Costs & Benefits of Globalization

The Costs & Benefits of Globalization

Do the benefits of globalization outweigh the costs?

​Objectives...

• Define globalization and describe different viewpoints about its effects.

• Identify major international organizations, such as the World Trade Organization and multinational corporations, and explain their role in a global world.

• Analyze the costs and benefits of globalization and debate its effects on economic growth, the environment, and culture.

• Evaluate whether the benefits of globalization outweigh the costs.

Globalization is a complex process. At its heart, it represents the growing integration of economies and societies around the world.

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​Introduction

Some of the main targets of globalization critics are international organizations like the World Trade Organization (WTO). Other key players in this group are the United Nations, the World Bank, and the International Monetary Fund.

​​Main Organizations

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As the body mainly responsible for drawing up and enforcing international trade agreements, the WTO stands at the center of the globalization debate. Its critics argue that the WTO works to protect the interests of wealthy countries and corporations at the expense of poor countries.

​​WTO

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As part of its mission, the United Nations analyzes economic issues and provides aid to poor countries. It also brokers international agreements designed to protect the environment, defend human rights, and preserve cultural traditions.

United Nations

​Who are the main players in the globalization debate?

Founded as World War II drew to a close, the World Bank has seen its mission change over time. Its initial goal was to help Europe recover from the war. Later, its focus shifted to helping developing countries advance their economies.

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​WTO

Multiple Choice

A program of thriftiness measures and economic reforms may please foreign capital but it will not guarantee popular support.

• austerity

• discipline

• punishment

• Today, the IMF offers economic advice and assistance to countries with financial problems.

• The International Monetary Fund is often called on to help countries experiencing a financial crisis. Such a crisis typically arises when a government accumulates too much foreign debt.

• The IMF uses a two-pronged approach to end such a crisis. First, it acts as a kind of lender of last resort.

• Second, as a condition for such loans, the IMF requires the government to adopt austerity measures.

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​IMF

Another set of players in the globalization debate consists of nongovernmental organizations. NGOs are nonprofit organizations that operate outside of governments.

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NGO (Non Governmental Organization)

Multinational corporations are both central players in the globalization process and prime targets of globalization critics.

These large companies promote globalization by moving goods, capital, information, and people across borders to do business.

The economic power of these giant corporations concerns critics of globalization.

​Multinational Corporations...

• Supporters of globalization argue that multinational corporations generate trade, investments, jobs, and other economic benefits in countries where those corporations do business.

• The last major players in the globalization debate are the world’s sovereign nation-states. A nation-state is an independent political body with full authority over its territory and inhabitants.

• A frequent complaint about the WTO is that its rulings on trade barriers restrict national sovereignty.

• As you would expect, some nation-states are more open to globalization than others are.

• A country’s ranking in this globalization index indicates how much or how little it has opened itself up to trade and contact with other countries.

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Has globalization helped or hindered economic development?

Multiple Choice

When WTO members disagree on trade issues, the WTO makes decisions to resolve the differences on the basis of the legal foundations of the trade agreement. What is this function?

• It facilitates cooperation with other international organizations

• It monitors national trade policies

• It administers WTO trade agreements

• It provides a forum for trade negotiations

• It handles trade disputes

Has globalization helped or hindered economic development?

• Most economists believe that globalization contributes to economic development by increasing trade and investment across borders. Economic development is the process by which countries increase their economic output and improve the lives of their people.

• The World Bank and IMF have a number of ways to measure economic development.

• The three general classifications of commonly used are developed, developing, and least developed countries.

Multiple Choice

What is the primary purpose of the U.N.?

• keep peace in the world

• foster global growth and economic stability

• help reduce poverty

• regulating trade and tariffs/ to sort out trade problems 

Multiple Choice

What is the primary purpose of the World Trade Organization?

• keep peace in the world

• foster global growth and economic stability

• help reduce poverty

• regulating trade/ to sort out trade problems 

Multiple Choice

What does the IMF do?

• Promotes International financial stability and monetary cooperation

• Helps its members use trade as a means to raise living standards

• The principle goal is to ensure that goods, services and labour can move easily across boarders

• Promotes work to build better policies for better lives

Multiple Choice

What is the purpose of IMF?

• works to build better policies for better lives

• to promote financial stability, solve and prevent profitable crisis, motivate growth, and relieve poverty.

• developing countries to reduce poverty and increase shared prosperity

• promotes peace, it's values and the well-being of its citizens

Multiple Choice

An international financial institution that provides loans to countries of the world

• multinational corporation

• WTO

• NATO

• World Bank

• Over the past several decades, American fads, foods, and fashions have spread rapidly around the world.

• Nevertheless, the spread of American culture concerns many critics of globalization. Some see it as cultural imperialism, the imposing of one country’s culture or language on another country.

• The main criticism of globalization from a cultural perspective is that it weakens local traditions.

• Critics point to the rapid extinction of languages as one cost of globalization.

• Along with the loss of language, many peoples are seeing their own traditions crowded out by cultural imports.

​Does globalization enrich or threaten local cultures?

Multiple Choice

What is the purpose of the World Bank?

• To provide developed countries with money to increase their existing wealth.

• To provide developing countries with money and aid to further develop themselves.

​Consists of the world's wealthiest nations. Generally defined as having an advanced industrial economy and a relatively high per capita GDP.

​​Developed countries

​Consists of a majority of the world's nation states. Have economies in the process of modern industrialization.

Developing Countries

​A country that is just beginning to modernize. Consists of a small percentage of the world's nation states.

Least Developed Country

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Has globalization helped or hindered economic development?

• The United Nations has developed a broader approach to classifying nations. This approach, the Human Development Index, is based on the belief that people are the real wealth of nations.

• The HDI measures a country’s level of human development along three dimensions. The first is life expectancy at birth, an indicator that reflects the general health of a population. The second dimension is education.

• The third dimension is standard of living.

• However one measures development, it is clear that globalization has not ended global poverty.

• Globalization hurts poor countries, critics say, because most trade agreements have been written to serve the interests of wealthy countries, not LDCs.

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Has globalization helped or hindered economic development?

• Supporters believe that globalization holds out the best hope for relieving poverty around the world.

• Among the greatest gainers benefiting from globalization are the four economies nicknamed the Four Asian Tigers.

• Beginning in the 1970s, the Tigers adopted an economic model known as export-led development. This model emphasizes the production of goods for export as a way of expanding an economy.

• Critics of export-led development point to a number of problems with this model. The most obvious is that it depends on a high level of demand for exports in wealthy countries, especially the United States.

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Has globalization helped or hindered economic development?

• The United Nations has developed a broader approach to classifying nations. This approach, the Human Development Index, is based on the belief that people are the real wealth of nations.

• The HDI measures a country’s level of human development along three dimensions. The first is life expectancy at birth, an indicator that reflects the general health of a population. The second dimension is education.

• The third dimension is standard of living.

• However one measures development, it is clear that globalization has not ended global poverty.

• Globalization hurts poor countries, critics say, because most trade agreements have been written to serve the interests of wealthy countries, not LDCs.

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Has globalization helped or hindered economic development?

Multiple Choice

The greater the country’s level of economic development, the —

• higher the quality of life

• higher the agricultural labor force

• lower the cost of living

• lower the urban population

Multiple Choice

Three indicators of development of a country

• GDP per capita, literacy rate and life expectancy

• Richness, industrial production and business

• Multinationals and industry

• Technology, trade and research

Multiple Choice

Developed or developing?

• Developed

• Developing

Multiple Choice

Which of the following regions include mostly developing nations?

• Sub-Saharan countries

• Europe

• North America

• Scandinavian countries

Multiple Choice

A country with a very low literacy rate, low life expectancy, and high unemployment is referred to as

• developed.

• developing.

• least developed.

Multiple Choice

What is the Human Development Index?

• The health of an individual.

• A set of statistics or numbers that rank countries by their development.

• The country a person lives in.

• The number of preventable diseases in a country.

Multiple Choice

Which one is NOT a factor when determining the HDI of a country?

• Education

• Health

• Income

• Miltary Size

Multiple Choice

Japan has an HDI score of 0.884. The life expectancy is 79, literacy is 100%, and the income of an average family is $34,000. Japan would be classified as a less developed country.

• True

• False

Multiple Choice

Angola has a life expectancy age of 44, literacy is at 58% of the population and an average income of $4,941 a year. What type of country is Angola?

• Developed Country (Most developed)

• Developing Country (Middle)

• Less Developed Country (Least developed)

Multiple Choice

Which of the following best describes Human Development?

• It measures high, low and middle income countries.

• It is the environment people grow in.

• It is used to compare countries to see what life would be like.

• It is a concept that provides a more accurate picture of how well people are living in each country.

Multiple Select

Which three of the following are advantages to the HDI? (select more than 1)

• Provides a more comprehensive (holistic) insight into a country than just GDP.

• Collecting data can be complex.

• Makes comparison between countries easy.

• Draws attention to significant global differences and raises awareness to improve these living standards.

• Takes into account personal feelings.

Multiple Choice

What are the criteria for classifying a country as a least developed country (LDC)?

• Low gross national income (GNI) per capita, weak human resources, and economic vulnerability.

• High levels of pollution and tropical diseases.

• Better access to basic needs like clean water, sanitation, and healthcare.

• Higher level of industrial development and a higher Human Development Index (HDI).

Multiple Choice

What challenges do developing countries often face?

• High unemployment rates, poverty, hunger, and inadequate access to healthcare.

• Less money per person and weak human resources.

• 
  Problems with agriculture, exports, or natural disasters.

• Lower levels of access to safe drinking water, sanitation, and hygiene.

Multiple Choice

Why is it important to understand the different categories of countries?

• To recognize the challenges that each country may face.

• To support and help developed countries.

• To classify countries based on their industrial development.

• To determine the size of a country's population.

• Cultural evolution is nothing new, of course. It is a natural process that has been taking place for thousands of years. But critics warn that globalization is speeding up the process of cultural change, often with commercial interests in mind.

• Supporters of globalization see a different result from the interaction of world cultures. They contend that globalization enriches local cultures by exposing people to new ways of doing things.

• Although globalization is often seen as a one-way flow—from rich to poor nations—it goes the other way, too. Customs and traditions from developing nations also influence the developed world.

• The idea that cultures should be protected from change is wrongheaded, say supporters of globalization.

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​Does globalization enrich or threaten local cultures?

• Cultural diffusion—the process of sharing ideas and knowledge across cultures—is often disruptive. But it is also productive and leads to new ways of life.

• McDonald’s is a powerful symbol of globalization for supporters and critics alike.

• All of this suggests that globalization is neither simple nor predictable. It is a complicated process, with many costs and benefits, that is changing the world in unforeseen ways.

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​Does globalization enrich or threaten local cultures?

Multiple Select

The United Nations has goals involving all of the following. (select 3)

• aiding poor countries.

• enforcing trade agreements.

• defending human rights.

• protecting the environment.

Multiple Choice

Critics of globalization contend that

• culture traits unique to smaller nations are being "stolen" by big countries.

• competition between many poor nations will result in economic collapse for some.

• the world's largest economies dominated global trade.

• companies from rich countries are negatively impacting the cultures of poor countries.

Multiple Choice

Supporters say globalization is good because

• cultural change is accelerating because of it.

• local cultures are enriched by it.

• commercial interests are leading it.

• it's a one-way flow from rich to poor nations.

Categorize

Options (8)

A world wide market for easy access to different products around the world.

Experiencing other cultures.

Receive news and information faster.

Loss of country's original culture.

Poor living and working conditions.

Prisoners and child workers are forced to work in unsafe conditions.

Organize these options into the costs or benefits of globalization.

Benefits

Costs

A cow

A shark

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