In modern conditions, the following main directions are distinguished, in which the process of globalization is developing most intensively:
the formation of global monopolies (oligopolies); globalization of the financial sector; regionalization of the economy.
The process of the emergence of global monopolies is developing simultaneously in two directions: first, through the formation of a global monopoly in the global financial market and the market of information instruments, and secondly, through the formation of a single global monopoly as a result of the integration of these markets. For example, the U.S. government is successfully implementing one of its unquestioned national priorities, which is to “grow” and strengthen conventional U.S. national campaigns to the national level and, furthermore, to the level of global dominance. As a result, more than half of the profits made abroad are repatriated to the United States by U.S. corporations.
International corporations, which form the core of the world economic system, now control more than half of the turnover of world trade and finance, the most profitable manufacturing industries in different countries, including the extractive and knowledge-intensive industries, telecommunications, and production infrastructure. The turnover of many corporations, exceeding the corresponding indicator of a country, makes it possible to exert pressure on national Governments, thereby influencing the formation of international law and the activities of international institutions and organizations. The leading 500 transnational corporations cover more than a third of the exports of the manufacturing industry, 3/4 of the world trade in commodities, 4/5 of the trade in new technologies, employ tens of millions of people in almost all countries of the world. The share of 37 thousand transnational companies (TNCs) and their 170 thousand branches accounts for 1/3 of all production assets of the private sector and about 40% of the total industrial production. TNCs account for approximately 50 per cent of countries’ foreign trade and 60 per cent of their exports. The role of TNCs in high-tech trade and in the export of capital from developed countries is particularly great. They account for 80 and about 90%, respectively.
The concentration of transnational production and capital has reached a qualitatively new level, which allows us to talk about the formation of a new world order, in which international capital, transnational corporations and international organizations associated with the core of the world economic system are beginning to play a decisive role. Non-member countries form a periphery devoid of internal integrity and opportunities for independent development.
The imperative of modern world economic development is the expansion of companies through the erasure of national borders, the creation of TNCs and the formation of a single world market space.
Globalization of finance is the most difficult process in terms of internationalization, which is the result of deepening monetary and financial ties between countries, liberalization of prices and investment flows, and the creation of global transnational financial groups. In terms of growth rates, the volume of loans in the international capital market in the last decade exceeded the volume of foreign trade by 60% and the gross world product by 130%, respectively. At the same time, it is important to note that, say, at the end of 1997, 15-35% of all bank loans in the world could be considered “problem”. Hence, globalization can be considered as a factor in the “infection” of the countries of the world with crisis phenomena – non-repayment of loans, the “flight” of capital, the loss of confidence in the subjects of financial relations, the national currency, the government. Thus, exacerbating traditional and generating new contradictions between the subjects of the world economy.
Growing competition in the world economy leads to the reorganization of the apparatus for the sale of financial services and to a change in the structure of the supply of the latter. For example, the traditional form of communication between the bank and the client through a stationary room is gradually losing its former significance. Currently, new structures of communication between the bank and the client are being actively created. We are talking about consulting centers for private investors and various firms. The first examples of this kind of global services appeared on the Internet. In the structure of the supply of financial institutions in the world market, the share of mergers and acquisitions, asset management operations is growing. Moreover, along with national associations – for example, the French Societe General and Paribas – mergers are increasingly becoming transnational, global in nature – for example, Deutsche Bank’s takeover of the American bank Bankers Trust, which cost more than $ 10 billion. As we can see, the general global interdependence is increasing.
Financial globalization is most intensively developing in the United States, Western Europe and Japan. It carries out large transactions with bonds, stocks and currency on an international scale on commodity and stock exchanges, as well as provides a wide range of universal services. London, for example, has gained a strong leading position in the world, primarily due to the financial power and international connections of its institutions, as well as as a result of the concentration of control over the commodity, currency, stock and insurance markets.
Another direction of globalization in modern conditions is regionalization. At the regional level, it is easier to establish common rules for all than at the global level, taking into account the similarity of cultural traditions and economic development of countries in the same region. In regional integration, states, first of all, try to take advantage of free trade, and each of the existing trading blocs will try to strengthen its influence through the admission of new members. The number of EU member states is likely to increase to 25 by 2010, and NAFTA members to 34. By this time, some regional blocs will have a common currency. Globalization, by making state borders increasingly conditional, reinforces the trend of increasing the number of independent states. So, if before the Second World War there were about 50 countries, now there are more than 200. When the UN was created, 51 states were represented in it, to date – about 190.
The efforts of States to create a system of global governance are intensifying. The Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), the International Monetary Fund (IMF), the World Bank are already “in charge” of such issues as: regulation of financial markets; corruption; specific economic policies; environmental standards; trade tariffs, which used to be the exclusive business of nation-states.
The growth of universal interdependence in the world has led to the development of concepts for the organization of global governance, designed to minimize the negative consequences of globalization for the countries of the world.
The first is the concept of world government, which involves the creation of an enlarged model of the nation-state, which on a global scale performs the same functions as the governments of individual countries. It is hardly possible to agree with this approach, because no world government would have sufficient political legitimization. In addition, the world as an integral system needs a policy of order, not the exercise of power.
The second is the concept of reforming the United Nations to make its Security Council a quasi-government and the General Assembly a quasi-parliament. This approach has many more supporters, but there are fears that business and influential non-governmental organizations will fade into the “background”, and the world economy will be controlled by a circle of selected states.
The third is the concept of political management of global development by either one hegemonic power (the United States) or a group of major powers united in NATO, the OECD or the Group of Seven or Eight. Although such a concept was being actively implemented in practice, it would inevitably be opposed by those States that had been left behind by the organizations concerned.
Finally, the fourth is the concept of corporate global governance, which offers a collective search for solutions and mutual understanding between the governments of states with the participation of business structures, trade unions, and non-governmental organizations. At the same time, governments retain a monopoly on the consolidation and implementation of political decisions, non-state actors play a significant role at the stages of identifying certain problems, as well as developing algorithms for their solution.
Thus, the globalization of the world economy in the above areas, “the formation of a global economy is a prospect in which each national economy is already trying to look for its place. Globalization is an objective process, which is unreasonable and impossible to resist.”
At the turn of the XX – XXI centuries, globalization, as we see, is characterized by the systemic integration of world markets and regional economies, as a result of which there is a positive economic dynamics in the world economy, an acceleration in the introduction of modern technologies and management methods into business practice.