Global Economic Issues and Relations
by Jayleen Li
The Ever Changing Economy
Power blocs, regional cartels and trade alliances changed the functioning of the economy of the world. It wasn't controlled by one power, but many.
Latin America
- Steady economic growth from export trade and more diversity
- Growth attracted foreigners, creating a lot of foreign debt(not good)
Africa
- Mostly a LDC(less developed country) with the highest population growth and highest number of low income
- Like Latin America, it also had many foreign debts, but had falling prices and increasing import costs caused a hindrance to African economic growth
- Many droughts, famines caused not enough food for the huge amount of people
- New International Economic Order (NIEO) was the distributing of money and guaranteeing prices in markets to help solve these problems
Japan
At first they suffered from no capital, no resources, and overpopulation.
How did they get so rich and powerful from there?
Products of Japanese started from the bottom with labor-based industries to high quality technology items like microchips and CD’s. “Made in Japan” represented high quality but cheap
Became on the same level as Europe and the US and also inspired other Asian countries to follow its example of export-based industrialization
How did they get so rich and powerful from there?
- Benefited from US financial aid after defeat from WWII
- No barriers on Japanese products into US
- Treaty from WWII only allowed 1% of Japanese income to be spent on military, so the Japanese spent the rest mostly on improving the economy
- Economists based the economy on exports and low wages
- Many Japanese laborers were willing to work hard at low wages and poor conditions, so labor was very, very cheap
Products of Japanese started from the bottom with labor-based industries to high quality technology items like microchips and CD’s. “Made in Japan” represented high quality but cheap
Became on the same level as Europe and the US and also inspired other Asian countries to follow its example of export-based industrialization
The Four Little Tigers (Hong Kong, Singapore, South Korea, Taiwan)
- Were all newly industrializing countries (NIC) that changed from followers of Japan to competitors of Japan
- They incorporated the export-based industrialization, following Japan
China
- Under the leadership of Deng and his revolution caused China to be industrialized and enter the world of global trade
- Also follow Japan footsteps for industrialization
- Allowed some free market trade and the private ownership of property
- But their industrialization was unbalanced:
Urban areas(coastal China) became centers of economic development. [Think about it, basically all of China’s cities are on the right of China, where the Pacific Ocean is]
Alliances and Trading Blocs
How does one get better and stronger economically?
Alliances of course!
That’s exactly what many nations did, and here are those alliances.
Alliances of course!
That’s exactly what many nations did, and here are those alliances.
OPEC - Organization of Petroleum Exporting Countries
Who’s in it?
The Oil Producing States(Mostly Arab and Muslim states): Iran, Iraq Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, Indonesia, Abu Dhabi, Algeria, Nigeria, Ecuador, Gabon What did they do?
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GATT - General Agreement on Tariffs and Trade
Who’s in it?
23 non communist nations, such as the US, later 123 nations
What did they do?
Wanted to eliminate barriers on free trade, such as tariffs
Ended in 1994 and was taken over by the WTO(World Trade Alliance)
23 non communist nations, such as the US, later 123 nations
What did they do?
Wanted to eliminate barriers on free trade, such as tariffs
Ended in 1994 and was taken over by the WTO(World Trade Alliance)
WTO - World Trade Organization
Who’s in it?
Everyone from GATT, plus some more, equaling 160(present-day)
What did they do?
Took over GATT and carried out their goals
Increased world trade
Everyone from GATT, plus some more, equaling 160(present-day)
What did they do?
Took over GATT and carried out their goals
Increased world trade
The Three Trading Blocs
Trading Bloc/Free Trade Zone - Area where tariffs and other trading barriers are removed for those certain countries. They promote global economic interdependence(all groups help control trade) through political and economic cooperation between the states that are involved in each bloc.
The following three are trading blocs
The following three are trading blocs
EU - European Union
Who’s in it?
Every nation in Europe except Iceland, Liechtenstein and Norway. Successor of the EC(European Commission) and is the biggest trading bloc.
Every nation in Europe except Iceland, Liechtenstein and Norway. Successor of the EC(European Commission) and is the biggest trading bloc.
NAFTA - North American Free Trade Agreement
Who’s in it?
United States, Canada and Mexico. It is the second biggest trading bloc.
United States, Canada and Mexico. It is the second biggest trading bloc.
ASEAN - Association of Southeast Asian Nations
Who’s in it?
Southeast asia(obviously): Thailand, Malaysia, Singapore, Indonesia and Philippines
Southeast asia(obviously): Thailand, Malaysia, Singapore, Indonesia and Philippines