Announcements

1
Announcements

• Waterloo-Germany Exchange
• Open to all students.
• Receive UW credits-language fluency-International
  experience! 
• Info session from 1230-130 p.m. Thursday, Feb.
  5, 2004, ML 245
• Check out the web site at  http//germanicandslav
  ic.uwaterloo.ca/exchange/.

• OIL POLICIES and the FUTURE of INDIGENOUS
  TERRITORIES IN THE ECUADOREAN AMAZON
• Dr. Pablo Ortiz Andean University
• Thurs., Feb. 5th, 400 Hagey Hall 150

2
Announcements

• CANCELLED TUTORIALS, Tuesday, Jan.27th
• 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 choice 40

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

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Mid-Term Exam

• multiple choice (40)
• 24 questions covering...
• 19 readings (up to and including Feb. 5th)
• 5 videos (up to and including Feb.5th)
• 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_testifies
  040128

7
International Organizations

• Trade Economic Interdependence --
• The WTO, NAFTA EU (Contd)
• Jan. 27th, 2003

8
European Union (EU) Economic Political
Integration

• expansion deepening and broadening integration
• European Coal and Steel Community, 1951
• six countries (Belgium, France, Germany, Italy,
  Luxembourg, the Netherlands)
• European Economic Community (EEC), 1957
• negative integration removing restrictions on
  movement of workers, goods, services
• Denmark, Ireland and UK admitted, 1972
• European Union, 1993
• positive integration actively fostering
  integration
• Maastricht Treaty, 1992
• Amsterdam Treaty, 1997
• 15 members currently
• Greece (1986), Spain (1986), Portugal (1986),
  Austria (1995), Finland (1995), Sweden (1995)

9
European Union (EU) Economic Political
Integration

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

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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

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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)?

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Globalization Third World Development

• World Bank and the IMF
• Jan. 27th, 2004

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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/IDA/0,,pagePK3A1186447EtheS
  itePK3A73154,00.html

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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

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World Bank, Votes by Country, 2002
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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 paymentsexports-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

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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
• Highly Indebted Poor Countries (HPIC) Initiative
• debt relief (joint IMF/World Bank)
• http//worldbank.org/hipc/about/about.html
• eligible HPIC countries undertake sustained
  implementation of integrated poverty reduction
  and economic reform programs

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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/2004/01/0
  8/business/08FUND.html?ex1075525200en2e26ea5a76
  a51764ei5070

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IMF, Votes by Country, 2002
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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

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The World Bank, IMF and Structural Adjustment

• the critique
• In whos 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

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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

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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

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