1. Announcements OIL POLICIES and the FUTURE of INDIGENOUS TERRITORIES IN THE ECUADOREAN AMAZON  Dr. Pablo Ortiz Andean University  Thurs., Feb. 5 th, 4:00 Hagey Hall 150 Waterloo-Germany Exchange  Open to all students.  Receive UW credits- language fluency- International experience!  Info session from 12:30- 1:30 p.m. Thursday, Feb. 5, 2004, ML 245  Check out the web site at: http://germanicandslavi c.uwaterloo.ca/exchange/.http://germanicandslavi c.uwaterloo.ca/exchange/

2. Announcements CANCELLED TUTORIALS, Tuesday, Jan.27 th  next week – will be following the regular tutorial schedule!!

3. Mid-Term Exam Thursday, Feb.12, in class 80 minutes – please do not come late two sections  short answer (paragraph) 60%  multiple choice40%

4. Mid-Term Exam short answer (paragraph) 60%  three sections – each worth equal weight  each section will present choice of two questions  Section A – Axioms of Political Science and Introduction to Globalization  Section B – Global Institutions I  Section C – Global Institutions II

5. Mid-Term Exam multiple choice (40%)  24 questions covering...  19 readings (up to and including Feb. 5 th )  5 videos (up to and including Feb.5 th ) Coca-Colonization This is What Democracy Looks Like Life and Debt To Have and Have Not Russia

6. International Organizations and Security http://www.cbc.ca/stories/2004/01/ 28/kay_testifies040128 http://www.cbc.ca/stories/2004/01/ 28/kay_testifies040128

7. International Organizations Trade & Economic Interdependence -- The WTO, NAFTA & EU (Cont’d) Jan. 27th, 2003

8. European Union (EU) – Economic & Political Integration expansion – deepening and broadening integration EEuropean Coal and Steel Community, 1951 ssix countries (Belgium, France, Germany, Italy, Luxembourg, the Netherlands) EEuropean Economic Community (EEC), 1957 nnegative integration – removing restrictions on movement of workers, goods, services DDenmark, Ireland and UK admitted, 1972 EEuropean Union, 1993 ppositive integration – actively fostering integration Maastricht Treaty, 1992 Amsterdam Treaty, 1997 115 members currently Greece (1986), Spain (1986), Portugal (1986), Austria (1995), Finland (1995), Sweden (1995)

9. 2004 expansion  10 candidate countries (Bulgaria, Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Romania, Slovenia, Slovakia, Turkey)

11. European Union (EU) – Economic Integration single market  free movement of people, capital (investment), goods and services  customs union  single set of trade/tariff policies monetary union  the Euro phased in 1999-2002 common labour market  Schengen Agreement, 1985

12. European Union (EU) – Political Integration common political institutions  legislative – shared legislative powers Council of the European Union –ministers and heads of state of member countries European Parliament –direct election  executive – European Commission  President and commissioners appointed by member states  confirmed by European Parliament  judiciary – Court of Justice

13. European Union (EU) – Political Integration common political institutions common European citizenship  freedom of movement  fundamental rights  civil and political rights common social citizenship (limited)  access to social programs in other countries common currency  money traditionally symbol of sovereignty  requires integrated monetary policy regional development funds  to help correct regional imbalances in wealth within the EU

14. Main Points! range of options for integration  economic integration  negative integration (removing barriers to economic integration) trade (WTO & GATT) trade plus (NAFTA)  positive integration (actively fostering integration) –common market (EU)  political integration  economic integration only WTO and NAFTA  economic integration and political integration EU

15. Democratic Issues... to what degree do democratically elected governments have the right to cede sovereignty in international agreements? to what degree do democratic governments have the right to make decisions that are binding on future governments? what is the required level of citizen engagement?  is involvement of democratically elected governments enough?  do international institutions themselves have to be democratic (and what would this mean)?

16. Globalization & Third World Development World Bank and the IMF Jan. 27th, 2004

17. The World Bank -- Functions International Bank for Reconstruction and Development (IBRD)  ensures access for middle-income and credit-worthy poor countries to low-cost borrowing in capital markets  funds are raised on the international capital markets  $11.5 billion (2002), $371 billion cumulative International Development Association (IDA)  long-term (35-40 year) interest free loans  aimed at poorest countries  funds are raised by contributions from richer member countries  $8.1 billiion (2002), $135 billion cumulative  sets conditions -- http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ID A/0,,pagePK%3A118644%7EtheSitePK%3A73154,00.html http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ID A/0,,pagePK%3A118644%7EtheSitePK%3A73154,00.html

18. The World Bank -- Structure corporation-style institution  owned by 184 member countries  corporate structure CEO, Board of Directors, shareholders  President – American  US is single largest shareholder  executive directors  top five shareholder countries appointed  rest by election  votes by number of shares

19. World Bank, Votes by Country, 2002

20. The IMF -- Function functions – to promote...  international monetary cooperation  expansion of trade  exchange rate ($$) stability  allow member countries to correct maladjustments in balance of payments  balance of payments=exports-imports  to allow countries to continue paying for imports without imposing import controls  provides short-term loans at market-related rate of interest lower interest rates for poor countries (as of mid-1980s) –requires structural adjustment plan

21. The IMF -- Function Poverty Reduction and Growth Facility (PRGF)  Poverty Reduction Strategy Papers  concessional lending (i.e. low interest)  http://www.imf.org/external/np/exr/facts/prsp.htm http://www.imf.org/external/np/exr/facts/prsp.htm  Highly Indebted Poor Countries (HPIC) Initiative  debt relief (joint IMF/World Bank)  http://worldbank.org/hipc/about/about.html http://worldbank.org/hipc/about/about.html  “eligible HPIC countries undertake sustained implementation of integrated poverty reduction and economic reform programs”

22. The IMF -- Structure all loan arrangements must be approved by Executive Board fund is based on quotas on members  based on the relative size of their economies in the world economy votes based on size of quota contribution IMF and the US -- http://www.nytimes.com/2004/01/08/business/08FU ND.html?ex=1075525200&en=2e26ea5a76a51764 &ei=5070 http://www.nytimes.com/2004/01/08/business/08FU ND.html?ex=1075525200&en=2e26ea5a76a51764 &ei=5070

23. IMF, Votes by Country, 2002

24. The Washington Consensus principles underlying the policies of World Bank and IMF new model of neo-liberal economic development  market liberalization  privatization  economic stabilization  deregulation World Bank and IMF structural adjustment policies (SAPs)  argument that loans were ineffective in fostering development without changes to ensure a healthy economy  countries had to be able to pay loans back  countries had “to get the basics right”  SAPs -- conditional loans issued to countries to pursue policy reforms in keeping with 4 goals above

25. The World Bank, IMF and Structural Adjustment the critique  “In who’s interest? Just ask...who set it up?” former Jamaican President, Michael Manley  World Bank  allows rich western industrialized countries to dictate the path of development in their own interests  project their preferred model of development on the domestic policies of developing countries  wield imperialistic power over developing countries through the mechanism of debt  IMF  as above, plus...  allows rich western industrialized countries to expand their markets  ensures that debts of developing countries (to interests in developed countries) are paid

26. The World Bank, IMF and Structural Adjustment the defense  what is the alternative?  would anyone argue that poor countries be denied IMF and World Bank loans?  capital (necessary for development) would not otherwise be available on the open market  however, cannot simply give money away...  countries must be able to show that they will be able to pay it back  best way to do so is to “get the basics right” – create conditions for economic development to some significant degree, this is where the difference lie  basic problems of poverty and underdevelopment are not created by World Bank and IMF

27. The World Bank, IMF and Structural Adjustment the counter-critique  international institutions (e.g. IMF, World Bank) would be more sensitive to needs of developing countries if they had stronger representation of developing countries  there are other alternatives  e.g. debt relief