In-Depth Notes on Contemporary Global Realignments

Contemporary Global Realignments, 1914 to the Present

The Soviet Union and Independence Movements

• Gorbachev's Reforms: Under Mikhail Gorbachev, attempts were made to reform the Soviet system; however, these reforms were viewed as insufficient by some, while others believed they went too far.
  • 1991 Coup Attempt: While Gorbachev was on vacation, a coup attempt by conspirators including party officials and military leaders aimed to seize power. Boris Yeltsin helped to crush this coup, leading to Gorbachev's political decline.
  • Dissolution of the USSR: By December 25, 1991, the Soviet flag was lowered for the last time at the Kremlin, and the USSR officially ceased to exist by the end of that year.

The Cold War's Legacy

• Comfort of Certainty: The Cold War ended the uncertainty that followed World War II by establishing a bipolar world dominated by the U.S. and the USSR.
• Perception of Global Powers: World nations viewed themselves through the lens of capitalist vs. communist ideology. The conclusion of the Cold War, however, led to a more complex world.

Economic Globalization

• Post-Cold War Economy: Following the collapse of communism, a new global economic order emerged characterized by:
  • Expansion of trade and foreign investment.
  • The privatization of state enterprises.
  • Deregulation of national economies and increased capital movement.
  • Technological advances like fiber optics and satellites facilitating market integration.
• Definition of Globalization: Reduction/removal of barriers to foster the flow of goods, services, and capital internationally.
  • Ancient Economic Integration: Historical examples (e.g., Rome and China) illustrate early forms of economic globalization.

Free Trade and International Alliances

• Free Trade Concept: Freedom from state-imposed limitations on trade. Debate surrounds its benefits to societal prosperity.
• GATT and WTO:
  • GATT formed in 1947 to promote unrestricted trade among member nations.
  • Transitioned to WTO in 1995, which established a framework for settling trade disputes and enforcing agreements, representing 97% of global trade.

The Rise of Global Corporations

• Shift to Global Corporations: Replace traditional multinational corporations; operate as single entities across the globe seeking low-cost operations.
  • This change challenges prior corporate responsibilities to local communities and labor.

Economic Growth in Asia

• Japan's Economic Revival: Policies post-WWII helped Japan recover economically, focusing on export-driven growth.
  • Japan leveraged its workforce and transitioned from labor-intensive to technology-intensive production.
• Asian Tigers: Hong Kong, Singapore, South Korea, and Taiwan adopted Japan's growth model, achieving significant economic power by focusing on export-driven industrialization.

Financial Crisis in Asia (1997)

• Many Asian economies faced a sudden loss of investor confidence, leading to a rapid decline in economic performance, starting in Thailand.
  • This financial crisis highlighted the volatility associated with globalization and economic interdependence.

BRICS Nations

• Emerging Economies: BRICS players (Brazil, Russia, India, China) embraced capitalism post-Cold War, focusing on education and entrepreneurship to integrate into the global economy.
  • China's Economic Reform: Since the late 1970s, reforms shifted focus from a planned economy to a socialist market economy, with significant growth and global influence.

Global Economic Alliances

• European Union: Established in 1993 with the Maastricht Treaty, promoting deeper economic and political integration among member states.
• OPEC and ASEAN: Other examples illustrating the rise of economic alliances aiming to improve economic stability and influence.

Globalization and Its Critics

• Supporters vs. Critics: While proponents argue globalization enhances economic efficiency and global cooperation, critics point to its potential risks, such as loss of local governance, environmental degradation, and cultural homogenization.
• Long-term Effects: The actual impact of globalization remains contested, with evidence of both prosperity and inequality emerging in different regions.