Does globalization contribute to sustainable prosperity for all people? Prosperity: “good...

Does globalization contribute to sustainable prosperity for all people?

RELATED ISSUE 3

Prosperity: “good fortune” or living a good, satisfying life

Sustainable: can continue or be maintained in the future

Economic Globalization

CHAPTER 11

In the early days and a simpler agricultural society, production led to consumption, which led to surplus and growth. This system created a dependence on private property to feed the family and produce an income.

Now, we live in a world of machines and salaries. No longer can we solely rely on our own piece of property for sustenance. We must move with the times, or get knocked down.

If you take a bus today, part of your fare will pay for the driver’s wages.

Another part will go toward the upkeep of the bus. Still another will go

toward taxes that the bus company pays to the government. Taxes are used

to provide services such as public education to your community. Paying bus

fare is an example of the role you play in the local economy. You also play a

role in the global economy. Whenever you buy something made outside

Canada, your purchase ensures that more of this item will be produced by

someone in some part of the world.

LOCAL VS GLOBAL ECONOMY

Figure 11-1 Activists protesting the sale of

lumber from rain forests. How might people who

live in these forests feel when foreign companies

cut down all the trees? How might the owners of

Home Depot feel about harvesting this inexpensive

source of lumber? How might environmentalists

feel about the fact that the world’s rain forests

are decreasing at an alarming rate? How do these

questions help you to consider why there are

different understandings of economic globalization?

NOT FAVORABLE ________________FAVORABLE

Definition: The process of economies becoming more and more connected.

FOUNDATIONS OF ECONOMIC GLOBALIZATIO

• Bretton Woods agreement- 1944

• Creation of the World Bank- 1944

• Development of the International Monetary Fund- 1944

• End of the Cold War- 1989

• Technology and communication

ECONOMIC GLOBALIZATION

• Representatives from 44 allied countries met.

• Discussed how to rebuild economies destroyed by WWII

• Established a system of rules and institutions:

World Bank

International Monetary Fund (IMF)

General Agreement on Tariffs and Trade (GATT)

BRETTON WOODS AGREEMENT

• A financial institution that provides loans to member countries in financial difficulty

• Provided Billions in loans to aid western Europe after WWII

WORLD BANK

http://www.cbc.ca/strombo/show-politics/canada-to-fight-newborn-deaths.html

Still provides loans to members in financial difficulty:

- Long term loans

- Countries must meet certain economic and political conditions:

a. Reduction of government debt

b. Reduction of corruption

c. Promotion of western free market policies

WORLD BANK TODAY

• Was created to work with the World Bank to bring stability to international monetary affairs and to help expand world trade.

• It is in charge of long-term financial aid for countries in need.

• The IMF also monitors exchange rates.

• Both the IMF and the World Bank are United Nations Agencies.

INTERNATIONAL MONETARY FUND (IMF)

Even though the IMF and World Bank provide aid to less developed countries, this is not their main function.

They are not charitable organizations.

They charge interest on their loans and expect the loans to be paid back in full. As well, in order to qualify for loans, the World Bank requires that a country adopt free market policies like those in Canada or the United States.

READ PAGE 184

Complete the fourth page of your handout!

Who controls the IMF and World Bank???

And other DEVELOPED countries.

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Ended in 1989

World was divided between communism (Russia) and

capitalism (USA) What about Hockey?????

Was mainly an economic struggle

As the cold war ended, eastern Europe opened to western

economic globalization

COLD WAR

Technology, has made borders seem unnecessary—

Television

Computers

Internet

Cell phones

Satellites

TECHNOLOGY AND COMMUNICATION

Definition: The process of economies becoming more and more connected.

FOUNDATIONS OF ECONOMIC GLOBALIZATIO

• Bretton Woods agreement- 1944

• Creation of the World Bank- 1944

• Development of the International Monetary Fund- 1944

• End of the Cold War- 1989

• Technology and communication

REVIEW

Trade Liberalization

Process of reducing barriers to trade

Free Trade

Trade between countries with relatively few restrictions

Trading bloc

A group of countries working together to provide better trading

terms

Tariff

A tax on imported goods or services meant to reduce

competition with domestic goods and services

Sustainable Development

Development that meets the needs of the present without compromising the ability of

future generations to meet their own needs

FREE TRADE

BARRIERS TO TRADE

1989

Canada and the United States sign the Free Trade Agreement

(FTA)

1994

Mexico enters and the FTA becomes the North American

Free Trade Agreement (NAFTA)

Read Figure 11-10

FREE TRADE

International organizations

ECONOMIC GLOBALIZATION

Has roots in the GATT

GATT was transformed into the WTO on January 1 1995.

Seeks to improve trade relations among countries of

the world

Provides a place to settle trade disputes

WORLD TRADE ORGANIZATION (WTO)

The G8 is an informal group of the eight most developed nations

with the strongest economies

Members include

United States

Great Britain

France

Germany

Italy

Japan

Canada

Russia

GROUP OF EIGHT (G8)

Deal with a wide range of global economic, political,

and social issues

G8 countries have nearly 50% of votes in the IMF and

World Bank

And has significant impact on WTO policies

G8

• Argues that the WTO and globalization does not contribute to the sustainable prosperity for all people

• Council of Canadians

• Formed in 1985

• Some Canadians became concerned that Canada’s independence and way of life was being threatened

Pg. 193

ANTI-GLOBALIZATION MOVEMENT

Methods of Protest used by various groups include

Public speeches

Letters of opposition or support

Mass petitions

Internet forums and blogs

Banners, posters and press statements

Public Acts such as

Marches, parades, sit-ins or fasts, civil disobedience.

METHODS OF PROTEST