Sustainable Prosperity –

Opportunities and Challenges

Chapter 12

To what extent can globalization bring

sustainable prosperity to all

people?

IQ # 1 WHAT IS SUSTAINABLE PROSPERITY?

IQ #2 WHAT POLITICAL AND ECONOMIC CHALLENGES AND OPPORTUNITIES ARE ASSOCIATED WITH

GLOBALIZATION?

IQ # 3 WHAT CHOICES ARE ASSOCIATED WITH SUSTAINABLE PROSPERITY?

This chapter deals with the following questions

sustainable prosperity

sustainable development

knowledge economiy

privatization

global climate change

Like “globalization” the term “sustainable prosperity” is defined differently depending on a person’s point of view.

IQ # 1 WHAT IS SUSTAINABLE PROSPERITY?

For some people, sustainable prosperity means practicing stewardship of the the environment and resources for future generations. Their goal is to balance environmental, social, and economic factors.

For other people, sustainable prosperity is more closely tied to freer trade among all countries, including developing countries.

Wind generates 20 per cent of electricity for Denmark. Globally wind supplies less than 1 per cent of electric power.

How does this type of technology contribute to sustainable prosperity and development?

Salaberry-de-Valleyfield, Quebec

Sustainable prosperity and global interdependence

•In Quebec in 2006 & 2007 two manufacturing plants closed

•Gildan Activewear (large T-shirt manufacturer) closed as this Canadian company had gradually moved its operations to countries such as Honduras Nicaragua, Haiti, and the Dominican Republic.

•Goodyear Tire and Rubber Co. (American Company) closed

What was the reason for the closure of the Goodyear Tire plant? How do you think the closing of these plants affected the retailers? How might the effects on retailers affect other people in the town ?

Who do you most agree with? pg 281

What things must change if all people are to enjoy sustainable prosperity?

VOICES“Sustainable prosperity is shared prosperity…That

globalization can open doors to prosperity has been

established, and is not the issue here. What is at issue is the concern that, left on their own, the dynamics of

globalization will bring prosperity to some, and

misery and marginalization to many others, particularly

in sub-Saharan Africa.”- Benjamin William Mkapa,

president of Tanzania, 2003

VOICES“To create economic prosperity

while creating ecological poverty (e.g., by logging a forest beyond its regrowth capability) is not creating

sustainable prosperity. Closing down a logging operation to create

ecological prosperity, without suitable transition arrangements, and thereby contributing to social

and economic poverty, is not creating sustainable prosperity….

- Perter Ellyard, senior adviser to the United Nations and author of Ideas for the

New Millennium, 2002In a phrase or sentence capture the

message of each quotation.

How do we measure prosperity?

• Gross domestic product is widely used to measure the health of a country’s economy and the prosperity of its people.

• The income and standard of living of the people in a country are closely tied to the GDP.

• Between 2002 and 2005 Alberta’s GDP was the highest ever recorded by a province.

FYI In 2005 the top 300 000 income earners in the US earned nearly as much as the bottom 150 million income earners combined.

The human development index as a measure eof prosperity

• The human development index (HDI0 was created by the United Nations Development Program to measure quality of life.

• The HDI classifies countries as developed or developing and measure how economic policies affect the quality of life of a country’s people.

• HDI calculations are based on the following: longevity (life expectancy); knowledge (school enrolment and adult literacy); standard of living (GDP per person).

The HDI was created to draw the attention of governments, the media, and NGOs to information that is not reflected in GDP statistics.

The HDI Gap: All Canadians and Registered Indian, 1980-2001

Canada, which ranks high on the HDI, has been criticized for the sharp differences between the level of quality-of-life indicators for the general population and for Aboriginal people.

Human development and access to clean water

• The UN and other international organziations track global sustainable prosperity over time and focus on issues needing attention

• In 2006, the Human Development Report focused on access to clean water and how societies use water as a productive resource

• In 2006, 1 billion people around the world did not have access to clean water – currently 1.8 million children die every year of diseases caused by unclean water and poor sanitation.

VOICES

“Gross national happiness is more important than gross

national product. Happiness takes precedence over

economic prosperity in our national development

process.”- King Jigme Singye Wangchuk of Bhutan,

2002

Some believe that measures of GDP and even HDI leave out important elements of prosperity.

The GNH (Gross National Happiness) is a measure of prosperity created by the king of Bhutan and based on spiritual values rather than economic growth.

In a globalizing world some people think that the GNH index should be a guiding force in economic and political decisions.

IQ #2 WHAT POLITICAL AND ECONOMIC CHALLENGES AND OPPORTUNITIES ARE ASSOCIATED WITH GLOBALIZATION?

• In recent years, Friedrich Hayek’s and Milton Friedman’s ideas of ensuring freedom and prosperity by promoting a market economy free of government interference have taken hold among many government leaders particularly in North America and Europe.

• Economic growth depends on businesses to produce more goods and services faster, more efficiently, and at a lower cost than the competition.

• Economic globalization has led to an increase in GDP in some countries but not everyone benefits from rapid economic growth.

The Fuel That Powers Economic Growth

Trade Liberalization and Sustainable ProsperityOpposing Views

• Some people believe that the economic growth inspired by trade liberalization is the best way to ensure prosperity for all people.

• Horst Kohler (head of IMF) said, “Trade liberalization is the most important element to promote sustained growth for industrialized countries and for low-income countries.”

• But others, such as environmentalist David Suzuki, are not convinced of the truth of this idea.

• Suzuki says that “continued growth in consumption is required for governments and business to be considered successful. This is a form of insanity. Economics is at the heart of our destructive ways and our faith in it has blinded us.”

The Knowledge Economy •Includes businesses and individuals who use research, education, new ideas, and information technologies

•Knowledge-based industries include those that create high-tech products – for example, biotechnology has developed news forms of antibiotics and genetically engineered insulin (can be produced faster and cheaper)

•Global networks in the knowledge economy can solve problems and create new ideas for products BUT keeping up to date and to other innovators can be difficult.

An artificial eyeAlberta – Misericordia Hospital, 2000

Privatization

•To eliminate costly services some governments are choosing privatization of public services

•Privatization involves selling a public service to a private company so the service is no longer owned by the government

•Governments have privatized services such as electric utilities, health care, highway repair and upkeep, and even water supply

Supporters of privatization says that it is an important trade liberalization reform. These people say that privatization lowers taxes because the service is no longer paid for by taxpayers. Another reason is that supporters believe that the competition that results from privatization improves the quality of service and lead to lower prices.

Critics of privatization say that privatization makes service more expensive because private companies must make a profit. They say that governments can provide the service more cheaply because they do not need to make a profit and government-run services meet the needs of all citizens, not just those who can afford to pay for them.

IQ # 3 WHAT CHOICES ARE ASSOCIATED WITH SUSTAINABLE PROSPERITY?

Millennium Development Goals

•In 2000, the UN and leaders of more than 150 countries held an assembly and agreed to work toward a world in which everyone had the opportunity to achieve sustainable prosperity and development

•They created 8 goals and has since monitored the world’s progress toward achieving these goals

•One goal was to eradicate extreme hunger and poverty

**********************UN plan to reduce poverty involved:

•Decentralization (people living there must decide what is to be done and how money is spent)•Training (at national, district and village level)•Information technologies (to communicate effectively and quickly)•Measurable benchmarks •Audits (spending audited or no funding given)•Monitoring and Evaluation

Which millennium goal do you think you might be able to influence most directly?

Climate Change and Sustainable Prosperity

• People are burning more and more fossil fuels (coal, oil, natural gas) to heat and cool home, power cars and run factories

• The burning of fossil fuels releases gasses which form a barrier in the atmosphere and radiate the heat from the earth back to Earth instead of allowing it to pass into space – many scientists say this is leading to global climate change

• In April 2007, the IPCC (Intergovernmental Panel on Climate Change) said that unless people around the world unite to stop the progress of climate change, the poorest people will suffer the most – the hardest hit regions will be the Arctic, sub-Saharan Africa, small islands, and large deltas in Asia.

Carbon Dioxide Emissions in Selected Countries, 2005

Opposing Views - The writing of the IPCC report was controversial. Some scientists said they had “very high confidence” in their findings. But representatives of some governments (US, Saudi Arabia, China and India) disagreed with the accuracy of the “high confidence.”

Why do you think countries might have had different agendas?

Changing Government PoliciesThe IPCC is an international effort but there are also local, provincial, and

national governments trying meet the challenges of climate change.

Bolivia

• concerned about the melting of glaciers which supply 80 % of water

Norway

•Project designed to save Earth’s diverse seed sources in the event of a global catastrophe or plant epidemic

•Prevent loss like occurred in US (6800 of the 7100 varieties of apples once grown no longer exist

•1400 seed banks around the world – but the seed vault in Norway will include seeds from both developed and developing countries

Alberta•April 2007 AB government asked Albertans to help shape the province’s action plan on climate change

•AB has highest greenhouse-gas emissions in Canada (less than half population of Quebec and about one-quarter of Ontario

•On line questionnaire (what goals? Important steps? Actions? Role of individuals?