POLI 211 Lecture Notes - Lecture 17: Foreign Direct Investment, Free Trade, World Trade Organization
17 May 2018
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GLOBALIZATION
Spread of technology, media, culture, tourism have accelerated globally
Globalization has political and economic aspects, as well as cultural and social ones
Does globalization strengthen or erode state sovereignty?
Does it benefit or hinder developing countries?
- Multinational bodies like the UN, EU, and WTO can make decisions that states are forced to
accept
- States can also organize to help each other solve problems like human trafficking, drug
smuggling, climate change
- Foreign direct investment (FDI) provides local jobs, strengthens local economies
- Free trade can flood local markets with cheaper goods, harming local businesses, farmers
- Total FDI has greatly increased over the past 35 years
Debating Globalizations Impacts:
- The number of people living in absolute poverty has declined rapidly over the last 30 years
- On the other hand, the percentage of global wealth concentrated into the hands of the very
rich has grown dramatically over the same period
Uneven economic impacts:
- China and India have reduced poverty, become major economic powers most of the data
indicating a decline in global poverty are driven by these two countries
- Latin America and Africa have not grown much wealthier since 1990, in fact, their share of
exports on the global market has declined since 1945.
- There remains much opposition to globalization in many parts of the world
Reasons for Public Resistance to Globalization:
- Political and economic elites in developing countries usually welcome globalization and FDI
and often benefit personally
- Globalization means cheaper goods, raising living standards,
- BUT Cheap foreign goods can bankrupt local industries by underselling them
How much FREE MARKET is good?
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Document Summary
Spread of technology, media, culture, tourism have accelerated globally. Globalization has political and economic aspects, as well as cultural and social ones. Multinational bodies like the un, eu, and wto can make decisions that states are forced to accept. States can also organize to help each other solve problems like human trafficking, drug smuggling, climate change. Foreign direct investment (fdi) provides local jobs, strengthens local economies. Free trade can flood local markets with cheaper goods, harming local businesses, farmers. Total fdi has greatly increased over the past 35 years. The number of people living in absolute poverty has declined rapidly over the last 30 years. On the other hand, the percentage of global wealth concentrated into the hands of the very rich has grown dramatically over the same period. China and india have reduced poverty, become major economic powers most of the data indicating a decline in global poverty are driven by these two countries.
