technology and improved production methods.
    • Partnerships with foreign businesses have brought new ideas and investment, enhancing efficiency and modernization.
  5. Boost in IT and Service Sectors: The IT sector in India has particularly benefited, with growth in areas like call centers and specialized work for foreign companies, such as magazine production.

Summary

Globalization has led to multifaceted changes in India, impacting different groups and sectors in varied ways. While urban consumers and large companies have generally benefited, small producers and certain workers have faced challenges. However, sectors like IT have witnessed substantial growth, indicating the complex and varied effects of globalization across the Indian society and economy.


LAQ-5 : Locate the following in the map of world.

1.China

2.Japan

3.Brazil

4.South Africa

For Backbenchers 😎

China is in Eastern Asia and borders 14 countries. Japan is an island nation in the Pacific Ocean, east of China and Korea, with four main islands. Brazil occupies a large area in South America, known for the Amazon River and sharing borders with most South American countries. South Africa is in the southernmost part of Africa, known for diverse geography including the Kalahari Desert and Cape of Good Hope. Knowing where these countries are helps us understand their place in the world.

మన తెలుగులో

చైనా తూర్పు ఆసియాలో ఉంది మరియు 14 దేశాల సరిహద్దులో ఉంది. జపాన్ పసిఫిక్ మహాసముద్రంలో, చైనా మరియు కొరియాకు తూర్పున నాలుగు ప్రధాన ద్వీపాలతో కూడిన ఒక ద్వీప దేశం. బ్రెజిల్ దక్షిణ అమెరికాలో పెద్ద ప్రాంతాన్ని ఆక్రమించింది, అమెజాన్ నదికి ప్రసిద్ధి చెందింది మరియు చాలా దక్షిణ అమెరికా దేశాలతో సరిహద్దులను పంచుకుంటుంది. దక్షిణాఫ్రికా ఆఫ్రికా యొక్క దక్షిణ భాగంలో ఉంది, కలహరి ఎడారి మరియు కేప్ ఆఫ్ గుడ్ హోప్‌తో సహా విభిన్న భౌగోళిక శాస్త్రానికి ప్రసిద్ధి చెందింది. ఈ దేశాలు ఎక్కడ ఉన్నాయో తెలుసుకోవడం ప్రపంచంలో వాటి స్థానాన్ని అర్థం చేసుకోవడానికి సహాయపడుతుంది.

Introduction

Geographical knowledge is essential for understanding global dynamics. Identifying countries on the world map is a fundamental skill. Here’s a guide to locating China, Japan, Brazil, and South Africa on the world map.

  1. China:
    • Location: Situated in Eastern Asia.
    • Notable Features: Borders 14 countries, including India, Russia, and Mongolia.
  2. Japan:
    • Location: An island nation located in the Pacific Ocean, to the east of China and Korea.
    • Notable Features: Comprises four main islands – Honshu, Hokkaido, Kyushu, and Shikoku.
  3. Brazil:
    • Location: Occupies a large area in South America.
    • Notable Features: Known for the Amazon River and rainforest, and shares borders with all South American countries except Chile and Ecuador.
  4. South Africa:
    • Location: Located in the southernmost part of Africa.
    • Notable Features: Known for its diverse geography, including the Kalahari Desert and Cape of Good Hope.

Summary

Identifying China, Japan, Brazil, and South Africa on the world map provides insight into their geographical positioning and neighboring features. Understanding their locations helps in comprehending global political, cultural, and economic contexts.


LAQ-6 : Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?

For Backbenchers 😎

Developed countries want trade and investment freedom in developing nations for market access, cost benefits, and higher profits. Developing countries should ask for job creation, technology transfer, fairness in trade, and support for their economic growth in return. This helps balance global economic relations.

మన తెలుగులో

అభివృద్ధి చెందిన దేశాలు మార్కెట్ యాక్సెస్, ఖర్చు ప్రయోజనాలు మరియు అధిక లాభాల కోసం అభివృద్ధి చెందుతున్న దేశాలలో వాణిజ్యం మరియు పెట్టుబడి స్వేచ్ఛను కోరుకుంటున్నాయి. అభివృద్ధి చెందుతున్న దేశాలు ఉద్యోగాల కల్పన, సాంకేతికత బదిలీ, వాణిజ్యంలో న్యాయబద్ధత మరియు ప్రతిఫలంగా తమ ఆర్థిక వృద్ధికి మద్దతు ఇవ్వాలని కోరాలి. ఇది ప్రపంచ ఆర్థిక సంబంధాలను సమతుల్యం చేయడానికి సహాయపడుతుంది.

Introduction

Developed countries often advocate for the liberalization of trade and investment in developing nations. Understanding their motives and what developing countries should seek in return is crucial for balanced global economic relations.

Why Developed Countries Want Liberalization

  1. Access to New Markets: Desire to import and export goods and services freely.
  2. Cost Benefits: Developing countries provide opportunities for setting up branches or factories at lower costs.
  3. Cheap Resources: Workforce and resources in developing countries are often less expensive.
  4. Higher Profits: Reduced production costs can result in increased profits.
  5. Expansion: Opportunity to expand businesses into new regions.

What Developing Countries Should Ask For

  1. Job Creation: Demand that global companies provide employment opportunities for local people.
  2. Tech Transfer: Seek access to modern technologies and training.
  3. Fairness: Ensure all trade practices are just and transparent.
  4. Developmental Support: Investments that aid in improving the economy, such as boosting GDP, and enhancing education.

Summary

While developed countries have clear motivations for promoting trade and investment liberalization in developing nations, it is crucial for the latter to ensure tangible benefits in return. Developing countries should focus on securing technology transfers, job creation, fair trade practices, and investments that contribute to overall economic development, ensuring mutual benefit in global economic interactions.


LAQ-7 : Explain the role of WTO in promoting Globalisation.

For Backbenchers 😎

The World Trade Organization (WTO) helps countries around the world trade and work together better. It encourages fair and open trade by solving problems and making sure everyone is treated equally. This helps countries connect and do business more easily, promoting globalization.

మన తెలుగులో

ప్రపంచ వాణిజ్య సంస్థ (WTO) ప్రపంచంలోని దేశాలకు వాణిజ్యం మరియు కలిసి మెరుగ్గా పని చేయడంలో సహాయపడుతుంది. ఇది సమస్యలను పరిష్కరించడం ద్వారా మరియు ప్రతి ఒక్కరినీ సమానంగా చూడటం ద్వారా న్యాయమైన మరియు బహిరంగ వాణిజ్యాన్ని ప్రోత్సహిస్తుంది. ఇది ప్రపంచీకరణను ప్రోత్సహిస్తూ దేశాలను మరింత సులభంగా కనెక్ట్ చేయడానికి మరియు వ్యాపారం చేయడానికి సహాయపడుతుంది.

Introduction

The World Trade Organization (WTO) is pivotal in facilitating the advancement of globalization, fostering closer ties among countries through trade and commerce.

Understanding Globalization

Globalization involves countries becoming increasingly interconnected, sharing goods, services, and ideas at an unprecedented rate.

WTO’s Central Role

  1. Driving Global Business & Trade: The WTO is committed to enhancing international trade and global business activities.
  2. Problem-Solving Platform: Provides a forum for countries to resolve trade disputes and form new trade agreements.
  3. Guiding Principles: Emphasizes principles such as non-discrimination (treating all members equally), reciprocity (making trade mutually advantageous), and transparent trade policies.
  4. Promoting Trade Agreements: Facilitates the negotiation and finalization of trade deals, leading to smoother and more open global trade.

Summary

The WTO significantly contributes to the expansion of globalization by offering a framework and set of principles that encourage free, transparent, and fair trade. Its objectives and platforms enable countries to engage in more connected and efficient economic interactions on a global scale.


LAQ-8 : Read the following paragraphs and answer the questions that follow.

In recent years, the central and state governments in India have been taking special steps to attract foreign companies to invest in India. Industrial zones, called Special Economic Zones (SEZS), are being set up. SEZs are to have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities. Companies who set up production units in the SEZS do not have to pay taxes for an initial period of five years. Government has also allowed flexibility in the labour laws to attract foreign investment. Instead of hiring workers on a regular basis, companies hire workers ‘flexibly’ for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company. However, foreign companies are demanding further flexibility in labour laws.

1.What are world class facilities?

2.What are foreign companies demanding?

3.Why did government allow flexibility in the labour laws?

4.What are industrial zones called?

5.’Why are the state and central governments in India taking special steps.

For Backbenchers 😎

The Indian government is trying to get foreign companies to invest in the country. They are doing this by creating special zones with excellent facilities and more flexible labor laws. These zones are called Special Economic Zones (SEZs). The government is also giving tax breaks to these companies for the first few years. However, foreign companies are asking for even more flexibility in labor laws. These efforts are aimed at making India more attractive for foreign investment.

మన తెలుగులో

విదేశీ కంపెనీలు దేశంలో పెట్టుబడులు పెట్టేందుకు భారత ప్రభుత్వం ప్రయత్నిస్తోంది. అద్భుతమైన సౌకర్యాలు మరియు మరింత సౌకర్యవంతమైన కార్మిక చట్టాలతో ప్రత్యేక జోన్‌లను సృష్టించడం ద్వారా వారు దీనిని చేస్తున్నారు. ఈ జోన్లను స్పెషల్ ఎకనామిక్ జోన్స్ (SEZ) అంటారు. ఈ కంపెనీలకు ప్రభుత్వం మొదటి కొన్నేళ్లపాటు పన్ను మినహాయింపులు కూడా ఇస్తోంది. అయితే, విదేశీ కంపెనీలు కార్మిక చట్టాల్లో మరింత వెసులుబాటును కోరుతున్నాయి. ఈ ప్రయత్నాలు భారతదేశాన్ని విదేశీ పెట్టుబడులకు మరింత ఆకర్షణీయంగా మార్చే లక్ష్యంతో ఉన్నాయి.

Introduction

The provided text discusses the efforts of the Indian central and state governments to attract foreign investment, highlighting the role of Special Economic Zones (SEZs) and their features.

Key Details:

  1. World Class Facilities:
    ‘World class facilities’ refer to high-standard infrastructure and amenities like electricity, water, roads, transport, storage, and recreational and educational facilities.
  2. Foreign Companies’ Demands:
    Foreign companies are demanding further flexibility in labor laws.
  3. Government’s Flexibility in Labour Laws:
    The government allowed flexibility in labor laws to attract foreign investment and reduce labor costs for companies, enabling them to hire workers ‘flexibly’ for short periods.
  4. Industrial Zones:
    Industrial zones are referred to as Special Economic Zones (SEZs).
  5. Government’s Special Steps:
    The central and state governments in India are taking special steps to attract foreign investment, part of which involves establishing SEZs with various incentives, like tax exemptions for initial years.

Summary

The Indian government is proactively creating Special Economic Zones with world-class facilities and flexible labor laws to attract foreign investment. This includes offering tax exemptions and the option for companies to hire workers flexibly. Foreign companies are seeking further relaxation in these labor laws. These efforts are made to strengthen India’s position as a desirable destination for foreign companies and boost economic growth.