Round 2: Global Marketplace

Cars, Tech and Pills

What Is Globalization?

• a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.

• Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. • Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. • Globalization is deeply controversial, however.

– Proponents argue that it allows poor countries to develop economically and raise their standards of living, – opponents claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people.

UNCTAD and Globalization

• contributes to the international debate on globalization and the management of its consequences for developing countries through its program on Globalization and Development Strategies • promotes policies at the national, regional and international level that are conducive to stable economic growth and sustainable development • provides technical support to developing countries in their efforts to integrate into the international financial system and to manage their external debt, particularly Africa

UN Conference on Trade and Development (UNCTAD)

• 1964 first conference held at the request of developing nations in Geneva • Conference held every 4 years; intergovernmental bodies meet in between; permanent secretariat • Forum where Group of 77 (today 131) voice their concerns • Helped to identify LDCs (least developed countries) 1971 • Accomplishments: – Generalized system of preferences (1968) (market access) – International Commodities Agreements (export prices) – Code of Conduct for Liner Conferences – Control of Restrictive Business Practices (competition rules)

UNCTAD Trade and Development Report

• Some momentum towards the achievement of Millennium Development Goals (MDG) as a result of global expansion in trade since 2002 • Remaining concerns about global inequity in standards of living and trade imbalances

UNCTAD’s World Investment Report 2006

• focuses on the rise of foreign

direct investment (FDI) by transnational global - players.

• Asia

remained corporations (TNCs) from developing and transition economies.

• TNCs are emerging as major

regional - or sometimes even the main magnet followed by Latin America, where for FDI re-invested flows, earnings have played a major role

• The number of TNCs

worldwide 77,000, 20,000 of which originate in developing countries

Features of the top 100 trans-national corporations (TNCs)

• 6 industries account for 60% of the activity of the top 100 TNCs – – motor vehicles, – pharmaceuticals, – telecommunications, – utilities, – petroleum, – electronic/electrical equipment • General Electric, Ford Motor and Vodafone head the list • US has 25 of the 100 companies; EU countries account for 53 more • Companies from 5 developing countries are represented – China, Hong Kong, Malaysia, Republic of Korea, Singapore

Technology

• Improvements in the early 1990s in computer hardware, software, and telecommunications have caused widespread improvements in access to information and economic potential.

UNCTAD and Technology

• UNCTAD XI June 2004 announces ICT as “Enabler for Growth, Development and Competitiveness” • Core indicators adopted February 2005 • “Transfer of Technology for Successful Integration into the Global Economy” consists of a number of case studies on TOT issues in individual industries in selected developing countries • A broader look at transfer of technology (TOT) that has resulted in increased efficiency and global competitiveness of LDC firms

Transfer of Technology: Case Study of Pharmaceutical Industry in India

• 1990’s removal of protectionist tariff walls • Paper is case study of Ranbaxy Laboratories as an example of one pharmaceutical laboratory’s response to changing labor policies • Changes in patent policies discouraged foreign investment

MDG 8: the production of affordable pharmaceuticals in developing countries

• MDG 8, Target 17 ("In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries").

• Pfizer in 2000 agreed to donate Diflucan to South African government to assist in the infections secondary to HIV