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    Lesson 7 Slides - Actors of Economic Globalization

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    Rhica Audrey Glorioso
    The document discusses the key actors in economic globalization, including international economic institutions like the World Bank and IMF, as well as transnational corporations. It provides details on the founding and goals of the World Bank and IMF, including their largest borrowers. It also describes the functions and principles of the World Trade Organization. Transnational corporations are defined as businesses with operations in multiple countries that can be as large as small nation states in terms of revenue and employees.

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    Lesson 7 Slides - Actors of Economic Globalization

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    Rhica Audrey Glorioso
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    The document discusses the key actors in economic globalization, including international economic institutions like the World Bank and IMF, as well as transnational corporations. It provides details on the founding and goals of the World Bank and IMF, including their largest borrowers. It also describes the functions and principles of the World Trade Organization. Transnational corporations are defined as businesses with operations in multiple countries that can be as large as small nation states in terms of revenue and employees.

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    The document discusses the key actors in economic globalization, including international economic institutions like the World Bank and IMF, as well as transnational corporations. It provides details on the founding and goals of the World Bank and IMF, including their largest borrowers. It also describes the functions and principles of the World Trade Organization. Transnational corporations are defined as businesses with operations in multiple countries that can be as large as small nation states in terms of revenue and employees.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    7 views22 pages

    Lesson 7 Slides - Actors of Economic Globalization

    Uploaded by

    Rhica Audrey Glorioso
    The document discusses the key actors in economic globalization, including international economic institutions like the World Bank and IMF, as well as transnational corporations. It provides details on the founding and goals of the World Bank and IMF, including their largest borrowers. It also describes the functions and principles of the World Trade Organization. Transnational corporations are defined as businesses with operations in multiple countries that can be as large as small nation states in terms of revenue and employees.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 22

    Lesson 7:

    Actors of
    Economic
    GLOBALIZATION
    Actors of Economic Globalization
    Transnational
    International Economic and Corporations (TNCs) /
    Financial Institutions Multinational Corporations
    (MNCs)

    World Bank

    International Monetary Fund


    (IMF)

    World Trade Organization


    (WTO)
    International Economic and Financial Institutions

    ◈ In July 1944, 44 countries assembled the Bretton Woods


    Conference, and countersigned a framework for the
    international economic cooperation after WW II.

    ◈ Two international economic organizations resulted from the


    Bretton Woods Conference—the International Monetary Fund
    (IMF) and International Bank for Reconstruction and
    Development (IBRD) or what is known today as the
    World Bank.
    ◈ It is the world’s largest development institution.
    ◈ It was founded in 1944; the International Bank for Reconstruction and
    Development- soon called the World Bank- has expanded to closely
    associated group of five development institutions.
    ◈ Originally its loans helped rebuild countries devastated by World War
    II. In time, the focus shifted from reconstruction to development, with
    a heavy emphasis on infrastructure such as dams, electrical grids,
    irrigation system and roads.
    Goals of the World Bank
    End extreme poverty - by decreasing the percentage of people living
    with less than $1.90 a day to no more than 3 percent by 2030.

    Promote shared prosperity - by improving the income of the


    bottom 40 percent of the population in each country
    Organizations of the World Bank
    IBRD IDA IFC MIGA ICSID

    • it lends to • it provides • is the largest ∙ was created • is responsible


    governments interest-free global in 1988 to for the
    of middle- loans — development provide loan settlement by
    income and called credits institution guarantees conciliation
    creditworthy — and grants focused on and or arbitration
    low-income to helping the insurance to of
    countries. governments private foreign investment
    of the sector. investors disputes
    poorest against loss between
    countries. caused by foreign
    non- investors and
    commercial their host
    risks in developing
    developing countries.
    countries.
    World Bank's Top Borrowers ( as of April, 2022)
    International Monetary Fund (IMF)
    ◈ The International Monetary Fund (IMF) was the other
    institution established as a result of the Bretton Woods
    Conference in 1944.
    ◈ The IMF's primary purpose is to promote global
    monetary cooperation and international financial
    stability.
    ◈ Itis also regarded as the “guardians of good conduct” in
    the area of balance of payments.
    Core Functions of the IMF

    Surveillance

    Lending

    Capacity Development
    IMF's Source of fund
    ◈ The IMF's primary source of fund is from the quotas paid by
    its member states.
    ◈ The size of each quota is determined by how much each
    government can pay according to the size of its economy.
    ◈ Hence, the quota of states reflects their relative position in
    the global economy and determines the voting power of
    states in IMF decisions.
    ◈ Multilateral and bilateral borrowing are the secondary and
    tertiary line of defense in case quotas would not be
    sufficient.
    Countries with largest IMF quotas
    World Trade Organization (WTO)
    WTO's Mission
    ◈ WTO's Mission: To manage the rules of international
    trade and ensure the fair and equitable treatment of all
    members through negotiations and trade dispute
    settlements (WTO, 2020).

    ◈ "The WTO was born out of negotiations; everything


    the WTO does is the result of negotiations"
    Functions of WTO
    ◈ • To implement trade agreements
    ◈ • To provide forum for trade negotiations
    ◈ • To handle trade disputes
    ◈ • To monitor national trade policies
    ◈ • To provide technical assistance and training for developing
    countries
    ◈ • To cooperate with other international organizations
    Principles of Trading System under
    WTO
    1. without discrimination —member countries must not discriminate
    against any of their trading partners (giving them equally “most-
    favoured-nation” or MFN status); and it should not discriminate
    between its own and foreign products, services or nationals (giving
    them “national treatment”);
    • 'Most-favoured-nation or MFN' treatment - it means
    non-discrimination and to treat everyone equally, where every member
    treats their trading partner as the most-favoured.
    • National treatment - this means imported and
    locally-produced goods should be treated equally.
    2. Free — trimming down of trade barriers to promote trades among
    countries through negotiation.
    Principles of Trading System under
    WTO
    3. predictable — this is through binding and transparency.
    4. more competitive — this discourages “unfair” practices such as
    dumping (exporting at a low price to increase market share) and
    export subsidies.
    5. more beneficial for less developed countries — the WTO system
    is said to be more beneficial for less developed countries by giving
    them more time to adjust,
    greater flexibility, and special privileges.
    The Transnational Corporations
    (TNCs)
    ◈A transnational corporation (TNC) is "any enterprise
    that undertakes foreign direct investment, owns or
    controls income-gathering assets in more than one
    country, produces goods or services outside its country
    of origin, or engages in international production"
    (Biersteker 1978).
    ◈ TNCs are formal business organizations that have
    spatially dispersed operations in at least two countries.
    ◈ Did you know that some of
    the TNCs are so rich and
    have so many employees
    that already resemble small
    countries? For example, the
    sales of both Microsoft and
    Nike are larger than the
    GDP of all but a few nations
    in the world including part
    of African nations.
    Top 10 Largest Companies by Market Capitalization*

    Rank Company Country Sector ($ Bil.)


    1 Microsoft U.S. Technology 1,058
    2 Apple U.S. Technology 959
    3 Amazon U.S. Consumer 959
    Services
    4 Alphabet U.S. Technology 839
    5 Facebook U.S. Technology 550
    6 Berkshire Hathaway U.S. Financial 496

    7 Tencent China Technology 436


    8 Alibaba China Consumer 431
    Services
    9 Visa U.S. Financial 389
    10 JPMorgan Chase U.S. Financial 366

    *As of August 1, 2019. Source: Global Finance Magazine (2019)


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