Prelim Study Guide - Politics of the Global North: Prelim...

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Politics of the Global North: Prelim Study Guide Ø IMF model (structural assistance program): conditional loans based on acceptance of SAP o Loans to support currency and repay investors o Focus on currency stability and open markets o Specific Policy Requirements § Open markets, free trade, exports § Capital market liberalization to encourage investment § Fiscal and monetary austerity · Cut government spending, reduce budget deficits · Raise interest rates · Privatization, deregulation · Labor market flexibility Ø Wangari Maathai : founded the Green Belt Movement in 1977 to organize poor women to plant millions of trees, received Nobel Prize o The group’s goals included replenishing Kenya’s dwindling forests, providing desperately needed cooking fuel, and making women active participants in improving their lives and those of their families Ø Market fundamentalism: free trade over social objectives and economic development in the South, Stiglitz was a huge critic of this idea o The idea behind it is that free markets provide the greatest equity and prosperity o Interferences with the market process decrease social well-being o Best interests in a society are gained by allowing people to pursue their own interest Ø Malawi: from 2001-2005, the World Bank pressured Malawi to eliminate all of its subsidies for fertilizer. The African nation then exported its diminished cash crops for foreign currency with which it was supposed to buy food for its starving peasants. In 2005, the government broke from the World Bank and subsidized fertilizer- this actually benefited the countries and helped the crop situation
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Ø G-8: an international forum for the governments of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. o Together, these countries represent about 65% of the world economy and the majority of global military power (7 of the top 8 positions for military expenditure, and almost all of the world's active nuclear weapons.) o The G8 can refer to the member states or to the annual summit meeting of the G8 heads of government. G8 ministers also meet throughout the year, such as the G7/8 finance ministers (who meet four times a year), G8 foreign ministers or G8 environment ministers. Ø Free capital flows : Bhagwati states the this free flow can bring panic and crashing markets (esp) in developing countries o Developing countries have small financial markets and do their borrowing in dollars/euros o They are vulnerable to rapid financial outflows if creditors suspect difficulty in repayment o When money is withdrawn, the country’s currency depreciates rapidly- this means that even more investors pull out- inflation and import prices soar Ø Seattle 1999 : this was supposed to initiate a new round of trade agreements of the WTO, massive protests ultimately led to the creation of a new anti-globalization
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This note was uploaded on 11/07/2008 for the course ILRIC 4330 taught by Professor Turnerl during the Spring '06 term at Cornell University (Engineering School).

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Prelim Study Guide - Politics of the Global North: Prelim...

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