Interaction between economics and politics Source: http://www.globalpolicy.org/images/pictures/bwi.jpg IPE Interaction between economics and politics

Approaches Look at LDCs vs EDCs Prescriptive vs. descriptive 3 main approaches: Economic nationalist Economic internationalist Economic structuralist

Economic Nationalist State should use its economic strength to further national interests Realist Imperialist/Neoimperialist Economic incentives/disincentives Protectionist

Economic Internationalist International economics can and should be cooperative with prosperity available to all Liberal capitalism, laissez-faire, free trade Keynes: IMF, World Bank, GATT

Structuralist Economic structure determines politics What does the world look like? Further refinements: Marxist World systems/Dependency theory

North vs South World Bank (IGO) statistics: World Bank projects: 10 things you should know World Bank projects: What does the world look like?

Trade Goods vs. Services Balance of Trade Source: www.greenleft.org.au/ back/2004/569/toonjb.jpg Trade Goods vs. Services Balance of Trade Trade has expanded exponentially: Supply/Demand Technology Politics Trade is uneven/growth unfair

World trade growth vs. GDP

What you export matters

Global Information: Trade statistics from US gov’t Global Statistical maps from nationmaster

International Monetary Policy Financial Institutions Currency FDI vs. FPI Exchange rates Source: Dana Deluca, Initiative for Policy Dialogue Region FDI 1990 ($B) FDI 2001 Latin America 10.3 85.4 South, East, and SE Asia 22.1 94.4 West and Central Asia 2.2 7.7 Central and Eastern Europe 0.6 27.2 Africa 2.5 17.2 This growth across regions masks the high concentration of FDI to developing nations. In 2001, about 62% of inward FDI to developing countries went to five countries: China, Mexico, Brazil, Hong Kong, and Poland.

Growth in IMF loans

MNCs: Top 10 things Source: http://www.globalpolicy.org/socecon/tncs/top200.htm 1. Of the 100 largest economies in the world, 51 are now global corporations; only 49 are countries. 2. The combined sales of the world's Top 200 corporations are far greater than a quarter of the world's economic activity. 3. The Top 200 corporations' combined sales are bigger than the combined economies of all countries minus the biggest 9; that is they surpass the combined economies of 182 countries. 4. The Top 200 have almost twice the economic clout of the poorest four-fifths of humanity. 5. The Top 200 have been net job destroyers in recent years. Their combined global employment is only 18.8 million, which is less than a third of one one-hundredth of one percent of the world's people. 6. Not only are the world's largest corporations cutting workers, their CEOs often benefit financially from the job cuts. 7. Japanese corporations have surpassed U.S. corporations in the ranking of the Top 200. 8. Over half of the sales of the Top 200 are in just 5 economic sectors; and corporate concentration in these sectors is high. 9. When General Motors trades with itself, is that free trade?: One-third of world trade is simply transactions among various units of the same corporation. 10. The Top 200 are creating a global economic apartheid, not a global village. The top eight telecommunications firms, for example, have been expanding global sales rapidly, yet over nine-tenths of humanity remains without phones.

Free Trade or Not? PRO Increased wealth CON Specialization/Efficiency Source:/www.giant.net.au/users/inkcinct/Web/Australian_Cartoons_List/Australian_Cartoons/2004_534_FTA_boomerang.gif&imgrefurl=http: Free Trade or Not? PRO Increased wealth Specialization/Efficiency Competition New capital World cooperation/less conflict Greater democracy CON Domestic economy vulnerable Diversification Environment Sovereignty National security Policy tool Interactive exercise: Rourke