Business & Society (ETLW 302)

“The poor complain, they always do, but that’s just idle chatter. Our system brings reward to all, at least to all that matter.” - Canadian economist

If the world were a village of 100  World Citizen’s Guide World Citizen’s Guide

Globalization + driving forces  Process of integrating the world through commerce, technology, culture and politics  International trade  Communications Technology  Human migration  Capital flow  International Institutions (IMF/World Bank)

What business best represents globalization to you?

 Invented in 1886 by Civil War Officer  Sold originally in soda fountains in Atlanta  Acquired for $2,300  Currently sold in 200+ countries  Employs 90,500 worldwide  1.5 BILLION servings/day  Over 2,800 products

Coca-cola = awesome  Signatory to UN Global Compact  Named one of the World's Most Accountable Corporations by One World Trust (2007)  Contributed nearly $100 million to communities worldwide (2007)  Coca-Cola associates and alumni worldwide donated more than 70,000 volunteer hours in 2007  Polar bear support fund  Coca-Cola and WWF are combining to help conserve and protect freshwater resources throughout the world

Coca-cola = not so awesome  “Coca-colonization”  “Killer coke”Killer coke  Dirty Coke in India  Attacks on unions in Pakistan

Multinational Corporations (MNCs)  Transnational Corporation or Multinational Enterprise  UN estimates that there are over 60,000 in global economy Top 100 TNCs responsible for 14% of the sales of all

International Trade and Financial Institutions  These organizations were created in order to deal with issues caused by MNCs, particularly: Environmental risk Worker rights Labor practices Human rights Community development

World Bank (est. 1944)  Dues paid by 184 member nationsmember nations  Selling AAA-rated bonds in the world's financial markets  Shareholder-support: $178 billion in "callable capital”  2 branches:

International Bank for Reconstruction and Development (IBIRD)  Aims to reduce poverty in middle-income and creditworthy poorer countries  Promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services  Raises most funds on international capital markets  Original institution of World Bank

International Development Association (IDA) 40 Donor countries One of the largest sources of assistance for the world’s 78 poorest countries, 39 of which are in Africa. Single largest source of donor funds for basic social services in the poorest countries. No-interest loans 40% of World Bank lending

IMF (est. 1945)  187 countries contribute to its reserve ($333 billion) 187 countries Mission: To foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty

World Trade Organization  Established in 1994 at last meeting of General Agreement on Tariff and Trade (GATT): 153 members “Organization for liberalizing trade.”  Negotiating forum  Set of rules: legal ground rules for international commerce

Life & Debt

Today  Jamaica owes over $4.5 billion to the IMF, the World Bank and the Inter-American Development Bank (IADB) among other international lending agencies  Debt to GDP ratio = 120%  Fourth highest debt burden in the world on a per- capita basis

To further improve the balance of payments  Currency devaluation: raises the cost of foreign exchange  High interest rates: which raises the cost of credit  Wage guidelines: which effectively reduce the price of local labor

 Unemployment: 12% + overall, 27% ages  Sweeping corruption  Higher illiteracy  Increased violence  Prohibitive food costs  Dilapidated hospitals  Increased disparity between rich and poor (16.5% below poverty line)

How do they fix it?!