Chapter 11 International Economics: The Alternative Road

Economic Cooperation After WWII, growth. LDCs need influx of development capital Only hard currency accepted in many transactions Four sources of capital: loans, investment, trade, and aid.

Economic Cooperation & Development The United Nations 1.Global Economic Regulation: development of UN Center for Transnational Corporations 2.Development of LDCs: sponsor economic summits; advocacy of debt relief

Economic Cooperation & Development World Trade Organization 1.Founded General Agreement on Tariffs and Trade 3.From 23 to 148 members 4.Handles disputes under GATT 5.Controversy over loss of sovereignty

Economic Cooperation & Development International Monetary Fund 1.World’s primary organization devoted to maintaining monetary stability by helping countries to fund balance-of-payment deficits. 2.Established Has 184 members 4.Controversial voting issues and conditionality

Economic Cooperation & Development World Bank Group 1.Four Associated agencies that grant loans to LDCs for economic development and other financial needs. 2.Two of the agencies, the International Bank for Reconstruction and the International Development Assn., are collectively referred to as the World Bank. 3.Other two agencies: Multilateral Investment Guarantee Agency and International Finance Corp.

Economic Cooperation and Development Two major organizations 1.Organization for Economic Cooperation and Development (OECD): organization that has existed since 1948 ( and since 1960 under this name) to facilitate the exchange of information and otherwise to promote cooperation among EDCs. In recent years, the OECD has started accepting a few newly industrialized and former Soviet countries.

Economic Cooperation and Development 2. The Group of 8 (G-8): The seven economically largest free market countries: Canada, France, Germany, UK, Italy, Japan and US, plus Russia (a member on political issues since 1998); represents pinnacle of economic power

Regional Economic Cooperation See Table 11.1 on page 320 NAFTA: North American Free Trade Agreement Free Trade Agreement of the Americas: FTAA Southern Common Market (Mercosur) Association of Southeast Asian Nations Asia – Pacific Economic Cooperation

Economic Advantages to McWorld 1.Specialization 2.General Prosperity 3.Promotion of Competition 4.Developmental Capital 5.Decreased Violence 6.World Cooperation 7.Promotion of Democracy