1. CONTEMPORARY ECONOMIC GLOBALIZATION Recipe for Today’s Economic Situation Around the World

2. Chapter 11: Economic Globalization economic globalization - the process of economies throughout the world growing more and more connected But how did this happen? Several key events led to the globalized economy we have today. They are:

3. 1. Bretton Woods Agreement During WWII, the allied countries became concerned with how they would rebuild their economies after the war against Germany, Italy and Japan.

4. Representatives from the 44 allied countries (including Canada) met in Bretton Woods, New Hampshire in 1944 to discuss and sign an agreement establishing rules and institutions that are still with us today.

5. These include: – World Bank – International Monetary Fund – General Agreement on Tariffs and Trade (known today as the World Trade Organization)

6. 2. World Bank The World Bank is a financial institution that was set up to give loans to nations in financial distress.

7. Since WWII, countries have been able to apply to the bank for a loan, but the loan can only be granted under certain conditions: Must be a member country. Must meet certain political and economic requirements (NEED) Must be attempting to reduce debt and corruption. Must be a free-market nation. Are these policies practical for all countries?

8. 3. International Monetary Fund The IMF works with the World Bank to bring stability to international money affairs and expand world trade. While the World bank is in charge of handing out long-term loans, the IMF makes sure exchange rates are kept in check.

9. 3. International Monetary Fund They also give out short-term financial assistance. Both the World Bank and the IMF are agencies of the United Nations.

10. 4. The End of the Cold War Another major event that pushed forward economic globalization was the end of the Cold War in 1989 The Cold War began in 1946, and for over 40 years, the world was divided between communist (Soviet Union) and capitalist (United States) countries

12. With the collapse of the Soviet Union, most of the communist countries (Poland, Russia, etc.) began their transition to capitalism. They depended on capitalist countries to show them the way.

13. 5. The Impact of Technology and Communications on Economic Globalization The Bretton Woods Agreement and the end of the Cold War may have been driving forces behind economic globalization, but none of this would have been possible without advanced technology (and increased communications)

14. Throughout the Cold War, technological advancements changed the world. Television, computers, the Internet, cell phones and satellites made borders irrelevant. The internet, in particular was a powerful globalizing force.

15. Why did economic globalization occur? And is it a good thing? A-B Partner Talk What are some of the benefits and drawbacks of our Canadian economy being connected to that of other countries?

16. Different Understandings Many factors can influence your opinion about economic globalization, including your: – Socioeconomic status (your position in society based on money and social factors) – Experiences – Nationality – Age – Education/Career You likely had positive things to say about economic globalization, but would someone from a poor country feel the same?

17. A Closer Look at the World Bank and the IMF... While these organizations are set up to help countries in need, they are not charitable by any means. They charge interest, and they require applicants to change to a Western-style free-market system. Can you guess who runs the IMF and World Bank?

18. A Closer Look at the World Bank and the IMF... Supporters of the World Bank and the IMF say that in the long-run, less-developed countries will benefit from free-market policies. Critics think the World Bank and IMF should not interfere with local economies in this way. Handout: Does the IMF Help Countries? Handout: Global Connections 184