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VNU-INTERNATIONAL UNIVERSITY INTERNATIONAL UNIVERSITY

VNU-INTERNATIONAL UNIVERSITY INTERNATIONAL UNIVERSITY. Instructor : Dr. Truong Thi Kim Chuyen Subject : world economic geography Group member: Trần kha di btwe08037 Nguyen xuan hoa baiu08133 Lý bích ngọc btwe08017

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VNU-INTERNATIONAL UNIVERSITY INTERNATIONAL UNIVERSITY

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  1. VNU-INTERNATIONAL UNIVERSITY INTERNATIONAL UNIVERSITY Instructor: Dr. Truong Thi Kim Chuyen Subject: world economic geography Group member: Trần kha di btwe08037 Nguyen xuan hoa baiu08133 Lý bích ngọc btwe08017 Vũ đình hợp btwe08010

  2. INTERNATIONAL & SUPRANTIONAL INSTITUTIONALIZED INTEGRATION

  3. OUTLINE • Economic change and the new geopolitics • International and supranational institutionalized integration • Spatial outcomes of economic integration

  4. 1/ ECONOMIC CHANGE & THE NEW GEOPOLITICS • After the Second World War, the world economy was characterized by the hegemony of the United States.  came to be characterized by Fordism, the socioeconomic system that links mass production with mass consumption. • Ex: the Bretton Woods Agreement of 1944 that made the US dollar the world’s reserve currency, Fordism was implanted in Europe & Japan through the Marshall Plan & foreign direct investment (FDI) by US companies.

  5. Consequence of the opening up of foreign trade means the globalization of supply & cheaper raw material. • This new internationalism also brought a host of other activities in its wake – banking, insurance, hotels, airports & tourism. • It also means a new international culture & a new global system of gathering & evaluating information.

  6. In the immediate postwar period ( 1947 – 60), the rise of a series of industries - automobiles, steel, petrochemical, rubber, etc. – that acted as the propulsive engines of economic growth, coordinated through the collective powers of big labor, big business & big government. There arose a series of grand production regions in the world economy managed from worldwide financial & governmental centers such as New York & London.

  7. The emergence of TNCs with the capacity to move capital & technology rapidly from place to place, drawing opportunistically on resources, labor markets & consumer markets in different parts of the world.

  8. Within this new context of political & economic interdependence, regional & international shifts in economic & political power began to occur. • In the core economies, the prosperity associated with the Fordist regime had been replaced by uncertainty, destabilization & crisis resulting from the conjunction of stagflation associated with the declining performance of many businesses.

  9. As a result, the role & relative power of nation-states began to change significantly. • Economic circumstances reduced the ability of governments to deliver full employment, full range of welfare services. • The growth of the global finance system blunted the power of individual countries to pursue independent fiscal & monetary policies with any degree of success.

  10. 2/ INTERNATIONAL AND SUPRANATIONAL INSTITUTIONALIZED INTEGRATION The logic of integration it was the international trade system that provides the major impetus for countries to be drawn into various forms of institutionalized integration

  11. Advantages • Potential for economies of scale • Potential for creating multiplier effects from the existence of enlarged markets • Potential for strengthening regional interaction by easing the movement of labour, goods and capital • Disadvantages • Potential loss of national sovereignty over a broad spectrums of issues • Potential for the intensification of internal inequalities as a wider geographical context makes for more pronounced processes of uneven development

  12. Type and level of integration • Field: WTO, NATO, UNESCO…. • Area: EU, ASEAN….

  13. SPATIAL OUTCOMES OF ECONOMIC INTEGRATION REALIGNMENT OF PATTERN OF ECONOMIC ACTIVITY Pattern of Trade Pattern of regional development

  14. Patterns of Trade Production • Trade Creation Effects • Trade Diversion Lower Costs External Sourcess reallocated High- to low-cost settings Higher Costs Internal Sources Lower costs contributed to improved levels of living

  15. Patterns of Regional Development A certain amount of relocation of production must take place withdrawn from less efficient locations Net effect of regional development within association spatial polarization • Spatial Polarization • Regional Policy Political dimension inherent to integration A powerful case for a strong regional policy provide

  16. Conclusion Basic principles of economic geography Reinforcement of the dominant core-periphery structure Spatial reorganization of production Creation and intensification of regional polarization

  17. Thank you !

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