The term globalisation became popular in the 20th century. Then onwards, it has become a typical issue affecting the whole socio-economic and political life of states throughout the world. Besides, the discourse on globalisation is complex with far-reaching effects on national and international laws and policies pertaining to the social, economic and political matters.
Issues related to globalisation are open for debate as various people have varying perceptions about it. At one extreme, there are people who see globalisation as an irresistible and benign force for delivering economic prosperity in economically underdeveloped areas. On other hand, there are people who blame it as a source of all contemporary ills. Those people taking the latter line of argument emphasis on the negative impacts of globalisation from various dimensions. Specially, they make frequent reference to the difficulties faced by small enterprises in underdeveloped areas in taking advantage of the benefits of globalisation. As a result, the rural and informal economies remain on the margin, which in turn leads to persistent poverty. Besides, the industrial restructuring in force of competitive markets is highly probable to insecure jobs and dramatically affects the working conditions and rights of workers in some countries.
In most developing countries, globalisation has undermined traditional livelihoods, changed the traditional social security systems and increased rural-urban and intra-regional inequalities. Moreover, some multi-national investment have been exacerbating environmental degradation and generated pressures for cheaper and more flexible labour in order to retain competitiveness, which in effect could erode the values of democracy and social justice. In relation to this, the accountability of these institutions engaged in business is debatable. In reality, some people feel that transnational bodies are unaccountable, which usually disregard the local perspectives of cultural, linguistic and other diversities.
The other extreme argument is on the positive impact of globalisation. To this effect, it is widely accepted that the key characteristics of globalisation have been the liberalisation of international trade, the expansion of FDI, and the emergence of massive cross-border financial flows. This resulted in increased competition in global markets.
It is also widely acknowledged that this has become about through the combined effect of different understanding factors, mainly, policy decisions, to reduce national barriers to international economic transactions and the impact of new technology. Due to the effect of the latter, the natural barriers of time and space have been vastly reduced. At present, the cost of moving information, people, goods and capitals across the globe has fallen dramatically, which in turn vastly expanded the feasibility of economic transactions across the world. People believe that markets can be global in scope and encompass an expanding range of goods and services.
Globalisation can have both direct and indirect impact on states. It would also inevitably affect the laws of international business transactions either negatively or positively. The challenges against globalisation may dictate the revision of these laws in a manner, which may equally benefit the poor and the rich. If nations are to be benefited from the globalisation, most argue that there must be fair laws which consider the local realities in developing countries.
Hence, some argue that the present laws to this end do not take the realities at ground in to account specially in third world countries. The fact that the market is highly competitive, the poor would be pushed out of game and this would even increased income disparities with in the industrial countries. The multi-national institutions which have small capital in industrial countries, may transfer to the countries with lower cost. These institutions would easily make profits in the expense of the poor. Then power would be shifted from local institutions to trans-national ones. Many agree that globalisation by itself is not a problem. But, laws which are designed to regulate the global transactions shall consider the existing realities the failure of which may raise various impediments against globalisation. Institutions like IMF, The World Bank, The WTO, The ILO, and other specialised agencies as well as business, trade unions and other NGOs are in a lead to guide the process to this effect.
