A globalized economy

Unit 5

3º ESO

1- What is globalization?

● Expansion of international trade.● Business concentration.● Global organization of production (outsourcing).● Large multinational companies.

Main characteristics of globalization

Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business.

Outsourcing

Offshoring is a type of outsourcing. Offshoring simply means having the outsourced business functions done in another country. Frequently, work is offshored in order to reduce labor expenses. Other times, the reasons for offshoring are strategic — to enter new markets, to tap talent currently unavailable domestically or to overcome regulations that prevent specific activities domestically.

Offshoring

http://youtube.com/v/aqhjNJkvC9w

2- Globalization factors

3- What are the effects of globalization?

It has negative and positive effects:POSITIVE●Increase in global wealth●Growth and economic development in some countries.●Social progress

NEGATIVE●Unequal distribution●Poor countries marginalized●Inequalities within countries (rural/urban areas)●States less able to control their own economy

3- What are the effects of globalization?

http://youtube.com/v/3YAUvDmMGMI

Fair Trade

Fair trade is an alternative approach to conventional trade based on a partnership between producers and traders, businesses and consumers. The international Fairtrade system - made up of Fairtrade International and its member organizations - represents the world's largest and most recognized fair trade system.

To learn about it in Spain click here:

http://www.sellocomerciojusto.org/es/

The World BankThe World Bank Group has set two goals for the world to achieve by 2030:●End extreme poverty by decreasing the percentage of people living on less than $1.25 a day to no more than 3%.●Promote shared prosperity by fostering the income growth of the bottom 40% for every countryThe World Bank is a vital source of financial and technical assistance to developing countries around the world. It is not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. Established in 1944, the World Bank Group is headquartered in Washington, D.C.

4- The role of international economic institutions

The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

International Monetary Fund

The Group of Twenty is an international forum for the governments and central bank governors from 20 major economies. The members include 19 individual countries—Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States—and the European Union (EU). The EU is represented by the European Commission and by the European Central Bank.

The G-20 is the latest in a series of initiatives aimed at international coordination of economic policy, which have been prominent since the efforts during World War II to create some form of international or global economic governance.

Collectively, the G-20 economies account for around 85% of the gross world product (GWP), 80% of world trade (or, if excluding EU intra-trade, 75%), and two-thirds of the world population.

G-20

Typically, several participants that are not permanent members of the G20 are extended invitations to participate in the summits. Spain is a permanent non-member invitee.

These countries can be classified in three groups:

●Traditional powers (EU, USA, Japan)●Emerging powers (BRIC)●Regional powers (Australia, the 4 asian tigers, South Africa, and Persian gulf oil producers).

The rest are less economically developed countries, and they are found in Latin America, Asia, and sub-Saharan Africa.

5- What are the world’s major economic powers?

The US economy: Characteristics:

●World leader companies●Entrepreneurial spirit●High investment in research that lead to high productivity and competitiveness●Highly skilled labour force●Natural resources and energy●Flexibility●Foreign investment●Dollar as the most important world currency●Consumer society -> highest per capita income

6- Who are the traditional economic powers?

● Families debt.

● Negative trade balance.

US weak points

Main characteristics:❖Five pillars:

➢ high industrial capacity➢ global exports➢ high levels of domestic savings➢ public investment➢ international financial markets

❖Strong points:➢ Varied industry (automotive, computers, electronics…)➢ Robotics➢ Exports of manufactured products (price-quality relationship)➢ Second largest global investor➢ Equal distribution of wealth and low unemployment rate

Japan economy

● Ageing population

● Scarce natural and energy resources

Japanese weaknesses

Thanks to economic union the EU is first in volume of trade, and a great economic power.70% of trade in the 28 EU countries is between member countries.However, different economic situations and inequalities arose within the EU.

WEAK POINTS:Economic growth, GDP per capita, worker productivity and technological development are lower than in the US or in Japan.Ageing population.Inequalities between member countries.

The EU economy

An emerging power or rising power is a term used as recognition of the rising, primarily economic, influence of a nation - or union of nations - which has steadily increased their presence in global affairs. Such a power aspires to have a more powerful position or role in international relations, and possess sufficient resources and levels of development that such goals are potentially achievable.

In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia,India and China, which are all deemed to be at a similar stage of newly advanced economic development. It is typically rendered as "the BRICs" or "the BRIC countries" or "the BRIC economies" or alternatively as the "Big Four".

7- Who are the emerging economic powers?

In international relations, a regional power is a state that has power within a geographic region.Typically, regional powers have capabilities which are important in the region but do not have capabilities at a global scale.

8- Regional powers

Current regional powers are many, you can check them in this article.

However we can highlight these ones.

Regional powers