SESSION 2
GLOBAL ECONOMIC INTEGRATION
though to improve the allocation of natural
resources, promote technology transfer, and
enhance living standards - Kahn, 2000
what is GLOBAL ECONOMIC INTEGRATION?
Global Economic Integration is the process or arrangement
between regions to reduce or eliminate trade barriers, and to
coordinate monetary and fiscal policies with the common
purpose of increasing the trade to those countries involved.
FACTORS OF ECONOMIC
GLOBALIZATION'S GROWTH
Regional Integration
Trade Liberalization
Foreign Direct Investment
Privatization and Deregulation
FACTORS OF ECONOMIC
GLOBALIZATION'S GROWTH
REGIONAL INTEGRATION
process of countries to enter into an agreement most
commonly because of economic to political to
environmental, but moreover to commercial interests that
focus for achieving broader socio-political and security
objectives.
FACTORS OF ECONOMIC
GLOBALIZATION'S GROWTH
TRADE LIBERALIZATION
removal or reduction of restrictions or barriers on the free
exchange of goods between nations. These barriers
include tariffs, such as duties and surcharges, and
nontariff barriers, such as licensing rules and quotas to
promote free trade.
FACTORS OF ECONOMIC
GLOBALIZATION'S GROWTH
FOREIGN DIRECT INVESTMENT
is an ownership stake in a foreign company or project
made by an investor, company, or government from
another country.
FACTORS OF ECONOMIC
GLOBALIZATION'S GROWTH
PRIVATIZATION AND DEREGULATION
Privatization is the transfer of a company or organization
from government to private ownership and control.
Deregulation is the process of removing or reducing
government regulations in a particular industry.
INTERNATIONAL FINANCIAL INSTITUTION
network of financial institutions that would promote economic
independence and prosperity .
"economic crises occur when money is not being spent and,
there, not moving" - John Maynard Keynes (1883-1946)
International Financial Institutions
Bretton Woods Agreement
International Monetary Fund
The World Bank Group
Attributes of Global Corporation
JOHN MAYNARD KEYNES
5 June 1883 – 21 April 1946
a British economist and philosopher whose ideas
fundamentally changed the theory and practice of
macroeconomics and the economic policies of
governments.
his ideas, reformulated as New Keynesianism, are
fundamental to mainstream macroeconomics.
He is known as the "father of macroeconomics".
BRETTON WOODS AGREEMENT
The Bretton Woods Agreement was negotiated in July
1944 at the United Nations Monetary and Financial
Conference held in Bretton Woods, New Hampshire.
Thus, the name “Bretton Woods Agreement.
730 delegates representing 44 countries met in
Bretton Woods in July 1944.
The Bretton Woods Agreement also created two
important organizations—the International Monetary
Fund (IMF) and the World Bank.
BRETTON WOODS AGREEMENT
British economist John Maynard Keynes and
American Chief International Economist of the U.S.
Treasury Department Harry Dexter White.
BRETTON WOODS AGREEMENT
key takeaways
The Bretton Woods Agreement and System created a
collective international currency exchange regime
that lasted from the mid-1940s to the early 1970s.
The Bretton Woods System required a currency peg to
the U.S. dollar which was in turn pegged to the price of
gold.
The Bretton Woods System collapsed in the 1970s but
created a lasting influence on international currency
exchange and trade through its development of the
IMF and World Bank.
INTERNATIONAL MONETARY FUND
The IMF was founded by 44 member countries that
sought to build a framework for economic
cooperation.
The IMF was established in 1944 in the aftermath of
the Great Depression of the 1930s
The IMF is able to lend about $1 trillion to its member
countries.
Based on Washington D.C. and currently consists of
190 countries that make up its near-global
membership.
WORLD BANK
With 189 member countries, the World Bank Group is
a unique global partnership fighting poverty
worldwide through sustainable solutions.
Followed the Bretton Woods Agreement to provide
financial assistance to countries affected by World
War I.
goals - end extreme poverty and provide shared
prosperity.
FIVE COOPERATIVE ORGANIZATIONS
International Bank for Reconstruction and
Development.
International Development Association
International Finance Corporation
Multilateral Investment Guarantee Agency
International Centre for Settlement of
Investment Disputes
largest and well-known banks in the world that is
focused on granting loans and assistance to
developing countries.
GATT
The General Agreement on Tariffs and Trade (GATT)
was signed by 23 countries in October 1947, after
World War II, and became law on Jan. 1, 1948.
a treaty minimizing barriers to international trade by
eliminating or reducing quotas, tariffs, and subsidies.
Intended to boost economic recovery after World
War II.
WORLD TRADE ORGANIZATION
The World Trade Organization is a global organization
made up of 164 member countries that deals with the
rules of trade between nations.
The goal of the WTO is to ensure that trade flows as
smoothly and predictably as possible.
The WTO was born out of the General Agreement on
Tariffs and Trade (GATT), which was established in
1947.
If a trade dispute occurs, the WTO works to resolve it.
responsible for the increasingly
focused on trade in goods,
important trade in services.
GLOBAL CORPORATION
operating in two or more countries
multination and transnational corporations
produces and sells goods or services in various countries
GLOBAL CORPORATIONS
cheaper labor
broader market base
tax cut
job creation
however,
potential abuse of workers
threat to local businesses
loss of jobs
THANK YOU
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