Cf. Lesson 2 (pages 74 and 75) of your textbook
The title of Lesson 2 describes globalization as “vulnerable”, meaning that it can be slowed down by events happening in the world (wars, terrorism, natural disasters, increasing costs of natural resources), and that it is facing increasing opposition.
Globalization creates economic growth with new
products and new markets. But, the process has not, so far, got rid of poverty
(some accuse it of actually causing the widening gap between rich and poor).
Globalization appears to offer more opportunities for the already
wealthy MEDCs (more economically developed countries) than for the LEDCs (less economically developed countries) where it is seen as a threat to development.
Comments on document 1: Globalization, growth and poverty: building an inclusive world economy
This graph uses the following criteria:
emigration to the USA, % of the world’s GDP that the export of merchandise
represents, and Foreign Direct Investment in developing countries (i.e. how
much capital rich countries invested in developing countries) to show that
globalization since the 1870s has not progressed at an even pace since it is affected by factors such as world events, agreements on trade, and progress in the means of transport.
There have been three “waves” of globalization:
1870 to 1914: The first wave was the “golden
age” of globalization, with increased international trade (due to falling costs
of transport), free flow of capital (massive investments in colonies), mass
emigration (mostly to the USA).
(1914 to 1939: globalization was halted during
the First World War and the Great Depression: very little emigration, a
down-turn in trade (there were high trade tariffs) and foreign investment.)
1945 to 1979: Second wave of globalization, due
to liberalization of trade between North America, Europe and Japan. Most former
colonies chose not to take part in it (preferring to produce their own goods
rather than importing them). The shipping container and jet travel made
transport much cheaper. Restrictions on immigrants were only slowly lifted.
Capital flows between rich countries were restricted up until 1971, when the Bretton
Woods system (which fixed exchange rates between major currencies) ended.
1980s to today: Third wave of globalization,
with increased participation of developing countries (China open-up to the
market economy in 1979 and India in 1991). China is today the “workshop of the
world” and the biggest exporter. Thanks to Internet, services on a world scale
have increased. Outsourcing and offshoring have become the norm. Increased
immigration means that the percentage of foreign-born citizens in the USA is now
about 13% of the total (the same as in 1913).
The “highs and lows” of globalization are
determined by world events (such as the world wars), international agreements, progress
in transport and communication, and by US hegemony since the start of the 20th
century (its economy, foreign policy, immigration policies).
Comments on document 2: Worldwide business: the New York Stock Exchange
NYSE is the biggest stock exchange. All global
cities have similar financial centres; it is one of the defining features of a
megalopolis. The display panels show the Dow Jones index
(i.e. of the value of the 30 biggest firms of the USA), the NASDAQ (National Association of Security
Dealers Automated Quotations), an index which measures the strength
(performance) of shares in businesses which are part of NASDAQ. Both the Dow Jones and NASDAQ measure the
strength of the USA and world economy. Financial markets are more and more contested because some see them as part of the cause of the economic downturn which started in 2007 (cf. the Occupy Wall Street movement).
Comments on document 3: Anti-globalisation
activists: “Africa is not for sale!”
Cancun is in Mexico. The WTO met there in 2003
for important trade talks. Poorer countries wanted to talk about increasing
access to the world market in agricultural products for their products, and
about the subsidies accorded farmers of the EU and the US by their governments.
The talks failed.
“Africa is not for sale” is a slogan that was
shouted by some African anti-globalization protesters during the talks (it is
probably what the man in the photo is shouting). The meaning is: Africa is not
just merchandise to be sold off by the powerful countries of the world to other
wealthy countries of the world (i.e. Africa belongs to the Africans and it is
where they live and work; the resources of Africa should belong to the Africans
themselves). The banner (streamer) being held up by the man shaking his fist in
anger says clearly that Africans should resist the WTO’s liberalization of the
world’s economy. Note the slogan on the back of the Tee-shirt of the woman on
the banner: “Our world is not for sale”; the meaning is: ordinary people should
be able to access the world’s resources and not have them “stolen” by the
wealthy (transnational corporations).
What is alter/anti-globalization?
It is a loosely-structured social movement that
opposes the negative effects of economic globalization, and supports
cooperation between the peoples of the world, environmental and climate
protection, economic justice, labor protection, protection of indigenous
cultures, human rights. According to anti-globalization activists, the victims
of globalization are the poor in Latin America, Asia, and especially Africa. And the WTO is partly to blame. The poor in developed countries (the “4th world”) suffer
too from globalization.
A few alter/anti-globalization associations:
- ATTAC (Association pour la Taxation des Transactions financière et l'Aide aux Citoyens), set up in 1998 in France, it is now an international association.
- People’s Global Action, since 1998, international coordinating body for anti-capitalist actions.
- Via Campesina, since 1999, international coalition of peasant organizations advocating sustainable agriculture.
- Fairtrade International, set up in 2004 to promote partnerships between consumers and producers.
- Oxfam International, set up in 1995 by a group of independent non-governmental organizations to reduce poverty and injustice. Oxfam claims that the combined wealth of the richest 1 percent is greater than that of the other 99 percent of people of the world... Cf. Oxfam
Comments on document 4: The new division of labour
and its repercussions
The “new international division of labour”
means that low-qualified workers in developing countries will be used by
transnational firms to make their goods cheaply (since the labour force is
cheap and plentiful), while high-qualified workers and managers will remain in
developed countries. Electrolux (which produces 25% of the world’s household
electric appliances) is a typical multinational in that it needs “to move
production to other countries to be competitive”, i.e. to Eastern Europe,
Mexico and Asia where the workforce is cheaper. The consequence of this on
low-qualified workers in wealthy countries is unemployment.
Globalization implies outsourcing
(“délocalisation” in French) by companies (also described as offshoring), that
is: the relocation by a company of an operational process, such as
manufacturing, or supporting processes, such as accounting, to another country.
Offshoring fosters an imbalance in the division
of the labour force: qualified personnel in the North, low-skilled workers in
the South.
The “law of supply and demand” means in fact that people in
the North want a product as cheaply as possible; in order to satisfy our demand
for cheap goods, firms (which compete with each other) have to find the
cheapest means of supplying these goods and they do so by offshoring to where
the cost of production is lowest, i.e. in the South. This fosters an imbalance
between North and South in that poor workers are in the South, and rich
consumers in the North.
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