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POLS 2080 (26)
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Chapter Six Summary

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Political Science
Course Code
POLS 2080
Adam Sneyd

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POLS*2080: Chapter Six Globalization and Developing Countries  Fernando Henrique Cardoso o One of the founders of the dependency school o Brazilian president from 1994-2002 o Thought that capitalism had won when the Cold War ended, no alternative but to get with it o Believed that past theories of development were dead and buried and the only way to develop was to accept the current macroeconomic structure of the world including the policies of the World Bank and IMF o Under his ruling the social and economic priorities of Brazil refocused to adjust to the needs of the international markets o The obvious tension in this came from the fact that Cardoso had once argued that the South needed to delink from global economic structures Success Stories  The World Bank has provided a lot of data showing that if developing countries integrate themselves into the world marketplace (through globalization) they will prosper  East Asian Miracle: o East Asia is the ideal model for globalization development o Countries that open their borders to the movement of goods and people will find competitive niches and attract foreign capital  The Bank believes this is demonstrated by countries such as China and South Korea who have emerged as key players in the world economy o East Asian countries account for 57% of the world’s population living in poverty  However they’ve been able to reduce their population of people living in poverty by 23% in less than 25 years o China is currently on track to become the largest exporter in the world, boasting a healthy economy and 9% of world exports Time and Space Contracting  David Harvey o Believes that modern capitalism has integrated the world much more profoundly than ever before o Time and space are no longer seen as an obstacle due to modern communications and transportation o This makes him believe that the divide between the North and South has been blurred  The way that wealth and poverty are distributed amongst sectors and regions has shifted greatly with these developments Trade and Growth  Exports from developing countries have been growing faster than exports from other places in the world o Even after the economic crash the countries were still making gains  With international organizations pushing for increased liberalization of developing economies trade is expanding faster than production o The theory is that the soothing influence of the market will help every country find its own niche where everyone will experience success  The World Bank believes that development by globalisation is evident in the fact that the growth of the poor nations has surpassed that of the rich nations for the first time in modern history o They believe the population living on less than $1.50/day has halved since 1981 o These trends are the most evident in countries that adopted globalisation policies the most eagerly and quickly o The growth of exports from developing countries is mostly in manufactured goods  This means that the country is both making and exporting the goods, as opposed to when developing countries used to simply export raw materials to be used by developed nations  Investment in developing countries has risen; they will receive more than half of the FDI (foreign direct investment) in the next decade o However most of this is concentrated in China, India, Brazil, and South Africa Who is Benefiting?  Even if an area has a high amount of exports it doesn’t necessarily mean they’re rich; Sub-Saharan Africa has a high ratio of exports but since they’re largely cheap products then it doesn’t benefit them  Only 12 developing countries are actually participating in the expansion of trade  The experiences of East Asia and Latin America are examples of contrasting looks at how “development” and poverty can co-exist o When development happens it usually just strengthens the divide between the rich and the poor because the poor don’t have access to the opportunities  The gap between the rich and the poor is growing significantly in developing countries  Amartya Sen o Economist from India o Critical of World Bank and IMF policies o Believes that while wealth is being created it is not being distributed and shared fairly o The poorest 40% accounts for 5% of global income while the richest 20% accounts for 75% of global income Sub-Saharan Africa on the Margins  More than 30% of Africans live on less than $1.50/day  The growth of Africa stagnated while other countries developed from 1960-2000  The UNDP had an optimistic report for Africa pre-2008 crash o Many countries were able to fund social services and pursue the Millennium Development Goals  The critical response to this is that the growth wasn’t caused be real economic development and simply the thirst for Africa’s natural resources among the developed nations (and China)  Africa accounts for less than 1% of the world’s GDP o While the aid being sent to Africa has been consistent and high the debt they’ve been carrying (and trying to pay off) has increased China: Exception or Trend?  China has surpassed Japan as the third largest economy in the world o Poverty is down, jobs are being created, investment is increasing, population shift to the cities (allowing for better access to education, health care,
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