Hyper Globalization

Hyper Globalization

Hyper-Globalization and The Effect of it on India

This article covers “Daily current events “and the topic is ‘Hyper-GlobalizationWhich is in news, it covers the “impact of it on Indian Society” In GS-1, and the following content has relevance for UPSC.

For prelims: About hyper-globalization

For mains: GS -1, about hyper-globalization and its impact

Why in news:

  • In 2022, two wars are actively taking place, undermining hyper-globalization.
  • The first conflict is Russia’s invasion of Ukraine, while the second conflict is an economic conflict between two superpowers (US and China).
  • The global trading order suffers the most collateral damage from the two conflicts: instead of production based on comparative advantage and trade profits, it is now each nation for itself.

About Hyper-globalization

  • It is the abrupt increase in the size, reach, and speed of globalization that started in the late 1990s and has persisted throughout the first decade of the twenty-first century.
  • Political, cultural, and economic globalization are all three of their key facets are all covered.

Salient Features

  • Characteristics of a hyper-globalized world: Wars are not common, and economies mostly adhere to the theories advanced by Adam Smith and David Ricardo in the late 18th and early 19th centuries.
  • In his book “Wealth of Nations,” Adam Smith argued that we should purchase a good from a foreign nation if they can do it at a lower price than we can.
  • According to Ricardo, nations are capable of producing even goods in which they do not have an “absolute advantage.” Comparative advantage was important.
  • The concept of comparative advantage served as the driving force behind “hyper-globalization’s” second golden age.
  • The “doux commerce” premise holds that men become less likely to engage in violence or illogical behavior as a result of trade.
  • “Commerce is a remedy for the most harmful prejudices,” according to the French philosopher Montesquieu, and “peace is the natural outcome of the trade.”

Comparing globalization and hyper-globalization

  • The International Monetary Fund describes globalization as the process by which international commerce and financial markets are uniting.
  • Hyper-globalization is the term used to characterize the tremendous rise in global trade that has been observed for nearly 15 years, starting in the early 1990s. It caused a previously unheard-of movement of both capital and people.
  • The primary distinction is how quickly the globalization process proceeds.

The Effects of It on Indian Society

  • It encouraged manufacturing in India based on comparative advantage.
  • For semiconductor companies producing less complex 28-65 nm range semiconductors that can be utilized in autos, household appliances, and mobile phones, India is offering incentives totaling 30-50% of the project cost.
  • Five years ago, it might not have thought it was worthwhile to spend tax dollars on this.

Source:

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