THE GLOBAL

ECONOMY ‘-

Group 5

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*Economic Globalization and global
trade
• According to the United Nations (as cited in
Shangquan, 2000), “Economic globalization
‘- refers
to the increasing interdependence of world
economies as a flow of international capital, and
mutual integration of market frontiers, and is an
irreversible trend for the economic development in
the whole world at the turn of the millennium.”

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*Two different types of economies
associated with economic globalization
Protectionism - means “a policy of systematic government
intervention in foreign trade with the objective of
encouraging domestic production. This‘- encouragement
involves giving preferential treatment to domestic
producers and discriminating against foreign competitors”
(McAleese, 2007 as cited in Ritzer, 2015, p. 1169).
Trade liberalization – trade protectionism usually comes in
the form of quotas and tariffs
• Tariffs – are required fees on imports or exports
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• Mercantilist era, from sixteenth to seventeenth centuries until the
early years of Industrial Revolution (Chorev, 2007)
• The Great Depression of 1929 marked the peak of protectionism.
Until today, protectionism exists in the world economy despite the
growth of trade liberalization. Countries such as China, Japan, and
‘-
the United States are being accused practicing protectionism
(Ritzer, 2015).
• Globalization made some countries, especially the developing
ones, to gain more in the global economy at the expense of other
nations. There are various ways, however, the country can make
trade easier with other countries while lessening the inequities in
the global world. One of the, is “fair trade”(Nicholls and Opal,
2005)
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Fair trade – is the “concern for the social, economic, and
environmental well-being of marginalized small
producers”(Downie, 2007, pp. C1-C5)
• Aims for a more moral and equitable global economic
system
‘-
• It concerned with protection of workers and producers,
establishment of more just prices, engagement in
environmentally sound practices and sustainable
production, creation of relationships between producers in
the South and consumers in the North, and promotion of
safe working environment. Products like coffee, bananas,
cotton, wine, tea, and chocolate have been exchanged in
light of fair trade. 5
*Economic Globalization and
Sustainable Development
Sustainable Development – specifically, the development
of our world today by using the earth’s resources and the
preservation of such sources for the future is called
sustainable development. ‘-
In other words, development has to be ensured in and for
the future generations. One significant global response
approach to economic globalization is that of sustainable
environment (Borghesi and Vercelli. 2008).
The relationship between globalization and sustainability is
multi-dimensional-it involves economic, political and
technological aspects. 6
*Environmental Degradation
• This is the period in human history that made
possible the cycle of efficiency, means finding
the quickest possible way of producing large
‘-
amounts of a particular product.
• This process made buying of goods easier for
the people. Then, there is an increased in
demand. Ultimately there was an increase of
efficiency. This cycle harms the planets in a
number of ways.
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*Food Security
 The demand for food will be 60% greater than it is
today and the challenge of food security requires
the world to feed 9 billion people by 2050 (Breene,
2016). Global food security means‘- delivering
sufficient food to the entire world population. It is,
therefore, a priority of all countries, whether
develop or less developed. The security of food also
means the sustainability of society such as
population growth, climate scarcity, water scarcity,
and agriculture.
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• Another significant environment challenges is
that of the decline in the availability of fresh
water (Conca, 2006). The decline in the water
supply because of degradation of oil or
desertification (Glantz, 1997), has
‘- transformed
what was once considered a public good into
a privatized commodity. The poorest areas of
the globe experience a disproportionate share
of water-related problems.

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• There are different models and agenda pushed by different
organizations to address the issue of global food security.
One of this is through sustainability. The United Nation has
set ending hunger, achieving food security and improve
nutrition, and promoting sustainable agriculture as the
second of its 17 Sustainable Development Goals (SDGs) for
the year 2030. The World Economic Forum ‘- (2010) also
addressed this issue through the New Vision for Agriculture
(NVA) in 2009 wherein public-private partnership were
established. It has mobilized over $10 billion that reached
smallholder farmers. The Forum’s initiatives were launched to
establish cooperation and encourage exchange of knowledge
among farmers, government, civil society, and the private
sector in both regional and national levels (Breene, 2016).
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 *Economic Globalization, Poverty, and
Inequality
• The Swedish statistician Hans Rosling once said, “The 1 to 2 billion poorest
in the world who don’t have food for the day suffer from the worst disease,
globalization deficiency. The way globalization is occurring could be much
better, but the worst thing is not being part of it.”
• Economic and trade globalization is the result of ‘- companies trying to
outmaneuver their competitors.
• The multiplier effect means an increase in one economic activity can lead to
an increase in other economic activities. For instance, investing in local
business will lead to more jobs and more income. According to the
economist Paul Krugman (as cited in The New York Times, July, 8 2013), “the
Bangladeshi apparel industry is going to consist of what we would consider
sweatshops or it won’t exist at all. And Bangladesh, in particular, really
needs its apparel industry. It’s pretty much the only thing keeping its
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economy afloat.”
• Not everyone agrees to this. Opponents of economic
globalization called outsourcing of jobs as
exploitation and oppression, a form of economic
colonialism that puts profits before people. A few call
for protectionist policies like higher tariffs and
‘-
limitations on outsourcing
• In the absence of regulation, it is still possible that
workers would not be horribly mistreated. First,
public awareness is growing along with the pressure
from the international community to take steps to
protect workers.
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• Economic globalization has helped millions of people get out of
extreme poverty but the challenge of the future is to lift up the
poor while at the same time keep the planet livable. One of the
best ways to help those in extreme poverty is to enable them to
participate in the economy. This applies to developing countries
in the global marketplace and to individuals at the local level. . A
perfect example is microcredit ‘-
• Microcredit, when it works, allows people to improve their lives
by participating in the economy on their own terms. But we
cannot forget that a lot of people who participate in the global
economy are not doing it on their own terms. Many of the people
who have emerged from extreme poverty in the last 25 years have
jobs, wages, and working conditions that would be unthinkable in
the developed world. Economist say that it is all right but it is
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progress that is very hard to achieve.
 *Global city
• Global city also called a power city, world city, alpha
city or world center, is a city which is a primary node in
the global economic network. Cities are centers of
‘-
innovation and businesses. They portray the economic,
social, and political state of the country and its people.
• The most complex node is the "global city", with links
binding it to other cities having a direct and tangible
effect on global socio-economic affairs. "World city",
meaning a city heavily involved in global trade.
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Global Power City top 10:
1. London 6. Amsterdam
2. New York City 7. Seoul ‘-
3. Tokyo 8. Berlin
4. Paris 9. Hong Kong
5. Singapore 10. Sydney

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*Global Income Inequality
• Income inequality is a global issue that has become
more prominent in recent years. As the top 1
percent now own 40 percent of all‘-national wealth,
economists and politicians have been debating
solutions for decreasing this growing wealth
disparity and increasing the economic prospects of
the lower and middle classes. High levels of
poverty and disparate wealth distribution are the
clearest signs of income inequality.
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*The Causes of Income Inequality
• When investors and capitalists enjoy a greater rate
of return than is seen throughout the overall growth
of the economy, it leads to income inequality.
‘- nations can be
• Increasing income disparities within
tied to two major causes. Either returns to private
investments become greater than the overall growth
of the economy, or the overall population
experiences a declining rate of growth.

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 *Population growth also influences
economic growth.
• The rise of Chinese exports has caused the wages of the American middle class to decline
• The rise of Chinese exports has caused the wages of the American middle class to decline
• Fighting for Income Equality
‘-
• While inequality across the globe is a massive issue, steps can be taken in the effort to
redistribute global wealth.
• Promoting trade policy that is simultaneously democratic and transparent can benefit
workers, employee health, public interest and the environment.
• Inhibiting illicit financial outflows can help reduce income inequality
• Implementing a progressive income tax on the wealthy can help decrease income disparities.
• Advocating for the right to organize unions can help members increase wages and bring other
benefits.
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*The third world and the global
south
• The world is divided into those countries that are industrialized, have
political and economic stability, and have high levels of human
health, and those countries that do not.
‘-
• First World described the NATO (North Atlantic Treaty Organization)
countries and their allies, which were democratic, capitalist, and
industrialized. The First World included most of North America and
Western Europe, Japan, and Australia.
• Second World described the communist-socialist states. These
countries were, like First World countries, industrialized. The Second
world included the Soviet Union, Eastern Europe, and China.

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• Third World described those countries that did not
align with either the First World or Second World
countries after World War II and are generally
described as less-developed countries. The Third
World included the developing nations of Africa, Asia,
and Latin America. ‘-

• Fourth World was coined in the 1970s, referring to the

nations of indigenous people that live within a
country. These groups often face discrimination and
forced assimilation. They are among the poorest in
the world.
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*Global North and Global South
• The terms "Global North" and "Global South" divide the world in half
both geographically. The Global North contains all countries north of
the Equator in the Northern Hemisphere and the Global South holds
all of the countries south of the Equator in the Southern Hemisphere.
‘- countries in the Global
• The issue with this classification is that not all
North can be called "developed," while some of the countries in the
Global South can be called developed.
• In the Global North, some examples of the developing countries
include: Haiti, Nepal, Afghanistan, and many of the countries in
northern Africa.
• In the Global South, some examples of the well-developed countries
include: Australia, South Africa, and Chile
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