Globalization, Poverty, and Inequality

Globalization, Poverty, and Inequality - PART 6 Week 14...

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PART 6 Week 14 INTB 3351 History of Globalization Reading Study Guide Trends in Global Poverty and Inequality Reading: 3. Other than East Asia, what other parts of the world succeeded or began to “catch up” to the developed world in the “new international division of labor”? How and why? (pp.426-434) 3. “The Latin American turn toward globalization was pioneered by Chile in the 1970s. .. The country had been one of the Western world’s most protected markets, with tariffs of 250% and more…the dictatorship had virtually eliminated trade protection and thrown open Chile’s financial markets. The economy came crashing down during the debt crisis , but after 1985 the military regime returned to its path of economic integration . Chile had a ten-year head start on the rest of Latin America with privatization, trade openness, and financial integration, and it adopted relatively extreme variants of the new orthodoxy, such as eliminating public pensions in favor of a private SS system . Chile’s turn toward exports paid off in the 1990s , as the economy doubled in size; in 2000 it was the richest country in Latin America . This growth was driven by Chile’s ties to the rest of the world economy : by the end of the century its trade was 30B dollars a year and foreign investment another 5B, many times previous levels. The new globalist Chile took advantage of long-distance transport and communications to specialize in some unusual product niches… Chile quickly became the world’s 2 nd largest exporter of salmon…summer fruits like grapes and peaches …newly developed products. Chile provided a textbook lesson in how economic integration spurred specialization: Export possibilities drove farmers to expand fruit production and entrepreneurs to start up the salmon-raising industry. Within 10 yrs the rest of Latin America followed Mexico liberalized its trade and investment policies after 1985. During the 1990s domestic policy change and the formation of NAFTA transformed Mexico from a self-contained, import-substituting country to a free- wheeling, free-trading integral part of the North American economy. In just 10 yrs the country’s total trade nearly quadrupled; manufactures sales abroad shot from about $10B to $120B, while foreign investors poured $20B a year into NAFTA’S low-wage member…Virtually all Latin America followed suit. (424-5) As finance minister [of Brazil ] Cardoso in 1994 introduced yet another plan, this one called the Real Plan , named for the new currency pegged at one real to the dollar …Inflation came down quickly, and the economy remained strong…He pushed on with his economic reforms, reduced trade barriers, deepened the country’s commitment…with Argentina, Paraguay, and Uruguay, and sold off a 100B dollars worth of public enterprises, including flagship electric power, telecommunications, steel, and railroad companies. Within four years the economy was growing. It had become a magnet for foreign lenders and investors
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Globalization, Poverty, and Inequality - PART 6 Week 14...

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