lesson 1 regional globalization integration
TRANSCRIPT
REGIONAL INTEGRATION
Lesson 1 – Pt 2: Globalization
Form 4/5
Teacher: Ann Samm-Regis
Objectives:
1. Define causes, benefits and disadvantages of
globalisation
2. Explain why we should be concerned about
globalisation
3. Explain how economies of scale work
KEY CONCEPTS• cooperation• teamwork• interconnectedness• competition• economic survival• economies of scale
Globalization explained
Globalisation is a process that sees
national economies, cultures and
societies being drawn together through
transportation, communication and trade.
Economic globalisation is usually
associated with the reduction or removal
of barriers to the flow of goods, services,
capital and labour across national
boundaries. This can result in some
companies becoming multinational,
doing business around the globe and
having access to the whole world as their
market.
Caribbean businesses need to be able to
function across the region if they are to
meet this challenge and compete in this
global market.
Top 10 MNCs:-
1. Microsoft
2. Nestle
3. PepsiCo
4. HP
5. Coca-Cola
6. Sony
7. Procter & Gamble
8. Citigroup
9. Nike
10.Apple
➢GLOBALIZATION refers to the process
by which the world’s economies are
becoming interconnected as a result of
improvements in transportation and
communication.
Due to development of:
1. air travel
2. computers, internet,
the worldwide web
3. satellite communication
➢Today, all countries are more
interdependent than ever before.
Globalization:
the greater movement of people, goods, capital and ideas due to increased economic integration.
•propelled by increased trade and investment
• living in a borderless world
Slide 1 of 2
There has always been a sharing of goods, services, knowledge and cultures between people and countries, but in recent years improved technologies and a reduction of barriers to trade means the speed of exchange is much faster.
Slide 2 of 2
Globalization:
• Technological improvements in transport and communication
• Increased speed of communication (email, social media, etc)
• Increased world travel
• Interconnectedness
• Increased trade (ecommerce)
• Increased competition for resources
• Satellite communication (news travels fast)
• Pandemics
• Borderless world
Issues to
consider
• World climate: All countries are affected by global
warming, ozone depletion, melting of the ice-caps,
rising sea levels, deforestation and pollution. All are
responsible for preservation of the environment.
• Tourism has grown into a globalised industry as a
result of international travel and can have a negative
impact on the natural environment and on societal
values (e.g. prostitution)
Issues to
consider
• A war or disaster in one country may have
worldwide impact (refugees, interruption of supply,
disruption of air-travel etc)
• Production is increasingly international
(↑ unemployment in some countries, ↑ exploitation
of workers in underdeveloped and developing
countries where labour is cheaper)
Disadvantages of Globalisation
1. Communicable Diseases can easily
become pandemics – SARS, H1N1, Bird
Flu, ebola, covid-19
2. Repatriation of profits by MNCs and
TNCs which exploit host country
resources and send profits to their own
home countries
3. Exploitation of workers in
underdeveloped and developing countries
where labour is cheaper
4. Local businesses face increased
competition from foreign products as
barriers to international trade are being
removed - (unemployment increases)
5. Loss of cultural uniqueness: People from
many countries eat the same foods and
watch the same TV programmes.
How can the
Caribbean
benefit from
globalisation?
How the Caribbean
can benefit from
globalisation: Advantages
1. Access to a wider range of goods
and services
2. Chance to export to new and
bigger markets
3. More exports:
➢increased employment
➢Increased government revenue
from taxation (income and
corporation tax)
➢increased business investment
(economic development)
4. Improved standard of living
Why must we in the Caribbean be concerned about globalization?
1. Many Caribbean countries depend on tourism for survival. Outbreaks of diseases such as SARS and H1N1 can cause great losses in the tourism industry because people tend to travel less during pandemics.
2. The cost of production in Caribbean countries is higher than the cost of production in larger, more developed countries. It is difficult for Caribbean products to compete on the international market against foreign goods. Also, our locally and regionally produced goods must compete on the local and regional market against cheaper foreign goods imported from countries such as China, Japan and the US. If local and regional goods do not sell, the industries will suffer, people will lose jobs and the economy will suffer.
CHALLENGES FACING CARIBBEAN COUNTRIES
1. With the opening up of world markets and free trade, how can we be competitive and produce high quality goods at cheap prices?
2. Should we finance development projects by taking loans from international lending agencies or should we open our doors to foreign investors?
3. How can we improve productivity in the workplace with the existence of powerful trade unions which consistently seek higher wages for members?
4. What can be done to train our nationals for jobs in an environment which is highly technological?
5. What can be done by Caribbean countries to reduce the food import bill and to be self-sufficient in food production?
6. What can be done to combat the effects on consumer tastes and spending of television programmes and other media (internet, books, magazines, newspapers etc) with a heavy foreign content?
Economies of scale are the cost advantages that enterprises obtain due to their scale of operation(typically measured by the amount of output produced), with cost per unit of output decreasing with increasing scale.
ECONOMIES OF SCALE
ECONOMIES OF SCALE
No. of wallets 10000
Fixed costs:
Land $50000
Factory building (mtge) $50000
Salaries $20000
Variable costs:
Wages per 10000 wallets $5000
Raw materials per 10000 wallets $10000
Electricity per 10000 wallets $5000
Total cost $140000
Unit cost (Total cost ÷ No. of wallets) = ?
$140000 ÷ 10000 = $14 per wallet
20000
$50000$50000
$20000
$10000
$20000$10000
$160000
?
$160000 ÷ 20000 = $8 per wallet
May 2006, Q7
GLOBALISATION: COOPERATE TO SURVIVE
a) Define “globalization” .
b) State TWO negative effects of globalization for Caribbean
businessmen.
c) Give THREE reasons why regional cooperation is necessary
to compete with international producers in a global
environment.
d) Suggest to Caribbean businessmen ONE action they may take
to prepare their workers for globalization. State why the
businessmen should support the measure you have suggested.
May 2006, Q7
a) Define “globalization” .
GLOBALIZATION refers to the process by which the world’s
economies are becoming interconnected as a result of
improvements in transportation and communication.
b) State TWO negative effects of globalization for Caribbean
businessmen.
– Competition from cheaper imported goods due to high cost
of production and lower levels of technology and
productivity in Caribbean countries.
– Difficulty accessing international markets or global
markets because prices are uncompetitive and quality
standards in the Caribbean need to improve to meet
international standards. Caribbean goods seen as inferior
to foreign products.
May 2006, Q7
(c) Give THREE reasons why regional cooperation is necessary
to compete with international producers in a global environment.
– Greater bargaining power as a region in dealing with
trade negotiations with external countries and MNCs
which have traditionally played us against each other
– Increased regional market allows for economies of scale
so our costs of production can go down allowing us to
compete on the global market
– Allows us to implement common policies such as the CET
and other barriers to trade which can protect regional
goods from competition from cheaper foreign products
(d) Suggest to Caribbean businessmen ONE action they may take to
prepare their workers for globalization. State why the businessmen
should support the measure you have suggested.
– Foreign language training to prepare workers for dealing with
customers and suppliers from foreign countries
– Investment in educational courses and short seminars e.g. by
provision of study leave for workers to improve their knowledge,
skills and competences
– investment in technology (the latest model of machines and
equipment) and training in ICT to ensure technologically skilled
workers and greater productivity
– Arrange for workers to attend seminars or workshops on
globalisation and the effects it can have on the business (increased
competition etc)
– Negotiation training/ cultural sensitivity training to prepare them
for interactions with people from different cultures and
backgrounds
– invite resource persons for sessions on values and attitudes,
designing of websites and advertisements
(1) Modules in Social Studies:
Read pages 236-241, 393, 401-403
(2) Study Guide: Read Unit 6.1-6.2 on pages 92-95
(3) Answer the following questions:
a) What does regional integration involve?
b) What is the fundamental purpose of regional integration?
c) List the 14 major challenges facing Caribbean countries?
(4) Complete the online quiz entitled: RI-Q1 Challenges facing
the Caribbean region
(5) Do Question 1 (a-d) on page 113 of your Study Guide.
ANSWERSa) What does regional integration involve?
Regional integration involves the unification of a number of
nation states into a larger whole .
b) What is the fundamental purpose of regional integration?
The fundamental purpose of regional integration is to enhance
the development of the region.
c) List the 14 major challenges facing Caribbean countries?
Small markets /no economies of scale, unemployment and
underemployment, Brain drain, debt burden, shortage of
capital, low productivity, limited physical resources and
unequal resource distribution, lack of
diversification/monoculture, unfavourable balance of
payments as imports exceed exports, inadequate technology,
transportation, natural disasters, difficulty accessing foreign
markets, high rates of illiteracy
ANSWERSa) The small size of Caribbean nations is a challenge to
economic development because the small size:-
• limits the markets, renders economies of scale impossible,
makes Caribbean goods comparatively more expensive on
the world market
• businesses remain small which limits job creation
capability and limits ability to earn foreign exchange from
exports
• limits government revenue from taxation .
b) Two reasons for the need to develop human resources are:-
- need well developed human resource to provide the skills and
knowledge to make full use of our physical resources for
economic development
- A well-developed human resource is more innovative, creative
and productive
- high rates of illiteracy and lack of employable skills lead to
high levels of unemployment so development of human
resources would make people more employable
Ways in which the region’s human resources are currently
underdeveloped are:
- high rates of illiteracy
- low level of skill
c) Diversification in agriculture is needed because
- It leads to more export products, increased foreign exchange
earnings, decreased vulnerability to natural disasters, pests and
diseases, more stable economy
- most agricultural products are sold on the commodities market
where prices fluctuate wildly so it is better to not have all your
eggs in one basket
- the wider availability of local fruits and vegetables leads to
increase self sufficiency in food production .
c) Diversification in tourism is needed because
- There is a lot of competition in traditional tourism product
areas such as cruise ship tourism and hotel or resort based
tourism; development of new forms of tourism such as
ecotourism and adventure tourism can create a unique niche
market
d) CARICOM leaders can support attempts at regional integration,
ensure the education system keeps pace with the needs of the
industrial sector, give incentives to farmers to introduce new crops.
These incentives might include:
- soft loans,
- duty-free import of equipment,
- training and advice,
- subsidize purchase of seeds, equipment and fertilisers,
- development of rural infrastructure,
- assistance in finding markets for their products
Vocabulary• Global: worldwide
• Market: a place where goods and services are bought and sold
• Trade: the buying, selling and/or exchanging of goods and services
• Multi-national corporation / trans-national corporation: organisations that have businesses in more than one country
• Social media: websites and applications that allow people to post and share content in order to connect with others
• Communicable disease: a disease that is passed from one person to another (e.g. hepatitis, influenza, HIV/AIDS)
• Epidemics: a widespread outbreak of a disease in a community
• Pandemics: a disease that spreads over a whole country or the world
• Economy: the system of how industry, trade and finance is organised in a country, region, or worldwide to manage wealth
• Global village: the way people all over the world have become connected through technology
• Technology: devices and systems which have been created for practical purposes
Image sources
• Flags graphic: http://www.jamaicaobserver.com/apps/pbcsi.dll/storyimage/JO/20170519/ARTICLE/170519571/AR/0/AR-170519571.jpg
• Map of the Caribbean: http://www.shipdetective.com/images/maps/caribbean_map-FS.png
• http://www.primemovermag.com.au/uploads/globaltrailer/news/gt-1116-news-globalisation2.jpg