(b) Employers at the exporting factories
Answer: Employers should provide good salary, social security net and other facilities to the workers.
Answer: MNCs should refuse to procure from those manufacturers who do not provide proper facilities to their workers.
Answer: Workers should be aware of their rights. They should form unions so that they can have a bargaining leverage with their employers.
Question 2: What was the main channel connecting the countries in the past? How is it different now?
Answer: Trade was the main channel which connected the countries in the past. Things have not changed much in the present as well. Trade still is the major channel to connect the countries. However, tourism and study also contribute towards making the world a more interconnected place now.
Question 3: Distinguish between foreign trade and foreign investment.
Answer: Trade with different countries is called foreign trade and it includes import and export. Foreign investment is the inflow of capital from another country to our own country. Foreign investment is just limited to the inward flow of capital, while foreign trade is about flow of goods.
Question 4: In recent years China has been importing steel from India. Explain how the import of steel by China will affect.
(a) Steel companies in China.
Answer: Chinese companies may find it difficult to compete with the import.
(b) Steel companies in India.
Answer: Steel companies in India will see a growth in business.
(c)Industries buying steel for production of other industrial goods in China.
Answer: For such companies, more option will translate into better choice.
Question 5: How will the import of steel from India into the Chinese markets lead to integration of markets for steel in the two countries? Explain.
Answer: The Chinese companies will make various products and those products would be selling in India as well. Thus, India can be a net exporter of the raw material and an importer of the finished goods. Because of low cost manufacturing by the Chinese companies, Indians can get various products at cheaper prices.
Question 6: What is the role of MNCs in the globalisation process?
Answer: MNCs play an important role in the process of globalization. They bring not only their products to a country but also the new business policies and cultures. They also help in increasing competitiveness among the Indian companies. At present, most of us are able to use the latest models of cars and this could be possible because of globalization. Because of hordes of MNCs in our country, most of the urban Indians have become broad-minded in their outlook.
Question 7: What are the various ways in which countries can be linked?
Answer: Countries can be linked through trade, tourism and through educational institutions. Now-a-days, internet and telecommunication are also helping in interlinking different countries of the world.
Question 8: Globalisation, by connecting countries, shall result in
Answer: (b) Greater competition among producers
Question 9: What do you understand by liberalisation of foreign trade?
Answer: Liberalisation of foreign trade involves reducing or removing various trade barriers. Government provides policies and facilities which attract foreign companies to come to India for business activities. Such steps help in increasing the foreign trade.
Question 10: Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can be imported. This is known as quotas. Can you explain, using the example of Chinese toys, how quotas can be used as trade barriers? Do you think this should be used? Discuss.
Answer: A fixed quantity for import is called quota. This can be done in case of Chinese toys. This will have both negative and positive impacts. Once the trade restrictions shall be there, the Indian toy manufacturers will be in a position to sell their products. This will help the Indian toy manufacturers and employees. But as the experience of better quality at lesser price; in case of Chinese toys; shows, this step would be detrimental for consumer’s interest.
Answer: WTO was started at the initiative of developed countries. The aim of the WTO is to liberalise international trade. WTO establishes rules regarding international trade for all countries, and sees that these rules are obeyed. In practice, trade between countries is not fair. Developing countries like India have removed trade barriers, whereas developed countries, in many cases, have continued to provide protection to their producers.
Question 11: What do you think can be done so that trade between countries is more fair?
Answer: All countries should remove trade barriers to make for a fair international trade. Developed countries should desist from forcing the developing countries in agreements which they themselves may not obey.
Question 12: In the above example, we saw that the US government gives massive sums of money to farmers for production. At times, governments also give support to promote production of certain types of goods, such as those which are environmentally friendly. Discuss whether these are fair or not.
Answer: Supporting its own farmers at the cost of fair international trade cannot be termed as a fair practice. Supporting the production of environmentally friendly products is beneficial for the whole world and every country should follow such practices.
Question 13: How has competition benefited people in India?
Answer: Competition has benefited the Indians in a positive way. To understand this, let us take the example of the availability of two-wheelers. Before liberalization, there were very brands of two-wheelers; like Bajaj, Rajdoot, Bullet and Yezdi. If someone wanted to buy a Bajaj scooter, the waiting period used to be for a couple of years. Once the markets opened up, many companies came in India. Right now, one can buy a two-wheeler of his choice at his own convenience. Two-wheelers can be seen even in remote villages of India. All of this could be possible because of competition.
Question 14: Should more Indian companies emerge as MNCs? How would it benefit the people in the country?
Answer: It is desirable that more Indian companies emerge as MNCs. This will help those companies in expanding their market and thus expanding their financial muscle. This will make India a stronger economy. A stronger economy is always beneficial for its people. The Indian MNCs too can directly benefit people through various CSR (Corporate Social Responsibility) Programmes.
Question 15: Why do governments try to attract more foreign investment?
Answer: More foreign investment in a sector helps in increasing the economic activities. This helps in employment generation. That is why governments try to attract more foreign investment.
Question 16: In Chapter 1, we saw what may be development for one may be destructive for others. The setting of SEZs has been opposed by some people in India. Find out who are these people and why are they opposing it.
Answer: When an SEZ is being made in a particular location, a vast tract of land needs to be acquired. Land acquisition means a large population is forced to relocate from many villages. Displacement is always painful for people. Moreover, people who are evacuated do not get proper compensation for their land and rehabilitation is never adequate and timely. These are the reasons; many people oppose various developmental activities.
Question 17: In what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?
Answer: Most of the workers have been badly affected by competition. Many people are forced to work in temporary jobs and at lower wages. Their earning is a meager fraction of what the intermediaries earn in the process.
Indian exporters are forced to improve the quality of their products to withstand competition. Those who have failed to do so, had to shut down their shops. Many smaller manufacturers have become bankrupt in the process.
MNCs are usually in profit. They buy cheap and sell dear. A cloth which may cost Rs. 100 for the procurement can sell at more than Rs. 5000 in USA market. Thus, MNCs usually make windfall gains in the process.
Question 18: One of the present debates in India is whether companies should have flexible policies for employment. Based on what you have read in the chapter, summarise the point of view of the employers and workers.
Answer: Many companies advocate the implementation of hire and fire policies so that they can work without thinking about the pressure from workers’ union. It sounds idealistic, but the real world is not ideal. A worker does not work just for himself but also for his family members. When a worker loses his job, his family and his society also gets affected. Hence, worker’s interest should always be the top priority when formulating employment policies.
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