Download 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?
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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?!