1. The Effects of Globalization

2. At the beginning of the twenty-first century, the world was divided over a number of political, cultural, and economic issues. Despite divisions, countries tied together like never before Globalization is force behind closer relationships –Process in which trade, culture link countries –Improvements in transportation, communication make global trade easier Globalization Major effect of global trade, increased economic interdependence –Relationship among countries in which they depend on each other for resources, goods, services –Occurs because countries vary in goods, services they provide, need Interdependence Economic Interdependence

3. Economy Goods, services nation provides and needs depend on level of economic development in that country Countries grouped in two categories: developed, developing Developing Less productive economies, lower standard of living; Guatemala, Philippines People in these countries lack adequate education, health care Poorest, least-developed countries located mostly in Africa, southern Asia Developed Industrialized nations have strong economies, high standards of living 20 percent of world’s nations wealthy, powerful like Japan, United States Have access to good health care, education, technology Developed and Developing Countries

4. Growth and Outsourcing Multinational Corporations  Increasing interdependence and dramatic growth of multinational corporations —large companies operating in multiple countries  Benefits to companies  Outsourcing —having work done elsewhere to cut costs, increase production  Manufacturing facilities in developing countries, where materials, labor relatively inexpensive Outsourcing  Advocates say: creates jobs and wealth in developing countries  Critics say: fails to improve standard of living, outsourcing causes job loss in company’s home country

5. Oil Prices All countries depend on oil for energy; rise in prices felt around world Developed countries like United States faced with higher costs Poor nations in Africa could not afford to import, faced shortages Rise in oil prices led to increased demand for alternative energy sources, attempts to reduce consumption Global Economic Ties Certain events, actions can affect economies of many nations Global interdependence particularly evident in times of uncertainty –Early 2000s, price of crude oil rose dramatically –Factors: rising world demand, concern over available supply

6. Globalization often leads to or promotes free trade, the exchange of goods among nations without trade barriers such as tariffs. This can lead to consumers purchasing higher-quality goods at lower prices. Many of these groups work to promote, regulate free trade 1948, General Agreement on Tariffs and Trade (GATT) Worked to limit trade barriers, settle disputes International Trade Organizations 1995, GATT replaced by World Trade Organization (WTO) Monitors national trade policies Organization of Petroleum Exporting Countries (OPEC) works to control oil production, price GATT, WTO, OPEC Regional trade blocs promote free trade, deal with economic issues of neighboring nations European Union (EU), North American Free Trade Agreement (NAFTA), others Regional Trade Global Trade

8. Opponents argue process benefits wealthy developed nations at expense of developing nations Free trade encourages practices that exploit workers, destroy environment Some promote fair trade, like fair trade coffee movement guaranteeing fair prices to coffee bean farmers Anti-Globalization Global trade has clear benefits Developing countries can provide new, valuable markets for goods, services produced by developed countries Technology, services, money from developed nations can improve public services, raise standard of living of developing countries Benefits Effects of Global Trade

9. Culture Globalization; countries linked through trade and culture Modern transportation, communication allow faster exchanges of ideas, customs Spread of Traits Globalization leads to cultural diffusion, spread of culture traits from one region to another Work, travel, permanent moves all play part Popular Culture Globalization leads to changes in popular culture Culture traits: food, sports, music common within group of people Mass Media Television, movies, music most powerful methods of cultural diffusion Satellite news and Internet also ways of exchanging images, ideas Cultural Exchange

10. Negative Effects Some believe changes largely negative Mass media, advertising encourage growth of consumerism, preoccupation with buying consumer goods World Community Globalization linking people together through economics, culture Challenge to preserve valuable traditional cultures while providing enrichment from other places in world Media Opponents say market shaped by media and advertising, not actual needs Worry that globalization creating common world culture, allowing traditional cultures to lose uniqueness Effects of Cultural Changes