Globalization

Globalization

1. Process of increasing interdependence of the world's economies and societies. Not new, but more significant now

2. Characteristics

   • Huge expansion of international trade
   • Business concentration
     • Companies more competitive
   • Global organization of production
     • Phases of production are distributed
       • Simple activities
         • Large number of workers
           • Countries with low wages
       • Complex activities
         • Coutries with skilled workers
   • Large multinational companies
     • Global players
     • Big financial capicity
     • International dimension and huge resources
       • Influence governments and economic institutions

3. Factors

   • Since the end of W.W II.
   • Information society
     • new technologies
       • Make possible
         • Organization of production
         • Move capital
   • Cheaper and improved transport
     • easier transport of goods
   • Liberation policies
     • Ex/ Elimination of custom duties and other obstacles to the import of goods and services
       • Products can be sold freely all over the world
   • Collapse of the communist bloc
     • 1989: economic relations between all the countries
       • They adopted capitalist system
       • They open their borders to products of other countries
       • All countries>>Global market
         • Except: Cuba and North Korea

4. Effects

   • Positive
     • Increase in global wealth
     • Strong growth and economic development
     • Social progress
       • Ex/ Health and education
   • Negative
     • Poorer countries marginalized
     • Inequalities between countries increase
     • States are less able to control
       • Decisions outside borders