[Country Reports] Introduction – Globalisation

The course will enable you to evaluate the economic environment at the country level.

1. Globalisation Process

  • Process of Increasing Cross-boarder trade & finance
  • Process of Increasing movements of knowledge, culture, and people across boarders
  • Process of Increasing International Governance

2. Globalisation Evidences & Indicators

2.1. Increasing Cross-Boarder Finance

  • FDI / GDP
    FDI = Foreign Direct Investment
    GDP = Gross Domestic Products
  • International Debt Securities Trends
  • Summary of International Positions – Amount Outstanding

2.2. Increasing Cross-Boarder Trade

Source: World Bank

2.3. Increasing movements of people across boarders

Source: World Bank

2.4. Increasing movements of knowledge

  • Number of Patents
  • Number of Citations

2.5. Increasing movements of cultures

  • The growth of the International Box Office
Source: The Economist

3. Three Waves of Globalisation

Source: Collier & Dollar – Globalization Growth and Poverty

1870 ~ 1914: First wave of Globalisation

Advances in transportation and negotiated reductions of barriers opened up the possibility for some countries to use their abundant land more productively. Flows of goods capital, and labour all increased dramatically.

  • Global Income per capita rose very fast BUT number of poor people from rising rose faster
  • Widening Gaps between the globalisers and those countries left behind
    -> leading to world inequality
  • Globalisation caused incompetent economic policies and unemployment between and within countries. These factors above with nationalism drove governments into beggar-thy-neighbour protectionism.
    .
    beggar-thy-neighbour policy is an economic policy through which one country attempts to remedy its economic problems by means that tend to worsen the economic problems of other countries
  • In retrospect, we can see the period encompassing the First World War, the Great Depression, and the Second World War as a giant step backward in global economic integration

1914 ~ 1918  –  The World War I

1929 ~ 1940  –  Great Depression

1939 ~ 1945  –  The World War II

1914 ~ 1945

Protectionism had erased 80 years of globalisation progress in transportation.

  • The growth per capita fell by around a third
  • The number of poor people continued to rise
  • World inequality continued to rise

Protectionism was clearly NOT equalising

1950 ~ 1980: Second wave of Globalisation

(Focused on integration among rich countries: Europe, North America and Japan)

  • These countries concentrated on restoring trade relations through a series of multilateral trade liberalisations under the auspice of GATTs (General Agreement on Tariffs and Trade).
  • During this period, most developing countries remained stuck in primary commodity exporting and were largely isolated from capital flows – In part this was due to their own inward-oriented policies
  • A group OECD (Organisation for Economic Co-operation and Development – International Economic Organisation of 34 countries founded in 1961 to simulate economic progress and world trade) was formed and their economies grew rapidly

1980 ~ Onwards: Third Wave of Globalisation

Globalisation due to technological advances in transport and communication technologies and by the choice of large developing countries to improve their investment climates and to open up to foreign trade and investment.

4. Multinational Institutions:

4.1. IMF, International Monetary Funds:

  • Main Objective: To Provide the global public good of financial stability
  • Short-term Loans to countries facing financial or currency crisis
    (EMERGENCY FUNDING) ★★
  • Raise finance by equity
    (Lend money to countries needed with interests)
  • Policy advice to governments and central banks based on analysis of economic trends and cross-country experiences
  • Concessional loans to help fight poverty in developing countries
    Concessional Loans, 양허성 차관: 일반적으로 이자율, 상환기간, 거치기간 등 3요소를 고려, 시중의 일반자금 융자와 비교하여 차입국에 유리한 조건에 의한 차관을 지칭한다. 개도국의 대한 직접차관중 증여율이 25% 이상을 상회하는 양허성 차관을 공적개발원조(ODA) 차관이라 부른다.
  • Technical Assistance and training to help countries improve the management of their economies

4.2. World Bank

  • Raises funds on world financial markets and makes low interest loans to national and regional governments for infrastructure projects to promote development
  • Receive donor funds and provide grants for improvement in health, education, environment or other social goals.

4.3. BIS, Bank for International Settlements

  • Act as a bank for central banks, holding foreign reserves and facilitating central bank transactions
  • Hosting Basel Committees on financial stability and disseminating results

4.4. Regional Development Banks

  • Development Banks fulfil same fole as World Bank BUT with regional focus
  • eg. Asian Development Bank, African Development Bank Group, European Bank, Inter-American Development Bank

4.5. OECD, Organisation for Economic Cooperation and Development

  • Provides information sharing on policies
  • Limited membership sometimes viewed as synonymous with developed country status.

5. Well-known Country Reports

    Leave Your Comment

    Forgot Password