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Economic Globalization

Economic globalization refers to the increasing interdependence of world economies through growing cross-border trade, flow of capital, and rapid spread of technologies. It has accelerated due to improvements in transportation and communication technologies. Key factors that facilitate economic globalization include modern transportation and communication infrastructure, reductions in trade barriers through institutions like the WTO, and integrated international markets for commodities, labor, and capital.

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276 views22 pages

Economic Globalization

Economic globalization refers to the increasing interdependence of world economies through growing cross-border trade, flow of capital, and rapid spread of technologies. It has accelerated due to improvements in transportation and communication technologies. Key factors that facilitate economic globalization include modern transportation and communication infrastructure, reductions in trade barriers through institutions like the WTO, and integrated international markets for commodities, labor, and capital.

Uploaded by

Melo fi6
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Economic Globalization and

Factors that facilitates


economic globalization.
Globalization
• - refers to a world in which societis, cultures, poitics and economies
have, in some sense, com closer together.
Economic Globalization
• - Refers to the increasing interdependence of world economies as a
result of the growing scale of cross-border trade of commodities and
services, flow of international capital and wide and rapid spread of
technologies.
• Economic globalization refers to the widespread international
movement of goods, capital, services, technology and information.
• While economic globalization has been expanding since the
emergence of trans-national trade, it has grown at an increased rate
due to improvements in the efficiency of long-distance transportation,
advances in telecommunication
Economic Globalization
Communication
Transportation
Trade
Communication
• Modern communication technology and mass meda are global
standard
• It’s relatively easy and inexpensive to stay in touch
Transportation
• Travel and shipping are cheap and safe
Trade
• Multi-national corporation have global reach and increasing power
e.g. McDonald Corp., Intel Corp. etc
Governments have decreases tariffs and regulation on international
trade
Forms of Economy
• Protectionism
• Trade liberation
Protectionism
• Protecting one’s economy from foreign competition by creating trade
barriers
• Domestic products > Imported goods

- Tariff – tax levied by a government on imports and exports.


The money collected from tariffs is called a customs duty
- Import quota – limits on the number of products that can be
imported into a country
- Bans – forbid products on import goods
Trade Liberation
• Also called “Free Trade”
• Act of reducing trade barriers to make international trade easier
between countries

Tariff
Import quota
Bans
Institution of Globalization
• World Bank
International Monetary Fund (IMF)
World Trade Organization (WTO)
 WORLD BANK
• Also called Int’l Bank for Reconstruction
and Development (IBRD)
Increases in economic growth and decreases poverty in
developing countries
e.g. Increases in education since 1962 like
Bangladesh, Chad and Afghanistan
WORLD TRADE ORGANIZATION
(WTO)
• Formerly known as General Agreement on Tariffs and Trade (GATT)
Deals with the rules of trade between nations, settles trades disputes
and conduct
straight negotiations
e.g. (May 2013) Japan and European Union bought a case to WTO
regarding unfair renewable energy serves offered in Ontario
INTERNATIONAL MONETARY FUND
• Provides short term loans to countries when an
emergency occurs
e.g. Yemen receive 93 Million USD (2012) during
struggle to terrorism
(IMF)
 BENEFITS VS DRAWBACKS
• Solves
trade disputes between countries in a peaceful ways
×But only focuses on developed nation
Lowers
the cost of goods and services for those developed nation
×To achieve low cost, labour rights and environmental concerns are
ignored
Promotes economic growth in developed countries
×Favour the rich nations and powerful trans-national corporation
History of economic Globalization
• Beginning as early as 6500 BCE, people in Syria were trading livestock,
tools, and other items. In Sumer, an early civilization in Mesopotamia,
a token system was one of the first forms of commodity money.
• Mesopotamia – TOKEN SYSTEM – COMMODITY MONEY
Hope and Reality
• The great hope of economic globalization is that it will raise standards
of living around the world.
• The reality is that until recently developing countries continue to
suffer from poverty and underdevelopment.
Advantages and disadvantages of economic
Globalization
Advantages
• Increase job opportunities and possible higher salaries.
• Can lead to economic growth and higher standard of living.
• The reliance of countries to each other has led to better chances of
international peace.
• It has paved the way for cultural awareness and understanding
through the help of technology.
Disadvantages
• Depletion of natural resources because of the increasing demand for
raw materials.
• Violation of human rights as many countries can exploit human labor
outsourced from developing countries.
• Globalization is a method for more powerful countries to colonize less
developed ones.
Factors that facilitates economic
globalization.
Factors that facilitates economic
globalization.
•  The rate of globalization has also increased under the framework of
the General Agreement on Tariffs and Trade and the 
World Trade Organization, in which countries gradually cut down
trade barriers and opened up their current accounts and capital
accounts.
• International commodity markets, labor markets, and capital markets
 make up the economy and define economic globalization
• Labor markets consist of workers, employers, wages, income, supply
and demand. 

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