Ch 01

Globalization
 Globalization

Globalization is the word used to describe the growing interdependence of the world's
economies, cultures, and populations, brought about by cross-border trade in goods and
services, technology, and flows of investment, people, and information.
 Cultural globalization
 Social globalization
 Economic globalization
 Political globalization
https://www.theglobaleconomy.com/
rankings/kof_overall_glob/#Pakistan
https://www.theglobaleconomy.com/Pakistan/Research_and_development/
Globalization of Markets

 Benefits
 REDUCES MARKETING COSTS
 CREATES NEW MARKET OPPORTUNITIES
 LEVELS UNEVEN INCOME STREAMS

 Challenges
 LOCAL BUYERS' NEEDS
 GLOBAL SUSTAINABILITY
Benefits of Globalization of Production

 ACCESS LOWER-COST WORKERS

 ACCESS TECHNICAL EXPERTISE
 ACCESS PRODUCTION INPUTS
 Forces Driving Globalization of markets
 Falling Barriers to Trade and Investment

 General Agreement on Tariffs and Trade (GA TT}

• Political leaders of 23 nations (12 developed and 11 developing economies) made history
• After four decades, world merchandise trade had grown 20 times larger, and average tariffs had fallen from 40 percent to
5 percent.
• A major flaw of the original GATT was that it lacked the power to enforce world trade rules.

 World Trade Organization (WTO)

 Because of its ability to penalize offending nations, the WTO's dispute settlement system truly is the spine of the global
trading system.
 Developed vs developing countries trade disputes
 Forces Driving Globalization of markets
 Falling Barriers to Trade and Investment
• The World Bank
• The International Monetary Fund (IMF)

o REGIONAL TRADE AGREEMENTS

 North American Free Trade Agreement (NAFTA) Canada, Mexico, and the United States into a free-trade bloc.
 European Union (EU) combines 28 countries.
 The Asia Pacific Economic Cooperation (APEC) combines consists of 21 member economies committed to creating
a free-trade zone around the Pacific.

 Technological advancement
Debate about Jobs and Wages

Against Globalization

 ELIMINATES JOBS IN DEVELOPED NATIONS

 LOWERS WAGES IN DEVELOPED NATIONS
 EXPLOITS WORKERS IN DEVELOPING NATIONS
 EXPLOITS WORKERS IN DEVELOPING NATIONS
Rana plaza Bangladesh
Bhopal disaster
For Globalization

 INCREASES WEALTH AND EFFICIENCY IN ALL NATIONS

 GENERATES LABOR MARKET FLEXIBILITY IN DEVELOPED NATIONS
 ADVANCES THE ECONOMIES OF DEVELOPING NATIONS

 Those in favor of globalization say individual pain is worth the collective gain
 Debate about Income Inequality

 Inequality within Nations

 within-country inequality has strongly increased in recent decades, reflecting widening income disparities
between the rich and the poor

 Inequality between Nations

 Developing countries that embrace globalization are increasing personal incomes, extending
life expectancies, and improving education systems

 Global Inequality
 Regarding the debate about global inequality, although experts agree inequality has fallen in recent decades, they
might disagree only on the extent of the drop
 Debate about Culture, Sovereignty, and the Environment

 Globalization and Culture

Globalization's detractors say that it homogenizes our world and destroys our rich diversity
 of cultures
 Debate about Culture, Sovereignty, and the Environment

 Globalization and National Sovereignty

 GLOBALIZATION: MENACE TO DEMOCRACY

Or
 GLOBALIZATION: GUARDIAN OF DEMOCRACY

Supporters say globalization has not sent democracy spiraling into decline but instead has been instrumental in
spreading democracy to the world.
 Debate about Culture, Sovereignty, and the Environment

 Globalization and the Environment

 The evidence refutes claims that economic openness
and globalization lessen environmental standards.
 Referenced Videos

 https://www.youtube.com/watch?v=QE8Dr556oC0&t=25s
 https://www.youtube.com/watch?v=DOijfzPdqxw&t=293s
 https://www.youtube.com/watch?v=DnW9ZQtI1_E