IMF_and_World_Bank_in_the_Globalization_Era_1_.pptx - The...

The IMF and The World Bank
in the Globalization Era

What is Globalization?

•
Economic "globalization" refers to the
increasing integration of economies around
the world, particularly through the movement
of goods, services, and capital across borders.
•
The term sometimes also refers to the
movement of people (labor) and knowledge
(technology) across international borders.
There are also broader cultural, political, and
environmental dimensions of globalization.

•
The term "globalization" began to be used
more commonly in the 1980s, reflecting
technological advances that made it easier
and quicker to complete international
transactions—both trade and financial flows.

•
It refers to an extension beyond national
borders of the same market forces that have
operated for centuries at all levels of human
economic activity—village markets, urban
industries, or financial centers.

•
Globalization means increased interconnectivity and
interdependence with the economies of the entire
world.
•
It encompasses
–
international trade, investment, and finance – helping in
augmenting the national incomes of economies.
Technologies got transferred in a manner that fostered
better communication. It also speaks of the global
environment,
–
untapped potential across economies and employment
opportunities that led to better economic integration.

•
There are countless indicators that illustrate
how goods, capital, and people, have become
more globalized.
•
The value of trade (goods and services) as a
percentage of world GDP increased from 42.1
percent in 1980 to 62.1 percent in 2007.

Foreign direct investment increased from 6.5
percent of world GDP in 1980 to 31.8 percent in
2006.
The stock of international claims (primarily bank
loans), as a percentage of world GDP, increased
from roughly 10 percent in 1980 to 48 percent in
2006.
The number of minutes spent on cross-border
telephone calls, on a per-capita basis, increased
from 7.3 in 1991 to 28.8 in 2006.
The number of foreign workers has increased from
78 million people (2.4 percent of the world
population) in 1965 to 191 million people (3.0
percent of the world population) in 2005.

Proponents of Globalization
•
Benefits of Globalization

•
The growth in global markets has helped to
promote efficiency through competition and
the division of labour
•
Global markets also offer greater opportunity
for people to tap into more diversified and
larger markets around the world.

•
The broad reach of globalization easily extends to
daily choices of personal, economic, and political
life.
•
For example,
–
greater access to modern technologies, in the world of
health care, could make the difference between life
and death.