Global Economic Trends Ch. 15 Sec.2

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Global Economic TrendsCh. 15 Sec.2

• Bell work 2
• A renowned geologist prof johnson told me and
  abram about the san andreas fault a earthquake
  zone in california

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Economic Trends

• Since the 1950s however, a growing gulf has
  divided the world into rich and poor nations. A
  few developing nations have done well. Many
  others have not. In todays interdependent world,
  the stories of rich and poor nations are closely
  linked.

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The Global North and South Two Worlds of
Development

• The Cold War created an ideological split between
  the communist East and the capitalist West.
  Today, an economic gulf divides the world into
  two spheres the relatively rich nations of the
  global north and the relatively poor nations of
  the global South.
• So the division is between the Rich nation of the
  North and the poor nation of the South.

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Rich Nations
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Rich Nations

• Western Europe and North America, as well as
  Japan and Australia make up the Rich Nations.
• They control most of the worlds wealth. Although
  pockets of poverty exist, the standard of living
  in the North is generally high. Most people are
  literate, earn adequate wages, and have basic
  health services. Rich nations have a lower
  birthrate and higher life expectancy than do the
  nation of the global south.
• Most rich nations have basically capitalist
  economies. Economic decisions about what to
  produce and for whom are generally regulated by
  the free market, not by the government. Still,
  their governments support economic growth through
  transportation and communication systems, public
  education, and social services.

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Poor nations
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Poor Nations

• Asia, Africa, and Latin America in the zone
  between the tropics of Cancer and Capricorn. The
  South has three quarters of the worlds
  population and much of its natural resources.
• Overall, though, the global South remains
  generally poor and underdeveloped. Unlike the
  nations that industrialized in the 1700s and
  1800s, newer nations have not had enough time to
  build up their capital, resources, or industries.
• For most people in the developing world, life is
  a daily struggle for survival. About one billion
  people worldwide live in extreme poverty.

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Migration

• Despite some growth, the gap between rich and
  poor nations is growing. The imbalance has
  created resentment and led to the migration of
  people form poor regions to wealthier countries.
• Refugees created by war, flood into Western
  Europe, North America, and Australia, hoping to
  find a better life.

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Economic Interdependence

• Rich and poor nations are linked by many trade
  and financial ties. The nations of the global
  North control much of the worlds capital, trade,
  and technology. But they depend increasingly on
  low-paid workers to produce manufactured goods as
  inexpensively as possible.
• Huge multinational corporations, enterprises with
  branches in many countries, have in vested in the
  developing world. They bring new technology to
  mining, agriculture, transportation, and other
  industries. Rich nations also provide aid,
  technical advisers, and loans.
• Poor nations claim that the North has a
  stranglehold on the global economy. With their
  great buying power rich countries control the
  prices of most good and commodities produced by
  the South. As a result, some emerging nations see
  interdependence as a new form of imperialism.

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The Oil Crisis

• In an interdependent world events in one country
  or region can affect people everywhere. Example
  of this was the oil crisis fo 1970s. All nations
  use oil for transportation and fro products
  ranging from plastics to fertilizers.
• Much of the worlds oil comes from the Middle
  East. In 1973, a political crisis in the Middle
  East led the Organization of Petroleum Exporting
  Countries to halt oil exports and then raise oil
  prices. Oil shortages and soaring oil prices set
  of f economic shock waves in industrialized
  nations.
• While some efforts were made to find other fuels
  or to conserve energy use, the energy crisis
  showed what impact a single vital product could
  have on the world economy.

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Oil crisis
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The Debt Crisis

• Higher oil prices brought riches to OPEC members.
  They deposited their oil earnings in western
  banks, which in turn invested the money to earn
  higher interest. Poor nations, needing capital to
  modernize, took loans offered by western banks.
  In the 1980s however, bank interest rates rose,
  while the world economy slowed down. AS demand
  for many of their goods fell, poor nations were
  unable to repay their debts or even the interest
  on their loans. Their economies stalled as they
  spent all their income form exports on payments
  to their foreign creditors.
• To ease the crisis, the International Monetary
  Fund, the World Bank, and private banks worked
  our agreements with debtor nations. Lenders
  lowered interest rates or gave some nations more
  time to repay the loans.

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The Debt Crisis

• In return, debtor nations had to agree to adopt
  free market policies. Many turned form socialism
  to privatization, selling off state owned
  industries to private investors. Nations hoped
  that more efficient private enterprises would
  produce higher quality goods in the long run.

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OBSTACLES TO DEVELOPMENT

• Why have they failed to achieve their economic
  goals. Many shared problems in five areas.
• Geography
• Population and poverty
• Economic dependence
• Economic policies
• Political instability

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Geography

• Some newly created African countries are tiny and
  have few natural resources. Difficult climates,
  uncertain rainfall, lack of good farmland, and
  disease have added to the problems of some
  nations.
• Population and Poverty- Better medical care and
  increased food supplies have reduced death rates
  and led to explosive population growth. Rapid
  growth is linked to poverty. Each year, the
  populations of countries like Nigeria, Egypt, and
  India increase by millions. All those people need
  food, housing, education, jobs, and medical care.
  Meeting the needs of so many people puts a
  staggering burden on developing nations.

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Economic Dependence

• Most new nations remained dependent on their
  former colonial rulers. They sold agricultural
  products and raw materials to the industrial
  world. They relied on the West for manufactured
  goods, technology, and investments. Also, many
  new nations had only a single export crop or
  commodity, such as sugar, cocoa, or copper. Their
  economies prospered or fell depending on world
  demand for the product.
• Once in debt, though, nations have to spend much
  of their resources to pay interest.

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Economic Policies

• Many new nations expected that socialism, rather
  than capitalism, would help them modernize
  quickly. They modeled their economic policies on
  those of China or the Soviet Union, which had
  made rapid gains in a short period. Under
  socialism, the government controls the economy.
  The government could raise the money through
  loans, taxes, and controlling profits form labor
  to finance large scale development projects.
• But in the long run, socialism frequently
  hindered economic growth.

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Political Instability

• Civil Wars and other struggles prevented economic
  development.
• Military dictators or other authoritarian leaders
  spent huge sums on weapons and warfare instead of
  on education, housing, or health care.
• War created millions of refugees living in camps
  both inside and outside their home countries. The
  loss of their labor has further hurt war-torn
  countries.

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ECONOMIC DEVELOPMENT AND THE ENVIRONMENT

• Economic development has been achieved at great
  cost to the natural environment. Modern industry
  and agriculture have gobbled up natural resources
  and polluted the worlds water, air, and soil.
• Growing Threats- People everywhere have taken
  what they wanted form their environment. In the
  past, damage was limited because the worlds
  population was relatively small and technology
  was simple. With the Industrial Revolution and
  the Populations explosion, the potential for
  widespread environmental damage grew.

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Good Environment Bad

• Why

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THE ENVIRONMENT

• Strip mining provided vital ores for industry but
  destroyed much land. Chemical fertilizers and
  pesticides produced more food crops but harmed
  the soil and water. Oil spills polluted oceans,
  lakes, and rivers. Gases from power plants and
  factories produced acid rain, a form of pollution
  in which toxic chemicals n the air become back to
  the Earth as rain, snow, or hail. Acid rain
  damaged forests, lakes, and farmland, especially
  in industrial Europe and North America.

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Global Warming

• Some Scientists warned of Global Warming caused
  by the increased emission of gases into the upper
  atmosphere. Global warming, they thought, could
  change the Earths climate, melting the polar
  icecaps. This would flood low lying areas,
  including most major coastal cities.

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Industrial Accidents

• Major accidents focused attention on threats to
  the environment. In Bhopal, India, a leak form a
  pesticide plant in 1984 killed 3,600 people and
  injured 100,000. In 1986, an accident at the
  Chernobyl nuclear power plant in the Soviet Union
  exposed people, crops, and animals to deadly
  radiation.
• An American oil tanker spill in 1989 destroyed
  much marine life off the coast of Alaska.
• In response to such disasters, technicians have
  developed measures to increase safety. However,
  such measures do not always succeed, and
  companies often resist the expense.

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Killing Earth
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Global Environmental Challenges Include

• Air and Water Pollution
• Deforestation
• Desertification
• Endangered Plants and Animals
• Waste Disposal

• Thinning ozone layer, acid rain, poisoned water
  supplies, human diseases
• Change in local weather, less absorption of
  carbon dioxide, soil erosion, extinction of
  plants and animals
• Reduced arable land, hunger
• Ecosystem imbalance, loss of resources for food
  and medicine
• Pollution of ground water and oceans, health
  hazards.