Global Issues

Front 1

Vienna Convention (1961)

Back 1

The Vienna Convention in 1961 created an international agreement that most countries signed. They called it because they needed international rules regarding how to treat diplomats. This created diplomatic immunity, the diplomatic bag, and how people should interact with diplomats and those who work with them. It also determined that diplomatic families enjoyed the same protections.

Front 2

Managed Floating

Back 2

Floating is when a state lets the market determine their currency value. Managed floating differs from normal floating because if the value goes too high or too low, they will interfere. This is done through raising interests rates, cutting spending and other economic changes. *mention what peg to basket means?*

Front 3

Import Subsitution

Back 3

Import substitution is when states close off their market to import with tariff and non-tariff barriers. This can be used as a way to build the state's domestic market. The problem is it tends to backfire and lead to rent-seeking behavior. Which means to take economic gain and disregard reciprocating the benefits to the community.

Front 4

Landlocked Trap

Back 4

The landlocked trap is when you have bad neighbors. 38% of the countries in the bottom billion live in landlocked countries. The geological location of these causes a challenge to development. Being landlocked isn't a disaster as long as your neighbors have decent infrastructure and allow you to use their ports. Switzerland, for example can trade through Italy or Germany. If your neighbors don't like you, you're screwed. Without dependable ways to export countries can't participate in the global economy.

Front 5

Resources Trap

Back 5

In Sudan, Angola, and Zimbabwe, oil is their only resource. This is a problem because the revenues end up in the foreign bank accounts of the elite, and the rush of investment draws attention from every other sector. This leads to capital gain in the oil sector, for example, but a decrease in from the other sectors.

Front 6

Conflict Trap

Back 6

74% of the poorest billion of the world's population are either involved in or recovering from a civil war. In the fights against poverty, civil war creates a circle - war causes poverty and low income contributes to tension. Low growth means high unemployment, which results in plenty of angry young men ready to fight. Conflicts then destroys infrastructure and scares away investors, leaving even fewer opportunities. Peace is a major factor in solving poverty.

Front 7

Bad Governance Trap

Back 7

Three quarters of the poorest billion of the worlds population live in countries that are either failing or were recently failed states - such as Somalia, Haiti, Sudan, and Zimbabwe. When governments don't function, or exist only to benefit themselves, development is impossible. Paul Collier, the writer of The Bottom Billion, estimates that each failed state costs the global economy $100 billion. It would cost less than that to intervene with military force, but then it would cause civil unrest in the intervening country's society.

Front 8

Human Development Index (HDI)

Back 8

The Human Development Index is a statistic that reflects life expectancy, education, and income of a country's citizens. This is used to rank countries into different tiers of human development. Health is ranked based on a calculation for life expectancy at birth. Education is based upon the means year of schooling and the expected year of schooling. Living standards is based upon gross national income, goods, and services. This is useful because it provides a single statistic which can be referenced for social and economic development.

Front 9

Greek Financial Crisis

Back 9

After spending a great deal more than it was bringing in, Greek went into a large amount of debt. People who had money in the bank in the form of Euros started withdrawing all their money to preserve their wealth. This led to a bank holiday, in which people were limited to how much they could take out each day. This resulted in people not being able to pay bills, and eventually an entire collapse of the economy. Greece is stuck in this crisis because it chooses to pay off it's loans instead of increase it's economy with the money its been given as a bailout.

Front 10

ASEAN

Back 10

ASEAN stands for Association of SouthEast Asian Nations. ASEAN was created to promote cultural, economic, and political development in the region. It was formed in 1967 with the signing of the Bangkok declaration. The original five members included Indonesia, Malaysia, Philippines, Singapore and Thailand. Since it began, ASEAN has grown slowly and more members have gained membership.

Front 11

Gold Standard

Back 11

The system by which the value of a currency was defined in terms of gold, for which the currency could be exchanged. The gold standard was generally abandoned in the depression of the 1930's. It rose because of the wide acceptance of gold as currency. It died because there was a limited amount of gold, and people wanted to spend an unlimited amount of money.

Front 12

Bretton Woods

Back 12

An international agreement created in 1944, developed at the United Nations Monetary and Financial Conference held in Bretton Woods New Hampshire. The major outcomes of the conference included the formation of the IMF and World Bank. These helped reduce poverty and increase sustainable economic growth. The Bretton Woods System was a way to stabilize the exchange rate by pegging it to gold. While this system is extinct, the IMF and WB continue to thrive.

Front 13

International Monetary Fund (IMF)

Back 13

Formed at the United Nations conference in Bretton Woods New Hampshire in 1944, the IMF was created to ensure stability of the international monetary system. To focus on the system of exchange rates and international payments that enable countries to transact with each other. In addition to these, the IMF finances and invests in developing countries. The IMF has 188 member-states. They can afford to help struggling countries by lending money at extremely low interest rates.

Front 14

World Trade Organization (WTO)

Back 14

The World Trade Organization (WTO) was created in 1995 and contains 160 member-states. The WTO enforces trade rules and is a place where disputes among trade are settled. The WTO also Increased global trade and expanded the global economy. All of the World Trade Organization's rules are full and permanent. In 2002, Canada won dispute through WTO against America regarding lumber taxes.

Front 15

2008 Global Financial Crisis

Back 15

The Federal Reserve lowered the interest rate to 1%, so investors went elsewhere. The banks borrowed at 1% and all banks borrowed a ton and went crazy with leverage. Leverage is borrowing money to amplify the outcome of a deal. The lenders got risky and began lending money to less qualified individuals. Because so many people began defaulting, the entire financial system froze and every started going bankrupt.

Front 16

World Bank (WB)

Back 16

The World Bank (WB), was created at the Bretton Woods Conference in 1944. It is compromised of five agencies that make loans or guarantee credit to its 177 member-states. In addition to financing projects such as roads, power plants and schools, the Bank also makes loans to restructure a country's economic system by funding Structural Adjustment Programs (SAPs). These loans are accompanied by various restrictions that require the borrowing state to lower spending, increase exports, and act on other ways to rebuild their economy.

Front 17

Non-Tariff Barriers (NTBs)

Back 17

Non-Tariff Barriers are restrictions that prohibit, or contain specific mark requirements that make importation or exportation of products difficult and/or costly. These barriers to trade creates an economic loss, which means it doesn't not allow the markets to function properly. One factor of NTBs is a quota. A quota is a limitation in value or in physical terms, imposed on import and export of certain goods for a certain period of time.

Front 18

Trans-Pacific Partnership (TPP)

Back 18

The largest trade deal in U.S. history, The Trans-Pacific Partnership (TPP) would cover 40% of the global economy. It would increase exports in 12 countries. There are many issues with this agreement. Corporations would be able sue states over things that limit their profit. The cost of pharmaceuticals would skyrocket and become a monopoly. Lastly it would also undermine internet freedoms, allowing states to monitor your searching for illegal downloads.