Key Concepts and Issues Since 1991 : Globalisation Exercise | Chapter 2 Class 12 Political Science Solution

Key Concepts and Issues since 1991 : Globalisation Exercise | Chapter 2 Class 12 Political Science Solution

1. [A] Choose the correct alternative and complete the following statements

Q: 1. In 1995, GATT was replaced by the

[a] WTO

[b] ECOSOC

[c] UNDP

[d] TRIPS

Solution:

[a] WTO

Q: 2. ……………… refers to a company that operates in several countries but has a distinct home base

[a] Transnational Corporation

[b] Mixed Economy

[c] Multinational Company

[d] Liberalism

Solution:

[c] Multinational Company

[B] Find the odd word.

Q: 1. Mobile, Satellite, Internet, Gramophone.

Solution:

Gramophone [not functioning on modern technology]

[C] State the appropriate concept for the given statements.

Q: 1. The international agency dealing with international trade.

Solution:

World Trade Organization [WTO]

Q: 2. The companies that operate in several countries.

Solution:

Multi National Companies

[D] Identify the incorrect pair in every set and correct it.

Q: 1. [a] Nestle – Trans National Corporation

[b] Copyrights – Intellectual Property

[c] India – Capitalist Market Economy

Solution:

[c] USA – Capitalist Market Economy

OR India – Economic Liberalism [Mixed economy]

Q: 2. [a] Amnesty International – Human Rights

[b] Green Peace – Environmental Issues

[c] Chernobyl – Trade Agreement

Solution:

[c] Chernobyl – Nuclear disaster

2. State whether the following statements are true or false with reason.

Q: 1. Globalisation brought in the concept of market economy.

Solution:

This statement is True.

[i] During the Cold War, the economic systems followed by countries, depended upon their ideology. For e.g., most West European nations and the USA were free democracies and followed capitalist economy.

[ii] In the era of globalisation there is only ‘market economy’. However, the nature of market economy is determined by the countries ideology for e.g., China has a socialist market economy, West European nations are described as ‘welfare market economies’ and USA is considered as ‘capitalist market economy’.

[iii] In most countries, the State has with draws from economic activities and the private sector and profit motive has propelled the economy.

Q: 2. Non-state actors have become irrelevant in the age of globalisation.

Solution:

This statement is False.

[i] Good governance and the participatory State focus on the role of the civil society which includes non-state actors such as NGO’s.

[ii] International relations today, are not only between States but also include non-state actors. These sometimes also pose a challenge to the position of the State. Globalisation has made non-state actors relevant. This includes organisations which are beneficial e.g., NGO’s working for humanitarian issues as well as threatening organisations e.g., terrorist outfits.

3. Explain the correlation between the following.

Q: 1. Globalisation and culture

Solution:

Today a ‘global cosmopolitan culture’ has emerged i.e movement of people across the world and public awareness of global issues. This is noticed in matters like values eg secularism, clothing food choices, ways of celebrating festivals, etc. There is international awareness of India’s rich cultural and historical heritage. Similarly, westernisation and urbanisation have influenced Indian society eg breakup of the traditional joint family and rise of individualism and materialism in the country.

Q: 2. GATT and WTO

Solution:

The General Agreement on Tariffs and Trade [GATT] was signed on 30th October 1947 by 23 countries with the purpose to promote international trade by reducing/eliminating trade barriers such as tariffs or quotas. It came into force on 1st January 1948. It aimed to boost economic recovery after World War II through reconstructing and liberalizing global trade. It introduced the most favoured nation principle. GATT was refined over 8 rounds of negotiations, leading to creation of World Trade Organization [WTO] which replaced GATT on 1st January 1995.

WTO covers services and intellectual property also. It is the international agency overseeing the rules of international trade i.e., it promotes free trade agreements, organizes trade negotiations, settles trade disputes, etc. It’s headquarters is in Geneva. It has 123 member States. The WTO dispute settlement system is faster, more automatic than the GATT system and it’s rulings cannot be blocked.

4. Express your opinion of the following.

Q: 1. Participatory State is beneficial to the society.

Solution:

Participatory State advocates more involved forms of citizen participation and greater political representation than traditional representative democracy. It goes beyond traditional democratic practices wherein decisions are made by the majority. In a participatory State, all sections of the society are involved in the making of policy. Participatory State is beneficial as it gives citizens a central role in public policy through public discussion, negotiations, voting, etc. It emphasizes the importance of making citizens aware and providing for a form of communication which promotes political dialogue.

5. Answer the following Q: in 80 to 100 words.

Q: 1. What are the positive and negative aspects of Globalisation?

Solution:

Globalisation refers to the rapid spread of goods and services, technology and information, ideas and culture, trade and interactions across the world. It is the connection of different parts of the world resulting in the expansion of international cultural, informational, economic and political activities. In the early 1990s, the term globalisation was used to include economic, political, socio¬cultural, technological and ideological changes that occurred in the world in the post cold war era. The world has become more interconnected due to advances in technology and communication. Events in one part of the world have an impact on other parts of the world. Changes have taken place economically and culturally.

The Positive aspects of globalisation are-

It creates more employment opportunities.
It encourages free trade.
It leads to better choice of goods and services to the consumer.
It leads to wider investments in developing countries.
It enhances efficiency of the tertiary sector i.e., banking and finance.
It increases purchasing power of citizens and enhances their standard of living.
It increases labour productivity and reduces capital-output ratio.
It helps to increase efficiency in the production system.
The negative aspects of globalisation are-

Globalization promotes technological adaption to increase productivity but has also resulted in loss of jobs.
Local/small scale industries cannot withstand competition from the MNC’s and may be bought off or shut down.
Less developed countries may become dependent on the technologically superior countries.
It has caused specialization of labour and so there are few employment opportunities for unskilled labour.
It has led to increased gap between rich and poor nations.
It may lead to overexploitation of resources and negatively impact the environment.
It leads to the harmful effects of consumerism.
It may lead to reduction in social welfare schemes in both developed and developing countries.

Maharashtra Board Class 12 Political Science Notes Chapter 2 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 focussed 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.

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 not only in India but 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.

(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

(iii) Rise of transnational companies : Until the 1990s the government had a lot of control on the economic sector. There was a limited scope for the private sector. Globalisation has changed this situation. We have seen the growth of private companies. Companies that used to operate within the nation started operating in foreign lands. They became multinational companies. Today we also see the growth of transnational companies. This development is mainly in the private sector. How does this affect the common person?

(a) One impact is seen on the labour market. There is a migration of skilled and semi-skilled labour from one country to another. For example, these companies recruit both, skilled and semi-skilled employees. There is a lot of skilled and semi-skilled Indian labour working in West Asia, Africa, United States, Europe, etc. The growth of private sector has also increased the employment in the service sector. Various services like providing catering, delivery of goods, transport, etc. are being provided

(b) A second impact is seen on the small industries and shops. They have to face competition from the big multinational companies. Shops and small industries that are efficient are able to compete. For example, we have seen big grocery stores and malls in cities, but despite these, the small shopkeepers, vegetable and fruit sellers continue to attract clientele. This is because they provide the necessary services to the people.

(c) A third impact is on the agricultural sector. Today farmers are able to sell their goods directly to companies. Multinational companies have brought in new technology and opened up markets for Indian agricultural products. For example, India exports marine products, meat, rice, spices, cotton, fresh fruits and vegetables, sugar, coffee, groundnut, cashews, etc.

Political Issues

Political issues in the context of globalisation mainly focus on the following:

(i) Importance of Democracy: The East European revolution of 1989 and the disintegration of the Soviet Union is looked at as the fall of communism. It has been argued that the world is moving towards democratic political systems. Terms like ‘Participatory State’, ‘Citizen Centric Governance’ and ‘Good Governance’ have become important. Participatory state goes beyond traditional democratic practices wherein the decision is made by the majority. In a participatory state all segments of the society are involved in the making of policy. Citizen centric governance and good governance focus on the role of the civil society in the functioning of the government.

(ii) Position of the State : It is being argued that the State is becoming less and less important. One of the key features of the State is its sovereignty. The concept of sovereignty is linked with the concept of jurisdiction of the state. This is the right of the State to make laws within its territory. It has been argued that the concept of sovereignty is being challenged from both, internal and external factors. External challenges come from the growth of international law, regional economic organisations, globalisation of markets, growing environmental and humanitarian concerns, etc. Internal challenges come from a decline of national consensus, growth of ethnic nationalism, activism of non-state actors, etc. Issues like environment, gender and humanitarian problems have taken the center stage.

(iii) Non-State actors : It is the importance of the civil society that has given importance to non-state actors. Thus, Voluntary Organisations and NonGovernmental Organisations (NGO) have started to become more important. Today international relations is not relations between states, it also includes non-state actors. They play an important role in promoting humanitarian issues. Besides organisations like the Amnesty International, Green Peace Movement, terrorist organisations are also non-state actors.

(iv) Human Rights: In the age of globalisation protection of human rights has become an important agenda. But there is a need to make a distinction between the approaches to human rights of the developed world and the developing world. The Third World holds that economic development has to precede before civil and political rights and that a greater value needs to be placed on community and family than on individual rights.

The Indian constitution for example, lays stress on the aspect of social justice and looks at food, shelter, clothing, education and health as primary needs of its citizens. It is further argued that in the desire to achieve distributive justice there is an undue emphasis on liberty rights and not welfare rights of the people.

Therefore, countries should have the right to interpret human rights in accordance to their history, culture, polity, and economy. Thus, the broad application of western approach to human rights, that focuses on civil and political rights and freedoms as a priority, would have to be tempered with the ground situation mentioned above.

Ideological Issues

Ideology was an important factor during the cold war era. Countries used to be classified as Socialist or Communist on the one hand and Capitalist or Free Democracies on the other. Soviet Union, East Europe, and China were grouped as the socialist world while West Europe and North America was the capitalist bloc. Ideology and the economic systems were well connected.

While ideology was a political feature, the economic system followed by the countries depended upon the ideology of that country. For example, the countries of Eastern Europe had followed the Socialist ideology and had socialist economic systems where the government or the public sector was most important. Western European countries followed the capitalist ideology hence their economic system was also capitalist in nature.

In these countries the private sector played an important role in the economy. During this period countries like India were ‘Democratic Socialist’. This meant that they combined the ideologies of socialism and capitalism as per their requirement. Consequently, India had a ‘Mixed Economic system’. This meant that both, the public and private sector played an important role in the economic system. Today, in the era of globalisation there appears to be only one dominant ideological and economic system. This is described as ‘Market Economy’.

But all countries do not follow the same kind of market economic system. The nature of market economy is determined by the ideology of that country. Let us take some examples. The United States is considered a ‘capitalist market economy’ because it combines the capitalist system of economy with market economics. Western European countries are described as ‘welfare market economies’ because their political system is that of a ‘welfare state’.

China is described as having a ‘socialist market economy’. China is a socialist state but its economic system changed in the 1990s and became a market economic system. In India we do not use the word market economics. We describe Indian system as ‘economic liberalism’.