Lec 1 Globalization, Sustainable Development

8/7/2019 Lec 1 Globalization, Sustainable Development

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Corporate Social

Responsibility


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Important Websites www.bsr.org Business Social

Responsibility

www.wbcsd.org World Business Council

for Sustainable Development www.worldbank.org The World Bank

www.undp.org United Nations

Development Programme


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Power of Corporations

Corporations have farmore power than the nation-states across whose borders they operate.

The combined revenues of just

General Motors and Ford -- thetwo largest automobile

corporations in the world --

exceed the combined Gross

Domestic Product (GDP) for all

of sub-Saharan Africa

The combined sales of

Mitsubishi, Mitsui,ITOCHU, Sumitomo,

Marubeni, and Nissho

Iwai. are nearly

equivalent to the

combined GDP of all of

South America

The United Nations has justly described these corporations

as the productive core of the globalizing world econom

y.


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What is a Corporate?

What is the role of corporates in a

globalized economy?

To whom are corporates/ businesses

responsible???


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Globalization

Globalization is a process of

Interaction andintegration among the

people, companies, and

governments of different

nations

A process driven by

international tradeand investment and

aided by information

technology

It impacts environment, culture, political systems,economic development and prosperity, and humanphysical well-being in societies around the world.


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What is the impact

of Globalization?


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Impact of Globalization

New job creation

Globalization ofInformationand

Communication system :

Global village

Globalization of science

leads to the fusion of

scientific data and

rules to

form a uniform

network of database

Increase in global awareness

about various

economic, legal, political,

technical and

cultural aspects


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Self-employment increased in all

developingregions except East and

South-east AsiaFigure 15: Non-agriculturalself-employment, 1980-89 and 1990-2000

(in percentof total non-agricultural employment)

26

13

44

29

26

32

12

44

32

48

0

10

20

30

40

50

World Developed Regions Africa Latin America Asia

Source: ILO, Women and men in the informal economy, 2002.

1980/1989

1990/2000


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What are the current

trends inGlobalization?


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Current Trends in GlobalizationCurrent Trends in Globalization

IMBALANCEIMBALANCE North-South imbalance - unfair rules in Trade and FDI

Trade: Despite liberalization, expansion did not occur uniformly

Barriers to market entry for certain products of poor countries

FDI highly concentrated in about 10 developing countries despite

efforts by many to attract FDI

Capital & goods move more freely than labour & knowledge

Disparities in enterprise competitiveness and labour markets

More than 2 billion people particularly in sub-Saharan Africa, the

Middle East, and the former Soviet Union live in countries that are

being left behind.


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China, India,

Bangladesh,Philippines, Brazil,Costa Rica, Thailand,

Source: World Bank 2006


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Is this growth affecting

business and in what way?


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Impact on the Global Markets

More choice but can result in

Unhealthy lifestyles lack of activity, risky sexual

behaviour, breakdown in traditional values Promotion of processed tobacco, alcohol and

processed food with high salt sugar and fat content

Unrealised expectations resulting in depression Increased tourism brings risks to health of tourists and

communities


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Impact on Global Health

Health conditions affecting people across

boundaries, culture & generations

Infectious diseases: HIV/AIDS, TB, Influenza,SARS,

Lifestyle diseases and conditions: obesity, lungcancer, heart disease, STDs, Type 2 Diabetes

Threats to global stability and economy: HIV/AIDS,

SARS. The vectors of these diseases may betravel or work place


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Impact of Globalization:

Environment

Threats to the Globe

Global warming

Agricultural development and food security

Water stress and water insecurity

Rising sea levels and exposure to climate

disasters

Environmental pollution

Loss of bio diversity


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Impact of Globalization on

Women Gender imbalance

Trade liberalization has wiped out

livelihood sources of women producers

Migrants particularly women driven to

illegal economy( trafficking) leaving them

vulnerable to exploitation.


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Impact of Globalization (Wider

Effects) Global revolution has impacted culture &

identity---- Values, norms

Illicit cross border activities-increased taxevasion, rise in multinational crime syndicatesmoney laundering

Trafficking of human beings

Rural & Informal economies remain on themargins resulting in persistent poverty

Loss of jobs due to industrial restructuring

Migration leading to brain-drain


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World increasinglyshapedby

Sustainable Development issues

A carbon constrained worldA water constrained world

Issues of sustainable production

Poverty


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CORRECTING THE

IMBALANCE

How to build a fair globalization to reducepoverty and inequality


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Millennium Development Goals

Eradicate extreme poverty and hunger

Achieve universal primary education

Promote genderequality and empowerwomen

Reduce child mortality

Improve maternal health

Combat HIV/AIDS malaria andother

diseases Ensure environmental sustainability

Develop a global partnership fordevelopment


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Adverse Effects of Globalization Can be Controlled

Principlesofdemocracy social equity

Human Rights

Respect the Law

Smart

Partnerships

between State

and

Businesses


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Hum

an Developm

entI

ndex Composite measure of three dimensions of humandevelopment:

a) Life Expectancy

B) Being educated (measured by adult literacy and

enrolment at the primary, secondary and tertiary level) C) Having a decent standard of living (measured by

purchasing power parity

India ranks 128th out of 177 countries ( Bottom 50)

Brazil-70/177

China- 81/177

Pakistan 136/177

Bangladesh-140/177

Iceland-

orway-

Australia-

Canada-

Ireland-


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Com

parisons El Salvador, which saw a civil war for over a

decade from the 1980s, ranks 25 places aheadof us at 103.

Bolivia, often called South Americas poorestnation, is 11 steps above us at 117.

Guatemala, nearly half of whose citizens arepoor indigenous people, saw the longest civilwar in Central America. Guatemala ranks 10places above us at 118.


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In Africa, Botswana ranked below us in the 2006 HDIat 131 climbed four places above us at 124 this time.

In Asia, countries like Vietnam victim of the conflictssince World WarII rose further in the charts, to rank105 this year.

Sri Lanka, is way ahead of us at 99. So are nations likeKazakhstan and Mongolia. They too have risen in theranks. The former from 79 to 73 and the latter from 116to 114.


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Disparity India rose in the dollar billionaire rankings. From rank 8

in 2006 to number 4 in the Forbes list this year.

The TOI reports, Mukesh Ambani alone increased hiswealth by roughly Rs.40 lakh every single minute.

It is doubtful if the wages of agricultural labourers went

up by just Rs.40 (just 40, not lakhs) in years, let alone bythe minute.

We rank fourth in super-rich and 128th in humandevelopment !!!!!


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What is the role of

business in

Sustainabledevelopment?


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Need for Intervention of Business for

Sustainable Development

If business has to be developed, the societyneeds to be developed, business sector cannot

flourish in any country, if the environm

entrequired by business is not conducive.

Increasing social issues impacts the entire

society in general and business in particular because to a large extent business is dependenton the society for its growth and prosperity.


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Sustainable Development The most fundamental impact on society is fromtechnological and social change.

Creation of new cultural and social attitudes

New set of relationships between the business firm andthe surrounding society.

Stakeholders, who have long remained dormant, have

stirred awake and are now proving themselves as majorforces to be reckoned with.


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Sustainable Development

Challenges in the 21st Century cannot be tackled

by yesterdays rule of governance.

There is a need to develop new ways of thinkingand new approaches to governance at every

level of society.

It is an accepted fact, that, there are crucial

linkages between economic growth, human

development, social cohesion and

environmental sustainability.

Documents

Lec 1 Globalization, Sustainable Development