ABSTRACT

Neither the concept nor the phenomenon of globalization, or financial globalization, can be considered novel. Although the contemporary era of globalization is around a quarter of a century old, during the last decade the concept of globalization has acquired a great deal of currency, relevance, acceptance, and emotive force. From an economic point of view, globalization represents a process of increasing international division of labor on the one hand and growing integration of national economies through trade in goods and services, cross-border corporate investment, and capital flows on the other. There is serendipity in globalization, and several emerging market economies discernibly and measurably benefited from it during the preceding quarter-century. According to Horst Kohler, Managing Director of the International Monetary Fund: “This process led average global per capita income to more than triple in the second half of the last century.”1 That said, there is an imperative need for globalization to be handled in a pragmatic, knowledgeable, clairvoyant and sagacious manner, otherwise its negative effects can seriously destabilize an economy.