Table of Contents

• Introduction • 1-1. Economic Development• 1-2. Economic Globalization

• Globalization• 2-1. Characteristics of Globalization• 2-2. Process of Globalization• 2-3. Adv + Disadvs of Globalization

• Globalization impacts in DCs and LDCs• 3-1. Economic impacts on DCs• 3-2. How globalization affects LDCs

• Conclusion• 4-1.Challenges for LDCS

Introduction1-1. Economic Development1-2. Economic Globalization

Economic Development

Progress of increasing national incomes involving social systems •Measurement:• GDP per Capita • HDI

•3 primary factors that influence of economic development• Growth of Human Capital Index• Decrease in inequality figures• When there is structural changes that improve the

general populations’ quality of life

Economic Globalization

Process of increased interconnectedness among countries.

• Reflects the continuing expansion and mutual integration of market frontiers

• Irreversible trend for the economic development •2 driving forces for economic globalization

• Productive activities• marketization

•Role of Globalization• essential to a nation’s ability to yield the maximum potential

from its available resources.• The success of economic development of nation;

• hinges on its ability to globalizes

Process of Globalization• A Multi-dimensional Process:

• A Top-Down process:

Economically: opening up of national market, free trade and commerce among nations, and integration of national economies with the world economy.

Politically: limited powers and functions of state, more rights and freedoms granted to the individual and empowerment of private sector;

Culturally: means exchange of cultural values between societies and between nations; and ideologically, it means the spread of liberalism and capitalism.

• As a result, the values and norms of developed countries are gradually rooted in developing countries.

• This leads to the growth of a monoculture - the culture of the North being imposed on the South.

• Involves the erosion and loss of the identity and the cultures of developing countries.

Globalization is thus a one-way traffic: it flows from the North to the South.

Globalization2-1. Characteristics of Globalization2-2. Advantages and Disadvantages of Globalization

Characteristics of Globalization• Liberalization• Free Trade between countries:• Increasing volume of international trade, FDI and general

international capital movements• Increasing amount of assets and liabilities of each country with

the reset of the world• Simultaneous competition in markets between new competitors

from all over the world places acquired positions at risk, necessitating extremely rapid structural adjustments in numerous areas

• Globalization of Economic activities• Control of economic activities by domestic market and

international market• Coordination of national economy and world economy

• Borderless globe

Globalization; irreversible trend

• Under the framework of WTO, • Reduction of tariff and NTBs & Open current accounts and capital

accounts • World’s economies integrated into a whole.

• MNCs – became main carriers of economic globalization• Global expansions of MNCs reshape macroeconomic mechanisms

of the operation of the world economies.

• FTAs • Structural economic reform to integrate itself into the process of

the economic globalization. • Win-Win agreement

• Eg/ U.S.-China FTA• U.S. – increase Exports of goods and services to China• China – boost economic growth by increasing its share of the US

market

Globalization in the perspective of DCs and LDCs

Advs& Disadvs of Globalization

Advantages

1. Education2. Employment3. Cheaper Price4. Quality of Product5. Communication

Disadvantages

1. Loss of Culture

2. Health Problems3. Environmental Degradation4. Disparity

Economic impact on DCs• Globalization;• Enables business to compete worldwide• Brings reorganization at the international, national, and sub-

national levels

• 3 major forces of Globalization• Globalization of all product and financial markets• Technology• Deregulation

Examples of globalization of DCsExample: •China: • Reform led to the largest poverty reduction in history.

Between 1990 and 2005, poverty rates in the country fell from 60% to 16%, leaving 475 million fewer people in poverty.

•India: • Cut its poverty rate in half in the past two decades.

•Uganda: • Poverty fell 40% during the 1990s and school enrollments

doubled.

•Vietnam: • Surveys of the country's poorest households show 98% of

people improved their living conditions in the 1990s.

How globalization affect LDCs

• Increased Standard of Living• Economic Globalization gives governments of developing

nations to access to foreign lending

• Access to New markets • Globalization leads a country to freer trade with other

countries• One of the largest benefits to developing nations

• Widening Disparity in Incomes• Increase the wage gap between those who are educated and

those who are not

• Decreased Employment • Automation in the manufacturing and agricultural sector

lessons the need for unskilled labor

Examples of globalization of LDCs

• Many countries in Africa;• have failed to share in the gains of globalization.• exports have remained confined to a narrow range of primary

commodities.

• Experts’ suggestion• Some experts suggest poor policies and infrastructure, weak

institutions and corrupt governance have marginalized some countries

• Other experts believe that geographical and climatic disadvantage have locked some countries out of global growth. For example, land-locked countries may find it hard to compete in global manufacturing and service markets.

Conclusion4-1. Challenges for LDCs

Challenges for LDCs• Developing countries are bogged in dilemma;• If they keep themselves away from this process, they will

surely be left far behind the development of other economies• If they participant actively in the process, it is most probable

that they will be reduced to annexes of developed countries due to the latter’s dominance in the process

• In the view of this anticipation, • the interests of developing countries must be guaranteed and

their say enlarged in the process of developing new international economic order

• Progress of Globalization should bring huge benefits for the world economy, also should make the benefits available to every country and to different departments and interest groups

Challenges for LDCs• Step of reforming economic system and readjusting

economic structure should be quickened• the government should strengthen its functions• the government should play the major role in establishing

incentive and constraining mechanisms• the government should focus their efforts on stimulating rapid

scientific, technological and education development

Thank you