Lesson 6 Contworld With Activities
Lesson 6 Contworld With Activities
OBJECTIVES:
2. narrate a short story of global market integration in the twentieth century; and
Lesson 6:
INTRODUCTION
This chapter will show the contributions of different financial economic institutions
that facilitated the growth of the global economy. The history of the global
market will be discussed by looking at the different economic revolutions. The
growth and dynamics of multinational corporations that are emerging in today’s
world economy will also be examined.
So what is Integration? According to Ulrich Koester;
It simply means that it is the process of combining different national economies
to build larger economic regions. These are the connection, arrangement and
agreement between nations and institutions to create a bigger and stronger
union.
Some examples are World Bank, Asian Development Bank, Islamic Development
Bank. Each of these international banks has their own goal for the global
economy. Each one of them greatly affect the growth of the world’s economy,
like in the phrase saying “When the American sneezes, the rest of the world
catches a cold” but always remember this only applies to those high income
countries, for instance would Philippines affect the global market if it will suffer
from financial crisis? I would rather say not, but if China, Russia or America is
suffering from a financial dilemma the answer is definitely yes.
The following are financial institutions and economic organizations that made
countries even closer together, at least, when it comes to trade.
the conference of establishing the Bretton Woods System, since USA holds 2/3 of
the gold reserves after the war. Central Bank of each country was also
established during this period and also World Bank and International Monetary
Fund (IMF) are founded.
THE GENERAL AGREEMENT on TARIFFS and TRADE (GATT) and THE WORLD TRADE
ORGANIZATION (WTO)
GATT or General Agreement on Tariffs and Trade was established in 1947.
Due to the effect of the Bretton Woods System, GATT was created to concentrate
on trade goods through multinational trade agreements conducted in many
“rounds” of negotiation.
The WTO or World Trade Organization is an independent multilateral
organization that became responsible for trade in services, non-tariff-related
barriers to trade, and other broader areas of trade liberalization. The
headquarters of WTO is located at Geneva, Switzerland with 152 member states
as of 2008. The general idea where the WTO is based was that of neoliberalism.
This means that by reducing or eliminating barriers, all nations will benefit.
These entities are created to manage global trade among nation and to
formulate rules that will help the proper flow of trade within the globe. However,
there are still some negative impact brought by these entities like less limitations
among countries in terms of trading, mass productions of product which resulted
to pollutions that weakened the environment and also weak countries are having
difficulties competing around the world with richer countries which causes
unemployment for smaller countries.
THE INTERNATIONAL MONETARY FUND (IMF) AND THE WORLD BANK
In the end of World War II, the economic stability and political stability of the
world became ambiguous. The economy started to rise again. The WORLD BANK
and INTERNATIONAL MONETARY FUND helped the world to get up again. Their
clients are not individual persons, instead they cater countries who are having
problems with their financial status.
The IMF’s main objective is to assist countries which were in trouble looking for
financial aids due to economic crisis. IMF’s serves as lending center of countries
meaning they lend cash to countries to help them with their struggles.
Unlike with the World Bank, it aims to eradicate poverty around the globe. It
funded projects of a certain country which would help to achieve their goals.
Mainly the investment of a country in education to help their citizens became
well-educated and competitive to other countries.
These two institutions have helped a lot of countries to get back on their feet,
along with this they also helped some corrupt political leaders and sometimes
they are having problems in collecting back their money.
.
3 Facts about European Union
If you wanted to be part of the European Union you must pay a membership
fee. After being a member your citizens are automatically EU Citizens which
means you can cross all borders of the EU without needing a passport.
There are 28 states inside the European Union, all of these states use a common
currency which is euro, however, Western European nations, like the Great Britain,
Sweden, and Denmark still used their own currency even if they are part of the
EU.
Activity 6A
Answer these:
1. Search for 3 more reasons regarding why the USA became the main character
of the Bretton Woods System, and briefly explain.
2. Give an international bank and identify its goal that may help the
improvement of the global economy.
Activity 6B
Answer these:
1. Briefly explain the difference between GATT and WTO and choose 1 topic only.
Activity 6C