Financial globalization is where a country purchases from another country which makes the world smaller and work together much easier. Also, it makes the economy get effected easier when a country gets effected in political problem all other countries who is involved with them economically to get effected as well. For example, the Arab oil-exporting countries are sensitive to global financial fluctuations as a result of the combination of volatility in oil prices and high investment concentration in Western countries. Therefore, currencies make a monetary variable to those countries and others who imports good using the dollar as their means of exchanging goods.
Currently, GCC economies has a limited level of success because of the increased economic diversification in an attempt to reduce to volatility in oil prices. Also, most MENA countries remain dominated by an inefficient public sector and facing the geopolitical shocks is an important contributor to financial instability in all MENA countries. Analysis Globalization shows the global combination of international trade, information technology, investment and cultures. The government regulations and policies create open economies locally and internationally to development in less fortunate countries and raise standards of living for their people. However, these policies mainly benefit multinational corporations in the Western world to the detriment of smaller businesses, cultures and common people. Globalization allows developing countries to reach developed nations through increased manufacturing, economic expansion, diversification, and improvements in standards of living. For example, outsourcing by companies creates jobs and technology to developing countries. Business enterprises increase cross-border trading by removing supply-side and business-related restrictions.
Another factor that effects is the political factor because when the political conflict happens between two countries or more creates restriction in the exchanging goods. A perfect example is the GCC cruises, the blockade on Qatar from several GCC countries. It blocked many transactions from Qatar and outside Qatar. There few approaches to reduce risk such as assets allocations it weights the investment in the portfolio to try a specific objective another approach is portfolio diversification is the process of selecting a variety of investments within each asset class to help reduce investment risk. Diversification across asset classes also help lessen the impact of major market swings on your portfolio. If I am an investor in Qatar stock market, I would only when the dollar price fall because in that case the price of the share is lower, and the number of shares would increase.
This way I would lower the risk and gain profit much faster. Conclusion In conclusion, globalization is good in term of business transaction where it links all countries together and makes the business stronger. On the other hand, it could affect the business hardly because when the connections are this strong together when situations are going well or when they fall apart from political restrains.