The Global Economy and Interdependence

The (1)_______________ economy is nowadays a very complex system linking people and places through the trade and flow of goods, services, and information. Since the 1950s, the scope and reach of national economies (2)_______________, leading to an increase in the number of exports produced for 3)_______________.

There are several elements that are responsible for the (4)_______________ of the global economy during the past several (5)_______________: new information technologies, reduction of transportation costs, the formation of economic blocs and the reforms implemented by states and financial organizations (6)_______________ at liberalizing the world economy.

The importance and economic scale of these changes took many governments and industrial (7)_______________ by surprise. Many governments struggled to react in the face of the industrial and labor relocations that took place and to recognize that the foundations of the new economy were no longer locally or nationally based, but were now global. Likewise, private firms had to adapt and to consider the most effective and (8)_______________ means of doing business in a global (9)_______________.

One of the hallmark characteristics of the global economy is the concept of (10)_______________. Economic (11)_______________ is linking places around the world through activities such as production, trade, and (12)_______________. As national economies become increasingly integrated through global trade, the (13)_______________ growth of any given nation becomes increasingly dependent upon the economic (14)_______________ of its trade partners. Activities such as the choice of clothes you buy have a direct impact on the lives of people working in the nations that (15)_______________  those goods. As Giddens (1990) put it, we now live in a world characterized by an "intensification of worldwide social relations (linking) distant realities in such a way that local events are shaped by events occurring many miles away, and vice versa".

Task 2. Guess the terms according to their synonyms.

1) To evaluate 2) Beneficial usage 3) Mutual dependence 4) International company 5) To realize, to know 6) Compensation 7) To spread 8) Ecological 9) Candidate 10) To coincide

Task 3. Paraphrase the following statements in your own words.

1) Countries are able to develop their economies and raise their standards of living.

2) Recently we have seen the improvements in workers' rights, an increase in environmental awareness and responsibility, and an increased awareness of fair trade as a result of advocacy campaigns using social media.

3) It doesn't matter how far apart we might be geographically, economically or culturally, we're all held tightly together as members of the human race.

4) England becomes first country to formally adopt gold standard – meaning currencies are convertible to a specific amount of gold – creating stability in exchange rates and facilitating trade and investment.

5) Separate from trade in goods and services, global financial integration is a much-debated but important topic.

6) Comparative advantage makes production more efficient, promotes economic growth, and lowers prices of goods and services, making them more affordable especially for lower-income households.

7) Larger markets enable companies to reach more customers and get a higher return on the fixed costs of doing business, like building factories or conducting research.

8) Countries exposed to globalization have alleviated inequality to different degrees through tax and welfare systems.

9) Globalization changes the types of jobs available but has little effect on the overall number of jobs in the ever-changing labour market.

10) Globalization at a business level means that a company has decided to participate in the global economy and it is going to establish its subsidiaries in foreign markets.

 

Task 4. Read the text and answer the question what are the driving forces of globalization.

Globalization is an ongoing process driven by a combination of political, economic, technological, and sociocultural forces. The process of globalization since World War II has been driven by the planning of politicians to break down borders hampering trade so as to increase prosperity and interdependence and to decrease the chance of future war. The process of globalization has been further accelerated by the global expansion of multinational corporations and the worldwide exchange of new developments in science, technology and in product manufacturing and design. Hence, the term “globalization” is often used to refer to economic globalization, that is, the integration of national economies into the international economy through trade, direct foreign investment, capital flows, migration, and the spread of technology. However, sometimes the term “globalization” is also used to refer to cultural globalization because many people believe that globalization is driven by the worldwide export of western culture through the new mass media: film, radio, television and recorded music. The development of international transport and telecommunication is another driving force which speeds up the process of globalization.

Globalization has various aspects which affect the world in several different ways. These aspects include:

a) Industrial globalization – development of worldwide production markets and broader access to a range of foreign products for consumers and companies involving particularly movement of material and goods between and within national boundaries.

b) Financial globalization – development of worldwide financial markets and better access to external financing for borrowers.

c) Economic globalization – establishment of a global common market, based on the freedom of exchange of goods and capital.

d) Political globalization – creation of international organizations to regulate the relationships among governments and to guarantee the rights arising from social and economic globalization.

e) Informational globalization – increase in information flows between geographically remote locations. This can also be seen as a technological change related to the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.

f) Cultural globalization – sharing of ideas, attitudes and values across national borders. This sharing generally leads to an interconnectedness and interaction between peoples of diverse cultures and ways of life. Mass media and communication technologies are the primary instruments for cultural globalization.

Task 5. Look at the chart and fill in the gaps with the proper words from the box using the information from the text.

mass media          international          economic          technological          sociocultural          political          politicians          distances

Task 6. Think over the major effects of globalization and fill in the blanks in the flow-chart with words from the box.

national       values       global       political       capital        financial       information       cultural       governments       consumers

Task 7. Fill in the gaps with suitable words and word combinations from the box.

free trade cross-border trade national economies global village shrinking globalization identities consciousness economy mass culture

Globalization, as a concept, refers both to the "(1)_______________" of the world and the increased (2)_______________ of the world as a whole. It is a term used to describe the changes in societies and the world (3)_______________ that are the result of dramatically increased (4)_______________, investment, and cultural exchange. The processes and actions to which the concept of (5)_______________ now refers have been proceeding, with some interruptions, for many centuries, but only in relatively recent times has globalization become a main focus of discussion. The current epoch of globalization has been dominated by the nation-state, (6)_______________, and national cultural (7)_______________. The new form of globalization is an interconnected world and global (8)_______________, often referred to as a "(9)_______________".

In specifically economic contexts, globalization is often used in characterizing processes underway in the areas of financial markets, production, and investment. Even more narrowly, the term is used to refer almost exclusively to the effects of trade, particularly trade liberalization or "(10)_______________".

Task 8. Fill the gaps with a proper derivative from the given words.

(1)__________ is a controversial issue mainly because different groups (2)__________ it in different ways. For its (3)__________ globalization is a threatening word. It prompts visions of large multinationals (4)__________ the world in pursuit of ever-higher (5)__________. Many pressure groups fear that globalization threatens the (6)__________ as well as national cultures - they (7)__________ that it will make the rich nations richer and the (8)__________ countries even poorer than they are. But its (9)__________ have another point of view. They believe that (10)__________ and freer trade between nations will offer (11)__________ and (12)__________ growth for all countries and businesses.

globe interpreter oppose   dominant profitable   environmentalist unpredictable developer   supportive increase prosperous economy

Task 9. Discuss the following questions in pairs or small groups. Consider the influence of the current global situation on your opinion.

1) What images spring to mind when you hear the word ‘globalization’?

2) What are the good things and bad things about globalization?

3) How long has the term ‘globalization’ been around?

4) Do you think it’s possible to ignore globalization?

5) How has globalization affected your life?

6) Is globalization good for the world?

7) Do you think globalization will make us all the same in the future?

8) Which countries do you think like or hate globalization most?

9) What concept do you think will come after globalization?

10) Could globalization have happened without the Internet?

Task 10. Check your knowledge of the notion “global village”. Choose the best answer.

1. There is a little doubt that improved communications have had a major impact on how we lead our lives, not least because it is now possible to talk to someone on the other __________ of the world whenever we want:

a) half

b) side

c) place

d) part

 

2. One symptom of this trend is how McDonalds has become __________, it is almost impossible to find a town where Big Macs are not for sale.

a) everywhere

b) ubiquitous

c) all over

d) worldwide

 

3. There is still a disparity between the standard of living in less __________ countries and richer nations.

a) developed

b) developing

c) development

d) develop

 

4. The credit crunch is one example of how there are negative aspects to having a global __________.

a) trade

b) multinational corporation

c) economy

d) transport system

 

5. This problem requires __________ cooperation just because it reaches beyond the borders of any one company.

a) national

b) world

c) domestic

d) international

 

6. The WTO has helped reduce tariffs on global __________ and this has changed the marketplace.

a) economy

b) transport

c) trade

d) communication

 

7. In the world today, it is not possible for governments to adopt policies on immigration unilaterally. Generally speaking, this __________ approach has been beneficial.

a) universal

b) multilateral

c) multinational

d) combined

 

8. One key feature of globalization is that economies around the world have become much more closely __________.

a) combined

b) joined

c) separated

d) integrated

Task 11. Solve the puzzle.

ACROSS

1. To guess or calculate the cost, size, value, etc. of something.

3.To make a product or service more suitable for a particular area.

7. Emotional or practical help.

8. The fact of depending on each other.

11. A quality or feature of a person or thing, especially one that is an important part of its nature.

12. A situation in which available goods and services, or social and cultural influences, gradually become similar in all parts of the world.

13. The system of trade and industry by which the wealth of a country is made and used.

14.To use something that you already have in order to achieve something new or better.

DOWN

2. A particular area of knowledge or the process of becoming an expert in a particular area.

4. The person who is responsible for managing an organization.

5. Something that needs great mental or physical effort in order to be done successfully and therefore tests a person's ability.

6. Involving several different countries, or (of a business) producing and selling goods in several different countries.

8. National … is a person's sense of belonging to one state or to one nation.

9. The air, water, and land in or on which people, animals, and plants live.

10. To increase in size, number, or importance, or to make something increase in this way.

Unit 7