Summary
Summary National government and international organization in globalisation
international organization, role of state, national government
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Globalisation is the process by which the world is becoming increasingly interconnected as aresult of massively increased trade and cultural exchange. = growing interdependence of
countries by creating networks which involve the reduction and removal of barriers between
national borders in order to facilitate the flow of goods, capital, services and people.
National govts have an impact on globalisation bc they can take part in intl trade, create SEZs,
invest in infrastructures like ports and create trade blocs. By encouraging flows of
goods/services/capital through trade, people will migrate because follow jobs and good quality
of life (ex: immigration to the US).
Intl trade: governments around the world have relaxed laws restricting trade and foreign
investment, with some governments offering grants and tax incentives to persuade foreign
companies to invest in their country. They also promote industry and agribusiness to
encourage exports.
- South Korea: top-down strategy based on exports, forced sectoral shift to produce
cheap industrial goods (textile industry at first)
- Brazil: the government has lessened tax burdens and ensured monetary stability so as
to encourage exports. Brazil is now the worlds third largest exporter of agri products and
first for crops like soybeans, corn and sugarcane (cash crops/agribusiness).
SEZs: geographical region designed to export goods and create jobs. Are exempt from federal
laws regarding taxes, quotas and regulations. Aim: increase trade and be attractive to TNCs
- Shenzhen (China): size of Luxemburg, average 25% growth/yr for 30 yrs, created in
1980 by Deng XiaoPing. TNCs can invest there with favorable taxes. 3rd port in the
world with 25 million containers per yr
Trade Bloc: A regional group of countries cooperating together to liberalise trade between
each other. The national government chooses to take part in one. They increase flows of
goods, capital (investments) and services and in the case of common markets like EU even
the flow of people (Schengen area).
- NAFTA (1992), ASEAN (1977), Mercosur (1991), EU (1950)
But the role of the state is diminishing:
- Out of the 100 most powerful entities in the world over 50 are TNCs
- States have less and less control on the economy and liberalisation decreases role of
state (ex: privatisation of public companies like British Petroleum)
Intl orga° of the bretton woods system and others like WTO, IMF, UN or G7 allow for more
interconnectedness and trade. Most countries are members of intergovernmental organisations
(ex. EU budget : 47% agriculture, 41% regional aid)
Intergovernmental organisations:
· G7 (1975) – UK, France, USA, Canada, Germany, Japan, Italy
o “club of rich nations”
o Criticised for exclusiveness and hegemony in worldwide decision-making
· G20 (1999) – G8 + EU, South Africa, Brazil, China, India, Mexico, Turkey, Argentina,
South Korea, Indonesia, Saudi Arabia, Australia
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