Globalisation is the interconnection between counties through the expansion of foreign trade and foreign investment. It is the process of integrating the home country with the foreign countries through the movement of goods, services, investment, technology and people.
Some of the challenges posed by globalisation are:
- Challenges to small traders: Because of the growing competition from the MNCs, small companies who are unable to withstand the increased competition are shutting down their companies. The unchecked imports of the goods without any restrictions and the aggressive advertising strategies taken by the MNCs has resulted in the closure of many small, domestic industries leading to large unemployment.
- Uncertain jobs: Globalisation has resulted in jobless growth. Government has allowed flexibility of labour to attract foreign investment. With the increasing competition in the market, MNCs placing orders for their products in the domestic countries are forcing the domestic producers to employ workers on a temporary basis to reduce their cost of production. Thus, they need not pay them for the whole year and can employ additional workers only during the peak seasons of demand. This results in uncertainty in jobs.
- Inequality: Globalisation has resulted in rising inequalities in income and wealth distribution. This has resulted in a rural – urban divide where many of the poor are excluded from the advantages and benefits of globalisation. Because of the strong demand for various essential goods due to increased competition, many poorer sections are adversely affected. This increases the income inequality between the rich and the poor.
