Global Inequality Theories

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1. How can globalization and international economic integration be measured? Globalization or international economic integration can be measured by four main factors which are “trade flows, capital flows, people flows and the similarity of prices in separate markets.” Trade flows basically refer to movements of products or outputs as exports or imports across national borders, whereas capital flows and people flows together make up a general category known as factor movements and refer to flows of production inputs, rather than the products themselves, such as capital and labor to the international markets. The similarity of prices factor can be thought of as the effect of globalization or global economic integration on prices in local or national markets as they converge with those of the international ones despite some differences due to transportation costs. The more globalized the countries are, the more similar or less differentiable the prices of their goods or services will be.

Economy is one of the evident drivers of globalization, hence it is meant to propagate the free market capitalism concept to the world where the entire world is viewed as a single market where services, commodities and labour can be traded. Organisations such as WTO, IMF, and WB have been given additional authority which they have initiated to reform trade rules. Social Environment The Kingdom of Saudi Arabia is observed as the leader of the Muslim world, as it is the home town of Mecca. The government is committed to supporting the economic growth and to be part of the developed nations, which is very challenging to achieve since fundamentalist Muslims turn down the idea of globalization which could be seen as a political risk on the jurisdiction. While on the other hand, this political situation has affected the restaurant business positively because the restaurant industry has not been affected and still remains as a form of a social gathering among people.

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