Infromation Globalization

Global Managerial Economics

ECO305-08 Phase 1 Task 1

Prof. Ray Bell

Bernard Meister

Globalize is defined by the dictionary on Yahoo.com as "To make global or worldwide in scope or application". Manfred B. Steger (2003) goes quite a lot further when he says, "...globalization is best thought of as a multidimensional set of social processes that resists being confined to any single thematic framework. Indeed, the transformative powers of globalization reach deeply into the economic, political, cultural, technological, and ecological dimensions of contemporary social life." (1) It would be simple enough to continue on, as it seems everyone, from the Canadian government to the International bank of Italy to the WTO, has their own definition of globalization. Let us look at this in an economic sense and put a few of the definitions together to say that globalization concerns itself with the world as being both producer and consumer. Crossing state and national boundaries, goods are produced by the people who are most able to specialize in their production for use by those who are in need or want of that particular good. This does not limit the production and transfer of goods to the corporations or countries, but it also does not consider the policies and agreements needed to move these goods from producer to consumer from differing states or countries.

This is where we start to look at the sovereignty of the states and nations that are involved with the international trade agreements, specifically NAFTA, the United States, and Mexico. The World Bank Group and the United States is pouring billions of dollars into the economy of Mexico and Mexico itself has decentralized it's government. (2) Mexico has made great strides in the world economy, but the dollars that could be going to the improvement of the people and the country are being paid to the creditors holding up the Mexican economy. (3) The Mexican government has put restrictions on the states for borrowing money to bring themselves out of an immediate problem and further worsening the debt burden of Mexico itself to foreign investors. With the NAFTA agreement in place in 1994, an opening to these investors placed Mexico in a bad position when they decided to withdraw funds caused a collapse in the economy in 1995. While this forced Mexico to make hard decisions, it has given them a strong base of self-reliance and more a stringent fiscal plan to assure this does not happen as easily again.

The United States, on the other hand, has lost jobs and revenue from the workers of those jobs. As of July 2001, over 350,000 workers have qualified for retraining