Chapter 2 The Global Economy

organizations like the UN contributor is economic gle more interconnected and free economies, THE GLOBAL ECONOMY Economic Globalization CHAPTER 2 According to the United globalization refers to the iner result of the growing scale of Introduction The United Nations (UN) tried to address the different problems in the world. Their flow of international capital, and efforts were guided by the eight Millennium Development Goals, which they created the continuing, expansion and in the 1990s. Among these eight goals, the eradication of extreme poverty and hunger irreversible trend for the econo ranked as the first. The other seven goals include: achieving universal primary education, of the millennium." (p. 1) promoting gender equality and women empowerment, reducing child mortality, improving There are two different ty maternal health, combating diseases like HIV/AIDS and malaria, ensuring environmental globalization-protectionism ar sustainability, and having a global partnership for development (United Nations, 2015), 'a policy of systematic govern The UN tried to achieve them by the year 2015. objective of encouraging dome Since there are different standards of living around the world, we can expect different giving preferential treatment to meanings attached to it. In the Philippines, a person is officially living in poverty if he makes foreign competitors" (McAleese, less than 100,534 pesos a year, around 275 pesos a day. This is called the poverty line or protectionism usually comes in the poverty threshold. But we are going to focus on extreme poverty which, according to the UN (2015), is a condition characterized by severe deprivation of basic human needs fees on imports or exports. For in including food, safe drinking water, sanitation facilities, health, shelter, education, and in Country B, it would be given fi information. The UN defines extreme or absolute poverty as living on less than $1.25 a day. Country B. This policy was practiced The organization aims to eliminate extreme poverty for all people by 2030. seventeenth centuries until the ear It was three years ago and the results were in. The UN (2015) reported that 836 million 2007). The Great Depression of 19 people still live in extreme poverty but that is down from 1.9 billion, so there is success or at today, protectionism exists in the least a lot of progress. The World Bank predicted that by 2030 the number of people living liberalization. Countries such as CH in extreme poverty could drop to less than 400 million. Of course that assumes everything accused of practicing protectionism will keep improving as it has been. However, climate change has to be considered since it is a threat to these improvements in global poverty. World War II heavily influenced from protectionism to trade liberali Most people who have been lifted out of extreme poverty are still poor and being and technological advances in trans poor comes with serious problems, from disease to lack of water. Income inequality is rampant and one in seven people still live without electricity. and services move around the world everything from shoes and bananas t So why is extreme poverty falling? The answer to this is really complicated. A set of factors like better access to education, humanitarian aid, and the policies of international phones as an example. Mobile phor 22 The Contemporary World everything including reducing povert mobile phones are the "single most t to the developing world. Phones give vivo Y35organizations like the UN have made a difference. However, the greatest contributor is economic globalization. The world's economies have become more interconnected and free trade has driven the growth of many developing economies. ONOMY Economic Globalization and Global Trade According to the United Nations (as cited in Shangquan, 2000), "Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, s in the world. Their flow of international capital, and wide and rapid spread of technologies. It reflects which they created the continuing expansion and mutual integration of market frontiers, and is an overty and hunger irreversible trend for the economic development in the whole world at the turn primary education, of the millennium." (p. 1) ortality, improving There are two different types of economies associated with economic g environmental globalization-protectionism and trade liberalization. Protectionism means ed Nations, 2015). "a policy of systematic government intervention in foreign trade with the objective of encouraging domestic production. This encouragement involves expect different giving preferential treatment to domestic producers and discriminating against erty if he makes foreign competitors" (McAleese, 2007 as cited in Ritzer, 2015, p. 1169). Trade poverty line or protectionism usually comes in the form of quotas and tariffs. Tariffs are required h, according to fees on imports or exports. For instance, a pen that costs $1.00 in Country A and c human needs in Country B, it would be given five-dollar tariff. The pen would become $6 in education, and Country B. This policy was practiced during the mercantilist era, from sixteenth to an $1.25 a day. seventeenth centuries until the early years of the Industrial Revolution (Chorev, 2007). The Great Depression of 1929 marked the peak of protectionism. Until at 836 million today, protectionism exists in the world economy despite the growth of trade success or at liberalization. Countries such as China, Japan, and the United States are being people living accused of practicing protectionism (Ritzer, 2015). s everything World War II heavily influenced the shifting of the dominant economic policy ered since it from protectionism to trade liberalization or free trade. Free trade agreements and technological advances in transportation and communication mean goods and being and services move around the world more easily than ever. We are talking about nequality is everything from shoes and bananas to innovations and ideas. Let us take mobile phones as an example. Mobile phones seem to have good consequences for d. A set of everything including reducing poverty. According to economist Jeffrey Sachs, ernational mobile phones are the "single most transformative technology" when it comes to the developing world. Phones give people access to banking and payment Chapter 2: The Global Economy 23 vivo Y35