Multinational CorporationsGross Domestic Product (GDP)The North American Free Trade

Agreement Association of Southeast Asian

NationsOrganization of the Petroleum

Exporting Countries Nixon ShockWorldwide Stock Market Crash1979 Oil CrisisThe 1980s Oil GlutSupertankersWorld Energy ConsumptionHeavily Indebted Poor Countries

Global North – Global SouthNewly Industrialized

CountriesFirst, Second, and Third

World Countries Foreign Debt by NationChange in the U.S.

WorkforceWomen in the WorkforcePrivatization Forced PrivatizationU.S. Exports and ImportsGeneral Agreement on Tariffs

and TradeThe World Trade

Organization

On a sheet of notebook paper copy the following table…

Examples of Interconnectedness and Interdependence of Globalization

Facts, people, organizations, ideas, statistics, etc… about each example

Multinational Corporations 4-5 lines of space

GDP 4-5 lines of space

NAFTA 4-5 lines of space

Oil and OPEC 4-5 lines of space

Stock Markets 4-5 lines of space

Debt and Poverty 4-5 lines of space

WTO and Other Trade Agreements

4-5 lines of space

Globalization is a relatively new term used to describe a very old process.

It is a historical process that began with our human ancestors moving out of Africa to spread all over the globe.

In the millennia that have followed, distance has been largely overcome and human-made barriers lowered or removed to facilitate the exchange of goods and ideas.

Propelled by the desire to improve one's life and helped along by technology, both the interconnectedness and interdependence have grown.

This increasing integration of the world or 'globalization' has enriched life but also created new problems.

What is Globalization?

History of Globalization

Globalization is an historical process that began with the first movement of people out of Africa into other parts of the world.

Traveling short, then longer distances, migrants, merchants, and others have always taken their ideas, customs, and products into new lands.

The melding, borrowing, and adaptation of outside influences can be found in many areas of human life

Multinational Corporations

• A multinational corporation (MNC), also called a transnational corporation (TNC), is a corporation or enterprise that operates in more than one country.

• The assets of many MNCs are larger than small nations.

Gross Domestic Product (GDP)

World GDP 1995

GDP is the value of all goods and services produced nationwide.GDP per capita is the total value of GDP divided by the total population.

The North American Free Trade Agreement (NAFTA), signed January 1, 1994, is a trade

agreement between the governments of the United States, Canada, and Mexico. It was negotiated

under the George H. W. Bush administration and signed by President Bill Clinton.

OPEC is a cartel of twelve countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

OPEC's mission is to coordinate and unify the petroleum policies of member countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.

OPEC regulates the price of barrels of oil.OPEC’s headquarters are in Vienna, Austria.

Organization of the Petroleum Exporting Countries (OPEC)

1. Algeria 2. Angola 3. Ecuador 4. Iran 5. Iraq 6. Kuwait 7. Libya8. Nigeria 9. Qatar 10. Saudi Arabia 11. the United Arab Emirates

12. Venezuela

1

23

4567

8

910 11

12

OPEC

OPEC

78%

NON-OPEC

22%

World Oil Production of OPEC and Non-OPEC Nations

0

20

40

60

80

100

120

1946

1948

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Nominal Adjusted

World Crude Oil Prices

Note: The price for 2009 is for January only.

Nixon Shock

“Nixon Shock” refers to monetary and political policies of the Nixon presidency which disrupted the world financial markets. In 1971, President Richard Nixon removed the U.S. from the Bretton Woods monetary system.He also stopped the exchange of U.S. dollars for their equivalent in gold.Nixon’s 1972 visit to China created uncertainty in all Cold War relations.

From January 1973 to December 1974 the world experienced a crash of all major stock markets.

The loss was blamed on Nixon Shock, the collapse of the Bretton Woods agreements, the devaluation of the dollar, and the 1973 oil crisis (see Middle East section).

In the U.S., the Dow Jones Industrial Average lost 45% of its value.

U.S. growth dropped from 7.2% to NEGATIVE 2.1%.

U.S. inflation rose from 3.4% to 12.3%.The London Stock exchange fell 73%.

Worldwide Stock Market Crash

0

200

400

600

800

1000

1200

1/2/

1973

2/2/

1973

3/2/

1973

4/2/

1973

5/2/

1973

6/2/

1973

7/2/

1973

8/2/

1973

9/2/

1973

10/2

/197

3

11/2

/197

3

12/2

/197

3

1/2/

1974

2/2/

1974

3/2/

1974

4/2/

1974

5/2/

1974

6/2/

1974

7/2/

1974

8/2/

1974

9/2/

1974

10/2

/197

4

11/2

/197

4

12/2

/197

4

1/2/

1975

2/2/

1975

3/2/

1975

4/2/

1975

5/2/

1975

6/2/

1975

7/2/

1975

8/2/

1975

9/2/

1975

10/2

/197

5

11/2

/197

5

Dow Jones Industrial Average

1979 Oil Crisis

The 1979 oil crisis in the United States was the result of an oil shortage caused by the Iranian Revolution. The new Iranian government was initially unable to maintain oil production. A worldwide panic forced prices to rise. Other countries increased production, resulting in an oil glut.

The T1 class double-hulled supertankers, with extra space between hull and storage tanks, are replacing single-hulled tankers for safety. The Hellespont Alhambra supertanker, built in Korea, can carry approximately 440,000 tons of crude oil.

The supertanker Knock Nevis, built in Japan in 1979, is the world’s longest ship. At 458.45 meters, it is longer than the Empire State Building. It is now permanently moored as a floating production storage and offloading center in Bahrain. It can carry over 564,00 tons of crude oil.

The largest ships by gross tonnage ever constructed were four Batillus-class supertankers built in France in 1976. At 414 meters in length, they could carry over 555,000 tons of crude oil. They have all been scrapped.

SUPERTANKERS

World Energy Consumption

COAL, 25.0%

GAS, 23.0%

HYDRO, 3.0%

World Energy Use

Heavily Indebted Poor Countries (HIPC)

Many developing countries have very large debts.The world-wide recession caused by the oil crisis made many

countries unable to pay their debt.Debt must be repaid in “hard currency” such as U.S. dollars,

euros, Swiss francs, or Japanese yen.In 1999, 128 million dollars a day were transferred from the

poorest countries to the richest countries for debt payments. According to one estimate, at least 7 million children die each

year because of poverty created by national debts.

Map of HIPCs

Countries qualifying for full HIPC reliefCountries qualifying for partial HIPC reliefCountries eligible for HIPC relief(IMF and World Bank designations)

Foreign Debt by Nation

All nations have foreign debt. Many of the developed nations have the largest debts.

Global North – Global SouthMap of economic disparity

between rich and poor nations

Advanced economiesEmerging and developing economies (not least developed)Emerging and developing economies (least developed)- Classifications by the IMF and the UN

Newly Industrialized Countries

First, Second, and Third World Countries

First World: the United States and its allies. Second World: the former Soviet Union and its allies. Third World: Non-aligned and neutral countries.These terms applied during the Cold War Era.

0

10000

20000

30000

40000

50000

60000

70000

80000

1950 2000

MEN WOMEN

Change in the U.S. Workforce, 1950 to 2000(numbers in thousands)

Women in the Workforce: United States

Privatization

• Privatization is the process of transferring ownership of a public enterprise (postal system, water network, gas company, etc.) to the private sector.

• The largest privatizations in the UK were British Telecom in 1984 and British Gas in 1986.

• The largest privatization in France was France Telecom in 1998.

British Telecom BT Group

France Telecom now operates worldwide

• In 2000, the World Bank forced the Bolivian government to privatize water services in Cochabamba, Bolivia. Violent public protest followed.

• “The biggest problem with water is the waste of water through lack of charging.” —World Bank President James Wolfensohn

• The people forced the government to abandon privatization.• Aguas del Tunari, a consortium of English, Italian, and American

corporations, sued Bolivia for breach of contract. • The suit was dropped in 2006 to avoid further violence.

The World Bank and Forced Privatization

Evo Morales, president of

BoliviaJames

WolfensohnBolivia

U.S. Exports

Source: Tradestats Express at export.gov

U.S. Imports

The General Agreement on Tariffs and Trade (GATT) was established in 1947, and remained in place until 1994 when it was replaced by the World Trade Organization.

GATT was responsible for regulating trade between member nations.

General Agreement on Tariffs and Trade

World Trade Alliances

• The World Trade Organization (WTO) is an international organization that oversees international trade and provides a forum for negotiation and settling disputes.

• The WTO was founded on January 1, 1995 under the Marrakesh Agreement, replacing the 1947 General Agreement on Tariffs and Trade.

The World Trade Organization

WTO Members

Worldwide WTO Status