Global Environment

The several facets or elements that influence the economic structure and operation of a community, area, or system are referred to as economic dimensions. These aspects aid in the analysis and comprehension of the intricacies of resources, economic activity, and decision-making in a particular setting. National borders are becoming increasingly irrelevant as globalization, liberalization, and privatization take place. This has led to a growing mobility of the world’s global business and capital markets.

Concept of Globalization

The term “globalization” describes the process by which the trade of products, services, information, ideas, technology, and culture makes the world more interconnected. It is the outcome of technological, communication, and transportation developments that have facilitated international interaction and cooperation between individuals, organizations, and governments. Aspects of life such as the economics, society, politics, and culture are all impacted by globalization community.

The important perspectives on globalization

• To a business executive, globalization refers to a strategy of crossing national boundaries through globalized production and marketing networks. Deregulation, privatization trade liberalization, protection of property rights, promotion of foreign direct investment, opportunities for strategic alliances, and the go along with this concept of globalization.
• To an economist, globalization refers to an economic interdependence between countries covering increased trade, technology, labor and capital flows. Perhaps the two most important aspects of economic globalization relate to the changing nature of the production process and the internationalization of financial institutions.
• To a political scientist, globalization refers to an integration of a global community in terms of ideas, norms, and values. Globalization means the creation of a world government, or cartels of government (e.g. WTO, World Bank, IMF) which regulate the relationships among governments and guarantees the rights arising from social and economic globalization.

Nature of Globalization

Globalization is multi- dimensional process. It has four important dimensions- economic, cultural, political, and environmental. The nature and scope of globalization are thus determined by the combination of these forces. A brief description of these forms of globalization is as follows:

Economic Globalization

Economic influence is the obvious part of globalization. Economic globalization is contributed by liberalization, privatization, and declining costs of transport and communication. This form of globalization indicates increased global inter- linkages of the markets in good, services, capital trade, and finance.

Economic globalization has speeded up in the recent past. A free-trade doctrine removes the barriers to the flow of goods between countries. The formation of the World Trade Organization (WTO) and many regional trading blocs has given impetus to this process. Multinational companies are another force to boost up economic globalization.

Cultural Globalization

The expending process of globalization has brought these cultural diversities together to form a global culture. Advances in communications, television networks, transportation technologies have been reducing the barriers of distance and culture. Interactions across boundaries lead to the mixing of cultures.

Over the last several years, global communications have been revolutionized by developments in satellites, digital switching, and optical fiber telephone lines. As a result of such developments, reliable system of communication is now possible with nearly any location in the world. The growth of commercial jet travel has reduced the time it takes to get from one location to another.

Political Globalization

Nations today are more inter-dependent. They are joining hands to participate in creating macro-political framework for development. There are exchanges of views and experiences between nations regarding the establishment of good governance, relatively free access to state information, and so on.

The regional grouping of nations has promoted the integration further and created pressure for democracy and human rights. Because of these global influences, the political system worldwide made a shift away from command and mixed economies to the free market model.

Environmental Globalization

The globe today is facing unprecedented problems of global warming, depletion of the ozone layer, acute loss of bio-diversity and trans-border pollution. In fact, ecological problem like floods, soil erosion, water pollution, air pollution, acid rain, and global warming cross- national borders without hindrance. To prevent any further degradation of global ecology, the world community is actively engaged in preventing the growing problems of environment.

Forms of Globalization

World Trade

The oldest form of international business is trading of merchandise. Consumers in one country buy goods, which are produced in another country. This is a common phenomenon. Most of the world trade today is among the industrialized countries world trade is mostly made up of manufactured goods.

In fact, expansion of world trade itself has been made easier by the following two things:

• Technological changes in transport, global network of network of banking and insurance, and information flows have made it possible to undertake world more quickly.
• A number of international and regional agreements or arrangements have been established to promote and coordinate world trade.

Portfolio Investment

International portfolio investment is also know as indirect foreign investment. portfolio investment is the second main type of globalization. It is the purchase of foreign securities in the form of stocks, bonds, or commercial papers to obtain a return on that investment in the form of dividends, interests, or capital gains.

Acquiring foreign stocks and bonds doesn’t confer managerial control of a foreign enterprise on the buyer. Rather , the international portfolio investor is a creditor whose main concern is a decent return on his or her investment.

Foreign Direct Investment

Foreign direct investment (FDI) is the long-term capital investment. It involves acquisitions by domestic firms of foreign- based factories or any other types of business firms. The investor, thus enjoys managerial control over the assets of the acquired firm. Direct investment may be financed in a number of ways than through capital movements.

Multinational Companies

FDI is an important vehicle for the birth and growth of multinational companies. A multinational company encompasses both domestic and overseas operations. It is called multinational because it operates across national boundaries. However , its focus is on foreign markets.

Business firms go for multinational operations as part of their business strategy mainly because of three reasons:

• They get access to more markets and customers.
• They can create better brand by way of expansion so that the acceptance at home market also increases.
• There would be a saturation point in the domestic business.

Methods of Globalization

Globalization happens through a variety of strategies or systems that make it easier for capital, people, information, goods, and services to move across national boundaries. These techniques influence the political, cultural, and economic environment of the world. Below are some of the primary methods through which globalization occurs:

Trade Liberalization

The removal of barriers to trade, such as tariffs, quotas, and trade restrictions, to promote the free exchange of goods and services between countries.

How it Works: .

• International trade agreements and organizations, like the World Trade Organization (WTO), facilitate trade liberalization by negotiating the reduction or elimination of trade barriers.
• Trade blocs (e.g., European Union, North American Free Trade Agreement (NAFTA), now USMCA) foster regional integration and encourage economic cooperation.

Impact

Increases the exchange of products and services globally, allowing businesses to access new markets and consumers to benefit from a wider variety of goods at lower prices.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country into business interests located in another country, usually by acquiring a business or establishing new operations.

How it Works

• Multinational corporations (MNCs) invest in other countries to establish factories, offices, or retail outlets.
• Governments may offer incentives to attract foreign investments, such as tax breaks or lower tariffs on imports.

Impact

FDI contributes to economic development, technology transfer, and job creation in the host countries, while also expanding the global footprint of multinational firms.

Global Supply Chains

The global network of production processes that involves sourcing raw materials, manufacturing, and assembling goods across various countries

How it Works

• Companies design, source, and manufacture products in different countries to take advantage of cheaper labor, specialized expertise, or raw materials
• .For example, a product may be designed in the United States, assembled in China, and sold globally.

Impact

Reduces production costs, increases efficiency, and provides access to cheaper labor markets, but can also lead to job losses in high-cost countries and can contribute to environmental and labor exploitation concerns.

Technology and Communication Networks

The rapid spread and integration of technological innovations, especially in communication, transportation, and information technology, facilitating global interaction

How it Works

• The internet, mobile technology, and social media enable the instant flow of information, news, and ideas across borders.
• Advances in transportation, such as container shipping and air travel, make the movement of goods and people faster and cheaper.

Impact

• Promotes collaboration, the exchange of ideas, and the diffusion of new technologies. It enables businesses to operate globally and consumers to access goods, services, and information from all over the world.

Migration and Labor Mobility

The movement of people across borders for reasons such as employment, education, or refuge.

How it Works

• Migration increases the flow of workers between countries, contributing to the global labor force.
• Labor mobility is supported by agreements like the European Union’s free movement of people or specific visa programs in countries like the United States and Canada.

Impact

• Provides access to a diverse workforce, allows for knowledge exchange, and can help address labor shortages. However, it can also create tensions over immigration policy and contribute to labor exploitation in some regions.

Multinational Corporations (MNCs) and Global Businesses

Large companies that operate in multiple countries, often leading to the spread of global business practices, products, and services.

How it Works

• MNCs invest and establish operations in different countries to take advantage of new markets, labor, and resources
• The success of MNCs drives the spread of global trade, technology, and capital

Impact

MNCs influence global economies by shaping local markets, investing in infrastructure, and providing jobs. However, they can also dominate local markets, reduce local business opportunities, and influence local policies.

Cultural Exchange and Media

The global spread of culture, including music, film, fashion, and cuisine, is an important facet of globalization

How it Works

• International media (TV, films, books, social media) spreads cultural products worldwide, leading to cultural exchange and mutual influence.
• Platforms like Netflix, YouTube, and Spotify provide access to cultural content across borders, allowing individuals to access entertainment from all over the world

Impact

• Encourages cultural awareness and exchange, leading to greater global interconnectedness. However, it can also lead to cultural homogenization, where dominant cultures, particularly Western culture, influence or overshadow local traditions.

International Financial Systems and Capital Flows

The movement of capital across borders through financial markets, including stock markets, bonds, foreign exchange, and banking systems.

How it Works

• Financial globalization facilitates the flow of capital from investors in one country to businesses and governments in other countries, often through international financial institutions like the International Monetary Fund (IMF) and World Bank.
• Global financial systems allow for easier access to capital, facilitating investment and development worldwide

Impact

• Encourages economic growth by providing businesses and governments with access to global capital markets, but also creates risks such as financial volatility, currency fluctuations, and economic crises that can spread across borders

Forms of Regional Economic Integration

The process by which nations within a geographic region collaborate and integrate their economies to improve trade, investment, and other economic activity is known as regional economic integration, or REI. The goals of REI programs are to encourage member state collaboration, stability, and economic prosperity. Depending on the degree of economic cooperation and integration, these integration plans can be roughly divided into the following categories.

Free Trade Area (FTA)

In a Free Trade Area, member countries agree to eliminate or reduce barriers to trade (such as tariffs and quotas) among themselves, but each country maintains its own trade policies with non-member countries

Key Features

• No tariffs or quotas on intra-regional trade.
• Independent external trade policies: Each member country can set its own tariffs and policies for countries outside the agreement.

Examples

• North American Free Trade Agreement (NAFTA) (now replaced by the United States-Mexico-Canada Agreement (USMCA)).
• European Free Trade Association (EFTA).

. Customs Union

A Customs Union is a more advanced form of integration in which participating nations impose a common external tariff (CET) on goods imported from non-member nations in addition to doing away with trade restrictions between themselves.

Key Features

• Elimination of internal trade barriers (no tariffs or quotas on intra-union trade).
• Common external tariff: Member countries agree to apply the same tariffs on goods coming from non-member countries.
• Shared external trade policy.

Examples

• The European Union (EU) (when considering the original Customs Union before deeper economic integration).
• The Southern African Customs Union (SACU).

Common Market

A Common Market goes beyond a Customs Union by allowing the free movement of not just goods, but also services, capital, and labor across member states. It aims to create a more integrated regional economy.

Key Features

• Free movement of goods, services, capital, and labor within the region.
• Common external tariffs for non-members.
• Coordination of policies related to immigration, labor markets, and capital flows.

Examples:

• European Economic Area (EEA)
• Mercosur (Southern Common Market in South America, though it is evolving into a deeper economic integration).

Economic Union

The greatest degree of economic integration is represented by an Economic Union. It combines a shared economic and monetary policy, deeper economic policy coordination, and the characteristics of a common market. It frequently entails the creation of fiscal policies, a single currency, and other integrated economic systems.

Key Features

• Free movement of goods, services, capital, and labor.
• Common external tariff and a common economic and monetary policy.
• Coordination of economic policies, including fiscal, monetary, and industrial policies.
• Common currency (in some cases), as seen in the European Union’s Eurozone.

Examples

• European Union (EU), particularly among Eurozone countries (e.g., the use of the euro and coordinated economic policies).
• West African Economic and Monetary Union (WAEMU).

Monetary Union

A Monetary Union involves countries that adopt a common currency or share a central monetary authority while still maintaining their political and economic sovereignty. This can be a step before a full Economic Union.

Key Features

• Common currency among the member countries or shared central monetary authority.
• Coordinated monetary policies to manage inflation, exchange rates, and interest rates.

Examples

• Eurozone (countries within the EU that use the euro).
• Eastern Caribbean Currency Union (ECCU) (using the Eastern Caribbean dollar)

Political Union:

The most advanced and comprehensive type of regional integration is a political union, where participating nations combine their economies, political institutions, legal frameworks, and systems of government.

Key Features

• Common political institutions, laws, and governance structures.
• Centralized decision-making in political and economic matters.
• Countries essentially form a single political entity.

Examples

• The United States of America (USA), which is a political union of states with a single government, currency, and legal system.
• The United Arab Emirates (UAE) (a political union of seven emirates).

SAARC

The South Asian Association for Regional Cooperation (SAARC) was established in 1985 with the goal of promoting regional cooperation and development in South Asia. Its main objectives are focused on fostering peace, stability, and socioeconomic progress across the member states.

• To improve regional cooperation, particularly in economics development.
• To promote the welfare of the peoples of south Asian and improve their quality of life.
• To accelerate economic growth, social progress and cultural development in the region and provide. all individuals the opportunity to live in dignity and realize their full potential.
• To promote and strengthen collective self-reliance among the south Asian countries.
• To strengthen cooperation with other developing countries.
• To cooperate with international and regional organizations with similar aims and purposes.
• To contribute to mutual trust, understanding and appreciation of one another’s problems.

SAPTA and SAFTA

SAPTA (South Asian Preferential Trading Arrangement) and SAFTA (South Asian Free Trade Area) are two key trade agreements within the South Asian Association for Regional Cooperation (SAARC). Both agreements aim to promote trade and economic cooperation among South Asian countries, but they differ in their scope and depth of integration

SAPTA

0bjectives

• Promoting cooperation for the benefit of their people.
• Bringing awareness that the expansion of trade could act as a powerful stimulus to the development of their national economies by expanding investment and production.
• Providing greater opportunities of employment and helping to secure high living standards for their people.
• strengthening intra-regional economic cooperation;
• Increasing the share in the total volume of south Asian trade.

Principles

• Most-Favored-Nation (MFN) Treatment: Ensures that any favorable trade terms extended to one member are applied equally to all other member countries.
• Preferential Tariff Reductions: Member countries offer preferential tariff reductions on specific goods traded within the region.
• Progressive Liberalization: Tariff reductions and trade liberalization are gradually implemented over time.
• Product-Specific Concessions: Countries may offer preferential treatment for specific products of particular economic interest to them.
• Non-Reciprocal Arrangements: Countries are not required to offer equal concessions, allowing less developed countries to benefit without needing to match the concessions.
• Special and Differential Treatment (SDT): Less developed countries receive special benefits, such as longer timeframes for tariff reductions or exemptions.
• Flexibility: Allows countries to gradually implement trade liberalization, with the option to opt out or delay commitments based on domestic circumstances.
• Regional Cooperation: Encourages closer economic cooperation among South Asian nations to reduce barriers to trade and foster collaboration
• Trade Facilitation: Aims to simplify trade procedures, reduce non-tariff barriers, and address technical barriers to trade
• Commitment to SAARC Objectives: Aligns with the broader goals of the South Asian Association for Regional Cooperation (SAARC) to promote peace, stability, and economic growth in the region.

SAFTA

Objectives

• Eliminating barriers in trade and facilitating to cross- border movement of goods between the territories of the contracting states.
• Promoting condition of fair competition in the free trade area, and ensuring equitable benefits to all contracting states, taking into account their respective levels and patterns of economic development.
• Creating effective mechanism for the implementation and application of the agreement for its joint administration and the resolution of disputes.
• Establishing a framework for further regional cooperation to expand and enhance the mutual benefits of the agreement.

Principles

• Most-Favored-Nation (MFN) Principle: Countries must extend the best trade terms offered to one member to all other members, ensuring equality in trade benefits.
• Progressive Trade Liberalization: Tariffs on goods will be reduced progressively over time to encourage regional trade.
• Non-Reciprocal Trade: Less developed countries receive trade concessions without needing to offer equal trade benefits in return, allowing them to gradually open their markets.
• Special and Differential Treatment (SDT): Special provisions for less developed countries, including longer timeframes for tariff reductions and exemptions from certain commitments.
• Flexibility in Implementation: Member countries have flexibility in implementing the agreement based on their economic needs and development levels.
• Exclusion List: Certain products may be excluded from the tariff reduction commitments to protect sensitive industries in member countries.
• Product-Specific Concessions: Specific goods may receive preferential tariff rates based on mutual agreements between member countries.
• Regional Integration: SAFTA promotes greater economic integration and cooperation within the South Asian region by removing trade barriers.
• Simplification of Trade Procedures: Efforts to reduce bureaucratic hurdles, streamline customs procedures, and facilitate smoother trade flows.
• Promotion of Investment: Encourages investment flows within the region by improving market access and providing more favorable trade terms.

BIMSTEC

BIMSTEC stands for Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation. It is a regional organization comprising countries from South Asia and Southeast Asia, aimed at promoting economic cooperation, trade, and cultural exchange among its members. BIMSTEC focuses on enhancing collaboration across various sectors, including trade, energy, transport, tourism, and environmental sustainability.

Importance of BIMSTEC

• Economic Growth: By connecting countries from both South Asia and Southeast Asia, BIMSTEC can leverage the potential of regional markets and enhance economic growth.
• Strategic Significance: The Bay of Bengal region is strategically important for global trade routes and maritime security.
• Diversified Cooperation: The multi-sectoral approach allows BIMSTEC to tackle a range of challenges, from trade to environmental sustainability, helping to improve the overall quality of life for people in the region.

Difference between SAFTA and BIMSTEC

SAFTA (South Asian Free Trade Area) and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) are both regional organizations focused on promoting cooperation and development in South Asia and neighboring regions, but they differ in their objectives, membership, and scope of cooperation.

• SAFTA and BIMSTEC differ in so far as targets and depth of integration and concerned SAFTA includes only trade in goods. BIMSTEC, on the other hand, covers both trade in goods and services.
• Rates of tariff is another difference. SAFTA aim is to bring down the tariff to a 0.5 percent level. BIMSTEC, on the other hand, aims for total elimination of tariffs. as each member country would like to protect its local market, countries that are members of both these FTAs may seek protection under the FTA that best fulfils their demands.
• Pakistan, Afghanistan and Maldives are not the member of BIMSTEC, while Thailand and Myanmar are not part of SAFTA. This composition of membership would create conflicting obligations as some member countries belong to both SAARC and BIMSTEK.
• Poor connectivity and geo-political tensions between member countries such as India and Pakistan are reasons for SAARC not achieving its potential in the three decades of its existence.
• BIMSTEC could be a practical and desirable bridge between South Asia, as a whole, and Association of Southeast Asian Nations (ASEAN).

World Trade Organization (WTO)

The World Trade Organization (WTO) is an international organization established in 1995 to regulate and facilitate global trade. It provides a platform for member countries to negotiate trade agreements, resolve trade disputes, and establish rules for international trade. The WTO aims to promote free and fair trade by reducing trade barriers such as tariffs, quotas, and subsidies, ensuring that trade flows as smoothly, predictably, and freely as possible. GATT was established as an international forum in 1948 by 23 signatories. its purpose was to ensure non- dissemination, transparent procedures, the settlement of disputes, and the participation of less developed countries in international trade.

Objectives of WTO

• Raising standard of living and incomes, promoting full employment, expanding production and trade, and optimum utilization of world’s resources.
• Introducing sustainable development – a concept, which envisages that development and environment can got together.
• Taking positive steps to ensure that developing countries, especially the least developed countries (LDCs), secure a better share of growth in trade.

Function of the WTO

• Administer and implement the trade agreements.
• Act as a forum for multilateral trade negotiations.
• seek to resolve trade disputes.
• Oversee national trade policies.
• Act as a management consultant for world trade.

Principle of the WTO

The main principles of the World Trade Organization (WTO) are the foundational rules that guide the functioning of the organization and its members. These principles ensure that international trade is conducted in a fair, transparent, and predictable manner.

Non-Discrimination

• Most-Favored-Nation (MFN): A WTO member must extend the same trade terms to all other WTO members. If one member receives a trade concession or preferential treatment, all members must receive the same benefits.
• National Treatment: Once goods have entered a market, they must be treated no less favorably than equivalent domestically produced goods. This principle ensures fair competition between imported and locally produced goods.

Reciprocity

• Trade negotiations are based on the idea of mutual concessions—each country offers something in return for receiving benefits from other countries. This principle ensures balanced and reciprocal benefits in trade agreements.

Transparency:

• WTO members are required to make their trade policies transparent, by publishing trade regulations and providing information on trade practices. This ensures predictability and fairness in global trade.

Free Trade

• The WTO encourages the reduction of trade barriers like tariffs, quotas, and subsidies to facilitate more open and freer trade between nations. The principle aims to enhance economic cooperation and efficiency.

Predictability:

• Through binding agreements and commitments, the WTO ensures that members’ trade policies are predictable and stable, reducing uncertainty in global trade and fostering long-term trade relationships.

Promoting Economic Growth and Development:

• The WTO aims to foster economic growth and development, particularly in developing countries, by providing them with access to global markets, technical assistance, and trade capacity-building.

WTO Agreements

General Agreement on Tariffs and Trade (GATT 1994):

• The GATT is one of the foundational agreements of the WTO. It sets out rules for international trade in goods and aims to reduce tariffs and other barriers to trade. It provides principles of non-discrimination, reciprocity, and transparency.
• GATT 1994 is an updated version of the original GATT (established in 1947), incorporating earlier agreements and new trade-related rules.

. General Agreement on Trade in Services (GATS)

• The GATS deals with the rules and commitments for international trade in services. It aims to create a transparent and predictable trading environment for services such as banking, telecommunications, and tourism.
• It covers various service sectors and allows countries to make specific commitments in terms of market access and national treatment.

Trade-related Intellectual property Rights (TRIPS)

The rules in the TRIPS agreement cover specific areas -copyrights, patents, trademarks, geographical names used to identify products, industrial designs, integrated circuits, layout designs, and undisclosed information such as trade secrets. Thus, WTO intellectual property agreements amount to rules for trade and investment in ideas and creativity.

TRIPS agreements state how ” intellectual property ” should be ported when international trade is involved. The agreement on TRIPS lays down minimum standards of protection, which countries must provide for intellectual property rights. this agreement provides rules rules specifying the detailed obligations on governments to provide effective means of actions by any right holder, foreign or domestic, to secure the enforcement of his or her rights.

Technical Barriers go Trade (TBT)

Technical Barriers to Trade (TBT) refer to regulations, standards, testing, and certification procedures that countries implement to protect domestic consumers, the environment, or public health and safety. While these regulations can serve legitimate policy objectives, they may also create obstacles to international trade by imposing burdens on foreign producers and exporters. In essence, TBTs can affect the free flow of goods and services across borders, often by making it more costly or difficult for foreign products to meet the technical requirements of importing countries.

Trade- related Investment Measures (TRIMS)

The purpose of the WTO Agreement on commerce-Related Investment Measures (TRIMS Agreement) is to prevent investment measures from unduly limiting or distorting global commerce. The goal of the TRIMS Agreement is to stop nations from implementing investment policies that go against fundamental trade principles, such as most-favored-nation (MFN) treatment, which treats all WTO members equally, and national treatment, which treats foreign investors the same as domestic ones. TRIMS agreement puts restrictions on the member countries as follows:

• No restriction should be imposed on foreign capital.
• No description should be made between the foreign investor and the domestic investor.
• There should be no restriction on any area of investment.
• There should be no limit on the quantum of foreign investment.
• There should be no force on foreign investors to use domestic products or materials.
• Export of the part of the final product should not be made mandatory.
• No restriction should ne imposed on repatriation of dividend, interest and royalty will removed.

Benefits of the WTO Trading System

Promotion of Free Trade

• Reduces trade barriers like tariffs, quotas, and subsidies.
• Encourages greater market access for businesses across borders.

Dispute Resolution Mechanism

• Provides a fair and impartial system for resolving trade disputes.
• Ensures enforcement of trade agreements and holds countries accountable.

Transparency and Predictability:

• Requires countries to publish trade regulations, enhancing transparency.
• Promotes a stable, predictable trade environment for businesses.

Non-Discrimination:

• Enforces the Most-Favored-Nation (MFN) principle, treating all WTO members equally.
• Upholds National Treatment, ensuring foreign goods and services are treated equally with domestic ones.

Encouragement of Economic Growth and Development:

• Increases global trade, leading to economic growth.
• Supports developing countries with longer implementation periods and technical assistance.

Special Treatment for Developing Countries

• Offers preferential treatment, more time to comply, and capacity-building support.
• Promotes inclusive economic growth by helping developing countries integrate into global trade.

Market Stability and Global Integration

• Stabilizes global markets by providing a rules-based framework.
• Encourages global economic integration and the creation of international supply chains.

Improved Consumer Welfare

• Lowers prices and increases the variety of goods available to consumers.
• Fosters innovation and improved product quality due to competition.

Fostering Cooperation and Diplomacy

• Provides a platform for dialogue and negotiation among countries.
• Helps maintain peaceful relations through economic cooperation.

Conclusion

In summary, the interrelated political, social, economic, and physical systems that influence our planet are all part of the global environment. Climate change, environmental degradation, economic inequality, health crises, and geopolitical tensions are just a few of the many issues it faces. To guarantee a sustainable, just, and peaceful future, these concerns demand immediate and coordinated international action. The complexity of the global environment emphasizes the necessity of shared accountability, open policy, and international cooperation.

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