Download - Present politic
Topic: Global EconomicProf:Gary Giss
Nguyen Thi Que Chi 1258005Nguyen Quoc Phi Khanh 1258024Tran Trung Hieu 1258022Le Tan Anh 1158005
Global Economic Crisis
A situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis.
What is economic crisis?
Economic crisis in 1929-1933 (overproduction)
• The biggest overproduction.• Reason: excessive producing >< low
purchasing power too much inventories.
• Happening: _The crisis started from the US in 9/1929 _In the US: industrial production fell 50% iron and steel dropped 75% automotive down 90% 11500 enterprises went bankrupt _In the UK (1931) production of pig iron lost 50% profit the trade fell 60%
• Happening(cont.): _In France (1930-1936): industrial output fell by 30% 60% of foreign trade 30% of national income _In Germany: industrial output fell 77%. _The crisis lasted for four years, until 1933, then
ended.
• Consequence _Unemployment: 17 million unemployed (US-1933) 3 million unemployed. (England-1931)
_The salary was reduced a lot industrial wages only 56% (the US), and fell
60% (Britain) salary reduced from 30 to 40% (France) farmers' incomes decreased by 2.7 times
How did the crisis effect to global politic?• In the US 2 thousand workers demonstrated (1930) 3,5 million workers participated in the strike. (1929-
1933)• In Germany: 15 thousand workers on strike (1930) and 35 thousand miners strike (1933)
International Economic Organizations
WORLD BANK • 1944 - Bretton Woods Conference• WB and IMF : based in Washington, D.C• reduction of poverty, provides loans to developing
countries for capital programs• IBRD and IDA• A component of the World Bank Group & a member
of the United Nations Development Group• Developing countries : human, agriculture and rural
development, environmental protection, etc
International Monetary Fund (IMF)• 1944 - Bretton Woods Conference : at the beginning 29
member – currently : 188 members• "188 countries working to foster global monetary
cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world“
• Objectives : – promote international economic cooperation– international trade– employment– exchange-rate stability– foster global growth and economic stability– mend the pieces of the international economy after the
Great Depression and World War II– technical assistance
The Organization for Economic Co-operation and Development (OECD) • 1961 • American recovery program
World Bank Group• 27 December 1945 following international ratification of
the Bretton Woods agreements• Mission : Achieve the twin goals of ending extreme
poverty and building shared prosperityConsists of:• The International Bank for Reconstruction and
Development (IBRD), ( 1945)• The International Finance Corporation (IFC) ( 1956) • The International Development Association (IDA), ( 1960) • The International Centre for Settlement of Investment
Disputes (ICSID) ( 1965) • The Multilateral Investment Guarantee Agency (MIGA),
(1988)
Impact of economic organizations
• 1993 to 1999, the IMF extended to Jordan three extended fund facility loans
• was admitted to the World Trade Organization (WTO) (2000)
• free trade accord with the US• bring down debt payment• WB : US$250M to France for
postwar reconstruction
Politics affect Global Economy
ChinaPolitic:-China communist party 18th conference- Xi Jinping (General Secretary of the Communist Party of China)- Reform- Corruption -Jiang Zemin (former General Secretary of the Communist Party of China)-Problems in sea.
China
• Economic-Oil
• -Currency RMB (CNY) ¥.
• Export - inport.
Global Affection • Vietnam ( oil, currency ..)• Venezuela ( Loan 50B $$$)• American ( Starup in China)• Inflation in import nation
Greece• Political:
Election in 2012 : 3 main party: ND, PASOK, SYRIZA- Prime minister : Alexis Tsipras- 3rd Supporting Budget ( from EU and IMF)
Economic• GDP decrease• Dept is much• Banking system is emergency• Need IMF and EU support.• Out EU zone.
Global Affection
• China want to help.• A new collarborator
in political problem.• Domino effect• Burden of EU
Russia• political:
-Crime-Different with American's perspective.
Economic• Embargo ( US and Europe)• Finding the new collarborators, market
( import and export)• Ready become a new competitor with Europe.
Global Affection • American and EU losing• China can take benefit for Russia Economic• Becoming a new potential market for
developing country.• Global political problem.
Forces driving globalization
● Advances in information and computer technologies
● The globalization of national economies
● The liberalization of national financial and capital markets
● Competition among the providers of intermediary services
Changes in capital markets
These forces have, in turn, led to dramatic changes in the
structure of national and international capital markets.
_Process of disintermediation
_Cross-border financial activity has increased
_The nonbank financial institutions are competing
_Banks have expanded beyond their traditional
deposit-taking and balance-sheet-lending businesses
Benefits versus risks
All in all, the radical change in the nature of capital markets has offered unprecedented benefits. But it has also changed market dynamics
.One of the main benefits of the growing diversity of funding sources is that it reduces the risk of a "credit crunch”
.More choices open to them, borrowers and investors can obtain better terms on their financing