THE GLOBAL ECONOMY
I. INTRODUCTION
United Nations and Millennium Development Goals (MDGs)
The United Nations (UN) created global programs to address major problems such as poverty, hunger, lack of
education, and diseases like HIV/AIDS and malaria.
One of its most important initiatives is the Millennium Development Goals (MDGs), which aim to:
Reduce extreme poverty
Improve education
Promote health and well-being
Enhance the quality of life worldwide.
Poverty and Extreme Poverty
Poverty – a condition where a person has very low income
Extreme Poverty – lack of basic needs such as:
o Food
o Clean water
o Shelter
o Education
Although poverty rates are decreasing globally, it remains a serious issue due to:
Climate change
Economic inequality
Limited access to resources
II. ECONOMIC GLOBALIZATION AND GLOBAL TRADE
Economic globalization refers to the increasing interconnectedness of countries through:
Trade
Technology
Investments
This allows goods, services, and ideas to move freely across borders, creating a more connected global
economy.
Approaches to Trade:
Protectionism
o Limits imports
o Protects local industries
Free Trade / Trade Liberalization
o Reduces trade barriers
o Encourages global exchange
Benefits of Globalization
1. More job opportunities
[Link] goods and services
3. Improved technology
4. Better access to education and information
Technology and Development
Technology plays a major role in economic development.
Key Contributions
Improves communication
Expands access to education
Supports businesses and farmers
Provides financial services
Example: Farmers use mobile phones to check market prices and sell products at better rates.
Effects of Globalization
Promotes economic growth
Helps developing countries progress
Can also lead to:
Income inequality
Unequal distribution of resources
III. FAIR TRADE
Fair trade is a system that promotes fairness in global trading relationships.
Objectives
Ensure fair wages
Protect workers’ rights
Promote environmentally friendly production
Supported by companies like:
Starbucks
Dunkin'
Examples of Fair-Trade Products
Coffee
Bananas
Chocolate
Cotton
IV. ECONOMIC GLOBALIZATION AND SUSTAINABLE DEVELOPMENT
Globalization supports:
Economic growth
Job creation
Technological advancement
However, it also increases the use of natural resources.
Sustainable Development
Defined as:
Meeting present needs without harming future generations
Challenges:
Pollution
Climate change
Social inequality
V. ENVIRONMENTAL DEGRADATION
Industrialization has improved living standards but caused environmental issues:
Major Problems:
Pollution
Deforestation
Climate change
Loss of biodiversity
Possible Solutions:
Carbon tax
Renewable energy
Carbon neutrality
International cooperation
Food Security
Food security means that all people have access to:
Enough food
Safe and nutritious food
Challenges:
Rapid population growth
Climate change
Water scarcity
Agricultural limitations
The United Nations continues to implement programs to reduce hunger worldwide.
Globalization, Poverty, and Work
Globalization creates both opportunities and challenges.
Positive Effects:
Job creation
Business opportunities
Poverty reduction (in some areas)
Negative Effects:
Low wages
Job outsourcing
Poor working conditions
An example solution: Microcredit, introduced by Muhammad Yunus, provides small loans to help people start
businesses.
Global Inequality
Global inequality refers to unequal distribution of wealth and income across countries.
Types
Wealth Inequality – differences in assets
Income Inequality – differences in earnings
Technology often benefits skilled workers more than unskilled workers.
VII. GLOBAL NORTH AND GLOBAL SOUTH
Modern terms used to describe global differences:
Category: Description:
Global North Rich, developed countries
Global South Poor, developing countries
Differences are influenced by:
History
Politics
Economic systems
Global Cities
Global cities are major centers of:
Finance
Trade
Culture
Technology
Examples
New York City
London
Tokyo
Global Stratification
Global stratification refers to inequality among countries based on:
Wealth
Power
Development
Factors affecting it include:
Education
Technology
Natural resources
Modernization Theory
Development through:
o Industrialization
o Technology
o Innovation
Rostow’s Stages of Development
According to (Walt Rostow) countries pass through stage of economic growth.
1. Traditional Society
2. Take-off Stage
3. Drive to Maturity
4. Age of High Mass Consumption
Dependency Theory
Poor countries depend on rich countries
Results from colonization and unequal trade
Structuralist Approach
Encourages:
o Local industries
o Reduced imports
Uses tariffs and government support
World-System Theory
(Immanuel Wallerstein)
Category: Description:
Wealthy and dominant
Core Countries
countries
Semi-Periphery
Developing countries
Countries
Periphery
Poor countries
Countries
Globalization Today
Positive Impacts:
Increased trade and communication
Economic growth
Cultural exchange
Challenges:
Inequality
Poverty
Unfair trade systems