DAY 8 Flashcards
repercussions of extractive processes
damage to the environment, social organization of communities (displacement, conflict), violation of human rights
International Monetary Fund (IMF)
- Created to oversee the stability of global currencies.
- Ensures countries maintain fixed exchange rates tied to the U.S. dollar or gold.
- Provides financial assistance to countries facing economic crises.
- Promotes global monetary cooperation and economic stability.
World Bank
- Established to fund the reconstruction of war-torn countries and support global development.
- Provides long-term loans and grants to developing countries for infrastructure projects.
- Aims to reduce poverty and promote sustainable development globally.
General Agreement on Tariffs and Trade (GATT)
- Created to promote global trade by reducing tariffs and trade barriers.
- Aimed at increasing international commerce and fostering economic cooperation.
- Evolved into the World Trade Organization (WTO) in 1995, which now handles global trade agreements.
what is the main goal of the WTO (created in 1995)
to promote free trade by reducing barriers like tariffs, quotas, and subsidies between countries
What year was the WTO established?
1995
What does TRIPS stand for in the context of the WTO?
TRIPS stands for Trade-Related Intellectual Property Rights, which protects intellectual property such as patents, trademarks, and copyrights.
What does TRIMs stand for, and what does it regulate?
TRIMs stands for Trade-Related Investment Measures and controls what rules governments can set for foreign businesses, like requiring them to use local materials or set limits on exports.
Is the Dispute Settlement Process considered an effective system?
No, the WTO’s Dispute Settlement Process is seen as somewhat ineffective in enforcing rulings, especially when it comes to punishment, because it lacks direct enforcement mechanisms.
In the 1970s, the IMF shifted its focus towards what?
Loans to developing countries with conditions attached, including austerity and structural reforms.
What are the main criticisms of the IMF?
Promotes neoliberal policies without considering the unique circumstances of individual countries.
Governance is dominated by the U.S. and serves the interests of developed countries, neglecting poorer nations.
Structural adjustment programs often worsen economic conditions in developing countries.
Contributed to the Great Recession and economic crises in Latin America.
the main criticisms of the world bank
Dominated by developed countries, serving their interests rather than the poor.
Has lost focus on key issues like agriculture in sub-Saharan Africa.
Fails to address the needs of developing nations in a way that promotes sustainable development.
Neglects important areas like poverty reduction and environmental sustainability.
Examples of Regional Trade Agreements
European Union (EU)
NAFTA/USMCA (North America)
When was the Euro introduced, and what is the Euro Zone?
The Euro was introduced in 2002
What was the Maastricht Treaty of 1992?
European Union and set the groundwork for a deeper political and economic integration among EU member states, including the framework fof a single currency (the Euro)
North America Free Trade Agreement (NAFTA)
Came into effect in 1994 to eliminate barriers to trade and investment between the three countries
(reaction to the EU)
Offshore outsourcing
transferring business activities or services to companies in other countries, often to reduce costs.
This is highly relevant in globalization because it allows companies to take advantage of cheaper resources abroad.
Insourcing
another country might gain jobs or services due to outsourcing from another country.
Creative destruction is a concept introduced by who?
economist Joseph Schumpeter, he said creative destruction is essential for long-term economic progress.
What is creative destruction and how it it linked to endogenous growth theory?
the process where new innovations replace older technologies, products, or services, making them obsolete.
This is a key idea in endogenous growth theory, which suggests that economic growth is driven by internal factors, like innovation and technological progress.
according to Schumpeter what is the major reason countries stagnate and go into decline?
if their ruling elites resist this change, trying to protect outdated industries. Instead of adapting to new innovations, these elites may block progress, preventing economic growth and development.
What are the major criticisms of NAFTA/USMCA ?
- Loss of jobs and wage reductions, especially in manufacturing sectors in the U.S.
- Environmental concerns, as the pact weakened environmental protections.
- Increased inequalities, as wealth became more concentrated, and many low-income workers faced economic hardship.
The phrase “Democrats betrayed the working class with NAFTA” refers to what?
NAFTA led to the outsourcing of manufacturing jobs from the U.S. to Mexico and other countries with cheaper labor. This resulted in the closure of factories and the loss of unionized, high-paying manufacturing jobs, which had been a staple of the working class in certain regions (e.g., Michigan, Ohio, Wisconsin).
what are Global Trade Chains and Networks
Global Trade Chains and Networks refer to the complex systems that facilitate the movement of goods and services across the world
