If we analyze Globalization carefully we get to know that success or failure depends on the abilities and capabilities of our human resources, the type of infrastructure we develop and the kind of governance we provide. If we are able we can turn it to our advantage. If we prove ourselves incompetent we fail in the global market and our country becomes a country of retailers dealing in foreign goods, in other words a banana republic.

First let us analyze some of the disadvantages of globalization:

When a country globalizes its economy it links its domestic economy to the global economy. That means it throws the doors of domestic economy wide open to the MNCs. With the advent of MNCs domestic businesses feel the heat and fail to compete with resource rich MNCs. As a result many domestic businesses get closed down and people go jobless. On the other hand there is no guarantee that MNCs open their manufacturing centers and create opportunities. So the unemployment rate may increase and as a consequence the standard of living of the people would decrease.

The second thing is the MNCs may not invest in hi-tech areas as the host country expects. They may manufacture potato chips instead of Micro Chips. So the host country does not derive much benefit as far as technology is concerned. So the third world still has to depend on the developed world and import the technical knowhow and it puts pressure on their foreign exchange reserves.

When we throw our domestic economy to FIIs they start investing in our stock market and our stock markets get affected by the global trends in stock indices. Markets turn volatile and many a time investors lose their hard earned money. Moreover when the strong economies slip into recession the recessionary trend continues and spreads all over the world and the third world countries like India would be hit hard.

Globalization invites companies like Mc Donald’s and KFC. There they eat burgers, French fries and drink colas, which are actually junk foods. It will have an adverse impact on the health of Indians and health care costs increase.

Protectionism is not allowed after we globalize our economy. There is a possibility of the markets of the host country becoming dumping grounds for foreign goods, and it will have wide ranging adverse consequences to the host country. At the same time the developed countries may clamp down many restrictions on our goods, on some or the other pretext and may harm our business interests.

Advantages:

But there are many advantages also, provided the domestic businesses have the capability to compete with MNCs and implement good corporate practices. It also provides us with an opportunity for our businesses to explore new markets for their products. Financially strong domestic companies can go for global acquisitions and it improves the prestige of our country.

 Since the globalization exposes the domestic businesses to the foreign competition it forces them to introduce good corporate practices, invest in R&D and go for foreign acquisitions. No country can shield its business corporations very long and one or the other day they have to compete and prove themselves.

The host country has to implement laissez-faire principle and reduce its intervention in business matters, but at the same time it can't remain as a mere spectator. It has to act as a regulator and protect the customer’s interests by curbing unfair trade practices. So globalization to a great extent reduces the burden on the government and lets its concentrate on more important things like infrastructure development, law and order and protection of borders.

Globalization, to a great extent erases the boundaries and it facilitates the mobility of 3Ms- Men, Money and Materials.

So we cannot avoid globalizing our economy. In the 21^st century, in this age of information revolution it is very harmful for our country if we refuse to mingle with other nations and isolate ourselves.