Stances on Global Economic Integration

• What can developing countries gain from globalization?

  Utilization of comparative advantages
• How can developing countries benefit from globalization?

  By introducing advanced technologies and foreign capital
• What are the three broad responses to economic globalization?

  1. Protectionism
  2. Fair Trade
  3. Helping the "bottom billion"
• What is protectionism?

  Government intervention to encourage domestic production
• What are two ways to protect domestic production?

  Tariffs and quotas on foreign imports
• What is a common criticism of protectionism?

  It leads to inefficiency in protected industries
• How does protectionism affect exports?

  It discourages exports and raises prices
• Why do developed nations seek trade protection?

  Fear of inexpensive imports harming local industries
• What do less developed countries complain about regarding trade barriers?

  Continuing trade barriers in developed nations
• What is a "race to the bottom" in trade liberalization?

  Competition to produce at lower costs
• What is the focus of fair trade?

  Creating a moral and equitable economic system
• What rights does fair trade protect?

  Workers' rights, including the right to unionize
• What practices does fair trade promote?

  Environmentally sound and sustainable production
• What percentage of the bottom billion lives in Africa?

  70%
• What is the income level of the bottom billion compared to other developing countries?

  About a fifth of those in other developing countries
• What are the four traps leading to the impoverishment of the bottom billion?

  1. Conflict trap
  2. Natural resources trap
  3. Landlocked with bad neighbors
  4. Bad governance trap
• What is the conflict trap?

  Ongoing violent conflict leading to poverty
• How does the natural resources trap limit economic development?

  Rich resources can lead to mismanagement and corruption
• Why are landlocked countries often impoverished?

  They lack resources and have problematic neighbors
• What does bad governance trap refer to?

  Bad policies that inhibit economic growth
• What are the risks brought by economic globalization?

  • Expanded gap between North and South
  • Increased vulnerability to external factors
  • Outsourcing leading to higher unemployment
  • Transnational corporations overpowering smaller governments
  • Economic interdependence causing widespread effects
  • Loss of cultural identity
• How has economic globalization affected the gap between North and South?

  It has expanded the gap rather than reduced it
• What is a consequence of outsourcing jobs due to globalization?

  Higher unemployment in developed countries
• What is a risk associated with transnational corporations?

  They can become too powerful for smaller governments
• How does economic hardship in one country affect others?

  It can greatly affect other linked economies
• What cultural impact does economic globalization have?

  Loss of cultural identity due to Western products