What does sustainable mean? What does prosperity mean?

Sustainable = to maintain something

Prosperity = a successful, flourishing, or thriving condition

What might sustainable prosperity mean?

Globalization and Sustainability:Shipping and Shipbreaking

• Assignment booklet

• Text pgs 266-268

Sustainable Prosperity

• Like the word “globalization,” the term “sustainable prosperity” is defined differently depending on a person’s POV and reason for using the term in a particular context.

• Sustainable prosperity:– practicing stewardship of the environment and

resources so that future generations are able to achieve prosperity.

– The goal is to balance environmental, social, and economic factors.

Examples of Sustainable Prosperity

• Practicing stewardship of the environment and resources for future generations.– (Reducing greenhouse gas emissions, limiting the

amount of garbage going to landfills).

• Freer trade among all countries, including developing countries. – This would allow every country to increase its

productivity and make prosperity possible for everyone (shared prosperity).

• Figure 12-2 pg. 280

What is Not Sustainable Prosperity?• Logging a forest beyond its re-growth

capability. (+economy, -environment)

• Closing down a logging operation without suitable transition arrangements for those workers who are laid off. (+environment, -economy, -social)

• Mining native land. (+economy, +social, -cultural)

• Pg 265

What is standard of living? What is quality of life?

Standard of Living• Standard of living:

– A level of material comfort as measured by the goods, services, and luxuries available to an individual, group, or nation.

– Standard of living is directly related to money.

• Indicators of standard of living include: • income, • unemployment rate, • housing affordability, • gross domestic product, etc.

Quality of Life

The state of being healthy, happy, or prosperous.

Indicators of quality of life include:

• life expectancy,

• adult literacy rate, • school enrollment, • air quality, • right to vote,• right to marry, • religious freedom, • gender equality,• equal protection of the law,

etc.

Our standard of living usually affects our QOL, our QOL does not affect our standard of living.

Does a higher standard of living mean for a better quality

of life?

Measuring Quality of Life• Usually:

– higher standard of living means for a better quality of life.

• NOT ALWAYS.

• when we are measuring quality of life, we need to take this into consideration.

– Do we use standard or living factors to measure quality of life at all? If so, to what extent?

How does one come up with a measure of “prosperity”?

Gross Domestic Product• Gross domestic

product is a standard of living measure. It is the value of all the goods and services a country produces in one given year.

• These figures are in trillions of dollars for the year 2008.

1United States14,264,600

2People's Republic of China7,916,429

3Japan4,354,368

4India3,288,345

5Germany2,910,490

6Russia2,260,907

7UnitedKingdom2,230,549

8France2,130,383

9Brazil1,981,207

10Italy1,814,557

11Mexico1,548,007

12Spain1,396,881

13SouthKorea1,342,338

14Canada1,303,234

Importance of GDP

• Changes in GDP can be used to track the health of a country’s economy. Agencies like Statistics Canada monitor and record these changes.

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

• How is GDP only a standard of living measure?

GDP Per Capita

• The GDP of a country divided by the number of people who live there. (per capita – think “per cap”, i.e. “per head”)

• If Canada has a population of 34 million and a GDP of 1.330 trillion, what is it’s GDP per capita?

• $39,117.65 (1.330 trillion divide by 34 million)

Could GDP per capita be misleading? How so?

• It includes children, the unemployed, and the retired. Also, it is an average, and averages can be deceiving.

Other Countries’ GDP

• If Norway has a population of 5 million and a GDP of 259 billion, what is it’s GDP per capita?– $51,800

• If India has a population of 1.2 billion and a GDP of 3.862 trillion, what is it’s GDP per capita?– $3,218.33

• February 2007: The Globe and Mail: – the chief executives of some companies in Canada

earn up to 400 times more than the average worker.,

• If a company has 100 workers who earn $35,000 a year and a president who earns 200 times as much, what would be the total earnings of the workers and the president?

• What happens when you average the earnings of the 101 people? – How accurately does this number reflect the real

prosperity of the workers? Of the company president? (FYI pg 282)

• 10.5 million, $103,960, not very accurate

Human Development Index (HDI)

• The human development index was created by the United Nations to measure quality of life in countries. It is measured on a scale of 1.

• HDI calculations are based on 3 main categories:

– Longevity (life expectancy)

– Knowledge (school enrollment, adult literacy)

– Standard of living (GDP per person)

A Comparison of Countries and their HDI (2006)

Top 10 HDI# 1   Norway:0.963 # 2   Iceland:0.956 # 3   Australia:0.955 = 4   Canada:0.949 = 4   Luxembourg:0.949 = 4   Sweden:0.949 # 7   Switzerland:0.947 # 8   Ireland:0.946 # 9   Belgium:0.945 # 10 United States:0.944  

Bottom 5 HDI

#174   Chad:0.341  #175   Mali:0.333  #176   Burkina Faso:0.317 #177   Sierra Leone:0.298 #178   Niger:0.281

(Figure 12-5, pg 283) 

World Map Indicating HDI (2006)

0.95 and over

0.35 – 0.5

0.7 – 0.75

Why Make the HDI?• The HDI was created to:

– draw attention to indicators that go beyond GDP – reveal information that is not reflected in GDP stats.

• Kuwait:– very high GDP – low level of education attainment.

• Canada: – ranks high on the HDI– has been criticized for the sharp differences between the

level of QOL indicators for the general population and for Aboriginals.

• Figure 12-6 & Voices pg. 283

Other Measures of Prosperity

• GNH (Gross National Happiness)

• GPI (Genuine Progress Index)

In Bhutan, the king has brought in the gross national happiness index, GNH. It is all about your inner self and well being.

Gross National Happiness Index• The GNH index:

– based on Buddhist spiritual values rather than economic growth.

– The focus is on the inner happiness and well-being of the people in a country, their spiritual and material development.

• The king is determined to help Bhutan keep its own cultural identity despite outside pressures, including the influence of TV and the Internet. The gov’t strictly controls trade, tourism, and foreign investment. (Voices pg. 285)

Why do you think Bhutan is so resistant to globalization?

Genuine Progress Index (GPI)

• The GPI index: being developed to measure sustainability, well-being, and QOL.

• Advocates of the GPI say that GDP does not measure growth accurately because it does not take ppl’s real prosperity into account.

– GDP, for example, does not reflect the toll of economic growth on the environment, nor does it measure the inequality of income among the people in the country.

What is Uneconomic Growth?The "costs" of economic activity which include the following potential harmful effects:

• Cost of resource depletion• Cost of crime• Cost of ozone depletion• Cost of air, water, and noise pollution• Loss of farmland and wetlands

For example, the GPI will be zero if the financial costs of crime and pollution directly from economic growth equal the financial gains in production of goods and services.

What is privatization?

Privatization• To eliminate the cost of operating services and

to raise cash, some gov’ts are choosing privatization.

• Privatization: the selling of a public service, such as electricity delivery or health care, to a private company so that the service is no longer owned by the gov’t.

• Around the world, gov’ts have privatized services such as electric utility companies, health care, highway repair and upkeep, etc.

Arguments for Privatization

• Privatization lowers taxes because we as taxpayers no longer have to pay for the gov’t to run the service. This means more money for us!

• Competition that arises from privatization improves service and lowers prices. (If Wendy's raises the price of their burgers you can just go to Dairy Queen. If Wendy’s wants to stay competitive they have to lower their burger prices or they risk losing your business.)

Example of Privatization Working• 2007, Japan:

– privatized its government-owned post office. • (The post office also was Japan’s largest savings and investment

bank).

• The post office was privatized and divided into four separate companies: – a bank, – insurance company, – courier service, and – post offices

• This made dealing with the post office easier for consumers since they all didn’t need to go to one place for different services.

Arguments against Privatization

• Many government-run services do not make money so the government simply eats the cost.

• If we privatize an unprofitable business then the company, in order to ensure it makes a profit, will raise their prices and hurt us as consumers.

• Government-run services meet the needs of all citizens, not just those who can afford to pay for them.

• Risk of monopoly.

Privatization Not Working Example

• 1989, the New Zealand:– gov’t sold Air New Zealand to an international

group that included Qantas and American Airlines.

• By 2001:– the airline had run into severe financial problems

and, because the airline is essential for their economy, the New Zealand gov’t had to take back control.

Issue: Privatizing Water

• The debate on whether to privatize water or not is a HUGE issue.

• American business magazine Fortune calls control of water resources:– “one of the world’s great business opportunities. It promises

to be to the 21st century what oil was to the 20th.”

• http://www.globalresearch.ca/the-privatisation-of-water-nestle-denies-that-water-is-a-fundamental-human-right/5332238

– Nestle Chairman Peter Brabeck-Letmathe believes that “access to water is not a public right.” Nor is it a human right.

– http://www.trueactivist.com/nestle-ceo-water-is-not-a-human-right-should-be-privatized/ (video)

Privatization of Water

• Assigment Booklet: article and paragraph

Privatization of Water Happening

• Despite the debate, privatization of water is already happening. – In 56 countries water supply is controlled by large

transnational corporations.

• Ironically, some of the people who pay the most money for water are the most poor! – Many governments do not properly regulate the

private providers of water. There is no way to ensure water is safely and efficiently delivered to everyone who pays for it in certain countries.

What is trade liberalization?

Trade Liberalization

• Trade liberalization is to make trade easier and more fair for everyone.

• Horst Kohler, head of International Monetary Fund: “trade liberalization is the most important element to promote sustained growth for industrialized countries and for low-income countries.”

Is Canada Two-Faced?

• Subsidies are gov’t grants.

• In the case of agriculture, the Canadian gov’t gives subsidies to Canadian farmers to offset their production costs. This allows prices to stay low for consumers.

Doesn’t this action go against the principles of trade

liberalization? Who does this action help? Who does it hurt?

Who Does This Help?

• Canadian farmers: they get money from the gov’t just for the sake of being farmers.

• Canadian consumers: we pay less for food then we would have to if this industry was not subsidized.

Who Does This Hurt?

• Canadian taxpayers: the gov’t pays the subsidies, which means we pay more taxes.

• Farmers in developing countries: they cannot compete with Canada and US farmers because they are not getting financial help and thus have to charge higher prices. Since consumers will go for the lowest price, nobody buys their product, putting them out of business.

If We Remove Tariffs/Grants…

• In 2005, the World Bank predicted that if all tariffs, subsidies, and other supports for agriculture were abolished, the global economy could grow by nearly $200 billion over the next 10 years.

• Should the Canadian gov’t get rid of grants to Canadian farmers? Why or why not?

Foreign Investment

• Foreign investment is the purchase of assets in one country by individuals, institutions, or governments in another country. (Kind of like buying stocks in a company).

• Foreign investors can buy shares in existing businesses, set up new businesses, or invest money in the currency of another country.

Why Foreign Investment?

• It keeps Canada competitive in an interconnected and fast-moving global economy and strengthens ties among Canada’s trading partners.

• It strengthens the sustainable prosperity of Canadian companies, consumers, and workers.

Does Foreign Investment Always Work?

• By the early 1990s, South Korea had the world’s 11th largest economy and was growing quickly. They attracted a lot of foreign investment that helped stimulate the economy.

• However, by 1997, the value of South Korea’s currency fell and with it people lost confidence in the economy. As a result, people pulled their money out, the economy shrank, South Koreans lost their jobs, and the gov’t had to borrow $58 billion from the Int’l Monetary Fund. (Figure 12-13 pg. 292)

The Knowledge Economy

• Generally, knowledge economy is described as businesses and individuals who use research, education, new ideas, and information technologies for practical purposes.

• This includes industries that create high-tech products for business: microsystem technologies, computer software, robotics, and biotechnology.

Challenges & Opportunities

• The knowledge economy offers both challenges and opportunities for sustainable prosperity.

• Opportunities are that it contributes to the evolution of technologies and increased trade and competition.

• Challenges are that to remain competitive, knowledge workers must constantly upgrade their skills. This can be difficult as this often requires more education, time, and money.

Robotics

• Robotic systems continue to evolve, slowly penetrating many areas of our lives, from manufacturing, medicine and remote exploration to entertainment, security and personal assistance.

• Developers in Japan are currently building robots to assist the elderly, while NASA develops the next generation of space explorers, and artists are exploring new avenues of entertainment.

Robots work on an Iranian made Samand car at the Iran Khodro auto plant, west of Tehran, on September 30, 2008. (BEHROUZ MEHRI/AFP/Getty Images)

Surgeons use a robot named da Vinci to aid a hernia operation, at the University Hospital Geneva, in Geneva, Switzerland, Thursday, Nov. 13, 2008. The University Hospitals of Geneva opened the department for robotic surgery in 2008, where between 50 and 80 surgeons from around the world will have the possibility to train with da Vinci each year. (AP Photo/Keystone, Salvatore Di Nolfi)

Vince Martinelli, an account manager at Kiva Systems, right, checks packages on the "pods", or shelves with dummy merchandise as robots run through a demonstration of an inventory check at the company's "demo warehouse" used to show their warehouse automation robots in action. (Josh Reynolds for The Boston Globe)

http://www.youtube.com/watch?v=lWsMdN7HMuA&feature=PlayList&p=16A39FD504A786B1&playnext=1&playnext_from=PL&index=1

Tokyo Fire Department's rescue robot transfers a mock victim onto itself during an anti-terrorism exercise in the response to a radiological dispersal device in Tokyo, on November 7, 2008. Tokyo Metropolitan government conducted the exercise with eleven organizations including Metropolitan Police Department. (TOSHIFUMI KITAMURA/AFP/Getty Images)

Mental commitment robotic baby seals named "Paro" are recharged at robot exhibition Robo Japan 2008 in Yokohama, Friday, Oct. 10, 2008. The 350,000 yen (US$3,480) Paro, a cooing baby harp seal robot fitted with sensors beneath its fur and whiskers, is developed by Japan's Intelligent System Co, to soothe patients in hospitals and nursing homes. (AP Photo/Itsuo Inouye)

NASA's Limbed Excursion Mechanical Utility Robot (LEMUR) is being designed as an inspection/maintenance robot for equipment in space. A scaled-up version of Lemur IIa, could help build large structures in space. The Lemur IIa pictured here is shown on a scale model of a segmented telescope. (NASA/Planetary Robotics Laboratory)

A mock intruder, tangled in a net that was launched by the remote-controlled security robot T-34, lies on the floor while posing beside the robot in Tokyo January 21, 2009. T-34 users can see live images from the robot's camera and control the robot using a mobile phone. The robot, which has sensors that react to body heat and sound, can launch a net against an intruder by remote-control during its surveillance. (REUTERS/Kim Kyung-Hoon)

Toyota Motor Corporation partner robots play instruments at the company's showroom in Tokyo on May 4, 2008. (REUTERS/Toru Hanai)

http://www.youtube.com/watch?v=Xs_vL9g4IYk

A biomimetic underwater robot, named "RoboLobster", designed by Professor Joseph Ayers, is seen, Aug. 17, 2007, in Nahant, Massachusetts. RoboLobster is intended to be used to recognize changes in seawater and to locate and destroy underwater mines. (Robert Spencer)

Matthew W. Fisher with Hanson Robotics makers of conversational, character robots holds up a synthetic face to show how light and easy it is to move and show human expressions in Boston. MA on May 15th, 2007. (David L. Ryan/Boston Globe)

Economic Growth• Economic growth depends on businesses

to produce more goods and services faster, more efficiently, and at a lower cost than the competition. Many agree that continuous economic growth leads to greater prosperity for everyone.

• One of the most common ways of measuring a country’s economic growth is by seeing how it’s GDP changes from year to year

Thinking about starting your own business?

• Economic growth and the living standards of a country’s people depend on the success of a country’s businesses.

• Not only do businesses provide jobs in a community but they account for a lot of the revenue that the gov’t gets from taxes. Businesses in Canada pay between 25 and 40 per cent of their profits in taxes!!!

Easy examples of foreign investment involve oil companies. As we know many troubled areas of the world have a lot of oil. Unfortunately for some of them they do not have the resources to extract the oil so they rely on foreign investment to help them as well as their economy out. Specifically some areas in South America, the Middle East and Russia. One example is Kurdistan (northern Iraq). By having foreign oil companies working in their country it can kick start their economy.

Millennium Development Goals

Eradicating Hunger & Poverty• United Nations has a goal of cutting in half, by

2015, the proportion of the world’s people whose income is less than $1 a day. Can this realistically be done?

• Think about your spending over the past 3 days. List everything you bought and what it cost, then calculate the total. Divide this total by 3 to get your average daily spending. Then add to your list everything you used but did not pay for (shelter, food, clothing, telephone, and computer). Estimate their costs and recalculate your average daily spending. Could you live on $1 a day?

The Greenhouse Effect• The burning of fossil fuels – coal, oil, and natural

gas – releases carbon dioxide and other greenhouse gases that were once trapped in these fuels.

• These gases form a barrier in the atmosphere that absorbs heat from the earth’s surface and radiates it back to Earth instead of allowing it to pass into space. Many scientists believe this process contributes to global climate change – small but steady changes in average temperatures around the world.

http://earthguide.ucsd.edu/earthguide/diagrams/greenhouse/

What does this all mean?

• Many scientists speculate that greenhouse gases already in our atmosphere will cause global temperatures to increase by and average of 0.5 degrees Celsius every year until 2025.

• This warming increases the risk of drought and evaporation of water from lakes and rivers.

• Scientists still believe that actions we take now can slow the rate after 2025.

• If nothing is done the poorest people in the world will suffer the most as climate change affects animals, plants, and water supplies.

• Hardest hit areas will be the Arctic, sub-Saharan Africa, small islands, and large deltas in Asia,

Norway: The Norwegian gov’t has made a seed vault, located far above the Arctic circle on one of Norway’s most northerly islands. The project is to save Earth’s diverse seed sources in the event of a global catastrophe or plant epidemic. It will include seeds from both the developed and developing countries around the world.

Bolivia: the Bolivian gov’t is concerned about that speed at which glaciers in the Tuni Condoriri mountains are melting. These glaciers supply 80% of the water for residents of La Paz, the country’s capital. What would loss of water mean to the people of this city?

Norway