Global Economic Challenges: Inequality, Climate, Migration
International Economic Organizations
The roles of international economic organizations were determined by institutions such as the World Trade Organization (WTO), World Bank, and International Monetary Fund (IMF).
Market Failures and the Need for International Organizations
Market failures necessitate international organizations due to major inequalities between people and countries, negative externalities, lack of effective competition in some sectors, the influence of large multinational corporations, degradation of international public goods (like the atmosphere), and the need for international economic crisis management.
Global Inequalities and Development
Market failures have severe consequences for people in less developed countries, perhaps most notably the increase in income inequality and persistent poverty.
Global and National Disparities
- Global inequalities.
- Inequalities and disparities within countries.
Features of Underdevelopment
- Low per capita income.
- Strong social inequalities and income disparities.
- Low productivity.
- Low life expectancy.
- High rates of unemployment and underemployment.
- Dependence on the primary sector.
- Serious imbalances in the production structure.
- Technological dependence on external and imperfect markets.
- Limited information access.
Causes of Underdevelopment
Internal Responsibilities
- Legal, political, and physical security that allows for medium and long-term investments.
- A stable macroeconomic environment.
- The fight against corruption.
External Factors
- The behavior of wealthy countries (a direct consequence of the actions of affluent nations).
- The international economic environment (e.g., low productivity in countries where workers have low incomes).
The Economy and the Environment
Economic Growth and Environmental Degradation
High global economic growth can only function thanks to the high consumption of natural resources.
Consumption and Environment
Environmental degradation is exacerbated by excessive consumption by richer countries.
Major Environmental Problems
- Desertification.
- Biodiversity depletion.
- Waste accumulation.
- River and ocean pollution.
- Global warming and climate change.
Emigration Trends
While large-scale migrations have occurred throughout history, they have acquired an extraordinary magnitude in recent years.
Reasons for Migration
- Economic factors.
- Political factors.
- Religious or ideological reasons.
- Weather conditions.
- War and natural disaster situations.
- Family or friends groupings.
Push-Pull Factors in Migration
Push: The rejection people feel to continue living in the conditions that exist in their country.
Pull: The seduction produced by a place or country (e.g., economic conditions, climate) that impels people to live there.
Economic Consequences of Emigration
- Increased global economic growth.
- Wage convergence.
- Increased revenues for sending countries (e.g., remittances).
- Short-term increase in tax revenues and social security payments for recipient countries.
- Economic growth for recipient countries.
- For the sending country, loss of much of its workforce and investment.