Maharashtra Board Class 12 Political Science Chapter 2 Key Concepts and Issues since 1991 Globalisation PDF Download

Key Concepts and Issues Since 1991: Globalisation

We have studied the changes that took place in the world after 1991. We read about the changes that took place in Eastern Europe in 1989, the Kuwait crisis of 1990 and the disintegration of the Soviet Union in 1991. It was during the Kuwait crisis that the term 'New World Order' was used to describe the nature of world order. After the disintegration of the Soviet Union two terms came to be used: 'post-Soviet world order' and 'post-cold war era'. All these three terms focused on the political and security situation that evolved after 1991. In the early 1990s another term started to be used. The term was 'globalisation'. Unlike the earlier terms the term globalisation was broader based. It included the nature of economic, ideological, political, technological, social and cultural changes that took place in the world after 1991. Today we use the term globalisation to describe the post-cold war era.

What is Globalisation?

When we talk of globalisation, we say that the world has become more interconnected. Technological developments have helped this interconnectivity. For example, online applications can be made for admission to any college or university abroad. Similarly, mobile calls or WhatsApp messages can be made from any part of the world to your friends and family. Changes have taken place in economics and trade. Indian fruits and flowers are exported to Europe and America, various consumer goods from Europe, America or China are available in the Indian market.

Globalisation increased interconnectedness among countries and people and events in one part of the world have an impact on other parts. There are various ways of looking at this change. One argument is that while interconnectedness has increased, the importance of the state structure has not declined. In fact, the concept of nationalism is still very much alive. Some feel that economics and technology are key factors that have brought the world together. They argue that the concept of sovereignty and jurisdiction of states is now being challenged. There are others who give importance to the civil society and non-state actors. According to them social movements cut across state boundaries and focus on humanitarian problems of the people.

Let us look at the changes that have occurred in each of these areas separately. We will also see how these changes have affected India. We are going to see the changes in these areas separately only for academic convenience. In reality all these areas are interconnected. This means that political or economic change will affect society and culture and vice versa.

Teacher's Note

Globalisation means the whole world is now connected like a village. Just like people in your village know each other and trade with each other, countries now trade and share ideas with each other.

Exam Trick

Remember: Globalisation = Global + Localisation. Think of it like this: WhatsApp connects you to your friend in America instantly. That is globalisation!

Points to Remember

Globalisation means the world is more connected through technology, trade, and culture.
After 1991, the term globalisation was used to describe all the changes in the world.
Globalisation is not just about economics; it includes politics, culture, and society too.
The state, nationalism, and civil society all still play important roles in globalisation.

Economic Issues

Some of the important changes that have occurred in the area of economic issues are as follows:

(i) Free flow of finance capital: Investment is an important aspect of the economic system. Industries need finance. Investments help to build industries as they provide finance. Investments are done by both, the government and the private sector. Today you may have read about how Indian companies are investing in foreign countries. Private companies like Tatas, Reliance, etc have invested in various industries in America, Europe, Africa and other places. Even government companies like ONGC have made investments abroad. Similarly, a lot of foreign companies are investing in India.

These investments take place in both infrastructural sector and consumer sector. Foreign companies have invested in building airports, nuclear power plants, etc. in India. They have also invested in consumer food chains like MacDonald's, Burger King, Pizza Hut, etc.

Prior to the 1990s such investments were rare. There used to be several governmental rules that made investments difficult. This has now changed. This change is looked at as free flow of financial capital. This capital flows both ways, from India to foreign countries and from foreign companies into India.

India is a developing country; it needs financial investment in industry for its development. There are limitations to domestic financial investment in India. Therefore, foreign investment is always welcome. But we must also remember that this investment in the infrastructure sector is more important than that in the consumer sector. Real development will take place with building of communication networks through road, rail, water and air travel.

Teacher's Note

Foreign companies investing in India means money coming into our country. For example, when Microsoft opened an office in India, it brought jobs and money to Indian cities.

Exam Trick

Remember: Free flow of capital = Money moving freely in and out of countries. Like water flowing in a river, money now flows between countries easily after 1991.

Points to Remember

Before 1990s, foreign companies could not easily invest in India because of government rules.
Today, Indian companies invest abroad and foreign companies invest in India.
Investments help build new factories, airports, and roads in India.
Both private companies and government companies invest money in other countries.
Infrastructure investments are more important for country development than consumer products.

(ii) Change in the concept of trade: Several changes have taken place in the approach to trade since the 1990s.

(a) International trade was governed by rules and regulations under the General Agreement on Tariffs and Trade (GATT) since 1948. GATT was not an organisation, it was an agreement amongst nations regarding trade. In 1995 GATT was replaced by the World Trade Organisation (WTO). WTO is an international body whose purpose is to promote free trade by persuading countries to abolish import tariffs and other barriers. The WTO is the only international agency overseeing the rules of international trade. It promotes free trade agreements, settles trade disputes between governments and organises trade negotiations.

(b) Trade is normally done in commodities. These can be commodities like iron ore, coal, oil or such perishable commodities like fruits, flowers, seeds, etc. In the 1990s the scope of the term 'trade' widened and we talked of trade in services. Thus banking, insurance, etc. were services and they were also looked at as matters in which trade can be done. Today we talk of trade in intellectual property. This includes copyrights, trademarks, patents, etc.

(i) The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organisation (WTO) that entered into force in 1995. The treaty was created to extend the multilateral trading system to services, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.

(ii) The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) is an international treaty which sets down minimum standards for most forms of intellectual property regulation within all member countries of the WTO.

Some of the things TRIPs deals with includes copyrights, geographical indications; industrial designs; integrated circuit, patents, trademarks, etc. TRIPs also specifies enforcement procedures, remedies, and dispute resolution procedures.

(c) Another change that has occurred in the area of trade is the use of container cargo ships. Container ships are able to carry huge amounts of goods across the world. There are special port facilities for container ships. The container cargo revolution has changed the manner in which trade takes place in the world today.

Teacher's Note

WTO makes sure all countries follow the same trade rules. It is like a referee in a football match, making sure the game is fair for all countries.

Exam Trick

Remember: GATT was replaced by WTO in 1995. Think of it as an old rule book being replaced by a new, better rule book for international trade.

Points to Remember

GATT was an agreement on tariffs and trade that started in 1948.
WTO replaced GATT in 1995 to make international trade easier and fairer.
Trade now includes not just goods but also services like banking and insurance.
Intellectual property like trademarks and patents can now be traded internationally.
Container ships can carry large amounts of goods across the world easily.

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