Welcome back to global business environment. This is module two, the sixth and final part of that module in which we're asking the question, is globalization new? Last time, we talked about how the inflection point of about 1980 was really the beginning of today's boom in globalization. We said that political leaders around the world increasingly embraced more openness. The IMF and the World Bank were involved in that. This was not a perfect period, we're not advocating and saying that it was the right way or not. But we are saying that is was the beginning of today's, major, globalized world in which we live. In addition to the political changes and the policies that were embraced, we also have said that the 1980s were the beginning of a major computing revolution and transportation costs rapidly decreased as the price of fuel stabilized. And so, there were other factors besides political factors that, that led to the 1980s, the early 1980s being the period of rapid growth in globalization that we're cur, currently still a part of. Another thing that happened in the 1980s and 90s was the formalization of the agreements that were wrapped up in the GATT, the general agreement on trade and tariffs, tariffs and trade, which came out of World War II. Those agreements were formalized into an organization called the world trade organization, in which many countries in the world, including China, for example, formed part and agreed to, certain changes in their policies, ways of, conflict dis, dispute resolution when disagreements occurred over, trade and trade rules. And so, the WTO has also played an important role in today's boom. We looked at this graph last time and linked trade and prosperity since 1980. We also can look at this graph and learn something else. It's very important to understand today's current boom in globalization. When we, when we talked about the 1950s, 60s and 70s, the increase in exports and imports and trade that we saw across the world, really was was focused in the developed or industrialized countries of the world. Most of the trade that occurred in the 1960s and 70s was between the wealthier countries of the world. Now that might not be what's commonly thought, but that was what was the case at that period of time. What we've seen since the 1980s with this major boom in globalization, is the increased involvement of the developing or emerging economies in this globalized world. Those countries have changed their policies in many places towards their openness in borders, in tariffs, in in cultural norms related to interacting with the rest of the world. So you can see that yes it's true that the developed economies represented by these yellow line since the 1980s have greatly im, in, increased their exports. But what's also notable is this major increase on the part of exports from developing economies. This is you know, countries that have previous experience lower levels of growth that have lower levels of gross domestic product, or GDP per capita, and therefore have not experienced some of the benefits from trade. We can look at another graph, to see some of the specific countries and their role in this current boom. For example if we look at the brown line, we see that China since 1988, the late 1980s, has experienced just exponential growth in their percentage or share of world trade. The, the Chinese economy went from being completely closed off from the rest of the world for the most part, or most of the rest of the world in the 1970s to embracing very open trade policies. And their economy has grown at the same time. We often talk of brick nations, which are some of the major developing countries including Brazil, China, and India, and Russia. There are others that we might include as well. So you see that China has been one of these major brick nations that have contributed to this, to this boom in globalization on the part of developing economies. It's important to note that the blue line represents what we might call the developed economies of the world. And their share, if you look at this right axis of total world trade has decreased quite a bit as the developing economies have increased in their in their trade. So, in 1988, the late 1980s the developing, or, excuse me, the developed countries which we call sometimes OECD, that's an organization of developed countries. It in, it decreased from about 72% by 10% to about 62 by the mid-2000s. And so, that's being replaced by all this trade from the rapidly growing developing economies. So what we're seeing in today's world is a major interaction on the part of more and more countries, even the growing or emerging or developing economies, which has great, great promise for continued world peace, hopefully for economic growth as countries continue to interact. Globalization is not new, it's not a new phenomenon. It has occurred throughout history, but we are currently experiencing a major boom. And one of the most important aspects of that current boom is the role the developing economies are playing and will continue to play. This concludes module two. We've answered the question is globalization new, as part of our course on global business environment. Thank you.
