Unit Three Overview:

Explain a centrally planned economy and free market economy. Why is a free market economy used in most countries?

- Centrally Planned Economic System: A system under which government planners decide what goods to produce, and how many. - Free Market Economy: A system in which the government does not intervene (or intervenes only minimally) in the production and control in goods and services. Most countries use free market economies due to the fact of competition, prices, and the way the economy thrives off of personal wealth and success.

List four key events that lead to economic globalization as we know it today:

- Establishment of a new international monetary system. - The creation of the World Bank and the International Monetary Fund. - The expansion of the free market economy into former Soviet-bloc countries at the end of the Cold War. -The impact of new technologies on the movement of money around the world

Describe the three trade agreements and in what order they were created in:

- The General Agreement on Tariffs and Trade(GATT)was established in 1947 as an agency of the UN. It began with a membership of 23 countries and operated according to four principles: •Conducting trade in a non-discriminatory manner.No member country could be requiring any country that applied for membership to present a list of tariffs and other trade restrictions imposed on member countries given special trading advantages or deny equal treatment to another member. •Treating imported goods from a member country in the same manner as similar domestic goods. For example, the imported goods could not be taxed at a higher rate. •Protecting domestic industries (where this applied) through tariffs and not through measures such as import quotas or fees. FTA in 1989- Allowed free trade between Canada and the United States NAFTA in 1994- Allowed free trade between Canada, the United States, and Mexico

Tariff

A tax imposed on imports to increase their price and thus reduce competition with domestic products

What does NEP stand for and what were the Goals?

1980, Prime Minister PierreTrudeau's government created the National Energy Policy (NEP)with the aim of lowering energy costs across Canada. The idea behind the NEP was to protect Canadians from paying global market prices for oil and gas because the resource was readily available in Alberta.The government made oil companies in Alberta lower oil prices throughout Canada. Oil companies that did not want to comply with the new regulations closed their Canadian operations, and many jobs were lost. Although a weak world economy was affecting the entire country, many Albertans blamed the downturn in Alberta's economy on the NEP.The goal of the NEP was to contribute to sustainable prosperity by allowing all Canadians to enjoy low-cost oil. It didn't work, however, because the strategy discouraged business in Canada. The oil companies were not prepared to lose profit, so they just focused on oil ventures outside the country. Successful strategies for achieving sustainable prosperity can be hard to find.

Mutual Fund

A company that combines its clients' money and invests it in a collection of stocks, bonds, and other securities.

Comparative Advantage

A country's ability to produce a product or civil service with comparatively fewer resources than another country.

Cold War

A global economic and political competition, from 1946 to 1989, that divided the communist countries, led by the Soviet Union, against the Western capitalist democracies, led by the United States.

International Monetary System

A global network of institutions established by the Bretton Woods Agreement to promote international trade and the regulation of currency (money) among Western countries.

Genuine Progress Indicator (GPI)

A measure of sustainable prosperity that takes into account the value of non-economic positive factors such as volunteering and education, and negative factors such as pollution and crime.

Recession

A period of reduced economic activity lasting longer than two business quarters (6 months)

Communism

A planned economic system in which government owns all means of production and all people work for government owned and government run enterprises.

Totalitarianism

A political system under which individuals are totally subordinate to the decisions of the state.

Developing countries

A poor country that is seeking to become more advanced economically and socially.

Gold Standard

A provision of the Bretton Woods Agreement that all printed money, such as a paper dollar, would be convertible to gold and could be cashed at any time for that gold.

Inflation

A situation in which the amount of currency in circulation increases yet each unit of currency buys less.

Intermodal Transportation

A system in which several types of transportation are used to move freight, especially when the starting point and destination are far apart.

Free Market Economy

A system in which the government does not intervene (or intervenes only minimally) in the production and control in goods and services.

Centrally Planned Economic System

A system under which government planners decide what goods to produce, and how many.

Sustainable

Able to be maintained at a certain rate or level

World Bank

An agency of the United Nations that in practice is independent and controlled by its 184 member countries, which provides loans to less developed countries that are in financial difficulty.

Common Market

An agreement between of among countries that includes the free trade of goods and services and the free movement of capital and labour within the trading bloc.

Bretton Woods Agreement

An agreement forged after the Second World War in Bretton Woods, New Hampshire, by 44 countries, and procedures for the postwar global economy.

Capitalism

An economic system for increasing individual wealth, requiring a relatively free market, open competition, the profit motive, and at least some private ownership of means of production.

CIDA

Canadian International Development Agency: Government agency responsible for administering foreign aid programs in less developed countries.

Subsidiaries

Companies controlled by a parent company.

Economic Nationalism

Concern about the impact of foreign investment in a country's economic independence and identity.

Floating Exchange Rates

Currency rates that are not fixed by the government but instead find their own value on the foreign exchange market.

What are some recent developments in telecommunications and how have these influenced globalization?

Developments in telecommunications over the past 25 years have revolutionized the business world. For example: • The use of ATM machines and Internet banking has dramatically reduced costs for the banking industry. • Computers allow businesses to process, share, and store huge amounts of information on a disk or a computer chip. • Stocks, bonds, and other securities can be traded around the clock and around the world as a result of innovations in telecommunications. • The Internet, fax machines, cellphones, and satellites allow people to communicate instantly with their employers and customers from almost anywhere. • When people in Canada want to order certain products or get advice about a problem with an electronic device, they can phone ,email, or fax a call centre that might be located in a foreign country.

Electronic Herd

Due to the fact that in the 1990s access to the internet became increasingly more popular, many people could access stocks with the click of a button. This created a herd like effect where profitable investments attracted more money, while funds that lost money lost even more investors.

What does the term electronic herd mean, and what has it allowed?

Due to the fact that in the 1990s access to the internet became increasingly more popular, many people could access stocks with the click of a button. This created a herd like effect where profitable investments attracted more money, while funds that lost money lost even more investors. It has allowed people to be more aware through the internet.

What is the reason behind a centrally planned economy?

During the Cold War, communist countries—under the leadership of the Soviet Union—operated under a centrally planned economic system. This means that government planners decided what goods to produce, and how much. It helps sustain the economy.

Sustainable development

Economic development that is conducted without depletion of natural resources.

Describe the European Union and its goals/ objectives and countries involved:

European Parliament and the Council of the European Union share the responsibility for passing laws and making policy decisions.Every five years, the people in EU countries elect their Parliament.The Council is made up of ministers from the national governments of all the EU countries. The number of votes allotted to each country generally reflects the size of its population. The responsibility for the EU's common foreign and security policies and for its strategy on some issues of justice and freedom mainly lies with the Council. Since there are no restrictions on the movement of people, capital, goods ,and services across national borders, the common market has facilitated trade among EU countries. Trade among these countries accounts for 33 per cent of all EU trade and is essential to all member countries' economies. More than 50 per cent of each country's trade occurs within the EU; in some countries, this figure is as high as 80 per cent.The EU is also an important player in world trade. It accounts for20 per cent of global imports and exports, even though it comprises only 7 per cent of the world's population.

Subsidy

Financial help given by the government to help support an industry.

How are fossil fuel resources being affected by globalization?

Fossil fuels such as oil and gas provide energy. Their energy fuels much of the world's transportation. Global transportation has increased in recent years because economic globalization has made it easier to trade goods internationally. Think about all the food from around the world you can buy in your local grocery store. Most of these products are transported to the store from around the world by ships, airplanes, trains, and trucks that run on fossil fuels.As globalization continues to expand trade, the transportation of goods will require more consumption of fossil fuels. In economic terms, this is called "demand." The demand for fossil fuels is constantly growing. More developed countries use fossil fuels to maintain the status quo for a growing population. Less developed countries increase their use of fossil fuels to become more competitive in global markets.

FTA

Free Trade Agreement. Free trade is a system in which the trade of goods and services between or within countries flows unhindered by government-imposed restrictions

GATT

General Agreement on Tariffs and Trade; international trade organization that encourages free trade by lowering tariffs and other trade restrictions

Crown Corporation

Government-owned companies (in Canada).

Describe the gold standard, floating & fixed exchange rates, and how they are all connected:

In a fixed exchange rate, the value of a country's currency is set by the government. Each of the countries also agreed that the fixed exchange rate for its currency would be based on the gold standard. This meant that all printed money, such as a paper dollar, would be convertible to gold and could be cashed in at any time for that gold. Thus, any money printed by the countries' governments had to be backed by gold reserves. By 1976, all the world's major currencies had floating exchange rates. This means that the exchange rate of a country's currency was no longer fixed by government, but found its own value on the foreign exchange market. Value of the dollar lies in the wealth of the country and in what the dollar can buy here and in other parts of the world.

IMF

International Monetary Fund: International agency that works with the world bank to bring stability to international monetary affairs and to help expand world trade.

International Monetary Fund

International agency that works with the world bank to bring stability to international monetary affairs and to help expand world trade.

Free trade

International trade left to its natural course without tariffs, quotas, or other restrictions.

MERCOSUR

Is an economic and political bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Created during a period when longtime rivals Argentina and Brazil were seeking to improve relations, the bloc saw some early successes, including a tenfold increase in trade within the group in the 1990s.

Stewardship

Is the obligation to maintain resources in a sustainable manner. People who believe in stewardship feel a responsibility to protect and tend the earth to keep it healthy for future generations.

Explain John Maynard Keynes & Friedrich Hayek's point of view on how an economy should work:

John Maynard Keynes, a British economist, developed theories that called for a large role for government in the economy. Keynes argued that falling wages resulted in decreased spending. He believed that direct government intervention in the economy was necessary to increase total spending and prevent—or lift the economy out of—recession. Spend when you are in a recession, and save when you are in a time of prosperity. Friedrich Hayek believed that when governments try to plan or control societies, those societies are doomed to failure. He argued that human societies are simply too complex to be planned, and can never match the natural evolutionary wisdom that comes from a free society. Hayek's theories were based on his analysis of totalitarian regimes such as the Soviet Union and Nazi Germany, where governments had enormous control over every aspect of society, including the economy.

Agribusiness

Large-scale agricultural businesses, such as factory farms and feedlots.

What is the impact freer trade has had on Canada?

Many American industries can easily swamp Canada's smaller market with their products or services, forcing local industries to adapt and compete or face closure. On the other hand, smaller Canadian industries can adapt and grow by selling their goods or services in the huge US market.

International Money Markets

Markets in which funds loaned for a short time to business or governments are bought and sold, for example, short-term bonds and certificates of deposit.

NAFTA

North American Free Trade Agreement; allows open trade with US, Mexico, and Canada.

Describe South American Trading Blocs, what are the countries and objectives for each one?

One of the major trade organizations in South America is Mercado Común del Sur (MERCOSUR)—in English, Common Market of theSouth. This organization includes Argentina, Brazil, Paraguay, andUruguay. Other South American countries associated with it are Chile, Bolivia, Colombia, Peru, Ecuador, and Venezuela. In May 2006,Venezuela signed an agreement to become a full member of the organization by 2012.The main objective of this organization is to improve its member countries' economies by opening markets, promoting economic development, and conserving the environment. In order to become a member of MERCOSUR, a country must also be committed to democracy and human rights The other major trade organization in South America is Comunidad Andina de Naciones (CAN)—in English, Andean Community of Nations. This trading bloc, established in 1969, consists of Bolivia, Colombia, Ecuador, and Peru. The combined population of the member countries is about 90 million. In 1999, MERCOSUR and CANbegan negotiating a merger, with the intention of creating a South American free trade area. This trading bloc will be called Comunidad Sudamericana de Naciones (CSN)—inEnglish, South American Community of Nations. CSN plans to eliminate all tariffs by 2019. As well, the leaders of CSN plan to model the new community after the European Union—in other words, they hope their countries will eventually share a common currency, parliament, and passport.

What are the objectives of sustainable development?

One way is to rely on their citizens to help them achieve sustain-ability. For example, many cities are combating waste disposal problems by encouraging citizens to generate less waste. They have organized extensive recycling programs that collect recyclable materials such as paper and plastic from densely populated neighbourhoods and transport them to central processing plants. Do you recycle at home and at school?Another approach is to encourage sustainability through globalization by tying international trade agreements to environmental protection. The results of such a link can be seen in Mexico City. As part of the North American Free Trade Agreement (NAFTA), Mexico is obligated to bring its environmental protection standards in line with those of Canada and the United States.Since the mid-1990s, new regulations have helped improve the air quality in Mexico City, where motor vehicles are among the biggest causes of air pollution. There are as many as four million cars in the city, many of which are old and less environmentally friendly than newer models. In 2002, a major effort to improve transit in the city began. The environmental secretary for Mexico City and the WorldResources Institute created the Centre for Sustainable Transport inMexico City to develop a plan for public transportation based on clean, efficient technology and useful service. Global support for the Centre for Sustainable Transport has provided information, assistance, and finances to improve the situation.

What are negative and positive effects or urbanization?

Only 20 per cent of the population in the world's more developed regions will not be urbanized by 2015. Few natural resources are available in cities. Where do food, paper, oil, and fresh water for urban dwellers come from? Most of the natural resources consumed in more developed regions are imported from the rural areas of less developed regions. How much of the population in less developed regions is expected to be rural in 2015? As people move to the city, urban areas grow and urban sprawl results. What does that suggest about the availability of rural land on which to grow food, for example? Some theorists argue that more developed regions have much to gain by keeping less developed regions as rural as possible. The trend toward urbanization raises some important questions related to globalization and the environment. What are the economic opportunities of urbanization? What are the drawbacks? What are the effects on the land and the environment? Suppose that the trends continue. In what ways would a totally urbanized world have to change its consumption of resources?

Deregulation

Opening an industry to more competition by removing government regulations.

OECD

Organization for Economic Cooperation and Development: International organization that works to meet the challenges of globalization, helping governments achieve sustainable economic growth while maintaining financial stability.

What is outsourcing? What are the pros and cons?

Outsourcing occurs when one company hires another company to fulfill certain tasks in production. Like unions in other more developed countries, unions in Canada claim that, because of economic globalization, outsourcing is resulting in significant job losses in our country. But supporters of economic globalization disagree. They argue that just as many jobs are created in Canada as a result of trade liberalization as are lost to outsourcing. Outsourcing has become a controversial issue in Canada and othermore developed countries. When a local plant or industry closes downbecause the company that owns it has decided to move its operationsoverseas, Canadians find themselves out of work. If they are unable to find other employment, they may have to collect employment insurance or social assistance. They will also likely experience a drop intheir standard of living for at least a short period of time. Outsourcing has become very common in the communications and high-tech fields. For example, call centres can be established atlow cost in less developed countries through the use of toll-free tele-phone numbers and high-speed computers. Outsourcing has alsoaffected many manufacturing jobs, such as those in the automotiveindustry.

Describe Canada's conservation plans:

Promoting Equity Improving Our Quality of Life and Well-being Sustaining Our Natural Resources Sustainable Jobs,Communities, andIndustries Protecting the Health ofCanadians and of Ecosystems Meeting Our International Obligations

Quotas

Proportional shares, such as those paid by member countries of the international monetary fund.

"Reclaim the land"

Reclamation is the process of attempting to return previously used land from oil sands mining or tailings storage back to its original, natural state.

Oil sands

Slow-flowing, viscous deposits of bitumen mixed with sand, water, and clay. ALBERTA

Why was OPEC created and how are oil prices influenced by them?

Some resource development agreements are negotiated not between corporations and governments, but by the governments of many countries with common interests. For example, the Organization ofPetroleum Exporting Countries, or OPEC, was formed in 1960 to regulate oil production and markets. Today, the 11 member countries control much of the world's oil. By agreeing about levels of oil production, OPEC countries control the supply for the world wide demand of oil. This often causes prices to increase.

Containers

Standardized units for carrying freight that can be directly transferred to truck trailers or rail cars.

Equalization Payments

Tax money collected from all provinces by the federal government and then dispensed to distribute wealth more equally throughout Canada.

Explain the type of economic and monetary system the Bretton Woods Agreement has created:

The Bretton Woods Agreement. This agreement established a system of rules, institutions, and procedures for the postwar global economy. The Bretton Woods Agreement effectively established a new international monetary system—a global network of institutions to promote international trade and the regulation of currency (money) among Western countries. It promotes Free trade, and interconnectedness between countries.

What are the CIDA priorities, and how do they contribute to an individuals sense of citizenship and identity?

The Canadian InternationalDevelopment Agency (CIDA)is the government agency responsible for administering foreign aid programs in less developed countries.CIDA's mandate is "to support sustainable development in developing countries in order to reduce poverty and contribute to a more secure, equitable, and prosperous world."If a country experiences a natural disaster such as an earthquake or a hurricane, CIDA contributes short-term humanitarian aid in the form of money, supplies, and human resources. To support long-term sustainable development, CIDA sponsors medical personnel, farmers, teachers, technicians, and other advisers to help people in less developed countries find lasting solutions to their problems. One of CIDA's priorities is to promote human rights, democracy, and good governance in less developed countries. They contribute to Canadians and their sense of responsibility to help other countries.

EU

The European Union, the world's largest market, which works to develop common foreign and security policies and to address other issues such as citizens' rights, job creation, regional development, and environmental protection.

Explain how the Genuine Progress Indicator Works?

The Genuine ProgressIndicator was first developed in the mid-1990s by an American non-profit organization called Redefining Progress. This organization developed a way to measure sustainable prosperity that took into account more than just the economic value of trade. It also considered the value of positive factors, such as volunteering and education, and negative factors, such as pollution and crime. The GPI has been adapted and applied to different countries and regions around the world, including parts of Canada. The PembinaInstitute, a non-profit environmental organization in Alberta, uses 51social, economic, and environmental factors to measure Alberta's GPI, a measure that has steadily declined even as Albe ta's economic wealth has risen. However, not all regions are using the same factors to determine GPI. For example, in 2006, GPI Atlantic Canada (a non-profit organization) measured 22 factors.

G8

The Group of Eight (G8) is an informal group of the eight major industrial democracies. It was previously known as the G7 until Russia became a full participant in the association in 1998.

IBRD

The International Bank for Reconstruction and Development is an institution of the World bank. The IBRD helps low- and middle-income countries.

IDA

The International Development Association is an institution of the World bank. The IDA focuses on the world's poorest countries.

Describe how the IMF was created and why?

The International Monetary Fund (IMF) came out of the Bretton Woods Agreement. Its purpose was to work together with the World Bank to bring stability to international monetary affairs and to help expand world trade. The IMF provides short term loans. The IMF is funded through quotas.

What is the role of the IMF? Describe their 3 goals:

The International Monetary Fund (IMF) is the other large agency responsible for regulating the economies of the world's countries. InChapter 10, you explored the IMF's role in monitoring exchange rates and providing short-term financial assistance. Similar to the World Bank, there are different perspectives on the policies of the IMF. Supporters argue that this organization of 184countries works to "foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty." It tries to achieve these goals in three ways: •surveillance: The IMF assesses each country's economic situation annually and discusses it with the country's authorities. The IMF's findings are published twice a year in World Economic OutlookandGlobal Financial Stability Report. •technical assistance and training: The IMF provides this service, generally offered free of charge, in the areas of banking and financial system supervision and regulation. •financial assistance: Like the World Bank, the IMF offers funds and loans to member countries to address debt problems and to help reduce poverty.

Mackenzie River Pipeline

The Mackenzie Valley Pipeline also called the Mackenzie River Pipeline, was a proposed project to transport natural gas from the Beaufort Sea through Canada's Northwest Territories to tie into gas pipelines in northern Alberta

What is the essential purpose of the World Bank? How effective has it been?

The World Bank provides loans to less developed countries that are in financial difficulty. However, in order to get these loans, the countries are usually required to meet certain political and economic conditions. Some of these conditions might include reducing corruption, increasing democracy, and adopting Western-style free market conditions. A common requirement, for example, is to reduce government spending on social programs. This practice has been criticized by opponents of globalization, who argue that free market reform policies are often harmful for the receiving countries. It has had many countries adopt trade liberalization, and this has damaged many economies. Its effectiveness is relative.

What is the WTO do and how does it relate to the expansion of economic globalization?

The World Trade Organization (WTO)works to improve trade relations among the countries of the world, especially by removing tariffs and other barriers to trade. It is the only international organization dealing with the global rules of trade among countries. Its main purpose is to settle trade disputes among governments and organize trade negotiations and meetings. It relates to economic globalization in a sense that it allows for countries to trade more effectively and be interconnected.

Euro

The basic monetary unit of most members of the European Union (introduced in 1999)

Deforestation

The destruction of forests by clearing or burning as a result of economic development, such as building roads or conversion to crop land, or through changes in Earth's vegetation due to global warming.

Urbainization

The growth or towns and cities as people migrate from rural areas in search of work and other opportunities.

Outsourcing

The hiring of one company b another to fulfill certain tasks in production.

Outsourcing

The hiring of one company by another to fulfill certain tasks in production.

Human Capital

The knowledge, skills, and talents that workers have.

Trade Liberalization

The process of reducing barriers to trade.

Privitization

The sale of government-owned industries and services to private business.

Nationalize

The taking over of ownership by a government from private business.

Gross domestic product

The total value of goods and services produced in a country in one calendar year.

Fixed Exchange Rate

The value of a country's currency as set by its government.

What are the differences and similarities between the IMF and the World Bank?

They both came out of the Bretton Woods agreement, and both provide countries with financial assistance.

What is trade liberalization and crown corporations? How did those effect the deregulation and privatization and foreign investment in Canada?

Trade liberalization describes the process of reducing barriers to trade. This can include privatizing Crown corporations(government-owned companies), encouraging foreign investment, and outsourcing jobs. Canada, one impact of trade liberalization has been the deregulation of Crown corporations and the privatization of these industries. Deregulation involves opening an industry to more competition by removing government regulations. This can be done in different ways. One method of deregulation is privatization—the sale of government-owned industries and services to private businesses. Another result of trade liberalization in Canada is foreign investment.Historically, the Canadian government has been concerned about theimpact of foreign investment on the country's economic independenceand identity. This concern is called economic nationalism.

EEZ

Under the law of the sea, an Exclusive Economic Zone (EEZ) is a sea zone over which a state has special rights over the exploration and use of marine resources.

Explain how wealth is distributed in Canada's regions?

Wealth is not evenly spread throughout Canada's regions andprovinces. People tend to move where they think they might findwork, so migration tends to occur from less developed provinces tomore developed provinces. For instance, Québec lost almost 300 000 people to other provinces over the last 20 years, while British Columbia and Alberta had an increase in population. To distribute wealth more equally throughout Canada, tax money from all provinces is collected by the federal government and then dispensed through equalization payments. The amount of equalization payments that a province receives depends upon a formula that takes into account its financial well-being. Alberta, for example, has not received transfer payments since the 1960s. The transfer of funds to less wealthy provinces is designed to ensure that all Canadians have access to the same level of services such as education and health.

prosperity

Wealth, success

What is the role of the world bank and what institutions is it made up of?

World Bank provides financial assistance to less developed countries to reduce poverty and improve living standards. Financial assistance can take the form of interest-free loans, low-interest loans, or grants. Usually, the funds are directed toward improving a country's education or health systems or its infrastructure.Supporters of the World Bank argue that without these funds, citizens of less developed countries would experience much greater hardship.The World Bank is actually made up of two institutions: theInternational Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD help slow- and middle-income countries, while the IDA focuses on the world's poorest countries. The World Bank claims to have accomplished many things. •The proportion of people living in poverty in less developed countries fell by half—from 40 per cent to 21 per cent. •Life expectancy in less developed countries has increased by 20 years. •The number of children dying before the age of five has been reduced by 50 per cent. •Adult illiteracy has been halved to 25 per cent

WTO

World trade organization: An international organization founded in 1995 that works to improve trade relations among the world's countries, especially by removing tariffs and other barriers to trade.

Developed countries

a wealthy country with an advanced economy. Developed countries have many industries and provide a comfortable way of life for most of their people.

What things are wrong with the World Bank, how can it improve itself?

e World Bank recently examined the work that it does—and the impact of that work. The investigation was conducted by World Bank'sIndependent Evaluation Group (IEG), and the findings were published in a 2006 report entitled "Assessing World Bank Support forTrade, 1987-2004." The report concluded that the$38 billion the World Bank had spent financing trade programs since 1986 had helped to open markets but had not been as effective in increasing exports and growth and reducing poverty.According to Ajay Chhibber, director of the IEG, less developed countries need some protection from the adverse effects of trade liberalization (seepage 261 for an explanation of this term). Since free market reforms in less developed countries some-times result in inflation or higher interest rates, these are forms need to be accompanied by investment in the economy and institution-building measures.Benefits for workers and investment in health care and education are examples of institution-building measures.

What is the difference between stewardship and spirituality?

people assess their position on sustainability, many consider their spiritual perspective in addition to political, ideological, or economic perspectives. Spirituality can have a profound effect on people's values, morals, and ways of life. Many experiences of spirituality are based on life in nature. Spiritual values often affect people's perspectives on the environment and the role of prosperity in a globalizing world. These, in turn, are reflected in reactions to and perspectives on land and resource development. People who believe in stewardship feel a responsibility to protect and tend the earth to keep it healthy for future generations. The relationship between spirituality and stewardship often compels individuals and groups to protect the land. When some people believe in stewardship or feel a spiritualconnection to the land and others do not, the differences can createconflict.

Describe the obstacles that the construction of the Mackenzie River pipe line had to overcome in order to be built:

the late 1970s, the discovery of huge reserves of oil and gas in theFar North led to the proposal to build an oil pipeline along the Mackenzie River. Before the pipeline could be built, Chief JusticeThomas Berger was commissioned to investigate the impact of the development on the local people. In May 1977, he recommended a 10-year freeze on the project in order to settle Aboriginal land claims before construction began. Berger recognized that the MackenzieValley was not only a construction site, but also home to many people who cared deeply about the land. Multiple perspectives on the issues needed to be addressed before a fair agreement could be reached. Construction on the pipeline was postponed indefinitely as a result of Berger's report. Then, in 2002, another proposal for a pipeline down the Mackenzie River was introduced. In the time that had passed, many land claims had been settled. Gas companies negotiated a resource development agreement with Aboriginal groups to give local Aboriginal people up to one-third ownership of the pipeline. Other resource development agreements committed to job creation for local people. The government also promised to direct $425 million of the money that will be generated in revenue from the development project toward funding of Aboriginal social programs.

How have transnationals impacted underdeveloped countries? Positively and negatively?

• passing on expertise in their field and increasing a country's humancapital—the knowledge, skills, and talents that workers have. SomeTNCs provide training and education for employees, creating a more highly skilled labour force. These skills, including management and entrepreneurial skills, may be transferred to other people and businesses in the country. • paying taxes to the host country's government. Another opinion holds that TNCs can do harm in less developed countries by • employing managers from other countries but employing manual labour from local communities and paying them low wages. This does not lead to the transfer of management and entrepreneurial skills within the country. • using capital-intensive production, in which most work is done by machinery, instead of using labour-intensive production, in which most work is done by hand. Since many less developed countries have a large labour force and high levels of unemployment, critics of TNCs argue that this approach does not reduce poverty or encourage development. • using their influence over a country's government to gain subsidies and grants or exemptions from taxes or environmental laws. • ignoring human rights issues, for example, by not allowing their workers to join trade unions or by buying materials from factories where child workers are exploited. • Bringing wealth into a country through employment and investment. The majority of international investment in less developed countries comes from TNCs and private sources. • providing jobs, either directly in the subsidiary or indirectly through the growth of local businesses that provide goods and services to newly employed workers, who can now afford them