Economic globalization and how it affects Cambodia

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The great hope of globalization is that it will raise standards of living around the world. The reality shows that, until recently, developing countries continued to suffer from poverty and underdevelopment.

Dr. Widyono highlights the global shifts in power over the last 500 years that have resulted in the so called "BRIC countries" (Brazil, Russia, India, China) gaining economic strength on the international stage and what effect this has on the poorest of the poor in these countries.

Looking ahead, the economic prospects for Cambodia continue to be bright. However, Cambodia must intensify policies to reduce poverty by moving its labour force from subsistence agriculture to an expanded manufacturing, construction and service sector base.

In this talk Dr. Widyono discusses the preparation for Cambodia’s integration into the ASEAN bloc in 2015 and what impact this will have.

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  • Van den Berg Economic Globalization constitutes the integration of national economies into the international economy through a) international trade, b)direct foreign investment (by multinationals), c) international capital flows , d) international migration of workers and humanity generally
  • Economic Globalization constitutes the integration of national economies into the international economy through a) international trade, b)direct foreign investment (by multinationals), c) international capital flows , d) international migration of workers and humanity generally
  • Economic Globalization constitutes the integration of national economies into the international economy through a) international trade, b)direct foreign investment (by multinationals), c) international capital flows , d) international migration of workers
  • Economic Globalization constitutes the integration of national economies into the international economy through a) international trade, b)direct foreign investment (by multinationals), c) international capital flows , d) international migration of workers and humanity generally
  • Angkorwat
  • As of 1820 the biggest gap between rich and poor, Britain and the world’s poorest region, Africa, was four to one in per capita incomeBy 1998, the gap between the richest nation, the USA and the poorest region, Africa, had widened to 20 to one.
  • 1. Power was concentrated with a small number of states, in North America and Western Europe, making decisions for the entire world system2,Communist Eastern Europe maintained deliberate policies of isolation3. The third world, emerging countries were fully integrated into a world economy they neither managed nor controlled
  • Four tigers: Hong Kong, Taiwan, Singapore and Rep.of Korea since 1970s. China is still poor but ahead of Cambodia and Indonesia But if you are a dealer of Lamborghinis or Mercedes benz do you go to Liechtenstein or to China? China’s population is 1.3 billion. One child policy
  • Source: World Bank
  • From world bank jey indicators
  • including work on regional tariff and non tariff barriers reduction, liberalization of trade services and streamlining of custom administration and procedures
  • Economic globalization and how it affects Cambodia

    1. 1. Paññāsāstra University of Cambodia Faculty of Arts, Letters, and Humanities In Collaboration with Center for Khmer Studies Proudly Presents A Special Lecture on “Economic Globalization and the Economic Challenges Facing Cambodia” By Dr. Benny Widyono Former UN Secretary General’s Representative in Cambodia Srey Dim Conference Hall May 8, 2014 5:30-7:00 pm
    2. 2. Defining Economic Globalization Economic Globalization involves the closer integration of national economies into the international economy through increased flows of
    3. 3. GOODS AND SERVICES Defining Economic Globalization
    4. 4. GOODS AND SERVICES INVESTMENTS BY MULTINATIONAL CORPORATIONS Defining Economic Globalization
    5. 5. GOODS AND SERVCIES INVESTMENTS BY MULTINATIONAL CORPORATIONS FINANCIAL CAPITAL Defining Economic Globalization
    6. 6. GOODS AND SERVICES INVESTMENTS BY MULTINATIONAL CORPORATIONS FINANCIAL CAPITAL LABOR Defining Economic Globalization
    7. 7. HOPE AND REALITY THE GREAT HOPE OF ECONOMIC GLOBALIZATION IS THAT IT WILL RAISE STANDARDS OF LIVING AROUND THE WORLD THE REALITY IS THAT UNTIL RECENTLY DEVELOPING COUNTRIES CONTINUE TO SUFFER FROM POVERTY AND UNDERDEVELOPMENT
    8. 8. THE THREE TECTONIC SHIFTS IN ECONOMIC GLOBALIZATION I. The Rise of the West 2. The rise of the US 3. The rise of China and the rest
    9. 9. THE FIRSTTECTONIC SHIFT:THE RISE OFTHE WEST SINCETHE 15TH CENTURY AND ACCELERATED DRAMATICLALY SINCE 1820sTHROUGH INDUSTRIAL REVOLUTION
    10. 10. COLONIALISM IN 1945
    11. 11. WIDENING GAP BETWEEN WEST AND AFRICA 1820: Gap between Britain and Africa was four to one 1998: Gap between USA and Africa is 20 to one
    12. 12. Angkor Wat built in 1150 Notre Dame de Paris built in 1345 Angkor Wat and Notre Dame de Paris
    13. 13. THE SECONDTECTONIC SHIFT: RISE OFTHE US Started at the closing years of the 19th century In the closing years of World War II its dominance unrivaled
    14. 14. TEHE WORLD ECONOMIC ORDER SHAPED AT BRETTON WOODS  ECONOMIC POWER CONCENTRATED IN NORTH AMERICA AND WESTERN EUROPE: GATT, THE WORLD BANK AND THE IMF  COMMUNIST EASTERN EUROPE AND CHINA IN ISOLATION  THIRD WORLD WERE INTEGRATED IN WORLD ECONOMY THEY NEITHER MANAGED NOR CONTROLLED
    15. 15. THE WORLD DURING THE COLD WAR
    16. 16. THETHIRDTECTONIC SHIFT: RISE OF CHINA AND THE REST SINCETHE 1980S UNTILTODAY
    17. 17. THE ERA OF ECONOMIC GLOBALIZATION The end of the cold war 1989 The collapse of the Soviet Union 1989 Reunification of Germany 1989 Information and technological revolution The rise of Brazil, Rusia, India and China (BRIC)
    18. 18. Soviet Union 122 to 1991 Break-up of Soviet Union 1991 BREAK UP OF THE SOVIET UNION
    19. 19. GDP RANKING BY PPP IN BILLION US DOLLAR Rank Country GDP (PPP) $Billion Year — World 85,538 2012 — European Union 16,805 2012 1 United States 15,685 2012 2 China 12,471 2012 3 India 4,793 2012 4 Japan 4,491 2012 5 Russia 3,380 2012 6 Germany 3,308 2012 7 Brazil 2,366 2012 8 France 2,355 2012 9 United Kingdom 2,265 2012 10 Mexico 2,015 2012
    20. 20. THE GIANT ASIAN DRAGON AWAKENED  IN THE OLD DAYS CHINA WAS VERY BIG BUT ALSO VERY POOR  TODAY CHINA HAS AWAKENED AND HOW?  CHINA’S AWAKENING IS RESHAPING THE GLOBAL POLITICAL AND ECONOMIC LANDSCAPE
    21. 21. GAIGE KAIFANG 改革开放 reform and opening up More than tenfold increase in GDP since 1978
    22. 22. USA VERSUS CHINA 2013
    23. 23. CHINA’S SPECTACULAR ECONOMIC GROWTH 1) manufacturing: greatly assisted by outsourcing of jobs by American and European MNCs to China 2) construction: massive urbanization and infrastructure expenditures by the government
    24. 24. EXPORTS RANKING BY COUNTRY IN US DOLLAR Rank Country Exports Date of information — World $17,779,000,000,000[2] 2011 est. — European Union (minus internal trade) $ 2,170,000,000,000[3] 2011 est. 1 China $ 2,050,000,000,000 2012 est. 2 United States $ 1,612,000,000,000 2012 est. 3 Germany $ 1,492,000,000,000 2012 est. 4 Japan $ 792,900,000,000 2012 est. 5 France $ 567,500,000,000 2012 est. 6 Netherlands $ 556,500,000,000 2012 est. 7 South Korea $ 552,600,000,000 2012 est. 8 Russia $ 530,700,000,000 2012 est. 9 Italy $ 483,300,000,000 2012 est. 10 Canada $ 481,700,000,000 2012 est.
    25. 25. Foreign exchange reserves in millions of US dollars 1 People's Republic of China 3,341,000 Dec 2012[1] 2 Japan 1,238,713 Jun 2013[2] Eurozone 808,192 May 2013[2] 3 Saudi Arabia 656,900 Dec 2012[1] 4 Russia 518,431 May 2013[2] 5 Switzerland 517,622 May 2013[2] 6 Republic of China (Taiwan) 406,062 May 2013[3] 7 Brazil 374,417 May 2013[2] 8 Republic of Korea 328,095 May 2013[2] 9 Hong Kong 305,713 May 2013[2]
    26. 26. CHINA TOP INVESTOR AND AID GIVER TO CAMBODIA Loans and grants from China during the period 1992 to 2013 have amounted to $2.7 billion. From 1994 to 2012, total Chinese investment in Cambodia has reached $ 9.17 billion. China is also one of the leading trading partners of Cambodia. Last year, bilateral trade volume accounted for $2.9 billion U.S. dollars and it is expected to reach $5 billion by 2017.
    27. 27. Per Capita Income by PPP method selected countries
    28. 28. THE MILLENIUM DEVELOPMENT GOALS  In Sub Saharan Africa almost half the population live on $1.25 per day  Sub-Saharan Africa saw the number of people living in extreme poverty rise steadily, from 290 million in 1990 to 414 million in 2010, accounting for more than a third of people worldwide who are destitute 
    29. 29. Successful Poverty reduction in Cambodia In Cambodian poverty has fallen sharply also. The percentage of poor people w living on $1,25 a day has more than halved within seven years to around 20 percent in 2011 However, in order to reduce poverty in the future, Cambodia must drastically move its labor force from subsistence agriculture to an expanded manufacturing, construction and services base
    30. 30. THE THREE ENGINES OF GROWTH IN CAMBODIA
    31. 31. CAMBODIA TODAY Population 14.9 million Population growth 1.8 percent GDP (PPP, int’l US$) 37.1 billion GDP per capita (PPP, int’l US$) 2,494
    32. 32. Worlds top ten Multinational Corporations (MNCs) in 2012
    33. 33. Company Industry Revenue (USD billions) FY2012 1 Exxon Mobil Corporation Oil and gas $482 Irving, Texas 2 Royal Dutch Shell Oil and gas $481 The Hague; London 3 Walmart Retail $469 Bentonville, Arkansas 4 Sinopec Group Oil and gas $441 Beijing 5 BP Oil and gas $388 London 6 China National Petroleum Corporation Oil and gas $378 Beijing 7 Saudi Aramco Oil and gas $356 Dhahran 8 Vitol Commodities $297 Rotterdam; Geneva 9 State Grid Corporation of China Electric utility $265 Beijing 10 Volkswagen Group Automotive $254 Wolfsburg
    34. 34. The rebirth of regionalism in international trade
    35. 35. TOWARDS AN ASEAN ECONOMIC COMMUNITY IN 2015
    36. 36. TOWARDS AN ASEAN ECONOMIC COMMUNITY IN 2015 Objective of AEC: to transform ASEAN into a single market of 600 million people with free movement of goods, services, investment, skilled labor, and freer flow of capital
    37. 37. Annual asean summit prepare for aec  Annual ASEAN Summit hosted by Cambodia in Phnom Penh Cambodia 18 November 2012
    38. 38. PHNOM PENH GAVE BIRTH TO RCEP  Regional Comprehensive Economic Partnership (RCEP) is a Free Trade Agreement scheme of the 10 ASEAN Member States and its FTA Partners (Australia, China. India, Japan, Korea and New Zealand to be concluded by the end of 2015
    39. 39. WILL THE TARGET DATE OF 2015 FOR AEC BE ACHIEVED? THE TARGET DATE OF 2015 MUST BE SEEN AS A MILESTONE RATHER THAN THE END IN THE CONTINUING PROCESS OF INTEGRATION.
    40. 40. CLVM VERSUS asean Six The Brunei ASEAN Economics Ministers summit on 15th August 2013 declared that ASEAN has implemented 80% of measures under the AEC blueprint
    41. 41. CONCLUSION

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