Chapter 11Economic CooperationEconomic Cooperation & DevelopmentSlide 4Slide 5Slide 6Economic Cooperation and DevelopmentSlide 8Regional Economic CooperationEconomic Advantages to McWorldChapter 11International Economics:The Alternative RoadEconomic Cooperation•After WWII, growth.•LDCs need influx of development capital•Only hard currency accepted in many transactions•Four sources of capital: loans, investment, trade, and aid.Economic Cooperation & Development•The United Nations1.Global Economic Regulation: development of UN Center for Transnational Corporations2.Development of LDCs: sponsor economic summits; advocacy of debt reliefEconomic Cooperation & Development•World Trade Organization1.Founded 19472.General Agreement on Tariffs and Trade3.From 23 to 148 members4.Handles disputes under GATT5.Controversy over loss of sovereigntyEconomic Cooperation & Development•International Monetary Fund1.World’s primary organization devoted to maintaining monetary stability by helping countries to fund balance-of-payment deficits.2.Established 19473.Has 184 members4.Controversial voting issues and conditionalityEconomic Cooperation & Development•World Bank Group1. Four Associated agencies that grant loans to LDCs for economic development and other financial needs.2. Two of the agencies, the International Bank for Reconstruction and the International Development Assn., are collectively referred to as the World Bank.3. Other two agencies: Multilateral Investment Guarantee Agency and International Finance Corp.Economic Cooperation and Development•Two major organizations1.Organization for Economic Cooperation and Development (OECD): organization that has existed since 1948 ( and since 1960 under this name) to facilitate the exchange of information and otherwise to promote cooperation among EDCs. In recent years, the OECD has started accepting a few newly industrialized and former Soviet countries.Economic Cooperation and Development2. The Group of 8 (G-8): The seven economically largest free market countries: Canada, France, Germany, UK, Italy, Japan and US, plus Russia (a member on political issues since 1998); represents pinnacle of economic powerRegional Economic Cooperation•See Table 11.1 on page 320•NAFTA: North American Free Trade Agreement•Free Trade Agreement of the Americas: FTAA•Southern Common Market (Mercosur)•Association of Southeast Asian Nations•Asia – Pacific Economic CooperationEconomic Advantages to McWorld1. Specialization2. General Prosperity3. Promotion of Competition4. Developmental Capital5. Decreased Violence6. World Cooperation7. Promotion of