10-18

10-18 - Globalization and Development Development Part I:...

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Unformatted text preview: Globalization and Development Development Part I: Defining Concepts & Institutions: A History African World Perspectives African October 18, 2007 What is Globalization? What Modern Economic Globalization Modern One Definition: One “Economic globalization constitutes integration of national Economic economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flow of workers and humanity generally, and flows of technology.” -Jagdish Bhagwati, 2004, In Defense of Globalization In A new phenomena for Africa? First wave globalization – “Pax Britannica”: Through WWI Slavery, Merchantilism, Abolitionism; Scramble for Africa Second wave globalization – “Pax Americana”: Post WWs Independence/Decolonization; Capitalist Globalization Periods of Significance: 1940s – Post World War II reconstruction 1970s/80s – Collapse of global currency exchange system 1970s/80s and reformulation of global economic institutions and Africa: 1940s Africa: Pre-WWII: All of Africa colonized except Ethiopia Pre-WWII: and Liberia and 1939-1945: WWII 1941: Atlantic Charter Before the US entered WWII, Roosevelt and Winston Before Churchill negotiated the charter Churchill Set out a vision for post-WWII, including international Set economic cooperation, advancement of social welfare, no new territorial establishments, and … welfare, Autonomy of imperial colonies (right to selfdetermination) 1945: End of WWII Beginning 1950s: Struggle for Decolonization Decolonization Decolonization Birth of Modern Institutions of Globalization and Development Globalization Bretton Woods Conference: 1944 Three Key Institutions Created: 1. International Bank for Reconstruction and International Development (IBRD, later World Bank) Development 2. International Monetary Fund (IMF) 3. General Agreement on Tariffs and Trade General (GATT, later World Trade Organization) (GATT, United Nations: 1945 The United Nations The United Nations Charter signed in 1945 by the 51 United original member countries, ratified by 5 permanent members of the Security Council (US, UK, France, Russia, China) (US, Goals: Goals: Promotion of international peace and security Promotion of equal rights (human rights) and selfdetermination Economic and social advancement and cooperation World Bank and IMF World World Bank: Original Goals: Post-war reconstruction of nations Today: expanded to focus on global poverty reduction through Today: capacity building, infrastructural development, good governance capacity Original Goals: Establishing and monitoring system of fixed Original exchange (gold standard); making short-term loans to countries to resolve balance of payment problems to Today: fostering global monetary cooperation, securing financial Today: stability, facilitating international trade, promote high employment and sustainable economic growth, and reduce poverty Contributing members and recipient members Stakeholder structure for decision making – US as central Stakeholder stakeholder in both organizations stakeholder Western economists determine policies Western IMF: Structure: GATT/WTO GATT/WTO GATT: GATT: An agreement/treaty between signatory nations (23 original An members) members) Goal: To reduce barriers to trade between countries Created in 1995 with the Uruguay Round of GATT negotiations Created Uruguay Became a full-fledged international organization with rights of Became enforcement (hard governance), and a vastly expanded mandate mandate Goal: To promote liberalized trade and to establish and monitor Goal: compliance with the rules of trade… But, with a broad new focus, including “domestic food safety standards, environmental focus, and product safety rules, service-sector regulation, investment and development policy, intellectual property standards, government procurement rules, and more.” (Wallach, 2004) WTO: UN and Bretton Woods Institutions: Shifting Priorities Shifting 1945-1960: Focused on rebuilding Europe: World Bank’s first loan was Focused its largest proportionally - $250 million to France in 1947 for reconstruction/infrastructure (roads, dams, bridges, etc.) reconstruction/infrastructure 1950s World Bank lending to Africa (10% of WB total): 1950s infrastructure for colonial exports of raw materials infrastructure UN Decade for Development (encouraged bilateral aid, but UN while many developing nations reached goal of 5% GDP growth, global wealth gap vastly increased) growth, World bank loans to Africa (share of total) increased from World 5.7% in 1960/61 to 14.7% in 1966/67. 5.7% 1960 to 1965: Increased proportion of WB loans to 1960 agriculture (9% to 15%) & social services (0% to 5%) agriculture 1960s: Shifting Priorities, Cont. Shifting 1970s: UN Conference on Trade and Development (UNCTAD) UN and the UN Group of 77 push for a New International Economic Order (NIEO) – aim to improve terms of trade Economic World Bank focus on poverty reduction strategies World (McNamara) – increased spending on “social area” development development IMF identity crisis – early 1970s, fixed exchange system IMF (gold standard) abandoned; OPEC crisis; IMF new focus on development IMF allocations to Africa increase 10 fold from 1960s Era of Structural Adjustment World Bank and IMF policy convergence 1980s to present: We will return to Structural Adjustment next class… The Premise and Promise of Modern Economic Globalization Modern Globalization compels all nations to participate in Globalization an interdependent world economy because… interdependent Global free trade (market liberalization) is Global expected to be more efficient than local or more regional trade… regional Why? A self-righting market (the invisible hand) Comparative advantage (do what you do best) “A rising tide will lift all boats.” The promise of rising globalization is development. is What is Development? What What does development look like? “What actually is a ‘state of development’? As a What process, development implies change for the better – in the individual’s circumstances as in society’s… But change towards what? What constitutes the developed society or person?” (M. Black, p.28-29) developed A focus on poverty reduction: “What is the nature of the poverty this development is What supposed to dispel? Many people living off the world’s lands or forests without the benefit of modern amenities or cash in their pockets do not perceive themselves as ‘poor’. Their aspiration is not necessarily a simulacrum of modern Western consumer society.” (M. Black, p.29) consumer Millennium Development Goals Millennium UN initiative – started in 2000 Goals to achieve by 2015: 1. 2. 3. 3. 4. 5. 6. 7. 8. Eradicate extreme poverty and hunger Achieve universal primary education Achieve Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, Malaria and other diseases Ensure environmental sustainability Develop a global partnership for development Requires cooperation of global, regional and local Requires development organizations development History with Poverty Reduction History How? Global approaches to poverty reduction have Global often been prescriptive and top-down… often Classical economic theory (revitalized in the Classical 1970s/80s as neoliberalism) focuses on trade as trade the mechanism to lift nations out of poverty: Trade enhances growth and growth reduces poverty poverty Investment in infrastructure and human Investment development is focused on enhancing national capacity to participate in global trade capacity Globalization and Power Globalization “Action at the international level is confined to a supporting Action role, in providing funds and forums in which to carry on debate, much of which is tenuously connected to what is happening on the ground. The reality is often ignored by enthusiasts who see international action for development as a be-all and end-all. Given the nature and distribution of power, this can never be the case” (M. Black, p. 17-18) power “’Uneven globalization is not only a process but also an Uneven ongoing structuration of power…[it] is the heirarchization of the world – economically, politically, and culturally – and the crystallizing of a domination.’” – Claude Ake (Magubane, p. 173) (Magubane, ...
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This note was uploaded on 04/23/2009 for the course SC 039 taught by Professor Magubane during the Fall '07 term at BC.

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