Unit 21 - Globalization

Worldwide: GDP

(Gross Domestic Product) per capita

APEC

Asian Pacific Economic Cooperation The primary economic forum supporting sustainable economic growth and prosperity in the Asia-Pacific Region, which stretches from East Asia and Australasia

What is the future of globalization?

The future is going to change rapidly...To be successful in the future, we need to be ready to adapt

developing nation

includes countries that are less industrialized and have lower per capita income levels. Developing nations can be divided further into moderately developed or less developed countries.

What are some positive effects of globalization?

Increased trade gives people more goods & services Companies lower costs & prices by buying materials & hiring workers from other countries Creates jobs & raises standard of living Globalization increases access to medicine & technology

Examples of developing nations

India, Malawi, Honduras, the Philippines, and Rwanda

MNCs

Multinational corporations (MNCs) operate in multiple countries in order to gain raw materials, assemble products, & sell throughout the world a corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management. An enterprise operating in several countries but managed from one (home) country. Generally, any company or group that derives a quarter of its revenue from operations outside of its home country is considered a multinational corporation.

OPEC

Organization Of Petroleum Exporting Countries - OPEC An organization consisting of the world's major oil-exporting nations. OPEC is a cartel of oil producing nations

SGR

Sustainable Growth Rate - SGR The sustainable growth rate (SGR) is the maximum growth rate that a firm can sustain without having to increase financial leverage.

What is sustainable growth?

Sustainable economic growth means a rate of growth which can be maintained without creating other significant economic problems, especially for future generations.

When/how/why was the UN established?

The UN was officially established on 24 October 1945 (after collapse of League of Nations) at the end of World War II to protect future generations from the scourge of war. It replaced the League of Nations an international organization conceived in similar circumstances and founded after the First World War at the Paris Peace Conference in 1919 under the Treaty of Versailles. It was however powerless since the United States was never a member. As a result, it was dissolved in 1946 making way for newly formed United Nations.

World Bank

The World Bank Group has set two goals for the world to achieve by 2030: End extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3% Promote shared prosperity by fostering the income growth of the bottom 40% for every country The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. The World Bank Group comprises five institutions managed by their member countries. Established in 1944, the World Bank Group is headquartered in Washington, D.C. We have more than 10,000 employees in more than 120 offices worldwide.

7. Why is sustainable growth important?

There is clearly a trade-off between rapid economic growth today, and growth in the future. Rapid growth today may exhaust resources and create environmental problems for future generations, including the depletion of oil and fish stocks, and global warming.

what was done?

To do so, a framework for international commerce and finance guided by international institutions (e.g., WTO, IMF, & World Bank) was created.

NAFTA

To increase international trade opportunities, the US has joined several organizations that enforce free trade agreements. The countries of NAFTA alone trade more than $2B worth of goods and services with each other every day.

What is the impact of globalization on the modern world?

Today, globalization is most associated with international trade & multinational corporations... ...advances in technology & communication... ...& increase in cultural diffusion

How many members in UN?

It is currently made up of 193 Member States.

IMF

The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Created in 1945, the IMF is governed by and accountable to the 188 countries that make up its near-global membership.

United Nations

The United Nations is an international organization founded in 1945.

Examples of developed nations

The United States of America, Canada, Switzerland, Belgium, and France

Reverse Globalization

The world economy is a complex environment. One minute companies are rushing to globalise their businesses in order to take advantage of manufacturing goods in low cost regions of the world. The next minute companies are reducing their global manufacturing footprint due to the economic downturn in various markets around the world. "

Trade Organizations

WTO NAFTA APEC CAFTA-DR

8/9/95

When Netscape went public.

11/9/89

When the Walls came down & the Windows went up.

OPEC mission statement

"To coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry."

The process of globalization has been facilitated by:

1. advances in technology which have reduced the cost of trade, 2. and trade negotiations (e.g., GATT) which have led to a series of agreements to reduce or remove restrictions to free trade

Biggest transnational companies

GE - $401B foreign assets BP Toyota Exxon Mobil - Largest foreign sales $322B Volkswagen Wal-mart - ranked 30th - had most foreign employees 650K

Globalization

is an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing INTERDEPENDENCE, INTEGRATION and INTERACTION between people and companies in disparate locations. Globalization is the increased flow of trade, people, technology, culture, & ideas among countries

6. What is the difference between a developing and a developed nation?

1.A developed country is a country that has a high level of industrialization and per capita income while a developing country is a country that is still in the early stages of industrial development and has a low per capita income. 2.The citizens of a developed country enjoy a free, healthy, and affluent existence while citizens of developing countries do not. 3.Developed countries are also known as industrialized, advanced, and first-world countries while developing countries are also known as underdeveloped, least developed, and third-world countries. 4.The infant mortality, birth, and death rates of developing countries are also higher compared to that of developed countries.

developed nation

A developed country is one that has a high level of industrial development, bases its economy on technology and manufacturing instead of agriculture. The factors of production such as human and natural resources are fully utilized resulting in an increase in production and consumption which leads to a high level of per capita income. A country with a high Human Development Index (HDI) rating is considered a developed country. It not only measures the economic development and GDP of a country but also its education and life expectancy. A developed country's citizens enjoy a free and healthy existence. Countries that are more industrialized and have higher per capita income levels. To be considered a developed nation, a country generally has a per capita income around or above $12,000. Also, most developed countries have an average per capita income of approximately $38,000. In addition to having high per capita income and stable population growth rates, developed nations are also characterized by their use of resources. In developed countries, people consume large amounts of natural resources per person and are estimated to consume almost 88% of the world's resources.

What are some effects of multinational businesses?

All of these companies have established manufacturing plants, offices, or stores in many countries. For their manufacturing plants, they select spots where the raw materials or labor are cheapest. This enables them to produce components of their products on different continents. They ship the various components to another location to be assembled. This level of economic integration allows such companies to view the whole world as the market for their goods. Goods or services are distributed throughout the world as if there were no national boundaries.

what 3 things - venn diagram?

Business Technology Culture

CAFTA-DR

Central American Free Trade Agreement - Dominican Republic The Dominican Republic-Central America FTA (CAFTA-DR) is the first free trade agreement between the United States and a group of smaller developing economies: our Central American neighbors Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, as well as the Dominican Republic. The CAFTA-DR promotes stronger trade and investment ties, prosperity, and stability throughout the region and along our Southern border.

How long has globalization been around?

Globalization has been around for centuries but has been rapidly increasing since 1990 One of the biggest changes of the mid-20th century was the rapid increase in globalization

GATT

General Agreement on Tariffs and Trade General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." It was negotiated during the United Nations Conference on Trade and Employment

What drove globalization?

Globalization has been driven largely by the expansion of MULTINATIONAL CORPORATIONS based in the US and Europe and facilitated by worldwide diffusion of new developments in science, technology, the production of goods. Accompanying this has been the development & growth of international transport & communications. In addition, the diffusion of WESTERN CULTURE through MASS MEDIA has saturated the globe.

What has led to increased globalization?

Globalization has increased due to lowered trade barriers, new trade organizations, & increased communication

What are some negative effects of globalization?

Globalization increases the gap between the developed nations & developing nations Outsourcing leads to low-paying jobs in developing nations Globalization increases spread of Western culture & resentment among non-Western nations Globalization increases environmental pollution & the depletion of natural resources

Can you name 1 of the top 10 multinational corporations in the world? (Hint: only 1 is shown in this image)

Google Microsoft Marriott Fedex Express

4. What is the purpose of the United Nations?

Maintain international peace and security Promote sustainable development Protect human rights Uphold international law Deliver humanitarian aid The United Nations settles trade disputes among member nations The purposes of the United Nations, as set forth in the Charter, are to maintain international peace and security; to develop friendly relations among nations; to cooperate in solving international economic, social, cultural and humanitarian problems and in promoting respect for human rights and fundamental freedoms; and to be a centre for harmonizing the actions of nations in attaining these ends.

5. What is the purpose of the World Trade Organization

The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. The goal is to help producers of goods and services, exporters, and importers conduct their business.

WTO

The World Trade Organization (WTO) promotes free trade The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.

Intent / goals

The intent is to increase prosperity & interdependence thereby decreasing the chance for future conflict and war.

Other Contributing Factors

Work Flow Software Open-Sourcing Outsourcing Offshoring Supply-Chaining

2. What is the purpose of OPEC?

founded in 1960 to coordinate the petroleum policies of its members, and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.