Issues In Global Economy Assignment Report

Running head: ISSUES IN GLOBAL ECONOMY
Issues in Global Economy
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ISSUES IN GLOBAL ECONOMY1
Introduction
The process of the integration and interaction among businesses, people and governments
around the world is known as the globalization. It generates a global unregulated market
economy through the interaction of national and local economies (Beck 2008). The role of the
nation state has reduced by the economic globalization. The five main criteria of the
globalization include liberalization, westernization, internationalization, deterritorialization and
universalization. The significance of the nation state diminishes in case of the
internationalization.
Main Body
The nation state plays a complex role in the globalization. The reason behind the complex
role of the globalization include changing concepts and varying definitions of the globalization.
The globalization is characterized by the partial or complement abolition of the social, cultural
and economic borders between the nation state. Therefore, it is believed that the importance of
the nation state would be minimal in case of globalization. As the power of the nation state is
declining, it is considered as less important in the internationalization (Prakash and Griffin
2012). Hence, globalization of the countries through the internationalization would influence the
role of the nation state. Furthermore, the main objective of the globalization is minimization of
the barriers in terms of international communication and commerce. In some cases, it acts against
the nation state and create potential threat for the country due to increasing global influence.
There were several past cases, where globalization reduces the power of the nation state (Chang
2007).

ISSUES IN GLOBAL ECONOMY2
It intends to maintain the sovereignty of the individual nation through the expansion in
trade and communication between the countries. Therefore, the process of dealing between the
countries participating in trade changes due to globalization. One of the vital feature of the
globalization is westernization. In case of westernization, the western perspective is applied to
create a global world model. Moreover, it intends to increase the communication, trade and other
economic activities with the western countries such as Europe and America. The reason behind
adopting western model is development and growth. As the western countries are advanced
economies, it will be beneficial for other countries to adopt the perspective of the western world
(Sorensen 2006). However, it has seen that dealing with the advanced courtiers with the
developing or less developed countries lead to exploitation. Thus, it proves disadvantageous for
the nation state as it induces the power of the advanced countries through globalization.
The presence of the powerful western firms increased the competition for the agricultural
firms of the less developed or developing countries. The agricultural sector is the backbone of
the poor countries. Therefore, increase in competition leads to losing of revenue and market
share to the rich western firms (Rodrik 2011). The westernization through globalization also
scales up the presence of the international commerce entities and multinational corporations.
Thus, it creates many opportunities and challenges in the globalized market. In order to, control
those challenges and tap the opportunities, the nation states are forced to change their economic
policies. It can be stated that the potential effects of the globalization lowers the power of the
nation state. Moreover, the flow of the foreign direct investment in the country also controlled by
the presence of the multinational corporation. It influences the nation state to allow the foreign
direct investment (FDI) in the nation. Hence, the nation state unable to decide the level of the
FDI allowed in the nation.