Contemporary World Midterm Reviewer PDF

CONTEMPORARY WORLD - Mobile Phones: Considered by (MIDTERM REVIEWER) economist Jeffrey Sachs as the "single most transformative technol...

CONTEMPORARY WORLD - Mobile Phones: Considered by (MIDTERM REVIEWER) economist Jeffrey Sachs as the "single most transformative technology" for providing The 8 Millennium Development Goals access to banking, education, and market - created in the 1990s, aimed at tackling various information, particularly in developing global challenges: countries. 1. Eradicate extreme poverty and hunger - Leapfrogging - Countries can skip 2. Achieve universal primary education to more efficient and cost-effective 3. Promote gender equality and empower technologies that were previously women unavailable and adopt more efficient 4. Reduce child mortality technologies without going through 5. Improve maternal health traditional stages of development. 6. Combat diseases like HIV/AIDS and malaria 7. Ensure environmental sustainability Fair Trade - concern for the social, economic, and 8. Develop a global partnership for environmental well-being of marginalized small development. producers - It promotes just prices, safe working HIV – Human Immunodeficiency Virus conditions, and environmentally sustainable AIDS – Acquired Immunodeficiency Syndrome practices, particularly in the trade of products like coffee and chocolate. Extreme Poverty - living on less than $1.25 a day, - International Fair Trade Association: An characterized by severe deprivation of basic human organization that promotes fair trade practices to needs. support marginalized producers. World Bank - predicts that by 2030, the number of people living in extreme poverty could drop to less Sustainable Development - defined as development than 400 million, contingent on continued of our world today using the earth’s resources and improvements. the preservation of such resources for the future. - aims to find a middle ground between Economic Globalization - increasing economic growth and environmental sustainability interdependence of world economies through cross- (Borghesi and Vercelli, 2008). border trade, capital flow, and technology spread. - ex. Turning Waste into Fuel, End Poverty, - irreversible trend in global economic Sustainable Agriculture development, particularly noted at the turn of the millennium (Shangquan, 2000) Multi-Dimensional Relationship between globalization and sustainability encompasses: The 2 Different Types of Economy Economic aspects. 1. Protectionism - involves government Political aspects. intervention in foreign trade to encourage Technological aspects domestic production, often through tariffs and quota through preferential treatment Sustainable Development Goals (SDGs) - it aims to for domestic producers and discrimination transform our world. They are a call to action to end against foreign competitors. (Tariffs - poverty and inequality, protect the planet, and required fees on imports or exports.) ensure that all people enjoy health, justice and - Practiced during the mercantilist prosperity. It is critical that no one is left behind. era (16th to 17th centuries) and into the early Industrial Revolution. Environmental Degradation - it is a process through - Peak of Protectionism: The Great which the natural environment is compromised in Depression of 1929. some way, reducing biological diversity and the - Countries such as China, Japan, and general health of the environment. the United States are accused of practicing - can be entirely natural in origin, or it can be protectionism. accelerated or caused by human activities. 2. Trade Liberalization - promotes free trade, Causes of Environmental Degradation Industrial activities have led to significant allowing goods and services to move more freely across borders, significantly carbon emissions, contributing to global influenced by post-World War II policies. warming and climate change.  Deforestation and pollution have resulted in habitat destruction and loss of biodiversity. Globalization - The rapid integration of economies, The production and disposal of consumer cultures and societies across the globe has brought goods contribute to marine pollution and both opportunities and challenges. the destruction of ecosystems (Goldburg, - A force that has transformed economies, 2008). cultures and societies, bringing both progress and The debate between free trade and challenges. environmental protection highlights the Poverty - lack of access to basic necessities life food, tension between economic growth and healthcare and education. ecological sustainability (Antonio, 2007). - the lack of essential resources and Technological fixes, such as geoengineering, opportunities for many. are proposed but may not address the root Inequality - differences in access to resources, causes of environmental issues (Dean, opportunities and power within the society. 2007). - uneven distribution of wealth, income, Global Responses to Environmental Challenges education, healthcare and other factors that Various measures, such as carbon taxes and influence quality of life. carbon neutrality initiatives, are being - moral wrongness or injustice. It’s about explored to combat climate change (Ritzer, actions or systems that are considered unfair, 2015). immoral or harmful The search for alternative energy sources, Income Inequality - the gap between the like biofuels, presents challenges, including earnings of the rich and the poor. efficiency and economic impacts Wealth Inequality - the difference in the (Barrionuevo, 2007). total assets owned by individuals or group. A global perspective is necessary to address Opportunity Inequality – unequal chances environmental issues, as localized solutions for success based on factors like race, may overlook broader impacts. gender or social class. Corporate momentum is building towards addressing environmental problems, Economic and Trade Globalization - result of indicating a shift in business practices. companies trying to outmaneuver their competitors. The need for comprehensive strategies that - consumers search for the cheapest place to integrate economic and environmental goals buy; companies search for the cheapest place to is critical for sustainable development. make products. - labor-intensive products like shoes are Food Security - is the ability of every human being often produced in countries with the lowest wages physically, economically, and socially to gain access and the weakest regulations. to sufficient, safe and nutritious food to - creates winners and losers. accommodate their dietary plans and food preferences in order to get a healthy life. Winners - corporations and stockholders earn more - ex. Soup Kitchen, Food Banks, School profit. consumers get products at a cheaper price. Lunch/Feeding Program Losers - high wage workers who used to make those shoes lose their jobs as production moves overseas. The 5 Components of Food Security Low Wage Foreign Workers - many are thrown into Availability hazardous working conditions. Accessibility - many workers in developing countries Adequacy make more money and seek these jobs. Acceptability - pay may be unacceptable in developed Agency countries but is often the best alternative. FAO – Food and Agriculture Organization Multiplier Effect - an increase in one economic NVA – New Vision for Agriculture activity can lead to increases in other activities. - investing in local businesses results in more Hans Rosling – Swedish statistician jobs and more income. - "The 1 to 2 billion poorest in the world who don't have food for the day suffer from the worst Microedit - involves providing small loans to low- disease, globalization deficiency." income individuals, enabling them to start - Globalization could be much better; the businesses and improve their livelihoods. worst thing is not being part of it.  - Muhammad Yunus, a pioneer of 1. First World - Western Capitalism microcredit, won the Nobel Peace Prize for his work countries (USA and Western Europe) in Bangladesh, demonstrating its potential to - associated with rich, industrialized alleviate poverty. nations. 2. Second World - Soviet Union and allies Global Inequality - the unequal distribution of 3. Third World – everyone else, initially a resources, opportunities, and power that shape vague term for non-aligned countries during the well-being among the 8 billion individuals on our Cold War, it has come to refer to impoverished planet. states. Global Income Inequality - refers to the unequal Gross Domestic Product (GDP) - measure of the distribution of income and wealth across countries total economic output of a country, reflecting its and populations worldwide. It highlights the economic productivity. disparities between the richest and poorest regions. Gross National Income (GNI) - measure that calculates GDP per capital, providing insight into the 2 Types of Economic Inequality average income of a country's citizens. 1. Wealth Inequality - refers to the unequal distribution of assets among individuals or Global North-South Divide – a new and simpler groups within a society or between countries. classification as the Second World countries got - Wealth refers to the net worth of a added into either the First or Third World country, including natural, physical, and categories. human assets minus liabilities (abundance of - not only economic but also racial, with resources) historical patterns of migration influencing current 2. Income Inequality - focuses on new earnings demographics. added to a country's wealth, measured by - Racial dynamics play a significant role in the Gross Domestic Product (GDP). it reflects the Global North-South divide, with white populations flow of goods and services rather than a stock predominantly in the North and black populations in of assets. the South. Migration patterns are changing this - Income is the new earning that are dynamic, as individuals from the Global South move constantly being added to the pile of a to the North in search of better opportunities. country’s wealth. Global North - developed countries, including the Inequality in the Global Level United States, Canada, Western Europe, and - Global wealth is estimated at about $3.5 developed parts of Asia which are considered trillion, not distributed equally (Credit Suisse economically and politically dominant. Research Institute, 2016). Global South - countries in the Caribbean, Latin - US and Japan were able to increase their America, Africa, some parts of Asia, often associated wealth. However, UK had a significant decline due with economic challenges and formerly labeled as to currency depreciation. Third World. Branko Milanovic (2011) - An economist specializing in global inequality, known for analyzing economic Global City - a major urban center that serves as a disparities between nations. hub within the global economic network (known as - Economic Big Bang: describes the economic powerhouses) this includes: profound changes in the economy initiated by the New York City Industrial Revolution, resulting in vast differences London between developed and developing nations. Paris - Industrial Revolution: A period of Tokyo significant industrial growth and technological Beijing advancement that transformed economies from agrarian to industrial, creating disparities among Singapore countries. Los Angeles First, Second, and Third World Hierarchy McMichael (2007): "Globalization has deeply altered During the Cold War, countries were divided North-South relations in agriculture... the rise of into three main groups based on their political and global agribusiness and factory farms." economic system: Schlosser (2005): "As commercial agriculture Eurocentric - viewpoint that focuses on European replaces local provisioning, the relations of social experiences and values, often found in Rostow's production are also altered." model, which emphasizes economic progress while Sassen (1991): Described the three urban centers of overlooking the different ways other nations may New York, London, and Tokyo as "economic centers seek development. that exert control over the world's political Dependency Theory - argues that economy." underdevelopment is not a result of the lack of Beaverstock et al. (2002): Noted that "not only are modernization but due to the exploitation of poorer there inequalities between these cities, there also countries by wealthier, capitalist nations. exists inequalities within each city." Transatlantic Slave Trade – a triangular trade route Castells (2000): Suggested that these cities can be exchanging goods and slaves between Africa, the seen as "important nodes in a variety of global Americas, and Europe, significantly impacting labor networks." and production. Bauman (2003): Claimed that cities, while major Dependency - A condition where the development beneficiaries of globalization, are also "the most of poorer nations (the South) decreases their severely affected by global problems." He noted independence while enhancing the economic that "local politics has become hopelessly growth of wealthier nations (the North) (Cardoso overloaded" and Felato, 1979). Liberal Trade - suggests that free trade can actually make poorer countries worse off instead of helping Global Stratification - unequal distribution of them grow economically. (Toye, 2003) resources and privileges across the globe, often between nations. Hans Singer and Raul Prebisch – initially developed - hierarchical arrangement of societies based Dependency Theory in 1950s. on wealth, power, and resources, indicating inequalities across nations. 2 Main Sub-Theories of Dependency Theory 1. North American Neo-Marxist Approach Modernization Theory - argues that development 2. Latin American Structuralist Approach and progress follow a set path, which all countries must go through to become modern, developed Core Nations - Industrialized, wealthier countries nations. that control a significant portion of the world’s - Walt Rostow, a key proponent of wealth and resources. Peripheral Nations - Less developed countries that Modernization Theory, suggested that all countries receive an unequal share of global wealth and often go through specific stages to reach development. suffer from exploitation by core nations. Walt Rostow's Four Stages of Modernization Exploitation - The process by which core nations 1. Traditional Stage: The first stage where small utilize the resources and labor of peripheral nations communities rely on family work and have for their own benefit, often leading to economic limited resources and technology, leading to inequality. strict social classes. Vicious Cycle - A situation in which peripheral 2. Take-Off Stage: The second stage where nations remain poor due to systemic exploitation, people start creating new products beyond preventing them from achieving economic growth. basic needs, leading to new markets and Economic Stagnation - The inability of peripheral greater focus on individual success. nations to develop economically, often attributed to 3. Drive to Technological Maturity: The third their dependence on core nations and limited resources. stage where earlier technological growth leads to more jobs, less poverty, and social Andre Gunder Frank (1969) - espoused the North changes like better education and democracy. American Neo-Marxist approach. He opposed the 4. High Mass Consumption: The final stage idea that less developed countries would develop by where production focuses more on wants following the path taken by the developed rather than just needs, and countries provide countries. support systems to ensure everyone can access basic necessities. ECLA – Economic Commission for Latin America Linkage - looks at how local leaders in less weaker economies (like Argentina's in the late developed countries and powerful international 1990s) tend to have less widespread effects. interests work together. Their shared goals and Major financial crises, such as those in Russia connections help keep the dependency cycle going, and Asia, demonstrate that stronger economies can meaning that local elites benefit while the broader have a larger ripple effect on global finance population remains disadvantaged. compared to weaker ones. Immanuel Wallerstein - an American sociologist International Financial Institutions - facilitate trade who developed the concept of the capitalist world and promote economic cooperation among nations. economy, emphasizing the relationships between International Monetary Fund (IMF): different economic regions. Provides financial support and advice to countries facing balance of payments issues, Wallerstein's World-Systems Theory helping stabilize economies. Core Nations: Developed, economically World Bank: Focuses on development and powerful, control global markets. poverty reduction by providing loans and - High-income nations that dominate the grants for projects in developing countries. global economy. They have strong manufacturing World Trade Organization (WTO): bases and accumulate wealth through resources Facilitates international trade agreements and labor from the periphery. and resolves trade disputes between Semi-Periphery: Industrializing countries with countries. some economic autonomy but still reliant on the core. Bretton Woods System - Middle-income countries (e.g., India, Brazil) Established after World War I, the Great that have stronger connections to core nations and Depression, and World War II. are in a transitional economic state. Aimed to prevent political instability and Periphery: Least developed, reliant on the economic turmoil. core for goods, markets, and technology. Focused on reducing barriers to trade and - Low-income countries that provide natural ensuring the free flow of money globally. resources and labor to wealthier nations. These countries often experience economic dependency 5 Key Elements of Bretton Woods System and exploitation. 1. Gold Standard - Currencies were expressed in terms of gold or gold value to establish a THE MARKET INTEGRATION "par value." Economy - a social institution that organizes the 2. Exchange Rate Stability - countries' central production, consumption, and trade of goods and banks agreed to exchange currencies at services in society, impacting people's lives established exchange rates, with a 1% significantly. margin. 3. Role of the IMF - established to oversee Economic Systems exchange rates and provide financial Capitalism stability. Socialism 4. Free Flow of Currencies - the system worked to remove rules that limited how currencies Economic Sectors could be used in trade between countries. 1. Primary Sector: Involves extracting raw 5. US Dollar as Global Currency - U.S. dollar materials from the natural environment (e.g., became the main currency used for agriculture, mining). international trade and savings, making it 2. Secondary Sector: Transforms raw materials very important worldwide. into manufactured goods (e.g., refining oil into gasoline). General Agreement on Tariffs and Trade (GATT) 3. Tertiary Sector: Provides services rather than - created in 1947 as part of the Bretton goods (e.g., healthcare, education, retail). Woods system, aiming to facilitate international trade among its 23 founding member countries The saying "When the American economy through negotiations and agreements. sneezes, the rest of the world catches a cold" - after years of negotiations, particularly highlights how a powerful economy like the U.S. can during the Uruguay Round (1986-1993), GATT influence global markets. Conversely, crises in evolved into the World Trade Organization (WTO) to address broader trade issues beyond goods, Organization for Economic Cooperation and including services and trade regulations. Development (OECD) - Comprises 35 member countries, that includes the world's richest nations, World Trade Organization (WTO) with Latvia being the latest member as of 2016. - Established in 1995 as an independent - Influential due to the economic power and multilateral organization, focusing on trade resources of its member countries. liberalization and resolving disputes between countries. Organization of Petroleum Exporting Countries - headquartered in Geneva, Switzerland, had (OPEC) - stablished in 1960 by Saudi Arabia, Iraq, 152 member states by 2008. Kuwait, Iran, and Venezuela to stabilize oil prices, - scope of WTO includes: trade in services, and increase revenue for member states. non-tariff-related barriers to trade, and other areas - includes additional countries like the of trade liberalization. United Arab Emirates, Algeria, Libya, Qatar, Nigeria, - promotes a neoliberal approach, and Indonesia, maintaining its status as a major oil advocating for reduced trade barriers, believing this exporter. would benefit all nations, and monitors trade regulations and ensures fairness in trade. European Union (EU) - Comprises 28 member states, many of which have adopted the euro as Criticisms of WTO their currency. Agricultural Trade Barriers - WTO fails to - Most members in the Eurozone have counter trade barriers created by developed adopted the euro as their currency except for some nations, especially in agriculture. countries, like the UK, Sweden, and Denmark whp Influence of Larger Powers - Decision-making chose not to. dominated by large trading powers, excluding - Critics say that adopting the euro has made smaller nations. prices go up in some countries and has caused slow Lack of INGO Involvement - Regular protests economic growth, especially in Greece, Spain, and due to exclusion of International Non- Portugal. They believe that the policies of the Governmental Organizations (INGOs). European Central Bank play a big role in these problems. The International Monetary Fund (IMF) and the World Bank North American Free Trade Agreement (NAFTA) - Both the IMF and the World Bank were - established on January 1, 1994. Initially founded after World War II to promote global formed in 1989 between the U.S. and Canada; economic stability and peace. Mexico joined later. - Most countries in the world are members, - aimed to expand world trade by reducing but the richest countries contribute the most trade barriers and enhancing cooperation. funding and, consequently, hold the greatest Economic Impact of NAFTA: influence over decisions. Job transfer - Manufacturing jobs from the U.S. and Canada were outsourced to Mexico International Monetary Fund (IMF) – its primary to reduce production costs. purpose is to provide financial assistance to In Mexico, producer prices dropped, but countries facing economic crises, acting as a "lender consumer food prices rose, leading to of last resort." widespread food poverty (affecting 20 million - For example, Yemen received a $93 million people). loan from the IMF in 2012 to combat terrorism and stabilize its economy. Modest impact on U.S. GDP, with the U.S. - Short-term financial assistance. becoming $127 billion richer annually from World Bank - focuses on long-term development, trade growth. aiming to reduce poverty through specific projects, Canada heavily depends on the U.S. for trade, such as investments in education in countries like with 76% of exports going to the U.S. Bangladesh, Chad, and Afghanistan. Positive Effects: Lowered prices, quadrupled trade Criticisms: between the three countries, created 5 million U.S. Reputation affected by lending to corrupt jobs, and opened opportunities for small businesses. governments and dictators. Negative Effects: Loss of over 682,000 manufacturing jobs in the U.S., environmental Imposition of ineffective austerity measures. concerns, exploitation of Mexican workers, and displacement of Mexican farmers.