CoGo Unit 5

Special economic zones

areas in China (particularly along China’s east coast) designated by the government as regions where private businesses could attract foreign direct investment.

Multinational corporations (MNCs)

businesses with a large presence in countries in different regions of the world.

Privatization

converting government-owned industries to businesses run with free-market forces that are owned and operated by private investors.

Nationalization

government-owned industries run without free-market forces.

Economic Globalization

includes economic networks that are growing more interconnected, a worldwide market with actors unconstrained by political borders, and a reduction in state control over economies.

Foreign direct investment

money invested in private businesses by individuals or a corporation outside of the country that can pose a challenge to a government’s foundational economic and political ideas and principles.

International organizations

organizations joined by member states with a common interest such as the International Monetary Fund (IMF,) the World Bank and the United Nations

Environmental degradation

environmental problems created by industrialization and other forms of economic development.

Supranational organizations

organizations in which member states grant the governing organization sovereignty over policies typically related to trade such as the Economic Community of West African States (ECOWAS), the European Union (EU), and the World Trade Organization (WTO).

World Bank (WB)

multi-country financial services provider and lender that offers loans and grants for lower income countries to build infrastructure projects

International Monetary Fund

exerts great influence through preconditions for financial assistance; countries that receive its assistance often must agree to structural adjustment programs requiring privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries

Tariff

taxes imposed by a government against imported goods

Structural adjustment programs

neoliberal reforms often required by international organizations granting emergency loans to countries that require privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries.

Demographic changes

the growth (or decrease) and movement of a population in a country

Subsidies

government funding made to support domestic industries against foreign competition or to shape economic behaviors

Gender equity

civil rights ideal for women to be protected with equal treatment and to secure equal power as men in governing a country

Austerity measures

governmental budget cuts and / or tax increases intended to decrease budget deficits and national debt; often required for IMF emergency loans.

Trade liberalization

affects the growth of domestic and foreign business, the amount of direct foreign investment, foreign exchange rates, population movement, and often the quality of the environment.

Rentier states

countries that obtain a sizable percentage of total government revenue from the export of oil and gas or from leasing the resource to foreign countries and have been able to raise standards of living and fund governmental programs based on their huge reserves

Maquiladora zones

areas of Mexico’s manufacturing industry mostly located in northern Mexico; factories established to assemble parts imported from the United States for assembly in Mexico made more possible due to NAFTA.

Economic diversification

when a country is able to obtain economic balance between agriculture, manufacturing and service without over dependence on one commodity or economic sector.

Import substitution industrialization (ISI)

policies aimed at reducing foreign dependency by raising tariffs and encouraging local production of industrialized products.

Resource curse

countries that rely too heavily on the export of commodities face negative economic, political and environmental consequences.

Industrialization

movement from agricultural economic production to industrial manufacturing