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Globalization and its effects on developing world.

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Presentation on theme: "Globalization and its effects on developing world."— Presentation transcript:

1 Globalization and its effects on developing world

2 Outline What we understand by globalization Introducing globalization, and its characteristics. Importance of Globalization Social Consequences of Market Globalization Globalization and economic development in Eastern Europe Globalization and economic development in Africa.


4 What is Globalization? A Turkish national, receives a Master's degree in France, will work for an American registered company, which is based in China and started by an Italian.... This is called GLOBALIZATION!

5 Phases of Globalization! GATT-WTOIMFWB Current 4th Phase! 1980s Personal Computers Internet, web browsing Advancement in communication Collaps of SU, LIb OF EE Ind. and moderns efforts of East Assia-China

6 Has simply accelerated and gained complex characteristics in recent decades. Indeed, national economic policies cannot be formulated without evaluating their probable impacts on the economies of other countries. This linkage takes the form of international movement of goods and services, labor, business enterprise, investment funds, and technology. No nation exists in economic isolation. Industries, service sectors, levels of income and employment, living standards- are linked to the economies of its trading partners. Globalization is not a new phenomenon; early civilizations in the Mediterranean, Meddle East, Asia, Africa, and Europe have all contributed to the growth of cross- border trade over time.

7 Importance of GLOBALIZATION! Law of Competitive Advantage... (Because of Trade Liberalization)

8 Openness = (Ex+Im)/ GDP Netherlands 99% Canada 70% Germany 56% South Korea 53% Norway 49% France 43% UK 39% US 22% Japan 18% Economics at the World Bank have found that economic growth rates are closely related to the openness to trade, education, and communication infrastructure. Source: IMF

9 Social Consequences of Market Globalization! Loss of National Sovereignty Off shoring and the flight of jobs Effect on the Poor Effect on the Natural Environment Effect on the National Culture

10 Eastern Europe

11 Obstacles encountered by EE countries. Obstacles encountered by EE countries. Lack of standardized business accounting knowledge Lack of practical applications on education Coping with the competition from Asia Too much government interference Prevailing role of government in contracting Cultural and language barriers

12 Market access-the most important factor considering FDI Globalization come to Eastern Europe mainly through FDI. The factors helping in reaching the markets of Eastern European countries, may well be tax advantages offered to foreigner investors. Corruption in Privatization.


14 Savings in Labor and Material costs

15 CEE advantages vs China in many industries

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