Globalisation

Globalisation encompasses increased international economic integration, evidenced by growing global markets, global resource flows, transnational corporations, global consumption patterns and intergovernmental agreements, resulting in economies becoming more interconnected through:

• Increased trade of G&S globally
• Increased global flows of production factors or resources (foreign capital, labour, and technology)
• Increased foreign investments, resulting in technological transfers
• Increased private savings or finance globally
• Harmonisation of the business cycle for globalised economies
• Increased economic interdependencies
• Increased growth of size and quantity of TNCs with global operations
• Increased global consumer trends
• Increased inter-government consultations/agreements to manage economic contacts and disputes

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Globalisation has allowed the Indonesian economy to reform to be in accordance with competitive economic growth rates. Globalisation represented the catalyst for Indonesia’s sustained growth once the oil boom of the 1970s subsided, as it allowed international exporting of manufacturing goods, made possible by uniform technological advancement with strong economies, leading to a GDP drop of only 2.6%.

Influence of Globalisation on the World

Globalisation has had lasting impacts on the globally integrated economy regarding trade, global financial and investment flows, and transnational corporations. Global market growth is initially evident through growing trade links of G&S between countries (incorporating consumer G&S, capital goods and intermediate G&S); as validated by increased global GDP from 12% in 1964 to 48% in 2010 for trading.