Business & Society (ETLW 302). “The poor complain, they always do, but that’s just idle...

Business & Society (ETLW 302)

“The poor complain, they always do, but that’s just idle chatter. Our system

brings reward to all, at least to all that matter.”

- Canadian economist

If the world were a village of 100

World Citizen’s Guide

Globalization + driving forces

Process of integrating the world through commerce, technology, culture and politics

International trade Communications Technology Human migration Capital flow International Institutions (IMF/World Bank)

What business best represents globalization to you?

Invented in 1886 by Civil War Officer Sold originally in soda fountains in

Atlanta Acquired for $2,300 Currently sold in 200+ countries Employs 90,500 worldwide 1.5 BILLION servings/day Over 2,800 products

Coca-cola = awesome

Signatory to UN Global Compact Named one of the World's Most Accountable

Corporations by One World Trust (2007) Contributed nearly $100 million to communities

worldwide (2007) Coca-Cola associates and alumni worldwide

donated more than 70,000 volunteer hours in 2007 Polar bear support fund Coca-Cola and WWF are combining to help

conserve and protect freshwater resources throughout the world

Coca-cola = not so awesome

“Coca-colonization”

“Killer coke”

Dirty Coke in India

Attacks on unions in Pakistan

Multinational Corporations (MNCs)

Transnational Corporation or Multinational Enterprise

UN estimates that there are over 60,000 in global economy

•Top 100 TNCs responsible for 14% of the sales of all

International Trade and Financial Institutions

These organizations were created in order to deal with issues caused by MNCs, particularly:

•Environmental risk•Worker rights•Labor practices•Human rights•Community development

World Bank (est. 1944)

Dues paid by 184 member nations Selling AAA-rated bonds in the world's

financial markets Shareholder-support: $178 billion in

"callable capital”

2 branches:

International Bank for Reconstruction and Development (IBIRD)

Aims to reduce poverty in middle-income and creditworthy poorer countries

Promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services

Raises most funds on international capital markets

Original institution of World Bank

International Development Association (IDA)

•40 Donor countries•One of the largest sources of assistance for

the world’s 78 poorest countries, 39 of which are in Africa.

•Single largest source of donor funds for basic social services in the poorest countries.•No-interest loans•40% of World Bank lending

IMF (est. 1945)

187 countries contribute to its reserve ($333 billion)

Mission: To foster global monetary cooperation, secure financial stability, facilitate

international trade, promote high employment and sustainable economic growth, and

reduce poverty

World Trade Organization

Established in 1994 at last meeting of General Agreement on Tariff and Trade (GATT): 153 members

“Organization for liberalizing trade.”

Negotiating forum Set of rules: legal ground rules for

international commerce

Life & Debt

Today

Jamaica owes over $4.5 billion to the IMF, the World Bank and the Inter-American Development Bank (IADB) among other international lending agencies

Debt to GDP ratio = 120%

Fourth highest debt burden in the world on a per-capita basis

To further improve the balance of payments

Currency devaluation: raises the cost of foreign exchange

High interest rates: which raises the cost of credit

Wage guidelines: which effectively reduce the price of local labor

Unemployment: 12% + overall, 27% ages 15-24

Sweeping corruption Higher illiteracy Increased violence Prohibitive food costs Dilapidated hospitals Increased disparity between rich

and poor (16.5% below poverty line)

How do they fix it?!