Contemporary World: Chapter 2 - Globalization PDF

CONTEMPORARY WORLD CHAPTER II THE STRUCTURE OF GLOBALIZATION WHAT IS GLOBAL ECONOMY? - A global economy refers to the interconnected global economic activities between multiple countries, which can have both positive and negative impacts on each other. The global economy is characterized by variou...

CONTEMPORARY WORLD CHAPTER II THE STRUCTURE OF GLOBALIZATION WHAT IS GLOBAL ECONOMY? - A global economy refers to the interconnected global economic activities between multiple countries, which can have both positive and negative impacts on each other. The global economy is characterized by various aspects, including: >Globalisation >International Trade >International Finance >Global Investment  GLOBALISATION Globalisation integrates national and regional economies, societies, and cultures through trade, communication, immigration, and transportation, leading to the global economy and improved domestic economies. INTERNATIONAL TRADE Globalisation impacts international trade, allowing countries to exchange goods and services, specializing in products with comparative advantages, and promoting economies' ability to produce at lower opportunity costs. INTERNATIONAL FINANCE International finance, including currency exchang rates and monetary policy, is a key feature of a global economy, facilitating faster money transfer between countries compared to goods, services, and people. GLOBALGlobal INVESTMENT investment is an investment strategy that transcends geographical boundaries, primarily involving foreign direct investment (FDI). WHY IS THE GLOBAL ECONOMY IMPORTANT? The global economy is important because it enhances development and connectivity between different countries. It facilitates the exchange of products, services, and ideas, as well as creates business and job opportunities around the world. WHO CONTROLS THE GLOBAL ECONOMY? The global economy is not controlled by a single person or institution. Instead, it is governed by various international organizations, governments, and major financial institutions. This includes organizations like the International Monetary Fund (IMF), World Bank, and World Trade Organization (WTO), as well as major economies such as the United States, China, and the European Union. HOW DOES THE GLOBAL ECONOMY WORK? The functioning of the global economy can be explained through one word —transactions. International transactions taking place between top economies in the world help in the continuance of the global economy. These transactions mainly comprise trade taking place between different countries. International trade includes the exchange of a variety of products between countries. It ranges all the way from fruits and foods, to natural oil and weapons. Such transactions have a number of benefits including: -Encouraging competitiveness between countries in various markets. -Raising productivity and efficiency across countries -Helping in the development of underdeveloped countries by allowing them to import capital goods (machinery and industrial raw materials) and export primary goods (natural resources and raw material WHAT ARE THE EFFECTS OF GLOBAL ECONOMY?  Nearly every country in the world is in some way affected by things that happen in what may seem at times, like unrelated countries - due to the influence of the global economy. A good example of this is the economic impact that the Brexit vote will have other countries, not only in Europe, but across the globe. Brexit was referendum decision for the United Kingdom to withdraw from the European Union (EU). The purpose of international trade is similar to that of trading within a country. However, international trade differs from domestic trade in two aspects. What are the benefits of global economy? There are numerous benefits of a global economy, which include: Free trade: Free trade is an excellent method for countries to exchange goods and services. Movement of labour: Increased migration of the labour force is advantageous for the recipient country as well as for the workers. Increased economies of scale: The specialisation of goods production in most countries has led to advantageous economic factors such as lower average costs and lower prices for customers. Increased investment: Due to the presence of global economy, it has become easier for countries to attract short-term and long-term investment. Factors affecting global economy According to the latest economic news, here are some of the key factors that influence and affect how well the global economy works: >NATURAL RESOURCES >INFRASTRUCTURE >POPULATION >LABOUR >HUMAN CAPITAL >TECHNOLOGY >LAW MARKET INTEGRATION: CONNECTING MARKETS FOR EFFICIENCY AND GROWTH Market integration refers to the process of connecting different markets through the removal of barriers to trade and the flow of information. This interconnectedness allows for goods, services, capital, and labor to move freely across borders, creating a more unified and efficient market system. Think of it like merging different streams into a larger river. Before integration, markets operate independently, with prices and conditions varying significantly. Integration brings them together, creating a single, unified market where prices tend to converge, and resources flow more efficiently. KEY DRIVERS OF MARKET INTEGRATION - Trade Liberalization: Reducing or eliminating tariffs, quotas, and other trade barriers allows goods and services to move freely between markets. - Investment Flows: Openness to foreign investment encourages capital to flow to areas with higher returns, promoting economic growth and development. - Technological Advancements: Improved communication and transportation technologies facilitate the exchange of information and goods, making integration easier and more efficient. - Harmonization of Regulations: Standardizing regulations across markets reduces complexity and costs for businesses, promoting cross-border trade. TYPES OF MARKET INTEGRATION Market integration can be categorized into different types: - Horizontal Integration: This occurs when companies at the same level of the production or marketing process merge or collaborate. For example, two competing car manufacturers could merge to create a larger, more powerful entity. - Vertical Integration: This involves a company expanding its operations to control different stages of the production process, from raw materials to final products. For example, an oil company might acquire a refinery and a distribution network to control the entire supply chain. - Conglomeration: This refers to a company acquiring or merging with businesses in unrelated industries. For example, a technology company might acquire a retail chain or a food manufacturing company. IMPACT OF MARKET INTEGRATION MARKET INTEGRATION HAS BOTH POSITIVE AND NEGATIVE IMPACTS ON ECONOMIES: Positive Impact: - Economic Growth: More trade and investment. - Lower Prices: Increased competition leads to lower prices for consumers. - Jobs: New opportunities in developing countries.  Negative Impact: - Job Loss: Companies move production to cheaper locations, leading to job losses in developed countries. - Environmental Damage: Increased production and transportation cause pollution. - Income Inequality: Some groups benefit more than others from globalization. GLOBAL INTERSTATE SYSTEM is a institutional arrangement of governance that addresses regional or globalized issues that go beyond the scope of a nation state (Chase- Dunn,1981) WHAT IS AN INTERSTATE SYSTEM? Chase-Dunn defines an interstate system as a system of inequally powerful and competing states in which no single state is capable of imposing control on all others. this states are in interaction with one another in a set of shifting alliance and wars and changes in relative power of states upsets any temporary set of alliances leading to a restructuring of the balance of power (Chase-Dunn) GLOBAL INTERSTATE SYSTEM is a institutional arrangement of governance that addresses regional or globalized issues that go beyond the scope of a nation state (Chase- Dunn,1981) EFFECTS OF GLOBALIZATION ON GOVERNMENTS as the world become more interconnected through politics, trades, and communications, the rule of nation states and government are also shifting. thus, national and local policies are not only based on local context but also international and global realities. One example of global treaty is the more treatly Montreal protocol on substances that Deplete the Ozone Layer. MONTREAL PROTOCOL ON SUBSTANCES THAT DEPLETE THE OZONE LAYER aims the phase out the production of numerous substances responsible for ozone depletion, signed in august 26, 1981 with 46 country signatories (US EPA, 2017) definitive evidence of the montreal protocol's success was discussed by nasa and protected that ocean levels will return to 1980 levels by 2032 (watts,2018)  This is an example of how international agreements and efforts could fight borderless challenges and issues specifically by domesticating international norms. HOW DOES GLOBALIZATION NEGATIVELY AFFECT LOCAL GOVERNMENTS AND LOCAL COMMUNITIES?  A local government would like to attract major global investors and their community by setting up for instance their manufacturing firms in the area. this could create jobs for the local people and generate income for local business. however it entails converting tracks of agricultural land into an industrial zone. Farmers will be displaced and agricultural production of the area will be affected. The global corporation is also demanding lower taxes and lower income wage in over to finalize their investment in the area. they argue that they will create more jobs and more income from the local community and the government. INSTITUTIONS THAT GOVERN GLOBALIZATION with the growing globalization, the governance of global relations goes beyond nation-state governments. Nation-state government scale and scope are limited in addressing regional and global issues like climate change, cybercrime, and global financial crises. works by authors like Dryzek (2012) and Castells (2008) show the growing emphasizes on the role of non-state actor and global governance. NON-STATE ACTORS non-government organizations, volunteer organizations, and interest groups. the increased number of international organizations and the expansion of their functions have undeniably restricted a country's sovereignty to a certain intent. several institutions govern international relations and affairs. INSTITUTIONS THAT GOVERNS AND INTERNATIONAL RELATIONS AND AFFAIRS UNITED NATIONS with 192 members states seen as a facilitator of global governance has regional commissions composed of official from different countries in charge of making certain laws that promulgate certain rights for economic and social development. WORLD BANK (WB) an international financial institution that provides loans to countries of the world for capital projects. established during the bretton woods conference in 1944. GLOBAL GOVERNANCE CONTEMPORARY GLOBAL GOVERNANCE This terms refers to domestic institutions and governments on how large scale problems and public- policy issues are being resolved on a global level. It involves a range of actors including states, national and regional bodies that have the eagerness and commitment to deal with a particular challenge. GLOBAL GOVERNANCE According to Weiss and Takur, the idea of global governance revolves around the sum of laws, norms, Policies and institutions which define, constitute, and mediate trans-border relations between states, cultures, citizens, inter-governmental and non governmental organization and the market global governance for karns and mingst is composed of pieces that account for the activities and arrangements of the different political actors in the global community.  some of these pieces of global governance include the different international structures and mechanisms, international rules and laws, international norms, international regimes And ad-hoc groups and global conference and they also include non-governmental organizations that influence the process of global governance. global governance according to karns and Mingst (2015) is not just a function of the existing international policies and different pieces that we're discussed in the preceding paragraph. Not with standing the perspective of seeing globa governance as a combination of pieces and elements, the concept of political actors remains an essential ingredient in understanding the dynamics of global politics. The United Nations arguably remains one of the crucial organizations among the myriad of political actors that influences the process of global governance in the contemporary world. From its humble beggining in 1945, the United Nations has evolved into a complex organization that performs a number of functions that were unthinkable in the early years. As stated in its charter, the United Nations is authorized to perform four essential functions that pertain to the maintenance of international peace and security, development of a friendly relation Among nations, achievement of international cooperation in solving global problems, and acting as a center in harmonizing the actions of the member states. The charter likewise divided the United Nations into six critical organs that we're not contemplated by the founding fathers of it's predecessor - the League of Nations. This primary organs are distinctive as they were able to maintain the relevance of the united nations in spite of the recurrence of several global issues that almost caused the collapse of its age old foundations. THE SIX ORGANS OF UNITED NATIONS (UN) 1. GENERAL ASSEMBLY - provides a venue for the discussion of issues related to international peace and security and recommends possible actions in order to resolve these issues. 2. THE SECURITY COUNCIL - In the same manner decides on several issues that are submitted by the general general assembly. 3. THE ECONOMIC AND SOCIAL COUNCIL - Complements the other organs of the United Nations through its comprehensive studies and reports related to economic and social issues. 4. THE TRUSTEESHIP COUNSIL - is another crucial organ of the United Nations that was created by the charter to administer a Number of territories relegated through the trusteeship system 5. INTERNATIONAL COURT OF JUSTICE - In the contrast serves as the judicial organ of the United Nations which deliberates and decides on several issues that are submitted to it, 6. THE SECRETARIAT - completes the five organs and serves as the administrative part of the entire system of the United Nations. SUSTAINABLE DEVELOPMENT GOALS - From former name of millennium development goals, was set to promote sustainable development. These are the More than the discussion of the different functions and organs of the united nations, it is also necessary and logical to consider how the organization is confronting the different challenges of global governance in the 21st Century. The United Nations According to karns and mingst (2015) remains the real embodiment of the community of states and the best venue where collective action can be obtained to resolve a number of international impasses. Through the years the United Nations has incredibly achieved several milestones in its 73 years of meaningful existence.  As the 21st Century unfolds, the United Nations continues to accomplish new feats in a manner that is unquestionably acceptable to the international community The United Nations continues to provide food aid to countries that are in need of it's assistance.Food remains scarce in other parts of the world and the involvement of the organization is definitely necessary.  The United Nations likewise continues to provide humanitarian assistance to states that are currently embroiled in civil wars. The United Nations continues to support the protection of human rights in every part of the globe. whenever needed, the organization authorized tha investigation of human rights abuses in countries where there are reported cases of violations. Finally, the United Nations remains committed to the provision of peacekeeping forces to countries and the other areas. THANK YOU!!