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And How It Got That Way. The Divided World. The Divided World. Notice: USA and Europe Look Similar. Look how small Russia is compared to South Korea!. Notice how Africa has shrunk to almost nothing. The Divided World.
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And How It Got That Way The Divided World
Notice: USA and Europe Look Similar Look how small Russia is compared to South Korea! Notice how Africa has shrunk to almost nothing
The Divided World • So, Globalization and Regionalization are not taking place on a level playing field • The World is sharply divided into rich and poor countries—and the gap is widening among the rich and poor in both rich and poor countries. • So, let’s ask a very basic question….
The Divided World • How did it come about that two people in different parts of the world, doing the same task, get paid very different wages? Ford Mexico Chihuahua Ford, Detroit
The Divided World • We call these “issues of equity,” or fairness • Again, by what process did 9% of the world’s population get to devour 60% of the world’s resources—the “access to resources” question • Why is there hunger in the world, when there is a surplus of food in most rich countries? The “Distribution” question
Why? This? Or this?...
Plus . . . . • Almost all the growth in the world’s population is in the poorest countries.
Where is the Growth in Population? You can see almostno population growth in the rich countries, and rapid growth in the poor world But, compare that with the growth in population in the poorer countries since 1950
How is Policy Reacting to This? Almost every developed country is taking measures to restrict immigration—particularly from poor countries: The North Africans in France, The Turks in Germany etc.
And the USA? • We are in a particularly sensitive position because the US/Mexico border divides the richest country in the world from what is still a Third World country with a huge population growth. • On the one hand, segments of the US economy depend on these “illegals”; on the other hand, they are illegal.
"Closing the Gap; or Catching Up" First: where did this gap come from? By the middle of the nineteenth century, when the Industrial Revolution was at it height, Europe occupied almost all of what are now the poor countries. So, the poor countries were not really poor to start with, but were locked out of the process of becoming wealthy and modern.
And where is the US in this? • Well, the US was fortunate enough, as we have said, to have thrown off domination by the Europeans, and to become its own master at this critical time in shaping the world.
The Challenge • The US wants to hold on to, and even improve, its life-style • The Rest of the World wants to live like this too—but the gap is widening.
How is the World Doing? Russia's Economy has picked up recently Britain seems to be doing better than the rest of Europe South and Southeast Asia Sluggish to Static Doing very well Negative
Policy Implications? • The basic policy of the US is that the only way for countries to improve is through: • Free Trade and Open Markets • “Comparative Advantage” allowing each country finds its place in the world: its “natural advantage” • Pursue Regional Free Trade first, as the World Trade Organization does not have the full confidence of the Administration.
