Globalization
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Transcript Globalization
Business & Society (ETLW 302)
“The poor complain, they always do, but that’s
just idle chatter. Our system brings reward to
all, at least to all that matter.”
- Canadian economist
If the world were a village of 100
World Citizen’s Guide
Globalization + driving forces
Process of integrating the world through
commerce, technology, culture and politics
International trade
Communications Technology
Human migration
Capital flow
International Institutions (IMF/World Bank)
What business best represents
globalization to you?
Invented in 1886 by Civil War Officer
Sold originally in soda fountains in Atlanta
Acquired for $2,300
Currently sold in 200+ countries
Employs 90,500 worldwide
1.5 BILLION servings/day
Over 2,800 products
Coca-cola = awesome
Signatory to UN Global Compact
Named one of the World's Most Accountable Corporations
by One World Trust (2007)
Contributed nearly $100 million to communities worldwide
(2007)
Coca-Cola associates and alumni worldwide donated
more than 70,000 volunteer hours in 2007
Polar bear support fund
Coca-Cola and WWF are combining to help conserve and
protect freshwater resources throughout the world
Coca-cola = not so awesome
“Coca-colonization”
“Killer coke”
Dirty Coke in India
Attacks on unions in Pakistan
Multinational Corporations (MNCs)
Transnational Corporation or Multinational
Enterprise
UN estimates that there are over 60,000 in
global economy
• Top 100 TNCs responsible for 14% of the sales of all
International Trade and Financial
Institutions
These organizations were created in order to
deal with issues caused by MNCs,
particularly:
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Environmental risk
Worker rights
Labor practices
Human rights
Community development
World Bank (est. 1944)
Dues paid by 184 member nations
Selling AAA-rated bonds in the world's
financial markets
Shareholder-support: $178 billion in "callable
capital”
2 branches:
International Bank for Reconstruction
and Development (IBIRD)
Aims to reduce poverty in middle-income and creditworthy
poorer countries
Promoting sustainable development through loans,
guarantees, risk management products, and analytical
and advisory services
Raises most funds on international capital markets
Original institution of World Bank
International Development Association
(IDA)
• 40 Donor countries
• One of the largest sources of assistance for the
world’s 78 poorest countries, 39 of which are in Africa.
• Single largest source of donor funds for basic social
services in the poorest countries.
• No-interest loans
• 40% of World Bank lending
IMF (est. 1945)
187 countries contribute to its reserve ($333
billion)
Mission: To foster global monetary cooperation,
secure financial stability, facilitate
international trade, promote high employment
and sustainable economic growth, and
reduce poverty
World Trade Organization
Established in 1994 at last meeting of
General Agreement on Tariff and Trade
(GATT): 153 members
“Organization for liberalizing trade.”
Negotiating forum
Set of rules: legal ground rules for
international commerce
Life & Debt
Today
Jamaica owes over $4.5 billion to the IMF, the World
Bank and the Inter-American Development Bank
(IADB) among other international lending agencies
Debt to GDP ratio = 120%
Fourth highest debt burden in the world on a percapita basis
To further improve the balance of
payments
Currency devaluation: raises the cost of
foreign exchange
High interest rates: which raises the cost of
credit
Wage guidelines: which effectively reduce the
price of local labor
Unemployment: 12% + overall, 27% ages 1524
Sweeping corruption
Higher illiteracy
Increased violence
Prohibitive food costs
Dilapidated hospitals
Increased disparity between rich
and
poor (16.5% below poverty line)
How do they fix it?!