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Unit 3- North- South Globalization Process of the world seeming smaller due to increases in communications and technology Eg. To travel to Europe now is only 7 hours by plane. Before it was weeks on a boat. Can also refer to country boundaries no longer being a restriction in things such as global business The world countries seeming more like one unit instead of separate countries Post WW2 Classification of Countries 1st World = developed market economy countries (eg. Canada and US) 2nd World = command economy countries (eg. USSR) 3rd World = non aligned countries, began referring to poorer countries (eg. Africa, South America) Post WW2 industrial bomb lead to a steady growth of the 1st world The 2nd world struggled to keep up when their economy focused around military developments 3rd world saw a steady decline in social standards, political instability, increased number of poor people North South Gap Term used to describe the economic gap between the rich northern countries of the world and the south poorer countries of the world 80% of the world’s population live in the south and own about 20% of the world’s wealth These people deal with malnutrition, no clean water and food, no health care, etc. What are some other problems in Southern Countries? Overpopulation- the population is growing at a rapid rate, too many people for the land to support Problems in trying to provide social services like health care and education Rich countries would pay for this by increasing taxes, poorer countries cannot do this due to high rates of unemployment and low wages Colonialism Control by one power over a dependant area or people Eg. Europe took colonies in Africa and Asia meaning they took over the land and people and treated it as their own The colony country supplied raw materials, and agricultural products to the “mother country” Mother country provided the direction, organization, capital investments and technological aid Colonalism was beneficial to the South at first because they now gained access to the global market This lead to economic growth for them Drawbacks to Colonialism Money became the main mean of exchange (before they could barter and trade) This means that the rest of the world measured the Southern countries success based on how much money they could earn Southern country was fully dependant on the mother country to keep their economy going (eg. For roads, schools, etc) Balance of Trade Equal or unequal value places on products being traded among countries Balance of trade was not in favor of Southern countries Their raw products were worth a lot less than the manufactured products of European nations they were bringing into their country Trade Deficit What you are spending to bring goods into your country is a greater sum that what you are making by selling products in the global economy You are loosing money Southern countries suffered from this Trade Surplus What you are spending on bringing goods into your country is less than what you are making by selling goods in the global economy You are making money Mother countries had this Tariff Special tax placed on goods not made in your country to make that product the same or more value than the same product produced in your country Encourages people to buy the product made in their country Tariffs hurt the Southern countries, because their goods may not be bought globally Natural Resources Products which come from the land or sea that can be sold for a profit Eg. Wood, fish, minerals, etc Renewable resources – natural resources that can be grown over and over again. Eg. Fish, crops Non-renewable resources – natural resources that can not be regenerated. Eg. Oil Southern countries main source of income is from natural resources, which don’t make as much money in the global economy as manufactured goods What happened when the mother countries left? Post WW2 colonies began gaining independence Southern countries were dependant on the mother countries for their economics Most countries did not have the structure to simply take over from the mother country Instead economic control was shifted to MNC (multinational corporations) Eg. Shell, Unilever, General Foods, Nike Headquarters are in northern countries, but they have offices all over the world MNC’s goals were mainly economic, so they were not concerned about social conditions in countries New technologies, roads, bridges, etc. were built, but only to profit the MNC’s Employment was created, but with very low wages Land was taken over, and traditional means of agriculture were replaced with large scale mechanical methods- farmers lost their form of livelihood Their products were loosing money in the global economy, so they needed to increase production The only way they could do this was to borrow money from the rich northern countries This put them in debt