Globalisation 1

This is World Xtra from the BBC. In this series we look at various ideas that you may hear about in the news and current affairs programmes.

John talks to an expert in every programme, who can tell us all about the topic. Today’s topic is globalisation.

World Xtra from the BBC

John: Hello and welcome. Today, what do we mean by globalisation? I’m John Escolme and I’m standing outside BBC Television Centre in West London to meet BBC Economics Reporter Steve Schifferes.

World Extra from the BBC. John Escolme speaks with Steve Schifferes about Globalisation.

John: You’ll hear Steve explaining how the world is driven by global finance, trade and investment and how all companies have a stake in the global economy – meaning they all have a part to play in it.

John: He’ll explain how individuals, people like you and me, are affected by globalisation. How people are becoming more interdependent as a result of globalisation – meaning they are becoming more reliant on each other because of it. He’ll also explain how globalisation has played a part in keeping inflation low – how prices have been kept low.

John: OK Steve, so what is globalisation? Can we really define it?

Steve: Well, I’d say globalisation is the closer integration of the economies of different countries around the world. It’s driven partly by trade, the fact that now many manufactured goods particularly are made in the Far East and sold around the world, such as electrical equipment, televisions and so forth.

Steve: It’s also driven by finance, by the fact that banks and investors now look to invest around the world, not just in their own country, and in both of these senses every country now has a stake in the global economy and is affected by it.

John: And how are individuals affected by this phenomenon?

Steve: Well I think because the world is more interdependent there are both benefits and losses for every person in the world. From the benefits point of view many goods now, because they are produced globally, can be produced more cheaply and more efficiently than elsewhere. So the price of many manufactured goods, everything from t-shirts to televisions, has fallen quite sharply and this has also helped contain inflation.

Steve: On the other hand, some of the effects of globalisation have been a huge disruption of traditional manufacturing, both in rich countries and in some cases poor countries and in some cases also disruptions of other sorts of markets for example markets for agricultural products have changed considerably and the price of food has gone up a lot and this we also have to say is an effect of globalisation.

World Xtra from the BBC

Let’s look again at some of the words and phrases which John and Steve used in the report.

First, some of the words which explain what globalisation is – global economy, trade and investment. The global economy means the combination of economies around the world. Global trade means buying and selling around the world. And investment means money put towards savings, put into businesses and so on in order to make a profit.

Traditional manufacturing means methods of manufacturing which were used before modern industry, and which may still be used by smaller producers.

One word which heard more than once in the report was interdependent – this means depending on or relying on each other.

This edition of World Xtra looked at globalisation.