Globalization PDF

***GLOBALIZATION*** **Introduction** Much has changed since time immemorial. Human beings have encountered many changes over the last century especially in their social relationships and social structures. Of these changes, one can say that globalization is a very important change, if not, the "mo...

***GLOBALIZATION*** **Introduction** Much has changed since time immemorial. Human beings have encountered many changes over the last century especially in their social relationships and social structures. Of these changes, one can say that globalization is a very important change, if not, the "most important" (Bauman 2003). The reality and omnipresence of globalization make us see ourselves as part of what we refer to as the "global age" (Albrow 1996). The Internet, for example, allows a person from the Philippines to know what is happening to the rest of the world simply by browsing Google. The mass media also allowed for further connections of people, communities, and countries all over the globe. What is globalization? This question is probably an easy one to answer. However, many scholars gave and continue to formulate definitions of it. This resulted to different, sometimes contradicting views about the concept. It cannot be contained within a specific time frame, all people, and all situations (Al-Rhodan 2006). Aside from this, globalization encompasses a multitude of processes that involve the economy, political systems, and culture. Social structures, therefore, are directly affected by globalization. Over the years, it has gained many connotations pertaining to progress, development, and integration. On the one hand, it can be said that some view globalization to be a positive phenomenon. For instance, Swedish Journalist Thomas Larsson (2001) saw globalization as "the process of world shrinkage, of distances getting shorter, things moving closer. It pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit with somebody on the other side of the world." On the other hand, some see it as occurring through and with regression, colonialism, and destabilization. In the mid-1990s, Martin Khor, the former president of Third World Network in Malaysia, once regarded globalization as colonization. In this chapter, different definitions of globalization will be discussed. It will be revealed that the task of conceptualizing it involves a variety of perspectives. For further understanding of the concept, different metaphors will be used, such as solid and liquid. These metaphors will also allow an appreciation of earlier epochs before globalization and the present globalized world. The final lesson in this chapter will be devoted to a general discussion of globalization theories. This section will highlight further differences among scholars in explaining globalization. **The Task of Defining Globalization** Since its first appearance in Webster's dictionary in 1961, many opinions about globalization have flourished. The literature on the definitions of globalization revealed that definitions could be classified as either (1) broad and inclusive or (2) narrow and exclusive. The one offered by Ohmae in 1992 stated, "... globalization means the onset of the borderless world..." This is an example of a broad and inclusive type of definition. If one uses such, it can include a variety of issues that deal with overcoming traditional boundaries. However, it does not shed light on the implications of globalization due to its vagueness. Narrow and exclusive definitions are better justified but can be limiting as well in the sense that its application are only to those who adhere to such definition. Robert Cox's definition suits best in this type: "the characteristics of the globalization trend include the internationalizing of production, the new internatiorial division of labor, new migratory movements from South to North, the new competitive environment that accelerates these processes, and the internationalizing of the state... making states into agencies of the globalizing world." Other definitions of globalization are shown in Table 1 in chronological order (See Appendix). Each could fall to either one of the two types of definitions. No matter how one classifies a definition of globalization, the concept is complex and multifaceted as the definitions deal with economic, political, or social dimensions. In fact, in a comprehensive study of 114 definitions by the Geneva Center for Security Policy in 2006, 67 of them refer to economic dimension. These definitions include political and social dimensions as well. The sheer number and complexity of definitions of does not mean that there is a remarkable improvement in every definition given by scholars. Kumar (2003) took on a different argument about the issue. To him, the debate about what can be done about globalization and what it is, are similar. This is, in relation to what some academics have claimed about defining globalization-it is a useless task. A more recent definition was given by Ritzer (2015), "globalization is a transplanetary process or set of processes involving increasing liquidity and the growing multidirectional flows of people, objects, places, and information as well as the structures they encounter and create that are barriers to, or expedite, those flows..." Generally, this definition assumes that globalization could bring either or both integration and/or fragmentation. Although things flow easily in a global world hindrances or structural blocks are also present. These blocks could slow down one's activity in another country or could even limit the places a person can visit. **If so, why are we going to spend time studying this concept? How can we appreciate these definitions? How can these help us understand globalization?** **Firstly**, defining globalization is shaped by the perspective of the person who defines it. The overview of definitions implied that globalization is many things to many different people. In 1996, Arjun Appadurai said, "globalization is a 'world of things' that have 'different speeds, axes, points of origin and termination, and varied relationships to institutional structures in different regions, nations, or societies." In a more recent study, Al-Rhodan (2006) wrote that definitions suggest the perspective of the author on the origins and the geopolitical implications of globalization. It is a starting point that will guide the rest of any discussions. In effect, one's definition and perspective could determine concrete steps in addressing the issues of globalization. For example, if one sees globalization as positive, the person can say that it is a unifying force. On the other hand, if it is deemed as creating greater inequalities among nations, globalization is negatively treated. **Secondly**, to paraphrase the sociologist Cesare Poppi: globalization is the debate and the debate is globalization. One became part and parcel of the other. As Poppi (1997) wrote: "The literature stemming from the debate on globalization has grown in the last decade beyond any individual's capability of extracting a workable definition of the concept. In a sense, the meaning of the concept is self- evident, in another, it is vague and obscure as its reaches are wide and constantly shifting. Perhaps, more than any other concept, globalization is the debate about it." **Thirdly**, globalization is a reality. It is changing as human society develops. It has happened before and is still happening today. We should expect it to continue to happen in the future. The future of globalization is more difficult to predict. What we could expect in the coming years is what has happened over the past 50 years and that is the fluidity and complexity of globalization as a concept made more debates, discussions, and definitions than agreements on it. **Overall**, globalization is a concept that is not easy to define because in reality, defining globalization has a shifting nature. It is complex, multifaceted, and can be influenced by the people who define it. Moreover, the issues and concerns involving globalization have a wide range from the individual to society; from small communities to nations and states; and from the benefits we can gain from it to the costs it could carry. In his article, "The Globalization of Nothing," George Ritzer (2003) said, "attitudes toward globalization depend, among other things, on whether one gains or loses from it." Nevertheless, the task of defining globalization should stimulate more discussions about it. More importantly, the fact that we experience globalization should give one the interest of engaging into the study of it. **Metaphors of Globalization** In order for us to better understand the concept of globalization, we will utilize metaphors. Metaphors make use of one term to help us better understand another term. In our case, the states of matter-solid and liquid-will be used. In addition, other related concepts that are included in the definition such as structures and flows will be elaborated. **Solid and Liquid** The epochs that preceded today's globalization paved way for people, things, information, and places to harden over time. Consequently, they have limited mobility (Ritzer 2015). The social relationships and objects remained where they were created. Solidity also refers to barriers that prevent or make difficult the movement of things. Furthermore, solids can either be natural or man-made. Examples of natural solids are landforms and bodies of water. Man- made barriers include the Great Wall of China and the Berlin Wall. Imaginary lines such as the Nine-Dash Line being used by the People's Republic of China in their claim to the West Philippine Sea is an example of modern man-made solid. This created limited access of Filipino fishermen to the West Philippine Sea. Obviously, these examples still exist. However, they have the tendency to melt. This should not be taken literally being like an iceberg melting. Instead, this process involves how we can describe what is happening to today's global world. It is becoming increasingly liquid. Liquid, as a state of matter, takes the shape of its container. Moreover, liquids are not fixed. Liquidity, therefore, refers to the increasing ease of movement of people, things, information, and places in the contemporary world. Zygmunt Bauman's (2000) ideas were the ones that have very much to say about the characteristic of liquidity. First, today's liquid phenomena change quickly and its aspects, spatial and temporal, are in continuous fluctuation. This means that space and time are crucial elements of globalization. In global finance, for instance, changes in the stock market are a matter of seconds. Another characteristic of liquid phenomena is that their movement is difficult to stop. For example, the videos being uploaded on YouTube or Facebook are hard to halt once they become viral. The so-called Internet sensations become famous not just in their homeland but to the entire world as well. Finally, the forces (the liquid ones) made political boundaries more permeable to the flow of people and things (Cartier 2001). This brings us to what Ritzer (2015: 6) regarded as the most important characteristic of liquid: it \"tends to melt whatever stands in its path (especially solids)." The clearest example is the decline, if not death, of the nation-state. Liquidity and solidity is in constant interaction. Liquidity is the one increasing and proliferating today. Therefore, the metaphor which could best describe globalization is liquidity. Liquids do flow and this idea of flow (Appadurai 1996; Rey and Ritzer 2010) will be the focus of the next discussion. Also, it should be expected that this concept will appear in the succeeding lessons. The literature on globalization makes use of the concept of flows. **Flows** The discussion above described the melting process of solid phenomena followed by the increase in liquidity. It is logical, that flows of liquid phenomena be discussed next. Flows are the movement of people, things, places, and information brought by the growing "porosity" of global limitations (Ritzer 2015). Think of the different foreign cuisines being patronized and consumed by the Filipinos. Aside from local dishes, many of us are fond of eating sushi, ramen, hamburger, and French fries-foods introduced to us by foreign cultures. Clearly, foods are being globalized. Another example of flows are global financial crises. As Landler (2008:C1) put it: "In global financial system, national borders are porous." This means that a financial crisis in a given country can bring ramifications to other regions of the world. An example of which is the spread of the effects of American financial crisis to Europe in 2008. The following are other kinds of flows that can be observed today: poor illegal migrants flooding many parts of the Or of the hybrids or combinations of cultures which can be produced through the different transplanetary processes. Contrary to cultural imperialism, heterogeneity in culture is associated with cultural hybridization. A more specific concept is "glocalization" coined by Roland Robertson (1992). To him, as global forces interact with local factors or a specific geographic area, the "glocal" is being produced. Economic issues are not exempted from heterogeneity. The commodification of cultures and "glocal" markets are examples of differentiation happening in many economies around the world. The same goes with political institutions. Barber (1995) also provided the alternate of "McWorld"-the "Jihad." As Ritzer (2008:576) mentioned, it refers to the political groups that are engaged in an "intensification of nationalism and that lead to greater political heterogeneity throughout the world. Although homogeneity and heterogeneity gave us an idea about the effects of globalization, the picture is not yet complete. The theories about globalization will be clarified as we look closer at each of them in the succeeding chapters. **Origins and History of Globalization** The previous discussions answered the question, "What is globalization?" The next question, "Where did it start?" is not easy to answer as well because there are different views about this. This book generally adheres to the perspective that the major points of the beginnings of globalization started after the Second World War. Nevertheless, it would mean no harm to look at the five different perspectives regarding the origins of globalization. **Hardwired** According to Nayan Chanda (2007), it is our basic human need to make our lives better that made globalization possible. Therefore, one can trace the beginning of globalization from our Ancestors in Africa who walked out from the said continent in the late Ice Age. This long journey finally led them to all-known continents today, roughly after 50,000 years. **Chanda** mentioned that commerce, religion, politics, and warfare are the "urges" of people toward a better life. These are respectively connected to four aspects of globalization and they can be traced all throughout history: trade, missionary work, adventures, and conquest. **Cycles** For some, globalization is a long-term cyclical process and thus, finding its origin will be a daunting task. What is important, are the cycles globalization has gone through (Scholte 2005). Subscribing to this view will suggest adherence to the idea that other global ages have appeared. There is also the notion to suspect that this point of globalization will soon disappear and reappear. **Epoch** Ritzer (2015) cited Therborn's (2000) six great epochs of globalization. These are also called "waves" and each has its own origin. Today's globalization is not unique if this is the case. The difference of this view from the second view (cycles) is that it does not treat epochs as returning. The following are the sequential occurrence of the epochs: 1.Globalization of religion (4^th^-7^th^ Centuries) 2.European colonial conquests (late 15^th^ Century) 3.Intra-European wars (late 18^th^ -- early 19^th^ Centuries) 4.Heyday of European imperialism (mid-19^th^ Century to 1918) 5.Post-World War II period 6.Post-Cold War period **Events** Specific events are also considered as part of the fourth view in explaining the origin of globalization. If this is the case, then several points can be treated as the start of globalization. Gibbon (1998), for example, argued that Roman conquests centuries before Christ are its origin. In an issue of the magazine the Economist (2006, January 12), it considered the rampage of the armies of Genghis Khan into Eastern Europe in the thirteenth century. Rosenthal (2007) gave premium to voyages of discovery Christopher Columbus's discovery of America in 1942, Vasco Da Gama in Cape of Good Hope in 1498 and Ferdinand Magellan's completed circumnavigation of the globe in 1522. The recent years could also be regarded as the beginnings of globalization with reference to specific technological advances in transportation and communication. Some examples include the first transatlantic telephone cable (1956), the first transatlantic television broadcasts (1962), the founding of the modern Internet in 1988, and the terrorist attacks on the Twin Towers in New York (2001). Certainly, with this view, more and more specific events will characterize not just the origins of globalization but more of its history. **Broader, More Recent Changes** Recent changes comprised the fifth view. These broad changes happened in The last half of the twentieth century. Scholars today point to these three notable changes as the origin of globalization that we know today. They are as follows: 1\. The emergence of the United States as the global power (Post-World War II) 2\. The emergence of multinational corporations (MNCs) 3.The demise of the Soviet Union and the end of the Cold War Through its dominant military and economic power after WWII, the US was able to outrun Germany and Japan in terms of industry. Both Axis powers and Allies fall behind economically as compared to the new global power. Because of this, the US soon began to progress in different aspects like in diplomacy, media, film (as in the Hollywood), and many more. Before MNCs came into being, their roots are from their countries of origin during the eighteenth to early nineteenth centuries. The US, Germany, and Great Britain had in their homeland great corporations which the world knows today. However, they did not remain there as far as their production and market are concerned. For example, Ford and General Motors originated in the US but in the twentieth century they exported more automobiles and opened factories to other countries. More recent than the first two would be the fall of the Soviet Union in 1991. This event led to the opening of the major parts of the world for the first time since the early twentieth century. Many global processes-immigration, tourism, media, diplomacy, and MNCs-spread throughout the planet. This paved way for the so-called "free" world. China, even though the government remains communist, is on its way to becoming a major force in global capitalism (Fishman 2006). Moreover, China is also globalizing in terms of other aspects such as their hosting of the Olympics in 2008. **The GLOBAL ECONOMY** **Introduction** We will begin with the discussion of economic history which made possible the economic structures that affect globalization today. The discussion of economic flows is closely associated with economic structures. The global economic system, beginning in 1896, had reached its peak in 1914. There are various changes and improvements that characterize economic globalization before and at present. Structures of transportation, communication, and capital are comparable then and now. In terms of transportation, railroads and steamships are the significant inventions that hastened development in the past. Today, airplanes have been transporting humans and objects all over the world in a relatively shorter period of time. When it comes to communication, the Internet today made the world open to everyone. The access to different social media and websites allows one to have access to overwhelming information of other people, organizations, and countries. In the past, it was the telegraph that assisted the early twentieth century communication. Today and even then, large-scale flows of capital and large-scale immigration are key processes that became the worldwide norm. One key element of these is the remittance. These are transactions by which migrants send money back to their country of origin. Free trades and elimination of trade barriers strengthened global economic processes in both periods. Not only are there structural similarities between global economic development in the two periods, but the problems are also similar in both of them. First, poor nations and the peoples who inhabit them were and are subjugated by the operations of the global economy. Second, not all parts of the world gain(ed) (or gain\[ed\] equally) from the growth of the global economy. There were still are sub-areas within those parts of the world and did advance that did or do not share equally in the gain. Third, not only were or are there losers in this economic competition among geographic areas, but also certain industries and social classes lose out, at least in comparison to the winners. Fourth, within nations, the poor tends or tended to suffer most when those nations, are forced to repay their debts to other, more developed, nations. In sum, the global economy of a century "was not equally good for everyone and was bad for many" (Frieden, 2006:26). While a strong case can be made for a prior epoch of economic globalization, what is not recognized in this argument and what is central to this book-is that there is far more to globalization than that which relates to the economy. For example, Jeffry Frieden mentions the global spread of the English language and of soccer or football, but he fails to accord such cultural phenomena the importance they deserve. Further, while Frieden devotes more attention to political issues, they are usually part of (or subordinated to), economics and economic globalization. Thus, he, (along with many others) fails to give political and cultural globalization their proper role in his overall perspective on globalization. The cultural and the political are just two of the aspects of globalization given short shrift or ignored by Frieden. Thus, even if we accept his argument that economic globalization is not new, this argument tells us little or nothing about these other aspects of it. Nonetheless, the argument about a prior epoch of economic globalization is very useful in terms of the discussion to follow on the emergence of more recent global economic structures. **Surpluses and Deficits** A good place to get a quick snapshot of global trade (Mann and Pluck, 2007: 1159-66), as well as net economic flows in and out of a nation-state, is by looking at a nation's trade surpluses and deficits. Of special interest and importance as far as trade surpluses and deficits are concerned are the positions of the two global economic giants-the US and China-in terms of their trade balances. On the one side is the US which by the end of November, 2007, had a trade deficit of \$701.6 billion (it'ended the year at \$738.6 billion) (Peters, 2007:C3). The deficit dropped slightly in 2008 and dramatically in 2009 to about half the 2007 figure because of the Great Recession. For its part, China announced that it had a record trade surplus of \$177.47 billion in 2006 (Peters, 2007:C3). China's surplus was 75% greater than it had been in the previous year (2005). Through November 2006, the Chinese surplus with the US was almost equal to its surplus with all other countries in the world. The US deficit with China alone was \$22.9 billion and that was just for the month of November 2006. The US has a larger deficit with China than with any other country in the world. The US is negotiating with China over the size of its deficit, blaming it, at least in part on Chinese monetary policies that, in the US view, artificially undervalue the yuan, thereby making Chinese exports less expensive and therefore more affordable to Americans. Of course, there is much more to the American attraction to Chinese products than their low prices traceable to China's undervalued currency. The fact is, many Chinese products are attractive because they are priced low, mainly as a result of the low cost of labor there and because their quality is high, at least for the price being paid. The trade deficit with China has certainly hurt American industry, but it has greatly aided the American consumer who has access to a wide range of low- priced imports from China and elsewhere. While only 7.5% of total US spending on consumer goods is on products imported from China, it is much higher for certain products such as footwear (85%), toys (80%), and clothing (40%) (Barboza 2008a:A1, A8). **MARKET INTEGRATION** **Introduction** Have you heard the phrase, "When the American economy sneezes, the rest of the world catches a cold?" this means that the economies have been brought closer together by globalization. But it is important to remember that it is not just the economy of the United States that has a significant impact in the global market and finance. This is clear, for example, in the global impact of the financial crises that struck Asia and Russia in the 1990s. However, it remains the case that the more powerful the economy, the greater the effect of its crises on the rest of the world. In the same manner, crises on weaker economies have less effect on other countries. For example, Argentina's serious financial crisis in the late 1990s and early 2000s had a comparatively small impact on the global economy. This chapter shows the contributions of the different financial and economic institutions that facilitated the growth of the global economy. As we discuss the history of the creation, interaction, and characteristics of these institutions, we will be able to see their significance as well as the controversies in which they became involved. We will also take a look at the multinational corporations that are emerging in today's world economy. Economic Development During and After World War II Frieden sees the development of economic globalization after WWII in the context of this prior epoch of economic globalization, as well as its collapse as a result of WWI,the Depression, and WWII. All of these events had negative effects on almost all major economies (the US economy was a major exception, at least in terms of the effect of the two world wars). Of particular importance in the 1930s was the movement of many countries-notably fascist Italy and Germany-in the direction of autarky, or the turn inward of a nation in order to create as much economic self-sufficiency as possible. Such a turn inward is, of course, anathema to globalization, which requires that various entities-including nation-states- be outward looking, rather than inward looking, not only in the way they view the world but also in their actual dealings with other parts of the world. For its part, the US in the 1930s had a strong tendency toward isolationism although such an orientation was not quite as antithetical to economic globalization as autarky, largely because it was more political than economic. However, even in the midst of WWII, the Western world, especially the US and Great Britain, began planning for a more open international economy. A great fear was the recurrence of the Depression after the end of WWII, especially because of the difficulties those societies would have in absorbing the massive manpower created by the demobilization of the military when the war ended. There was also fear of a resurrection of barriers to trade and the free flow of money that had become commonplace prior to WWII. The focus of the planners was on reducing trade barriers and on creating conditions necessary for the free flow of money and investment. Another concern was the creation of conditions needed for financial stability around the globe. This was the background for a meeting in July 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire, which led to the beginning of the "Bretton Woods System" by the end of the three-week meeting. **Bretton Woods and the Bretton Woods System** A key factor in the Depression was thought to be a lack of cooperation among nation-states. That lack of cooperation was associated with high tariffs and other import restrictions and protectionist practices, as well as the propensity of governments to devalue their currencies in order to gain an edge in global trade over other countries. The latter also made exchange rate wars among the nations involved more likely. Those concerns were the backdrop for the creation of the Bretton Woods system and its five key elements (Bordo and Eichengreen 1993; Boughton 2007:106-7). Firstly, each participating state would establish a ""par value' for its currency expressed in terms of gold or (equivalently) in terms of the gold Value of the US dollar as of July 1944" (Boughton 2007:106). For example, the US pegged its currency at 535 per ounce of gold, while, to take one example, the figure for Nicaragua was 175 cordobas per ounce. This meant that the rate between the two currencies was five cordobas for one dollar. "Secondly, the official monetary authority in each country (a central bank or its equivalent) would agree to exchange its own currency for those of other countries at the established exchange rates, plus or minus a one-percent margin" (Boughton 2007:106-7). This made international trade possible at or near the exchange rate for the currencies of the countries involved without the need for any outside intervention. Thirdly, the International Monetary Fund (IMF) was created (Babb 2007:128- 64) to establish, stabilize, and oversee exchange rates. Forty states became IMF members in 1946 and were required to deposit some of their gold reserves with the IMF. The IMF was empowered to approve the par values of currencies and member states could not change that value by more than 10 percent. If a currency was destabilized, the IMF was prepared to lend member states the money needed to stabilize their currency. Fourthly, the member states agreed to eliminate, at least eventually, "all restrictions on the use of its currency for international trade" (Boughton 2007:107). Finally, the entire system was based on the US dollar (at the end of WWII the US had about three-fourths of the world's gold supply and accounted for over one-fifth of world exports). The US agreed to make the dollar convertible into other currencies or gold at the fixed par value. The dollar became, in effect, a global currency. Of course, as the Bretton Woods system came into existence and had a chance to develop, it changed dramatically over time. Bretton Woods had its most powerful effects on global trade, the global monetary order, and global investment (Peet 2003). In terms of global trade, a key was the idea of the "unconditional most favored-nation" which "required governments to offer the same trade concessions \[reductions in trade barriers, non-discrimination against a nation's products\] to all" (Frieden 2006:288). Restrictions on international trade were reduced over the years through various meetings (rounds) under the auspices of General Agreement on Tariffs and Trade (GATT) and later the WTO. In terms of the monetary order, it was the IMF that took center stage. The goal was to provide security, as well as flexibility, to the monetary order. What emerged between 1958 and 1971 was a system in which the US could not change the value of its dollar, while all other countries could, but as infrequently as possible. This made exchange rates stable enough to encourage international trade and investment which otherwise would have been discouraged by dramatic fluctuations in rates. In terms of global investment, a key role was envisioned for the World Bank, but massive US aid through the Marshall Plan and rapid European post-war recovery made its work in that period of much less significance than had been anticipated. A key development in terms of investment involved MNCs, especially American-based firms in fields like automobiles and computers, constructing their own plants and/or investing in indigenous companies in other countries. This kind of investment took center stage because the industries involved required very large, often global, organizations in order to function effectively. In addition, this kind of investment made it possible to get around trade barriers by opening plants within the countries with such barriers. The global openness encouraged by Bretton Woods also contributed to the emergence or expansion of social welfare programs, indeed the welfare state, in many countries. Welfare states sought to deal with various problems- recessions, layoffs, reductions in wages, and bankruptcies of uncompetitive firms. The creation of a social safety net within a given country served to protect it and its citizens from these problems, at least to some degree. In the process, it gave a nation and its entrepreneurs the cover they needed to be actively involved in the global marketplace. The combination of all of these aspects and dimensions of Bretton Woods satisfied many different nations and constituencies and in the process, \"oversaw the most rapid rates of economic growth and most enduring economic stability in modern history" (Frieden 2006:300). Given this brief background on Bretton Woods, let us now look in more detail at some of the economic organizations spawned by it either directly or indirectly. **General Agreement on Tariffs and Trade (GATT)** General Agreement on Tariffs and Trade (GATT) was a system for the liberalization of trade that grew out of Bretton Woods and came into existence in 1947 (Hudec 1975). It operated until 1995 when it was superseded by the World Trade Organization (WTO). While GATT focused on trade in goods, the WTO also took on responsibility for the increasingly important trade in services. While GATT was simply a forum for the meeting of representatives of countries, the WTO is an independent organization. GATT was deemed more acceptable than the International Trade Organization (ITO) by the US and other countries and in 1947, the number of initial trade agreements have been negotiated under CAFT's (ang later the WTO%) rotitutional unbrella. Over the years, a number of "rounds" of negotiates were completed, it was out of the Uruguay Round (1986-1993) that an agreement was reached to create the WTO. While GATT has been superseded by the WTO, many of its elements were Incorphile Alt habeo, although they continue to change and evolve asa result of changing global economic realities. Negotiations on trade have continued under the auspices of the WTO and as of this writing the highly disputatious Doha Round has just ended in failure. Over the years, WTO negotiations have dealt with such issues as reducing tariffs on the trading of goods, dealing with non. Tariff barriers (e.g., quotas, national subsidies to industry and agriculture), and liberalizing international trade in agriculture. More recently, attention has shifted to such issues as "international trade in services, trade-related international property rights (TRIPS), and trade-related investment measures (TRIMS)" (House 2007: 477-9). Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Correa 2000) was negotiated through the WTO, as a result of the 1986-1994 Uruguay Round of negotiations. This involves intangible ideas, knowledge, and expressions that require their use to be approved by their owner. Involved here is a wide range of intellectual property, such as movies, books, music recordings, and computer software, which exists, or whose value lies largely in the realm of ideas. There are many other material products, such as pharmaceuticals and advanced technologies that are also viewed as having a significant intellectual component. Trade-Related Investment Measures (TRIMS) "are a range of operating or performance measures that host-country governments impose on foreign firms to keep them from having a distorting effect on trade in goods and services" (Grimwade 2007: 1178). There are a number of specific restrictions and constraints on foreign firms that can be included under this heading, including requirements for minimum amounts of local content or sourcing, how much of a foreign producer\'s output must be exported, and limits on the value of goods imported by a foreign firm in relation to the amount it exports, and so on (Grimwade 2007:1178-80). **World Trade Organization (WTO)** The WTO is a multilateral organization headquartered in Geneva, Switzerland with 152 member nations as of 2008 (Krueger 2000; Trachtman 2007:1308-15). Its focus on trade places it at the heart of economic globalization and has made it a magnet for those opposed either to the broader process of trade liberalization and promotion or to some specific aspect of WTO operations. The WTO encompasses much of what was GATT's mandate, but has moved onto other issues and areas such as services (General Agreement on Trade in Services \[GATS\] \[Koivusalo 2007: 479-81\]), intellectual property (TRIPS), and so on. Each member state in the WTO has an equal vote. To a large extent, the WTO is the organization of these member states and not (with some exceptions) a supranational organization. Agenda items to be voted on generally flow from a number of more informal groups. There are stresses and strains between developed and developing nations in the WTO that manifest in and between these groups, as well as in the WTO as a whole. One bone of contention has meetings of the larger trading powers in the so-called "Green Room" and the exclusion of smaller powers from these meetings. Protests over such matters have led to greater transparency in the internal operations of the WTO. There is also no mechanism for involvement of international nongovernmental organizations (INGOs) in WTO's decision-making and this has led INGOs to stage regular protests and demonstrations against the WTO. While GATT focused on tariff reduction, the WTO has come to focus more on non-tariff-related barriers to trade. One example is the differences between nations in relation to regulations on such items as manufactured goods or food. A given nation can be taken to task for such regulations if they are deemed to be an unfair restraint on the trade in such items. However, the WTO has been criticized for not going far enough in countering the trade barriers retained by developed countries in such domains as agricultural products and some services. Of course, the WTO continues to be concerned with tariff barriers, as well as restrictions on trade in services. The WTO also deals with other types of protectionism. Overall, WTO operations are premised on the neoliberal idea that all nations benefit from free and open trade and it is dedicated to reducing and ultimately eliminating barriers to such trade. While there are winners under such a system, there are also losers. **International Monetary Fund (IMF)** The goal of the IMF is macroeconomic stability for both member nations and the global economy (Cardim de Carvalho 2007: 658-63). More specifically, the IMF deals with exchange rates, balances of payments, international capital flows, and the monitoring of member states and their macroeconomic policies. The IMF is a lightning rod for critics who see it as supporting developed countries and their efforts to impose their policies on less developed countries. Its supporters see it as key to the emergence and further development of the global economy. As a result of changes in the global economy, the nature and functions of the IMF have changed since its creation in 1944. In the beginning, it managed the exchange rate system created at Bretton Woods. The IMF closely watched a nation's balance of payments in order to be sure it could sustain the agreed. Upon exchange rate for its currency. If there were problems in the latter, the IMF concerned itself with two matters. The first was policy errors by a nation, which presumably could be corrected. The second was more fundamental economic problems (relating, for example, to productivity). Above all, the IMF wanted to be sure that a nation did not use such problems as an excuse to lower its exchange rate and therefore improve its competitive position vis-à-vis other nations. If a fundamental disequilibrium occurred, the IMF had the power to authorize a change in the exchange rate of a nation's currency. The IMF could also give adjustment loans to nations (initially, largely developed countries) in disequilibrium so that they are able to meet their international financial obligations. The fund was created on the basis of quotas for member nations. The quota for each nation was related to the limits on its borrowing (should it become necessary), as well as its voting power in the IMF. When the fixed, albeit adjustable, exchange-rate system collapsed in the early 1970s, the first of the IMF's functions changed so that it was in charge of the much more amorphous goal of seeking stable exchange rates in order to prevent exchange rate wars among its member nations. By the end of the 1970s, developed nations had fully recovered from WWII and ceased seeking adjustment loans; such loans were now given to developing countries with balance-of-payments problems. With a new clientele, the conditions for such loans changed and became more stringent, including the demand for structural adjustments in such nations. Among such adjustments were demands for a tight monetary policy and fiscal austerity. More specifically, the IMF might demand "currency devaluation, measures to reduce government spending or (more rarely) increase taxation, deregulation of interest rates and of foreign exchange transactions, slower expansion of domestic credit creation, and measures to manage and reduce external indebtedness" (Killick 2007:1095). This policy was traceable to a growing belief that balance-of-payments imbalances were caused by inflationary policies and processes (i.e., "loose" monetary policy, expansionist fiscal policies) in a given nation. Structural adjustments were designed to reign in such tendencies toward inflation and became conditions ("conditionalities") of help from the IMF. A nation receiving help agreed to alter its policies in order to achieve a balance of payments in a short period of time. As the IMF became the lender of last resort for developing countries in the late 1970s and 1980s, it underwent further changes. Such countries were unlikely to be able to achieve a balance of payments in a short period of time. Thus, longer-term structural adjustment programs were required. The IMF adopted general models of the requirements for the operation of a market economy and these tended to be imposed on developing economies without regard for the differences among and between their economies. These structural adjustments not only took the IMF into uncharted waters and new directions, but they also became highly controversial and ultimately a target of groups opposed to globalization, at least as it was conceived and practiced by the IMF. Such protests were also related to the IMF governance structure, which is dominated by the US with about 17% of the total IMF vote and veto power over any strategic decision; developed nations control more than 50% of the votes. (Votes are a function of a fixed number for each nation plus additional voting power based on each nation's quota of contributions to the Fund.) The managing director of the IMF usually comes from Western Europe; the deputy managing director from the US. In order to cope with criticisms of this structure, the IMF has been moving in the direction of greater transparency in its dealings with member nations, dealing more with Nongovernmental Organizations (NGOs), and being more concerned with social issues in its dealings with developing nations. The changing nature of global economic crises in the late twentieth century led to further changes in the IMF. It shifted from an interest in balance-of-payments issues that were related to current accounts to capital account movements of financial assets. This led to the creation of a Capital Markets Department to monitor financial markets and to suggest ways of stabilizing them. In the 1990s, the IMF was actively involved in helping resolve the economic crises in Latin America, Asia, and Russia. It loaned large amount of money, but as the countries involved lead their loans, income to the IMF declined and by 2007, with interest income declining, it found itself running a deficit (about \$400 million a year). It cut 380 members of its staff (it employed about 4,000 people in 2007) and saved a considerable amount of money as a result (Economist 2008: February 7). There was even some talk that it would need to sell its gold bullion reserves (about \$70 bilion). A new managing director (Dominique Strauss-Kahn) from France took office in October 2007. He Indicated that the very existence of the IMF might be in jeopardy. The IMF increasingly seemed marginal or irrelevant. It had about \$300 billionIn reserves and credit lines, but it confronted a global economy where trillions of dollars flowed throughout the world every day. In light of its increasingly marginal economic position, the IMF began to focus on other issues such as working to "prevent crises, monitoring the global economy and providing technical assistance" (Weisman 2007b:C1). Others thought it should focus on data gathering and the dissemination of financial information in order to forestall economic surprises. The IMF faced other problems such as protests from the rest of the world over the continuing dominance of the IMF by the Western powers (in addition to the new IMF director from France, the new \[in 2007\] World Bank director Robert B. Zoellick was from the US). Further, the countries bailed out in the 1990s had become powerful economically and increasingly resented being dictated to by the Fund. There were also lingering resentments over IMF interventions that demanded austere budgets and other fiscal tightening in exchange for loans. As the Russian IMF representative described it, the resentment was over the traditional approach of the IMF-"you need our money, we tell you what to do" (Weisman 2007b:C5). However, the Great Recession brought about a dramatic change in the fortunes of the IMF. A number of economies were on the brink of disaster (Iceland, for example), or close to it (Hungary, Ukraine), and they gladly accepted funds from the IMF (Economist 2008). Even healthy economies (Brazil, South Korea) were receiving economic help from the IMF (Landler 2008). The long decline of the IMF was at an end, at least for the time being, and there were calls, even from former critics, for a massive increase in the lending capacity of the IMC to help deal with the global economic meltdown (economic 2009) **World Bank (WB)** The World Bank, officially the International Bank for Reconstruction and Development (IBRD) is the most importa't element of the World Bank Group (WBG) (Gilbert and Vines 2000; Bradlow 2007:1262-7). The IBRD or the Bank was established in 1944 at Bretton Woods and began operations in 1946. Membership is open to all member states of the IMF, and as of this writing, it includes 184 nations. It provides funds to government-sponsored or guaranteed programs in so-called Part II countries (member states that are middle-income or creditworthy poorer nations). It also provides advice and analytical services to such states. Among the missions of the Bank are: Encouraging development of productive facilities and resources in less developed countries; Funding for productive purposes when private capital cannot be obtained on reasonable terms; Encouraging international investment in order to promote international trade and development and equilibrium in balance of payments; and Helping member countries improve their productivity, standard of living, and labor conditions (Bradlow 2007:1264). Over the years, the Bank has expanded far beyond its original focus on pro- jects involving physical infrastructure (e.g., transportation, telecommunication, and water projects, among others) capable of generating income. It now deals with a broad range of issues related to economic development including "population, education, health, social security, environment, culture aspects of macroeconomic policy and structural reform... \[and\] poverty alleviation" (Bradlow 2007:1265). In addition, it now makes loans to deal with a variety of governance matters such as "public sector management, corruption, legal and judicial reform, and some aspects of human rights and broader policy reforms" (Bradlow 2007:1265). Support is also given to help women deal with gender inequality and discrimination. The Bank continues to expand its range of concerns and activities. NGOs and affected people have grown increasingly involved in projects financed by the Bank. Decisions are supposed to be made on purely economic, not political grounds and the Bank is not supposed to intervene in the political affairs of the member states. However, exactly what is deemed political is not defined and it is often difficult to ascertain whether, and to what degree, political considerations have been involved in Bank decisions. All of the member states have a say in the WBG, but a state's number of votes varies depending ontates leaved its importance in the world economy. Each member state appoints a governor to the Board of Govermotors empreets once a year. There appoints a gover Board of Executive Directorsmeldered to handle the most important functions of the larger and more unwieldy Board of Governors. The president of the Bank is chief of the Bank's operating staff The Board officially oppidents the president to a five-year renhe Uble term, but by tradition, the president is appointed by the President of the United States. This was much in the news in 2007 when the then president of the Bank, Paul Wolfowitz, a prominent neo-conservative and neoliberal; a close advisor to President George W. Bush who had nominated him to the post, was forced by the Board to resign. The resources of the Bank include both a relatively small sum paid in by member countries and, if necessary, a much larger amount that can be called in by the Bank from the members. The Bank uses its potential access to the latter to issue highly rated bonds and in this way, raises about \$25 billion per year. It is this money that provides the bulk of the funds that uses to finance loans of various sorts. Countries that receive the loans benefit from the fact that the Bank offers low interest rates. Since its money is borrowed, the Bank depends on the ability of nations to which it has loaned money to pay back those loans. Its lending decisions are based on a given country's ability to repay loans. Over the years, especially since the 1980s, the operations of the Bank have become increasingly controversial. First, the Bank is seen as dominated by rich developed nations, and less developed countries and non-states have little say in it. Second, there are concerns that the Bank serves certain interests (e.g., the nation-state, international capital, and wealthy nations) and thereby adversely affects those of others especially the poor and less developed nations. Third, as a result of its expanded mandate described above, the Bank is seen as having lost focus and encroaching on the activities of other agencies. In late 2007, a controversy arose over the Bank's annual World Development Report that devoted to agriculture. Given its mandate to use funds from rich nations to reduce poverty in poor ones, the report was a shocker since it showed that the Bank had long neglected agriculture in sub-Saharan Africa. This neglect occurred in spite of the fact that sub-Saharan Africa is one of the poorest regions in the world and one that is almost totally dependent on agriculture. In fact, in the 1980s and 1990s, the Bank had helped push the public sector in sub-Saharan Africa-which was seen as inefficient and dominated by poor management practices-out of agriculture on the neoliberal assumption that agriculture would improve if privatization and market forces (e.g., through the decontrol of prices) were allowed to operate. However, the private sector has not filled the void and this has had disastrous consequences for agriculture in the region (e.g., farmers find it difficult to get credit). As one economist put it, "markets can't step in and won't step in when people have nothing. And if you take help away, you leave them to die" (quoted in Dugger 2007:A3). Another economist commented, "Here's your most Important client, Africa, with its most important sector, agriculture, relevant to the most important goal-people feeding their families and the bank has been caught with two decades of neglect" (quoted in Dugger 2007:A3). While some observers felt that the Bank was not given enough credit for its positive contributions and much of the blame lay with African governments, the Bank itself acknowledged its mistakes in this domain. With the 2007 World Development Report, the Bank announced its intention to return to a focus on agriculture in developing nations, especially in Africa. It is late in doing so since both the Bill and Melinda Gates and the Rockefeller foundations have already been focusing on this issue in Africa. While many of the details are to be worked out and negotiated with African governments, the Bank has decided to shift back to an earlier focus on agriculture from later concerns with such issues as health (e.g., AIDs) and primary education (Dugger 2007:A6). Of course, the Bank, like the IMF, has become deeply immersed in the economic issues produced by the Great Recession and that might sidetrack it, at least for a time. Even before the Recession, the Bank was following and concerned about debt levels, especially of developing countries. In spite of a wide range of difficulties, the Bank is an important force globally. First, it is a forum for a vast number of nations to discuss development and development financing. Second, it remains a significant source of funds for developing countries. Third, it is an important source of information on development and provides valuable advice and support to the nations that are its members. **Changes in Bretton Woods Era Organizations** In the twenty-first century, the organizations that were spawned by Bretton Woods the World Bank, the International Monetary Fund, and the World Trade Organization-are undergoing dramatic changes (Weisman 2007a:C1, C8). A former US Secretary of Treasury commented: "The Bretton Woods system has become outmoded.... It has served us very well for a long time, but these institutions haven't changed with the times. They need to be rethought and restructured" (Weisman 2007a:C8).