1. Chapter 17: Critical Issues of the 21 st Century

2. Global Interdependence International Trade Flow of manufactured goods and armament from MDCs to LDCs (70% or world trade) Flow of natural resources and cash crops from LDCs to MDCs (30% of world trade)

3. Global Interdependence In MDCs: recession reduces the demand for LDC imports In LDCs: reduced export earnings lowers the demand for MDC imports, resulting in a global recession Each $1 billion exports in the U.S. sustains 25,200 jobs – 1981-82 recession: -400,000 jobs – 1982-83 Latin American debt crisis: -500,000 jobs – 1997-98 Asian financial crisis: -1,100,000 jobs

4. Global Interdependence International Finance Flow of DFI from MNCs into LDCs (the “global factory”) Flow of ODA from MDC governments to LDC governments Flow of loans from IMF and World Bank to LDCs Flow of debt-service payment from LDCs to MDCs Flow of funds due to TOT decline from LDCs to MDCs Flow of resident capital from LDCs to MDCs

5. Global Interdependence Human Capital Flow of people from politically, socially, and economically repressed LDCs to MDCs – Legal immigration: The Brain Drain phenomenon – Illegal immigration

6. Global Interdependence Reduce the debt and debt-service burden Create new LDC funding: tax resident capital outflow and MNCs Establish new international institutions to stabilize global economic relations Reform IMF and World Bank policies

7. Global Environment The Greenhouse Effect and Global Warming Excessive per capita energy fossil fuel consumption due to affluence Rapid deforestation due to poverty, falling primary- commodity export prices, and commercial land development Rapid desertification due to soil erosion due to land over-use and lack of fertilization

8. Global Environment The Rio Summit’s Agenda 21 Alleviate poverty and improve environmental capital Invest in R&D to reduce soil erosion Improve family planning through female education and employment Prevent the destruction of the rain forest Protect the natural habitats and biodiversity Invest in alternative energy to reduce pollution

9. Crisis in Sub-Saharan Africa Decline in the standard of living Rapid population growth, but slow economic growth Social and political oppression and human rights violations HIV-infection and death from AIDS (20 million HIV-positive in 1997 of which 9 million were women)

10. Transition in Eastern Europe Sharp decline in the GDP High and rising inflation Increased poverty: 14 million (4%) in 1988 to 119 million (32%) in 1994 Increased crimes and social injustice Diversion of funds from LDC development ($100 billion per year)

11. Democracy Help LDC people remove non-democratic governments and repressive regimes (Iran, Iraq) Solve international conflicts that make the oppressed resort to violence and terror (Arab-Israeli land dispute) Eradicate poverty and prejudice: one world, one people