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Defining-Globalization [Autosaved].pptx
- 1. THE CONTEMPORARY WORLD PROF. DAN LHERYSUSANO GREGORIOUS, Ph.D, LPT, SMRIEDr, FMERU,FMERC
- 3. PROF. DAN LHERYSUSANO GREGORIOUS, MAED, LPT, SMRIEDr, FMERU,FMERC • PRINCIPAL • RESEARCHER • EDUCATOR
- 4. What is CONTEMPORARY WORLD? •Refers to circumstances and ideas of the present age, where it deals with problems and issues related to environment, population, wealth, power, tensions and conflicts.
- 5. Why study CONTEMPORARYWORLD? a. To be aware about Contemporary World problems and issues that all societies must be concerned. b. To developed competencies and construct knowledge about problems and issues and become aware of our roles and our responsibilities as citizen.
- 6. You, in the21st century Should you care if…? •Brazil allows more people into the rainforest • Russia rebuilds its military forces •India raises the salaries of its senior IT workforce • China buys up the industrial metals of Australia
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- 17. What is Globalization? Global industrialismor globalization is a process of forging international political, economic, religious, and socio- cultural interconnections KFC Kuwait 7-11 Beijing
- 18. Globalization Definition •Variety ofdefinitions, centering around the world becoming “smaller” and more interconnected in the areas of commerce, culture, and politics •Causes: technological advances in communication, travel, and computational power, expansion of trade
- 19. Thomas Friedman, “TheLexus and the Olive Tree” • A globalist system has replaced the Cold War system • The new system has unique rules, logic, pressures and incentives driven by international capitalism • Features integration: free flow of capital, goods, ideas more broadly, faster, deeper than anytime in the past. • The “Golden Straightjacket”: must abide by goals of free market principles, efficiency. Rewarded if you do. • New key players: The “Electronic Herd.” • Globalization promotes cultural homogenization, the “Big Mac.”
- 20. Thomas Friedman’s Definition ofGlobalization
- 21. Friedman: Globalization’s NewStructure and Balance of Power • Traditional balance between states (countries), U.S. is the paramount player • Balance between states and global markets: states can’t ignore the market any longer without costs • Balance between individuals and states: people influence governments through the market at home and abroad (for good and evil). • Globalization produces “super-empowered individuals
- 22. Important Conclusions fromFriedman’s Argument 1. Rewards. Those who participate in globalization are rewarded, though there are winners and losers. 2. Peace Dividend. Those engaged in globalization have too much to lose with war. 3. Democratic Dividend. Free movement of information with markets produces drive for freedom and liberty—seeds of democracy.
- 23. History of Globalization Accordingto Thomas Friedman
- 24. The Stages ofGlobalization (From Thomas Friedman in The World is Flat) • Globalization 1.0 (from 1492 to 1800) • Globalization 2.0 (from 1800 to 2000) • Globalization 3.0 (from 2000 to the present)
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- 26. Globalization 2.0 (firsthalf) Steam engine Railroads
- 27. Globalization 2.0 (secondhalf) OpenMoko open source smart phone Satellites Apple Mac Pro Fiber optics
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- 29. Globalization 3.0 (continued) SchematicMap of the Internet
- 30.
- 31. 5 ASPECTS OFGLOBALIZATION 1. ECONOMIC 2. TECHNOLOGICAL 3. CULTURAL 4. POLITICAL 5. MILITARY THESE ASPECTS ARE ALL INTERCONNECTED! ********************* After this lecture, can you give 1 example of each of the above?
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- 33. • Economic globalizationrefers to the widespread international movement of goods, capital, services, technology and information. It is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital. • Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and people
- 34. 1. Economic Globalization TODAY: EconomiesAre Increasingly Linked Together EXS: NAFTA (MX, CA, US), The EU, WTO (World Trade Organization) WTO • Only global international organization dealing with the rules of trade between nations • Goal: help producers of goods and services, exporters, and importers conduct their business
- 35. 1. ECONOMIC GLOBALIZATION MULTI-NATIONAL CORPORATIONS •OLD: Dutch East India Company? • 1602 company of Dutch merchants & independent trading companies • Spice trade monopoly in East Asia • Power to colonize territories & enslave indigenous people • Indonesia & South Africa
- 36. 1. ECONOMIC GLOBALIZATION •NEW: Nike, Wal-Mart, Royal/Dutch Shell • Top 100 multinationals are all US-owned companies! • Royal/Dutch Shell: global group of energy and petrochemical companies, operating in more than 140 countries and territories, employing more than 112,000 people
- 37.
- 38. 2. TECHNOLOGICAL GLOBALIZATION • “WorldWide Web” has exploded in last 10 years • Computers can move money around world = “finance capital” • Silicon Valley is 9th largest economy in world! Africa • Number of telephones is decreasing • More computers in Manhattan than all of Africa! • Post-colonial infrastructures don’t support technology
- 39.
- 40. 3. CULTURAL GLOBALIZATION •Cultural Imperialism = Dominance of one culture over others • Hollywood movies, MacDonald’s, Disneyland, Starbucks • Dominance of the English language and invasion of other languages • Do people all over the world have the same taste? Africa • “Culture Industry” = opportunities for Africans to sell their culture in the “global market” that values traditional culture
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- 43. 4. POLITICAL GLOBALIZATION TheUnited Nations: Global assoc. of govts. facilitating cooperation in international law, security, economic development, and social equity • Whose interests does the UN represent? • The US and the UK were the only nations in support of going to war in Iraq • Can a global politics with social values exist? • Alternative political gatherings: Annual World Social Forums since 2001, The Piece Process @ Gav!
- 44. 4. POLITICAL GLOBALIZATION SouthAfrica • In 2001, US pharmaceutical corporations sued South African companies for infringing on AIDS medication patent laws • In 2003, President George W. Bush announced the Emergency Plan in 2003 - the largest international health initiative in history by one nation to address a single disease •HIV/AIDS Situation in 2004 HIV Infected: 5.3 million AIDS Deaths: 370,000 AIDS Orphans: 1.1 million
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- 46. 5. MILITARY GLOBALIZATION NuclearBombs F/A-22 Raptor
- 47. 5. MILITARY GLOBALIZATION •Global alliances become clear during war time • Ex: Today’s US alliance with Britain in wars against Afghanistan and Iraq • What will happen with North Korea and nuclear weapons? Africa • “Trade in Arms” = US sold $227 million in arms to AF in 1990s • US train and provide weapons for African armies on both sides of their civil wars (ex. Mobutu civil war in Congo) • US is the #1 exporter of weapons globally • US is the last on the list of exporters of non-military aid to the developing world
- 48. 5. MILITARY GLOBALIZATION SmartBombs Sidewinder Missiles
- 49.
- 51. Globalization Consequences/Effects •Consequences citedby various scholars and activists: •Cheaper goods and services •Growing wealth for certain actors •Environmental damage •Exploitation of labor
- 52. Globalization Consequences/Effects •Consequences citedby various scholars and activists (cont.): •Mixing of cultures: •Dominant Western culture eroding traditional cultures •Backlash from those who want to maintain traditional cultures • “Lexus and the Olive Tree” (Friedman) • “McWorld vs. Jihad” (Barber)
- 53. Globalization Consequences/Effects •Consequences citedby various scholars and activists (cont.): •Diseases spread more rapidly •Economic crises spread more rapidly •Increased trafficking of humans and drugs •Terrorism/asymmetric warfare made easier
- 54. Globalization Consequences/Effects Global Culture:Homogenization Technology (Internet, TV, cell phones etc.) is sweeping away cultural boundaries creating the possibility and even the likelihood of a global culture. Global entertainment companies shape the perceptions, values, and dreams of people, everywhere. This spread of values, norms, and culture tends to promote Western ideals of capitalism and consumerism. Resulting in the disappearance of local cultures, traditions, and identities replaced by a single commodity/ single identity world – the Westernization of culture Ladies only line Saudi Arabia
- 55. Coca-colonization: Coke,McDonald’s, Levi’s, MTV, Disney, computer games, American (or American style) TV shows, look-alike shopping malls with look- alike goods the meaning of good, appropriate, success changes Globalization Consequences/Effects Asymmetry in Power Relations and Flows Banana Republicanization Move from the dominant to the weaker like to teach the world to sing Big Bird does China
- 56. Summary of Consequences/Effects Pros andCons to Globalization
- 57. increases economic prosperityand opportunity higher degrees of political and economic freedom in the form of democracy Improved standard of living – reduction in poverty Improved gender relations Increased life-span Pros
- 58. Cons Increasedenvironmental damage increased poverty, inequality, injustice erosion of traditional culture Corporations are motivated by profit and have little concern for people economic globalization developments feed into ethnic, religious, and factional tensions that lead to wars and help breed terrorism Terrorists now globally interconnected and empowered with knowledge, create a whole new category of warfare based, in part, on the disruption of the interconnections which are both created by and necessary for globalization Corporations shape political policy of countries e.g. over fishing
- 59.
- 60. Role of Tradewith Globalization •A key element of economic globalization •Dramatic increases in trade over the past 200 years •Technological advances (most notably the steam engine) powered expansion of trade in 19th and early 20th centuries •After setback of Great Depression and World War II, trade grew again, accelerating with collapse of communist bloc and advances in information technologies •Institutions such as GATT (later WTO) have facilitated trade globally •Growth of regional free trade blocs
- 61. Economic Approaches toTrade •Approaches to trade •Mercantilist/autarkic practices •Liberal, “free trade” policies •A mix of the two extremes (protecting certain domestic industries, etc.)
- 62. Effects of Trade •Differencesin countries’ exports (primary products vs. high-tech manufactured goods) can lead to dependency relationships and inhibit development of poorer countries •“Free trade” vs. “fair trade” •Comparative and absolute advantage (see lecture #10)
- 63. Free Trade Controversy •Freetrade and barriers to trade •WTO (previously GATT) •Most favored nation and reciprocity principles •Efforts to reduce tariffs, subsidies, quotas, and other barriers to free trade (and ongoing disputes, such as agricultural subsidies by wealthy countries) •Regional free trade agreements (e.g., NAFTA) •Conflict with WTO goals
- 64. Summary of GATTRounds Round N of Countries Subjects and Modalities Main Outcomes Value of Trade Covered Average Tariff Cut Average Post Round Tariffs Geneva 1947 23 Tariffs; Item-by-Item Negotiation Concessions on 45,000 tariff lines $ 10 billion 35% Annecy 1949 33 Tariffs; Item-by-Item Negotiation Modest tariff reductions 37% Torquay 1950 34 Tariffs; Item-by-Item Negotiation 8,700 tariff concessions 26% Geneva 1956 26 Tariffs; Item-by-Item Negotiation Modest tariff reductions $2.5 billion 15% Dillon 1960-1961 26 Tariffs; Item-by-Item Negotiation Tariff adjustments following creation of EEC $4.9 billion 20% 17% Kennedy 1962-1967 62 Tariffs; Linear cuts 30,000 tariff lines bound $40 billion 35% 8.7% Tokyo 1973-1979 102 Tariffs; NTBs; Linear cuts; Codes $155 billion 34% 6.3% Uruguay 1986-1994 103 start, 128 end Tariffs; NTBs; Item-by-Item and Linear; WTO WTO Dispute Resolution $3.7 trillion 39% 4.0%
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- 66. Regional Trade Agreements •Besides economic organizations, regional trade agreements form a key part of the institutional structure of the world economy • Regional trade agreements have proliferated around the world since the beginning of the 1990s
- 67. Five Types ofRegional Trade Agreements •1. Partial trade agreement – two or more countries liberalize trade in a selected group of product categories •2. Free trade area (FTA) – trade in goods and services fully liberalized between two or more countries •North American Free Trade Agreement (NAFTA)
- 68. Slide 2-68 Five Typesof Regional Trade Agreements (cont.) •3. Customs union (CU) – an FTA plus a common external tariff (CET) •European Union in the 1970s and 1980s •MERCOSUR in South America •4. Common market – a CU plus free mobility of factors of production •European Union in the 1990s
- 69. Five Types ofRegional Trade Agreements (cont.) •5. Economic Union – common market with coordination of macroeconomic policies (including common currency, harmonization of standards and regulations) •United States •Canada •European Union
- 70.
- 72. International Institutions • Thethree global organizations playing a major role in international economic relations are: • The International Monetary Fund (IMF) • The World Bank • The World Trade Organization (WTO) Let’s take a closer look at the functions of these organizations…
- 73.
- 74. The IMF • Foundedby the Bretton Woods meetings between the Allies in July 1944 • Each of the 184 members charged a quota • 25% in SDRs or convertible currencies • US quota is SDR 37,149.3 million (largest) • Palau quota is SDR 3.1 million (smallest) • The size of the quota determines the member’s voting power • 250 basic votes + 1 voter/SDR 100,000 quota • US has 371,743 votes (17.11%) Palau 281 votes.
- 75. The IMF • TheIMF was established to: •Promote international monetary cooperation; •Promote exchange stability and orderly exchange arrangements •To foster growth and high levels of employment, and •to provide temporary financial assistance to countries to help ease balance of payments adjustment
- 76. The IMF •Fundamental disequilibriumand exchange crisis •Crisis occurs when a country runs out of foreign exchange reserves – a major currency or gold that can be used to pay for imports and international borrowings •IMF conditionality – requirement for the borrowing member to carry out economic reforms in exchange for a loan
- 77.
- 78. The World Bank •Alsofounded at the Bretton Woods Conference •Founded as the International Bank for Reconstruction and Development (IBRD) •World Bank has 184 members
- 79. The World Bank •Mainfunctions: development lending •Today, IBRD is one of the five subgroups making up the World Bank Group •IDA (International Development Assn.), •IFC (International Finance Corp.), •MIGA (Multilateral Investment Guarantee Agency), •ICSID (Int’l Cent. For Settlement of Investment Disp.)
- 80.
- 81. From GATT toWTO •Uruguay Round Agreement signed in 1994 •The round established the WTO: •144 members as of 1 January 2002 •reaches beyond GATT to new trade issues; •has a more effective dispute settlement mechanism; and •monitors national trade practices more consistently
- 82. The WTO •Main Tasksof the WTO •Administering WTO trade agreements •Forum for trade negotiations •Handling trade disputes •Monitoring national trade policies •Technical assistance and training for LDCs •Cooperation with other international agencies
- 83. The WTO InterdependenceNorms Liberalization – negotiations to reduce protection. Nondiscrimination – enshrined in the concept of most favored national status (MFN): every WTO member must treat each of its trading partners as it treats its most favored partner National treatment – imports must be given a similar treatment on the domestic market as domestically produced goods
- 84. The WTO •Sovereignty Norms •Reciprocity– negotiations proceed in terms of exchange of “concessions” of substantially equivalent value. •Safeguards – right of government to preserve economic stability through (nondiscriminatory) protection recognized.