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The Positive Impact of Economic GlobalizationTo what extent does globalization contribute to sustainable prosperity for all people?In the past video we discussed some of the international agreements that have been created to encourage trade _____________________, which has increased economic globalization. There are many benefits to these initiatives. One of them is increased _______________ _________________. The developed countries of the world have the majority of wealthy entrepreneurs who are willing to risk their money by investing in new businesses. This can help to develop an industry. And often if the area is undeveloped, those foreign investors will pay for the ______________________ (which is things like the roads, water supply and electrical grid) to ensure that their business will be successful. There are many businesses in Canada that are foreign owned that help to promote our economic growth. For example, Wal-Mart is an American company that will often build a new store on the outskirts of town because land is cheaper, and what often happens is that other businesses will follow and build up a new commercial center for the community.Our standard of living has also increased because of transnational corporations. Companies can ______________ the work to regions that have lower regulations, which in turn makes it cheaper to produce the goods and therefore cheaper for us to buy our goods. For example, when I was a little girl, it would be very expensive to have a Disney princess dress for a Halloween costume. Today I can buy a princess dress for $20 because it is so much cheaper to make and ship the dress than it was a generation ago.Outsourcing allows us to take advantage of the ________________ ______________ which relates to technology. Knowledge is a commodity – something we can use to make money. Many transnational corporations have established major centers in places like India and China because there are many very smart people over there who can help to create new ideas and technologies. While many people in these countries do not have access to a Western style education, some do and they are skilled professionals. An example of this is in Asia there are radiologists who can read MRI or CAT scans that have been taken in North America – this works really well when scans need to be done in the middle of the night and it is very expensive to have the radiologist come in. Why not have a radiologist who is just as competent look at the scan when it is the middle of the day for her to look at it.We could also argue that this global economy allows for the better use of resources. One reason is because powerful developed nations can put ________________ on developing nations to improve their environmental impact. Because of the Internet, people in developing countries can get support in trying to influence their government to enact better environmental legislation. Another reason globalization can be more efficient in the use of resources is because of technology companies can order products _____ ______________, instead of filling warehouses full of goods they hope people will want to consume. There is a theory that says the world is ________, meaning that anyone in the world can now compete in the global economy (similar to the idea of a level playing field), which means that anyone in the world can participate in international trade. And this makes the world a more _________________ place because you don’t fight with your important customers or business partners – and if you look at global conflicts today you can see that most of the conflict regions of the world are areas that are not major players in the global economy.One of the concerns with outsourcing is it means that jobs in Western nations are moving to other parts of the world, especially Asia. People will say that we are hurting our economy because of those lost jobs. But it actually balances out because while some people will lose their job, the majority of the people are getting their goods and services for a lower price thus increasing their ____________ of _____________. And because our country is so developed, many of those people who lose their job are not out of work for long because there are other jobs for them to fill (and we have government intervention to help them out in the meantime). Here’s something to consider: why are these “_______” jobs? Why do Canadians deserve a job more than a person living in Bangladesh? Why do we often value the lives of our neighbors, which then means we are putting less value on the life of someone living on the other side of the world. Globalization allows for goods and jobs to move around the world so that all of us can participate.Remember in the last video we talked about the Bretton Woods agreement. _____________ _________ established standard exchange rates for various currencies because when we are trading with other countries we need to know what their currency is worth to us. Initially currency value was based on the gold standard, which meant that governments needed to have a store of gold that backed up their currency (so that pretty piece of paper could be traded in for something of value quickly). But this system was inflexible and countries wanted to be able to control their money supply to help deal with things like debt. So in the 1970s we dropped the gold standard and we moved to a floating exchange rate – this meant that the value of a currency was now based on supply and demand. When people are wanting to buy your products and your economy is strong, your dollar will be worth _________ because it is in _____________. And we usually compare the value of our dollar to the US dollar, because over time it is usually among the strongest (many people would like to see the world move away from this comparison). The IMF helps to monitor those exchange rates.The European Union made it even easier to trade with member countries by creating a _________________ currency – the Euro. While there are some concerns with the fact that countries lose some of their ____________ (or personal control) over their economy because the European Union makes demands on any country using the Euro, for the most part this universal currency has made trade in Europe so much easier. Remember, geographically Europe is broken into many small pieces compared to Canada or the United States; if you wanted to sell your goods within a 1000 km radius here in Alberta that would mean international trade with just one other country, but in Europe that could include half a dozen countries. By having a common currency, packaging laws and other regulations, businesses can more easily sell to more markets.Globalization also means that powerful companies in developed countries can invest in programs in less developed countries. Of course the main goal of these investments is to make money, but the people in the developing country benefit as well. An example is the distribution of clean water. In South America there was a developing nation that was struggling to provide clean water for their citizens, so they allowed an American company to come in and sell clean water to the people (this is known as __________________________). A few documentaries were made about how horrible it is to allow access to clean water to be controlled by a multinational corporation because it meant that the really poor could not afford to pay for clean water which is a necessity of life. But guess what, after enough protests the government took back control of the water supply and even less people had access to clean water because the government was not as good as the multinational corporation at getting things done.Because of globalization, it is much easier for people in developed nations to help those in less developed nations. For example, an organization like Kiva will allow me to give a small loan to a woman in a developing nation to buy a sewing machine, which she can then use to make money as a tailor. She can then afford to use the cell phone that was purchased by another woman using a _________________ who acts like a local payphone, charging neighbors a small fee to use the phone. Or I can use the same website to loan money to a student in a developing nation to go to school, thus improving the productivity of the workforce.Finally, the best reason to encourage economic globalization is the fact that there are _________ people living in poverty around the world. According to the World Bank the number of people living in poverty has dropped by 50% in the last 20 years and life expectancy around the world has increased. International trade means that goods, ideas and technologies are shared around the world. Transnational corporations provide jobs in areas that are impoverished and as we have stated they also bring in roads, electrical grids and improved sanitation. Countries like China are becoming the largest consumers of goods from Western countries because of the jobs created in their country from transnationals, so in other words by purchasing products made in their factories, we have created ____________________ who want to purchase our goods. Review questions: These questions will help you to focus on the most important parts of the video. Read them through to ensure that you clearly understand those concepts. How can foreign investment help a developing nation?How has economic globalization increased most people’s standard of living?What is outsourcing?What is the knowledge economy?How can globalization encourage better use of resources and protection of the environment?What do we mean when we say “the world is flat”?How can adopting a currency with another country diminish your sovereignty – what is sovereignty?What is privatization and how can it be beneficial?How can microloans bring people out of poverty? ................
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