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CHALLENGES AND OPPORTUNITITES OF ECONOMIC GLOBALIZATION

CHALLENGES AND OPPORTUNITITES OF ECONOMIC GLOBALIZATION. INTERNATIONAL TRADING BLOCS REGULATING INTERNATIONAL TRADE DEREGUALTION, PRIVATIZATION AND FOREIGN INVESTMENT IN CANADA. INTERNATIONAL TRADING BLOCS.

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CHALLENGES AND OPPORTUNITITES OF ECONOMIC GLOBALIZATION

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  1. CHALLENGES AND OPPORTUNITITES OF ECONOMIC GLOBALIZATION INTERNATIONAL TRADING BLOCS REGULATING INTERNATIONAL TRADE DEREGUALTION, PRIVATIZATION AND FOREIGN INVESTMENT IN CANADA

  2. INTERNATIONAL TRADING BLOCS • In many South American countries, the richest 20% of the population owns more than 60% of the wealth • The poorest 20% of the population owns less than 5% of the wealth • MERCOSUR is the common market of the South • It includes Paraguay, Argentina, Uruguay, Brazil • Chile Bolivia, Columbia, Peru, Ecuador, and Venezuela are associate members • The main objective is to improve the economies in the member countries by opening markets, promoting economic development, conserving the environment • https://www.youtube.com/watch?v=yudK8sUwTK4

  3. INTERNATIONAL TRADING BLOCS • A second South American based group, is Comunidad Andina de Naciones (CAN) • This organization created in 1969 has a combined population of 90 million • In 1999, the of groups began to consider a merger • The new organization is called Comunidad Sudamericana de Nacions (CSN), and its plans to eliminate all tariffs between members by 2019 • It is hard because Bolivian President Evo Morales nationalized 53 foreign natural gas installations

  4. THE EUROPEAN UNION • The European Union is an organization of 25 countries which combine to form the largest and most powerful common market in the world at over 450,000, 000 • Among the items they share in common • Flag • Currency • Anthem • founding date • The European Parliament and Council of Europe Union share responsibility for passing laws and making policy decisions • Elections are held every five years • https://www.youtube.com/watch?v=O37yJBFRrfg

  5. THE EUROPEAN UNION

  6. THE EUROPEAN UNION • More than 50% of each countries trade occurs with the EU, some countries have over 80% of their trade with the organization (graph page 253) • On the global stage the EU accounts for over 20% of world imports and exports, despite making up only 7% of the world’s population • The Euro began its circulation in 2002, 12 countries share the currency

  7. THE ROLE OF THE WORLD BANK • The World Bank is actually two separate institutions, the International Bank for reconstruction and Development (IBRD) and the International Development Association (IDA) • The IDA helps the world’s poorest countries • In the past 20 years the World Bank says it has accomplished • poverty levels dropping in the poorest countries from 40% to 21% • Life expectancy in developing countries increasing by20 years • Infant mortality prior to age five cut by 50% • Adult illiteracy halved to 25%

  8. THE ROLE OF THE WORLD BANK • Criticisms of the World Bank • Ideology that free market can bring prosperity to all • Falls under the influence or more developed countries like United States • Inability to cause changes to countries with poor human rights records • In its own evaluation in 2006 the $38 billion the World Bank had spent financing free trade since 1986 has opened markets but has not been as effective in increasing exports and reducing poverty • In less developed countries free markets can cause inflation and high interest rates • Heavily Indebted Poor Countries (HIPC) owe debts to developed countries that they have little or no chance of repaying

  9. THE ROLE OF THE WORLD BANK • In 1996, the HIPC Debt initiative was launched • HIPCs must agree to reforms in order to be eligible for debt relief • HIPCs have to show they have followed these reforms for three years to be eligible for the program • In 2000, Canada announced it would halt debt repayments from 11 of the poorest countries in Africa and Latin America • By 2004, Canada had contributed over $312 million to the HPIC debt initiative • https://www.youtube.com/watch?v=kvjo8Ur1IGE

  10. https://www.youtube.com/watch?v=EPSrsEhqCBE https://www.youtube.com/watch?v=sqVHZFbz-Fo

  11. THE ROLE OF THE INTERNATIONAL MONETARY FUND • The IMF works to foster global monetary co-operation, secure financial stability, facilitate international trade, promote high employment, sustain economic growth and reduce poverty • Uses three methods to achieve these goals • Surveillance: assesses each countries economic situation and publishes the findings twice a year • Technical assistance and training usually offered free of charge, in areas of banking supervision and regulation • Financial assistance offers funds and loans to countries to address debt problems and to reduce poverty

  12. THE ROLE OF THE INTERNATIONAL MONETARY FUND • Criticisms of IMF • Lends money to military dictatorships friendly to American and European corporations • Austerity programs cause countries to increase taxes and reduce social programs • Does not actively promote democracy, human rights, and labour rights • Is controlled by developed countries particularly USA • Since 1980, more than 100 countries have experienced a banking collapse more than at any point in history

  13. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA • Trade liberalization is the process of reducing barriers to trade • Crown Corporations have been privatized, foreign investment has been encouraged and jobs have been outsourced • Deregulation involves opening an industry to more competition • One example of this is privatization • This has taken place at both the federal and provincial levels

  14. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA • In 1973, the Foreign Investment Review Agency was developed due to concerns over foreign ownership in oil and gas, mining, manufacturing • Its initial purpose was to screen foreign takeovers, it was hoped that it would stop further American control in the Canadian economy • The program which was started by the Liberals was ended by the Conservatives in 1984 • Today like many other countries Canada actively recruits foreign investment

  15. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA • Foreign investment in Canada climbed from $182 billion in 1996 to over $415 billion in 2005

  16. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA

  17. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA

  18. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA • Outsourcing remains a major concern • It can occur when a company hires another company to fulfill certain tasks in production • https://www.youtube.com/watch?v=hvZ-9uC1RcI • Related is off shoring, where these tasks are done in foreign markets to take advantage lower labour costs or environmental standards • It is most common in communications and high techs fields • In 2006 an OECD study determined that one in five jobs could be affected by continuing growth of offshore outsourcing

  19. IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA • The following industries were identified as vulnerable to outsourcing: • Information technology • Accounting • Consulting • Financial services • Research and development • the study also told us that automation is a factor in decline of some of these industries • https://www.youtube.com/watch?v=fO5Z0ZYQJ2I&list=PL44AF0E52B39D5B95

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