Globalization of World Economy

Globalization is understood as increasing internationalization of ideas, science, communication and technology that must be distinguished from economic globalization. The latter means the process of integration of markets, great changes in trade and finance and the establishment of the global economy.

The main aim of economic globalization is to change the world into one dynamic market which has uniform characteristics in different countries. Globalization should lead to a free mobility of capital as well as to privatization of the economy and a sharp reduction in government budgets. Besides, globalization means wide advertising of new consumer products all over the world, low taxes for producers both domestic and foreign and similar life-styles¹⁾ for people of different nationalities.

First steps towards globalization in Europe were made by the establishment of the Common Market in 1993 and the introduction of the " euro" as the new single currency for Europe on January 1, 1999. Since that time the euro has been used in foreign trade transactions by the countries which joined the euro-zone²⁾. Euro banknotes were introduced in circulation in 12 member-countries of the European Union on January 1, 2002.

Some countries of Central and Eastern Europe have recently joined the European Union, such as Lithuania and Poland while others are planning to do it in the near future. However, in order to transform the former planned economies into really mixed economies³⁾ countries of Eastern Europe must increase sharply the levels of productivity and competitiveness of their economies. Special adjustments should be made in agriculture, tax system and in the system of social security⁴⁾.

Economists think that the single currency will increase trade integration as well as labour mobility in the euro-zone. The introduction of the new currency and participation of different countries in integrated European financial markets should reduce any risks in business transactions and lead to more efficient European finance, promote European political as well as economic integration.

Globalization at a business level means that a company has decided to participate in the global economy and it is going to establish its subsidiaries in foreign markets. However, a company mill have to adjust its products or services to the consumers' requirements in a foreign country. Nowadays any company may do e-business using the Internet services. In order to attract consumers it is important to advertise new goods and services both in national and international markets. Advertising of popular goods and services is often done in such international languages as English, German, French, and Spanish.

Ответьте на вопросы к тексту.

1. What does globalization mean?

2. What are the main characteristics of " economic globalization"?

3. What are the aims of economic globalization?

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¹⁾similar life-style - похожий образ жизни

²⁾euro-zone — страны, где используется денежная единица «евро»; зона «евро»

³⁾a mixed economy — смешанная экономика (сочетает элементы командной и свободной рыночной экономики)

⁴⁾social security — социальное обеспечение

4. What are the main steps of globalization in Europe?

5. What is the euro?

6. When and where was the euro introduced?

7. Is the euro used in all European countries?

8. What problems should the former Eastern European countries cope with nowadays?

9. What benefits can the single European currency ensure?

10. What does globalization mean in business?

11. What is important in e-business?

Раскрыв скобки, употребите глагол в форме настоя­щего простого, продолженного или совершенного времени, простого прошедшего времени, простого будущего времени страдательного или действительного залога.

1. Farmers of different countries usually (to support) long-term ecological programmes.

2. Problems of globalization (to discuss) by leading economists, scientists, writers and activists at the International Forum on Globalization every year.

3. The government policy (to maintain) economic security of the country last year.

4. The first meeting of the International Forum on Globalization (to hold) in San Francisco in January 1994.

5. The world's resources of water and other natural resources (not/ use) properly in recent years.

6. Lately the euro (to become) an alternative to the US dollar as an international currency.

7. The degree of economic interdependence between different countries in the world (to increase) today as a result of close trade relations.

8. Even now the protective tariffs (to impose) on the export of some manufactured goods from Latin American countries to Europe.

9. Modern and improved transport facilities (to build) in Moscow in the near future.

10. Some economists (to think) that such organizations as the World Trade Organization, the International Monetary Fund, and the World Bank (may/ to replace) by new organizations in order to develop new trade and investment rules.

11. Russia (to join) the World Trade Organization when all the necessary adjustments in the national economy (to do) by the government offices.

12. Harvard University (to have) this name because in 1638 John Harvard (to leave) all his money to a school that later (to become) the well-known university.

13. You (to lose out) if you (to pay) in dollars when their value (to fall).

14. If the company (to establish) a subsidiary in this country its goods (to become) cheaper and more competitive Russia.

Переведите однокоренные слова и определите, какими частями речи они являются.

1. globe, globalization, global, globally

2. establish, establishment, established, establishing

3. advertising, advertise, advertisement, advertiser

4. reduce, reduced, reduction, reducing

5. introduced, introducing, introduce, introduction

6. competitive, competitiveness, compete, competition, competitor

7. participator, participation, participate, participating

8. promotion, promote, promoter, promoting

9. Europe, European, euro

10. circulate, circulating, circulation

Вставьте слова из предыдущего упражнения в нужной форме.

1. The... in taxes usually stimulates production.

2. Both small and large companies spend money on... in newspapers or on TV in order to promote their goods and services.

3.... may help people to move from one country to another easily in order to seek for better jobs.

4. In order to get more profits companies try to... goods.

5. The... of the single currency has made transactions between different foreign companies much easier and faster.

6. The members of the... Union started to use the... as the single currency in... in 2002.

7. Most countries of Central and Eastern Europe try to join the European Union as... in such a union can provide certain benefits in trade.

8. Famous American companies such as Coca Cola, and McDonalds have already... subsidiaries in Russia and they can successfully... with domestic producers for consumers.

UNIT 8