WEEK 3-4 Overview In the next two weeks you will continue to learn more about our main topic. We will be focusing on the different trends and issues and how does it affect globalization in general and what are measures undertaken to resolve such issues. Expectations 1. Read the required readings and complete the given activities related to this week's topic. 2. You are expected to join a debate with your classmates to take a stand on a particular issue that you believe in related to globalization. The debate will be recorded and will be posted in the google classroom so that everybody will be able to view and give their insights as well. 3. You are required to present your draft of how your final output will look like. 4, Manage your time wisely. You must be able to complete all your tasks within two - weeks time. In the next reading activity, you will look at how different viewpoints impact how policymakers respond to and address issues related to globalization Financial Crisis and Xenophobia “In my experience as a politician, 'd say that when things go wrong in a country, there are two potential targets: one is the government, the other is the foreigners.” - Antonio Guterres, United Nations High Commissioner for Refugees and former Prime Minister of Portugal One worrying consequence of the global downturn has been a rise in antimigrant and anti immigrant sentiment in countries with significant expatriate populations, most notably, in Europe. In February 2009, the United Nations High Commissioner for Refugees Antonio Guterres averred, “Xenophobia is an inevitable trend in many parts of the world when the economic situation deteriorates. A Broad Spectrum in Europe In ttaly: ‘A wave of attacks on migrants took place in Italy around October 2008 (right in the middle of the economic crisis). Among the incidents which were: the fatal assault in Milan of Abdul Guibre (born in Burkina Faso and raised in Italy), the injury of a Ghanaian ~ Emmanuel Bonsu Foster — in Parma, the battery of a Chinese man — Tong Honsheng — in Rome and the gunning down of six African immigrants in Castel Volturno, a Mafia stronghold, In response, the Italian Parliament debated that month, “whether Italy was facing what, newspaper headlines referred to as a ‘racism emergency.” In addition, a top official from theVatican, Msgr. Agostino Marchetto, decried what he saw as “discrimination, xenophobia and racism” towards immigrants in Italian society. In Germany: In late September 2009, German police began investigations on a string of letters sent from members of the rightwing National Democratic Party (NDP) to politicians from immigrant backgrounds. Around 30 candidates received letters telling them to "go home” and one contained a “five point plan for moving foreigners gradually back to their home countries.” In response to the NDP letter campaign, the Berlin State prosecutor's office commenced investigations on incitement to racial hatred. Despite these tactics (described as “Nazilike” by BBC's correspondent), the NDP poll numbers remain poor and it has no seats in the national Parliament. In Russia According to the New York Times, a Moscow-based human tights group announced in February 2009 that ten people have been killed in Moscow, in what were apparently racist attacks, since the start of this year. Most migrants working in Russia (an estimated 10 million people} hail from former USSR republics in Central Asia and work in the construction business, where they find that “employers are increasingly withholding wages for work already completed.” In addition, migrant workers often find themselves at the mercy of the police, who demand bribes and administer beatings. As a result of the financial crisis, migrant workers are the first to be laid off at the construction sites where they primarily work. This has had far-reaching consequences; remittances to migrants’ counties of origin have dried up, negatively affecting Central Asian economies. In the United Kingdom: (On September 10, 2009, the BBC reported that foreign students spending the summer at a college in Sussex’ were physically attacked by local youth. Additionally, 100 members of the Roma Community (an Eastern and Southern European ethnic minority commonly referred to as Gypsies) in Belfast were flown back to Romania in June 2009 amid concerns for their safety due to attacks on their community. One incident involved a gang of youths who hurled rocks and bricks and shouted Nazi slogans at the Roma. In Aberdeen, séveral youths attacked a Polish man, leaving him seriously ill in a hospital on July tIth, 2008. In Greece: In May 2009, the Inter Press Agency reported that the financial crisis was taking its toll on migrant workers in Greece. Anna Triandafylidou, senior research fellow at the Hellenic. Foundation for European and Foreign Policy (ELIAMEP) pointed to a “negative trend in media coverage describing irregular flows” as “creating a feeling of insecurity.” That same month, the president of the Pakistani Community in Athens listed 20 attacks against Asians over a 30* day period, concentrated in working-class neighborhoods.Economic and Social Context The rate of migration soared in previous decades when countries in the European Union and the United States enjoyed economic growth and opportunities abound for all. However, as the global economy soured, many industries where migrants predominated began to shed jobs fast. In order to reduce the number of migrants claiming benefits, foreign workers are often encouraged to return to their home countries with promises of lump-sum benefits As The Economist reported in January 2009 As long as the slump was limited to rich countries, the impact on migrants was relatively predictable: some would go home, at least for a time [..] But as economic misery has spread to poorer countries, the picture has been muddied. In Europe [...] migrants may opt to stay. Young and single workers may choose to move on, but migrant families, especially, may conclude that they are better off claiming welfare in rich countries than returning home. Thus, migrants who choose to remain may attract negative attention from frustrated local populations. This frustration, which is sometimes exploited by pre-existing interest groups, can and does spill over into violence against those who choose to stay. The media can also play a role in this cycle; as the Office of the High Commissioner for Human. Rights asserts, "xenophobic and racist attacks on migrants are often a response to a distorted perception, at times fomented by the media, of the scope of irregular migration and its Consequences for the host societies.” The global intelligence company, Stratfor Forecasting, issued a brief in March 2009 provides some historical and social context for the current wave of ant-migrant sentiment: Minorities are often seen as either the source of the economic malaise or as unnecessary expenditures of the public purse. [Furthermore] An economic recession also creates problems because businesses will begin seeking out migrant workers. Not only are they often more willing to work for less pay than citizens, but if they are illegal they can be fired without cause or trade union intervention at any time. Thus, migrants who keep their jobs because they accept harsh terms of labor may also be viewed as “taking away native jobs.” Economic and Social Implications As a result of job losses, remittances from migrants back to their home countries are drying up, with disastrous economic effects. According fo The Economist: flows to Africa, which had earlier boomed, stagnated last year [2008}; flows to parts of Latin America dropped. In November [2008] the head of the UN Conference on Trade and Development, Supachai Panitchpakdi, predicted that 2009 would see remittances to poor countries slide by 6%. In addition, the International Labour Organization (LO) cautions that: even if there are no job losses, migrant workers may be forced to accept lower wages and suffer poorer working conditions in an attempt to retain their jobs. According to past experience, migrant workers, especially women workers and those in irregular status are among the hardest hit and most vulnerable during crisis situations.Finally, as the International Organization for Migration notes, “trying to combat the financial crisis by simply cutting immigration may make the situation worse. [..] Countries of origin are likely to experience influxes of returning migrants, which may result in economic and social instability in poorer countries,” many of which have young, expanding populations which will not absorb millions of returnees easily. Not Just a European Phenomenon The recent rise in xenophobia and anti-migrant sentiment is by no means exclusive to the European continent. At the world conference on racism in April 2009, Haiti's Vice Foreign Minister Jacques Nixon Myrthil said Haiti could be hurt significantly by xenophobia linked to the financial crisis. In the Bahamas, for example, where around 80,000 Haitians live and work, Amnesty international reports increasing human rights violations against workers. In South Aftica, Aftican migrants from Zimbabwe and Malawi are starting to leave cities like Johannesburg amid fears of xenophobic violence which, in the month of May 2008, Killed around 23people. In Durban, over 150 people vandalized a Nigerian-owned bar in May 2008. According to the Earth Times, the violence has displaced 13,000 people. Thus, European antimigrant sentiment must be viewed as part of a larger trend in xenophobic attitudes exacerbated by the global recession Responses By and large, the policy response from national governments has been precisely the opposite of recommendations made by the International Organization for Migration, which cautioned against limiting migration. For example, in Russia, Vladimir Putin called for quotas on permits for work visas to be temporarily cut in half.23 Many other governments, such as the UK and. Germany have followed suit, stepping up deportations and implementing measures which make it difficult for migrants to enter the country. Some lawmakers express anxiety over this turn of events. Jear-Leonard Touadi, an Italian Member of Parliament, originally of Congolese descent, was quoted in the New York Times as saying, "You can't say all Italians are racist, but it would also be dangerous to underestimate what's happening|.Faced with sacial and economic crisis, it’s easy to push rage and frustration on the foreigner. It shouldn't make this a war between poor Italians and poor immigrants.” Actoss the English Channel, at a Scottish Labour Conference, Secretary Jim Murphy exhorted lawmakers not to succumb to “credit-crunch racism” — xenophobia caused by the economic crisis — stating: While understanding people's fears and anxieties, we as a Labour Party are very clear =no one should ever pander to credit crunch racism. This crisis wasn't caused by a Polish plumber or a Bangladeshi shop worker it was caused by irresponsible actions of international bankers. Our party should relentlessly make clear that itis the irresponsible bankers, some of whom are on £1m bonuses— not industrious migrant workers on the national minimum wage — that caused this financial calamity. Ultimately, however, changing public attitudes, even in times of economic prosperity, is a slow and arduous process. Reversing the economic decline would go a lorg way towards reducing xenophobic sentiments; however, without a concerted effort to promote integration on a community-level, itis tremendously unlikely that any longterm progress would be made towards fully accepting the contributions of migrant workers to the global economy. Reference: Levin Institute, https:/mww_globalization101.org/the-financiatcrisis-and-xenophobia- 21, (visited on 8 July 2020),As you build your knowledge on any given topic from various sources, you'll be exposed to opposing or biased viewpoints. This helps you exercise and improve your critical judgment, which will help you formulate and construct your personal stand and opinions. IMF and the World Bank ‘Toward the end of the Second World War in July 1944, representatives of the United States, Great Britain, France, Russia, and 40 other countries met at Bretton Woods, a resort in New Hampshire, to lay the foundation for the postwar international financial order. Such a new system, they hoped, would prevent another worldwide economic cataclysm like the Great Depression that had destabilized Europe and the United States in the 1930s and had. contributed to the rise of Fascism (a form of farright, authoritarian ultranationalism characterized by dictatorial power, forcible suppression of opposition, as welll as strong regimentation of society and of the economy) and the war. ‘The United Nations Monetary and Financial Conference, as the Bretton Woods conference was officially called, created the International Monetary Fund (the IMF) and the World Bank to prevent economic crises and to rebuild economies shattered by the war. The Bretton Woods strategy addressed what were considered to be the main cause of the pre war economic downturn and obstacles to future global prosperity—the lack of stable financial markets around the world that had led to the war and the destruction caused by the war itself. The IMF would be aimed at stabilizing global financial markets and national currencies by providing the resources to establish secure monetary policy and exchange rate regimes, while the World Bank would rebuild Europe by facilitating investment in reconstruction and development. Although intended to benefit the global economy and contribute to world peace, the World Bank and the IMF, collectively referred to as international financial institutions (IFls), have become primary targets of the antiglobalization movement. In many countries, they are resented and are viewed as imposing Westernstyle capitalism on developing countries without regard to the social effects. Even with these criticisms, in recent decades, the bank's primary focus has shifted from partnering with middieincome nations on growth-related programs and trade liberalization toward global poverty alleviation. These efforts take place in the world’s poorest countries— Particularly those in Africa—and in middle-income countries, such as China and India, where many of the world’s poor reside. In 2013, the bank set a goal to end extreme poverty, experienced by people living on $1.25 or less per day by 2030. Other priorities for the bank include reconstruction in post conflict nations and transnational issues, including public health and environmental concems. ‘The World Bank is one of the Philippines’ sources of funding amidst the pandemic. © April 9, 2020—the World Bank's Board approved a Third Disaster Risk Management Development Policy Loan of US$500 million to enhance the Philippines's disaster preparedness policies, planning, and investments for public health emergencies at the ational and local government levels. The financing provided under this project will also support urgent needs created by the COVID-19 crisis. © April 23, 2020, the World Bank approved another US$100 million loan for the Philippines COVID-19 Emergency Response Project to help meet urgent healthcare needs in the wake of the pandemic and bolster the country's public health preparedness.© May 28, 2020—The World Bank's Board of Executive Directors today approved a US$500 million loan to help the Philippines mitigate the impact of COVID9 pandemic on poor and vulnerable households, and to provide financial relief to small and medium enterprises. Read more about the IMF and World Bank and the controversies surrounding it in the next reading activity. IMF and the World Bank The International Monetary Fund The IMF is controlled by its 187 member-countries, each of whom appoints a representative to the IMF's Board of Governors. The Board of Governors, most of whom are the finance ministers or heads of the central bank of the members, meet once per year to discuss and achieve consensus on major issues. In the meantime, dayto-day operations are managed by a 24- person executive board. The world's major economic and political powers—the United States (the IMF's largest shareholder), Great Britain, Japan, Germany, France, China, Russia, and Saudi Arabia—each have permanent seats on the executive board, while the 16 other directors are elected for two-year terms by groups of countries divided roughly by geography, e.g. Caribbean, Africa, Southeast Asia, etc. In turn, the executive board is run by the managing director, who is elected for renewable five-year terms. ‘The IMF also has an International Monetary and Financial Committee of 24 representatives of the member-countries that meets twice yearly to provide advice on the international monetary and financial system to the IMF's staff. In all of its operations, voting power is weighted based on the size of the economy and the quota allocation of each country. Decisions are usually taken by consensus, but the United States, as the IMF's major shareholder, has the most influence on its policy-making, In simpler terms, the goals are to: @ Facilitate the cooperation of countries on monetary policy, including providing the necessary resources for both consultation and the establishment of monetary policy to minimize the effects of international financial crises. @ Assist the liberalization of international trade by helping countries increase their real incomes while lowering unemployment. @ Help to stabilize exchange rates between countries. Especially after the global depression of the 1930s, it was vital to establish currencies that could hold their value, serve as mediums of international exchange, and resist any speculative attacks. @ Maintain a multilateral system of payments that eliminates foreign exchange restrictions. Countries are thus free to trade with each other without worrying about the effects of interest rates and currency depreciation on their payments. © Provide a safeguard to members of the IMF against the balance of payments crises, Le. when governments cannot balance the money they have with the money they owe to other countries. IMF members can have the confidence to adjust the imbalances h their national accounts without resorting to painful measures that would hamper their prosperity, such as devaluing their currency in relation to other countries’@ Tryto reduce the effects of volatiity in countries’ balance of payments accounts. The IMF helps assure that global trade and financial relationships can continue at a steady rate without the risks of global depressions like that of the 1930s. When founded, the IMF also operated the international exchange system based on gold reserves that its member countries pledged to it. In 1971, however, the U.S. government under President Nixon eliminated the connection between the U.S. dollar and gold as a means to resolve a domestic monetary crisis. By allowing the dollar's value to “float” as opposed to having it peaged to gold, the U.S. government was able to adjust its monetary policy to deal with changes in the American economy. Subsequently, the IMF eliminated its use of gold, and all other members were allowed to “float” their currencies as well How Does the IMF Achieve Its Goals? The IMF has three main activities: surveillance, financial assistance, and technical assistance. Surveillance Each year, the IMF sends economists to each member country to analyze the country’s economic’situation. The team examines fiscal and monetary policy, exchange rate, general macroeconomic stability, and related policies, such as labor policy, trade policy, and social Policy (such as the pension system). This process is known as an Article IV consultation, after the section authorizing it in the Articles of Agreement. The purpose of such consultation is to provide an outside check on national decisions that might affect the international economic system. After the team finishes its analysis, the IMF executive board discusses the report. It gives the official opinion of the IMF to the country’s leaders. A version of the report is also published and available as an IMF Public Information Notice (PIN). The IMF also performs similar reviews of regional policy by such organizations as the European Union (EU), the West African Economic and Monetary Union, and the Eastern Caribbean Currency Union. On a global level, the IMF also publishes its analysis of the world economic system in its World Economic Outlook twice per year and the Global Financial Stability Report, which focuses specifically on the international capital markets, also twice per year. Financial Assistance The central activity undertaken by the IMF is financial assistance to national treasury departments. Member countries with balance of payments problems can receive credits and loans to pay off their obligations and readjust their economic policies to avoid another crisis or nearcrisis. To receive assistance, however, the member-country must agree, through a “letter of intent,” to implement changes in its fiscal and monetary policies that IMF experts have determined are necessary. As explained below, these conditions are the cause of some of the most vociferous resentment toward the IMF because they often involve very detailed changes in national policies. Nevertheless, the IMF assistance is considered so essential to national economic health that countries generally agree even when they have strong reservations. The loans are disbursed in phases to ensure that the receiving country moves forward with the reforms required of it. Loans are generally granted for relatively short periods, for just a few months, or for as long as ten years, depending on the type of loan. The receiving country must pay back loans on time, on a rigorous schedule, because the loans are intended to be temporary assistance. Countries are discouraged from becoming dependent on IMF loans, and, in fact, may face extra charges if too much of their government funding comes from the IMF. Rather, the IMF hopes to play a role as a catalyst for private banks to lend to governments, because theextension of an IMF Toan is intended to express confidence that the receiving country Is getting its financial house in order. The IMF assists in several lending programs (“facilities”): © Stand-by arrangements are loans granted for specific amounts over 12 to 18 months to deal with short-term problems. @ The Extended Funds Facility is used to help a member-country deal with what are called “structural” economic problems resulting from a history of poor economic planning. The IMF attaches strong conditions to loans through this facility, which are granted for three to four- year terms. © The Poverty Reduction and Growth Facility is granted at low-interest rates to poor countries. © The Supplemental Reserve Facility grants shortterm loans during crises, but adds a surcharge to discourage too much borrowing, © Contingent Credit Lines are granted during waves of crises that can spread from one country to another, called “contagions.” @ Emergency Assistance is granted to countries facing military conflicts or other sudden disasters. Technical Assistance The IMF provides technical assistance on fiscal and monetary policy, regulatory procedures, tax policy, and collection of statistics, among other issues. These programs are aimed at strengthening developing countries’ abilities to reform and properly manage their macroeconomic policies. The IMF dispatches its experts and private consultants on training missions to educate government officials and also runs the IMF Institute in Washington, D.C. to provide courses for officials. In addition to these three main activities, the IMF has instituted various programs to ensure financial system management stability on a global scale. For example, the IMF, along with the World Bank and other institutions, has drafted voluntary standards and codes for countries and financial institutions to adapt to increase accountability and transparency and limit corruption. The IMF has also developed two systems of collection and dissemination of statistical information to assess the economic viability of the domestic and international financial systems. Why the IMF is Controversial After the collapse of the Soviet Union, the western approach to market liberalization, privatization, fiscal austerity, and free trade that had produced economic growth in the developed countries—especially in the United States—was exported to developing countries through the International Financial Institutions (IFIs). Since they were headquartered in Washington, D.C. the IFis’ strategy was called the “Washington Consensus.” As summarized by the World Bank, it had ten basic points: @ Fiscal discipline (that is, not too much government spending). @ Redirection of public spending toward education, health, and infrastructure. Tax reform (that is, broadening the tax base and cutting tax rates}. @ Market-determined interest rates. Competitive exchange rates.@ Trade Iiberalzation (thats, eliminating quotas and tariffs. Openness to foreign direct investment. @ Privatization of state enterprises. @ Deregulation @ Legal security for property rights. The success of industrialized nations when following these practices in comparison to Communist countries’ lack of economic development caused western economists and Politicians to assume their infallibility and enticed many developing countries into following them. However, how the Washington Consensus was uniformly presented to a wide range of national economies is said by critics to have contributed to serious problems Critics attack four interrelated aspects of the implementation of the Washington Consensus First, critics say that the conditions of loans are too intrusive and compromise the economic and political sovereignty of the receiving countries. For example, Joseph Stiglitz, a winner of the Nobel Prize in economics and former chief economist of the World Bank, writes that those conditions, often referred to as a whole as “conditionality,” are not just the typical requirements that anyone lending money might expect the borrower to fulfil to ensure the money will be paid back. Rather, says Stiglitz (2002), “‘Conditionality’ refers to more forceful conditions that often turn the loan into a policy tool.” The IMF has used conditionality to exact major changes, called " structural adjustments,” in borrowing countries’ fiscal and monetary policies, including such issues as banking regulations, government deficits, and pension policy. He cites the example of the IMF's insistence that the Korean Central Bank focus on fighting inflation during the 1997 Asian Financial Crisis, not because monetary policy was a cause of the crisis, But rather because the IMF believed that fighting inflation should be the primary purpose of a central bank. According to Stiglitz, many of these changes are simply politically impossible to achieve because they would cause too much domestic opposition. Even in the United States, he points out, the Federal Reserve Bank is not charged with just fighting inflation, but also with promoting employment and economic growth, and an attempt by a powerful senator in the mid-1990s to refocus its charter just on inflation was beaten back by the White House. Second, critics say that the IMF imposed the Washington Consensus policies on countries without Understanding the distinct characteristics of the countries that made those policies difficult to carry out, unnecessary, or even counter-productive. According to Stiglitz, for example, the economists of the IMF had a “one-size-fitsall” policy based on their academic training, which focused on economic models with unrealistic assumptions about how reaHlife economies work. They do not generally specialize in the economies of the countries whose policies they oversee, often do not live in those countries and mostly work from Washington, D.C., and have litte appreciation for the political circumstances under which the governments operated. When crises arise, therefore, says Stiglitz (2001), the IMF instinctively blames the governments of the, Countries suffering the crises. Third, critics say that the policies were imposed at once, rather than in an appropriate sequence. For example, the IMF demands that countries it lends to privatize government services rapidly—that is, sell them to private investors rather than operate the services itself such as water supply and utilities. According to Stiglitz, this is a result of the IMF's "market, fundamentalism,” blind faith in the free market, that ignores the fact that the ground must be prepared for privatization. Private owners are most interested in operating a company efficiently, which often means letting go of staf. But, says Stiglitz (2002), if country’s unemployment program and other social safety nets are not sufficiently developed, those fired staff will have no way to support their families.“Privatization needs to be part of a more comprehensive program, which entails creating jobs in tandem with the inevitable job destruction that privatization often entails. Macroeconomic policies, including low-interest rates that have helped create jobs, have to be put in place. Timing (and sequencing) is everything.” Fourth, critics say that the IMF was not open to criticism or public oversight when working on these policies, leading to arrogance and a lack of connection to the reality on the ground in the affected countries. For example, Stiglitz points out that the agreements between the IMF and borrower countries were always kept secret from the general public in those countries. Sometimes, he says, the agreements were kept even from him and his colleagues at the World Bank when working’on joint projects with the IMF. At the same time, the government officials of borrowing countries often felt powerless to question the IMF's policies, believing that just to ask a question would be viewed by the IMF as a challenge to its authority and jeopardize the loans it was offering. A great lack of trust, therefore, characterized relations between the Fund and its borrowers, as the public and governments of its borrower countries felt out of the loop on the decisions that would shape their economic future. Some opponents of the IMF, and globalization in general, go even further. They claim that the entire international financial system is corrupt and unfair. They criticize not just the implementation of the Washington Consensus, but its very existence. One group, for example, called 50 Years Is Enough, argues that the IMF, World Bank, and the World Trade Organization (WTO) are antidemocratic institutions, responsible for the impoverishment of the developing world and benefiting only rch countries and multinational corporations. This group wants an immediate end to the IMF's policies, a cancellation of all outstanding government debts in the developing world (discussed in more detail below), and reparations for the damage, in their view, that the IMF and World Bank's policies have caused. As you can see, three views of the IMF's role are possible. First, the IMF views itself as committed to sound financial management, lending money, and providing surveillance and advice to help countries avoid economic collapse. Second, however, IMF critics claim that the IMF's policies are often Poorly planned, and even counter-productive. Third, the most radical critics of the IMF contend that the whole international financial system, of which the IMF is one of the leading institutions, should be dismantled for the benefit of the world's poor. ‘The World Bank Structure ‘The World Bank is the name that has come to be used for the International Bank for Reconstruction and Development (IBRD), founded at Bretton Woods. As the World Bank expanded beyond its initial scope and purpose of rebuilding Europe after the Second World War, the World Bank grew through the creation of four additional organizations. Together, these five financial organizations comprise the World Bank Group, namely the IBRD, the International Development Association (IDA), the International Finance Corporation (IFC), the Muttilateral Investment Guarantee Agency (MIGA), and the International Center for Settlement of Investment Disputes (ICSID). The IBRD and the IDA focus mainly on public sector monetary policy and provide lowinterest loans, interestfree credit, and grants to developing countries. Additionally, they work to affect governments’ policies by providing macroeconomic policy advice, research, and technical advice. The remaining three institutions that belong to the World Bank Group focus more on private market interactions, providing funding, insurance, and dispute resolution for private sector projects. The sections below discuss each part of the World Bank Group in tum. Governance ‘The governance of the World Bank is almost identical to that of the IMF. Itis directed by a board of governors composed of one representative from each member country, and the governors direct the IBRD based on weighted voting rights that are determined by each.country’s agreed annual contributions to the World Bank. As in the IMF, the United States is the largest contributor and has the most weighted voting power, though asa practical matter, decisions are made by consensus. ‘Twenty-four executive directors oversee the World Bank's daily operations, including five permanent spots given to the United States, Japan, Great Britain, Germany, and France. All member-nations élect the remaining 19 directors. Vice presidents manage Bank affairs in six regions: Africa, East Asia; and Pacific, Europe, and Central Asia, Latin America; and the Caribbean, Middle East, and North Africa, and South Asia; and in other functional units such as Finance, Poverty Reduction, Infrastructure, and Private Sector Development. The World Bank also operates a World Bank Institute for the training of Officials in development-related topics. The IBRD The IBRD’s mission statement states that it “aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, and non-lending-including analytical and advisory services.” The World Bank aims at issues such as building infrastructure (roads, dams, power plants), natural disaster relief, humanitarian emergencies, poverty reduction, infant mortality, gender equality, education, and longterm development issues. Furthermore, the World Bank tries to foster social reforms to promote economic development, such as the empowerment of women, building schools and health centers, provision of clean water and electricity, fighting disease, and protecting the environment. Since 2000, the World Bank has been devoted to helping implement the Millennium Development Goals (MDGs), drafted by the United Nations at the Millennium World Summit. The goals are as follows: @ Eradicate extreme poverty and hunger. @ Achieve universal primary education. @ Promote gender equality and empower women. @ Reduce child mortality @ Improve maternal health Combat HIV/AIDS, malaria, and other diseases. Ensure environmental sustainability © Develop a global partnership for development. ‘The World Bank operates by providing loans in two different ways. @ Investment loans are granted for projects that will produce goods or services or public works to help economic and social development. @ Adjustment loans are granted for programs to support reforms to government policies. Like IMF loans, World Bank loans are conditioned on the World Bank's approval of the investment plans and schedule for the project and repayment of the loans. The World Bank funds its loans by raising money on the international bond market, issuing bonds in its name to large institutional international investors, such as banks and pension funds. As a non-profit institution, however, the World Bank does not take any profit on the results of its fundraising. Instead, it uses its profits to subsidize its lending back to the countries whose projects its finances. Only about half of the World Bank's funding comes from grants by members, and the rest comes from the World Bank's own operations. Examples of the programs the World Bank funds include:@ In Bangladesh, the World Bank provided a $59.8 million credit to provide medical services, and nutritional supplements to children and their mothers. @ In Bosnia, the World Bank helps offer ” microcredit” loans, typically less than $1,000, to individuals who wish to start small businesses and otherwise would not have access to bank credit. @ In Peru, the World Bank helped finance the Peru Rural Roads Program, which increased the connection of rural areas to each other and urban centers to increase economic activity. @ In Brazil, the World Bank has provided funds to the government to run the RainForest Pilot Program to reduce deforestation in the state of Mato Grasso. @ In China, the World Bank supported the Chinese government's National lodine Deficiency Elimination Program by providing at! for upgrading physical plants for iodized salt production, Packaging, and distribution, by establishing effective quality control in the salt industry, and funding the training of laboratory staff and the improvement of laboratory facilities. @ In Cote d’ Ivoire the World Bank has financed an ‘emergency urban infrastructural project’ intending to improve access to and quality of facilities and services in Abidjan and other select Cities. This project will support some of the country's poorest communities. Why the World Bank is Controversial Like the IMF, the World Bank has been criticized for its part in promoting the Washington Consensus through its close participation with the IMF in lending only to programs that were heavily conditioned. Some believe the programs are focused on austerity measures that hurt the poor, while allowing big corporations to flourish In addition, several unique factors contribute to dislike and distrust of the World Bank. The World Banicis often accused of ignoring the environmental and social impact of projects it supports. For example, the World Bank helped fund Brazil's Polonoroeste development program, inaugurated in the Amazonian state of Rondonia in 1981. By improving the main highway into the forest, subdividing the land, and granting ownership of the land to settlers, the program caused an intense migration and land rush that resulted in the wide-spread destruction of the rainforest (Mahar and Ducrot, n.d) ‘The World Bank also funded a dam-building project in India that resulted in the forced resettlement of people in the Narmada River Valley between 1978 and 1993. As dams were built on the river, territories that have been populated since prehistoric times were lost to man- made reservoirs, causing resentment and social turmoil, for which the World Bank was blamed (Dams and the World Bank, 2003), Similarly, the World Bank has been attacked for funding the Western Poverty Reduction Project in China that opponents of Chinese control of Tibet say will resettle 37,000 ethnic Chinese in the territory of Tibet. Most recently, the Baku-Ceyhan pipeline mentioned above has garnered opposition because, its critics say, it will increase pollution in the region and worldwide through further use of fossil fuels, contribute to oil dependency in the economies of the countries involved, damage the forests and water supplies in the region, and contribute to human rights abuses. Another major complaint about the World Bank (as well as the IMF) is its role in causing high debt among developing countries. Although the World Bank’s loans are intended to help countries, they also cause those countries to take on debt that they must pay interest on and remain under the conditions of the institution. Over the last 20 years, these debts have piled up so much that, critics say, they amount to “perpetual debt” that the poor people of the worldare saddled with, Many countries, say these critics, spend more on servicing their debt obligations than basic social services. To remedy this problem, a campaign has begun to get international banks-both the public development banks such as the World Bank and private banks—to eliminate the debt. According to the Jubilee movement (named after the Biblical practice of forgiving debts every 50 years), the campaigners “want to put an end to this system of deliberate exploitation which generates external debts for our countries, impoverishes billions of people and degrades our environment. Itis a system which does not allow our communities, societies and nations to develop on their own terms, democratically, without domination and exploitation by foreign interests, and dictates from the OECD [Organization for Economic Cooperation and Development, countries who are the world's major economic powers] governments, the IMF, the World Bank and the WTO" (Statement of the Jubilee Movement, 2001). Naturally, this, campaign is opposed by the IMF and the World Bank, and their private-sector allies. Debt Relief Many of the world’s poorest countries accumulated debt in the 1970s and 1980s, after suffering from worldwide oil shocks, high-interest rates, weak commodity prices, and recessions that marked this period of history. At the time, development experts recommended that governments of poor countries should borrow money from the World Bank and the IMF, among others, to industrialize their economies by investing in industry and infrastructure, and by replacing goods and services from abroad with goods and services produced within the country, Unfortunately, weak commodity prices decreased the value of poor country exports and high oil prices increased the price of imports, both further increasing debt. In addition, many low and middleincome countries were living beyond their means, with high trade and budget deficits, as well as low saving rates. Weak public sector management and corruption contributed to improper or inefficient use of loans, further decreasing these countries’ capability to pay back the borrowed money. Problems, such as droughts, civil war, weak economic policies, all exacerbated the situation. Eventually, poor countries were taking out new loans to pay back old ones. ‘The World Bank and IMF were the main lenders to these poor countries because private lenders believed that these countries were too risky. Realizing the magnitude of the problem, in 1988, the World Bank began to forgive some debt. In the 1990s, some major industrial countries started to cancel bilateral debt payments as well. By 1994, more than $15 billion of Africa's debt was forgiven. Nonetheless, the region still owed $235 billion to foreigners, including donor countries, regional banks, and multilateral institutions. In 1996, the World Bank and IMF created the Debt Relief for Heavily Indebted Poor Countries (HIPC) Initiative, recognizing the need for debt relief from multilateral institutions. Through this initiative, eligible countries are required to introduce specific economic reforms, such as restructuring and privatization of state-run enterprises and creating a sound legal system, in return for debt relief. The Initiative requirements were quite stringent, and by 1998, only two of the 40 eligible countries received actual debt cancellation. In 1999, the World Bank enlarged the program to encompass more countries and take into account other ongoing efforts for Poverty reduction in eligible countries. Critics were still not satisfied. Rallies, concerts and campaigns, sponsored by U2’s Bono and by NGOs, such as Oxfam, raised public awareness and pressured countries to respond. The G-8 meeting in 2005 brought 100 percent cancellations of debt owed to the African Development Fund, the World Bank, and the IMF by 18 countries who were eligible for the HIPC initiative. ConclusionThe IFis are pillars of globalization. Designed to help manage the international financial system, they have taken on major roles as drivers of the closer economic integration of all of the world's countries, from the advanced to the least developed. They have provided funds and advice to assist countries with their economic development and policy-making. At the same time, they are subject to criticism on many levels—for intrusiveness into the economic and political sovereignty of nations dependent on their aid, lack of transparency, and impact of their policies on societies and the environment, The IFils have responded with new programs to address these critiques. For example, the IMF has begun publishing Public Information Notices (PINs) regarding their Article IV consultations with governments. Also, the IMF has emphasized “ownership” by client countries of the Policies it recommends. Finally, the World Bank and the IMFund are cooperating in the Heavily Indebted Poor Countries (HPIC) initiative to provide debt relief. Whether or not these new policies will serve to mollify the IFls critics remains to be seen. Protests continue against the IFls, and its likely that controversy about these institutions and globalization in general will continue for some time. Reference: Levin Institute, https://wmw_globalization101org/categorylissues:in-depthVimfworld- bank, (visited on 12 July 2020). Learn more about the different issues related to globalization. Itwill widen your perspective about how these issues affect developing countries vis-a-vis alongside with highly developed ones. Click on this link Globalization and its effects on developing countries, - YouTube Importance of government policies and other influences in transforming global diets The Second International Conference on Nutrition, organized by the United Nations and the World Health Organization, took place in November 2014. The period since the First International Conference on Nutrition, held in 1992, has seen significant changes in global nutrition. While the number of undernourished has remained between 800 and 900 milion, its share of the world population has fallen. The number of overweight people worldwide, however, has leapt to over 1 billion from levels so low even most developed countries did not consider them worth counting in 1992. The aim of this article is to describe and discuss the dietary and nutritional changes that have occurred since the 1992 International Conference on Nutrition by attempting to untangle the muttitude of factors that have contributed to such changes, with particular reference to the role and importance of public policies that influence food prices and/or food availability, particularly agricultural policies (e.g., reform of the Common Agricultural Policy), trade and investment policies (e.g,, the Uruguay Round Agriculture Agreement), and consumer-oriented policies (e.., domestic and international food-assistance programs).The influencing factors are divided into two broad sets. One set, categorized as “trending factors,” captures the important developments over the last 20 years in technology, globalization, population, urbanization, and other sociodemographic factors such as the increased participation of women in the workforce. Another setincludes the range of government policies that impinge on diets. These are divided into trade policy, domestic policy relating to agriculture and food, and consumer policy. Both sets of factors influence food consumption and dietary quality via two pathways. One pathway operates through “income effects,” wherein socio demographic trends or government policies induce changes in income and its distribution, thereby influencing people to change their consumption patterns. The second pathway operates through food prices, food availability, and consumer food preferences, all of which can be altered by trends and policies. Changes in food consumption (operating in conjunction with other determinants) have implications for both over- and undernutrition. Background: Dietary Change As the Chicago Council on Global Affairs acknowledges, the shift from early death due to communicable diseases and undernutrition to later death from chronic noncommunicable diseases often associated with overnutrition is primatily a story of technological, social, and economic success. In developed countries, deaths from diet-related noncommunicable diseases have fallen steadily, and life expectancy is litle, if at all, diminished by being obese. However, itis an incomplete success for many countries where rural and child hunger remains common and where advances in healthcare systems have yet to diminish the adverse health effects of overnutrition. Such countries are affected by what has become known as the double burden of malnutrition. Indeed, it has become apparent that diet-related noncommunicable diseases are emerging increasingly among lower- and middle-income groups in less affiuent Countries, and death rates from noncommunicable diseases are much higher, for example, in Burkina Faso and Bangladesh, than in the United Kingdom, The increase in available food energy has been accompanied by changes in the composition of the diet. The process appears to follow a pattern involving two main stages: @ the “expansion” effect, which results mainly from an increase in energy intake, largely from cheaper foodstuffs of vegetable origin @ the “substitution” effect, which follows a shift from primarily carbohydrate-rich staples (cereals, roots, tubers) to vegetable oils, animal products (meat and dairy foods), and sugar. Culture, beliefs, and religious traditions can influence the extent to which animal products are Substituted for vegetable products and the specific types of meat and animal products consumed, Key Trends Driving Food Consumption Food price trends and their impact International food prices were largely stable (with a gentle decline) from 1991 until 2003, having declined for a considerable time before this period. The food price inflation that began in 2003 turned into a fultblown inflationary crisis in 2007-2008, which, after a brief respite, has since continued Sugar prices have been highly volatile since 2005, and cereal, oil, and dairy prices have escalated rapidly since 2007. Meat price changes have been much more modest in comparison. Global prices for processed food and beverages are not available, but data from ‘Thomson Reuters’ Datastream for the United States and the European Union (EU) suggest that prices of soft drinks, snacks, and confectionary have fallen most sharply since 1992, particular)Tn relation to prices of fresh fruit and vegetables. The imited coverage of these data, however, prevents global generalizations. The decline in the price of meat relative to the price of cereals and other foods since the early 2000s, combined with a higher price elasticity for meat, may partially explain the shift toward meat in the diet in several developing countries. Similarly, the relative decline in the prices of processed foods has contributed to the increased consumption of these foods. Lakdawalla and Philipson emphasize the importance of reductions in the overall price of food relative to other goods in stimulating overnutrition. Other authors attribute overnutrition to the relative affordability of energy-dense foods with adcled sugars and fats compared with healthier diets composed of lean meats, whole grains, and fruit and vegetables. It may be too simplistic to state that healthier foods have become more expensive relative to unhealthy foods, particularly since the increasing relative attractiveness of ready-to-eat foods as a source of energy becomes apparent when the opportunity cost of cooking time is factored into the comparison. In the last two decades, an increasing proportion of fruitand vegetables has been affected by value addition through processing (washing, peeling, cutting, microwavable packaging, etc) ‘When the price trends for such value-added produce are compared with those for processed snacks, thereby maintaining the level of convenience constant across the two sets, the. relatively expensive nature of healthier foods is confirmed. Although arguments about the role of food prices in overnutrition patterns have been framed largely in the context of the developed world, particularly the United States, they are also relevant for low- and middle- income countries undergoing nutrition transition, particularly the urban areas. In addition to the many processed foods that are increasingly available in developing countties, street foods (often high in fats, salt, and sugar) may provide inexpensive energy with a low'time cost of preparation, In relation to undernutrition, the general fallin the price per calorie should be considered beneficial. By the same token, recent food price increases are cause for concern. Poor consumers cope with rising food prices by switching from preferred to lower-quality staples or by cutting back on relatively expensive nonstaple sources of calories such as meat, fruit, and vegetables. Reliance on cheap and eneray-dense convenience foods or street foods may increase in urban areas. Dietary diversity and micronutrient intakes may be casualties in this process. In Liberia, the World Food Programme found substitution of cassava for rice following the crisis, as well as an overall reduction in protein sources and vegetable consumption. In Palestine, households were found to have reduced milk and meat consumption due to the crisis. D'Souza and Jolliffe found that the food price crisis in Afghanistan resulted in substantial reduction in real per capita food consumption, calorie intake, and dietary diversity. Trends in income and impact on diet Income elasticities approximately mirror own-price elasticities (i., similar magnitude, opposite sign). Price elasticity of demand is a measure of the change in the quantity demanded or purchased of a product in relation to its price change. Price elasticity is much higher in low-income countries than in middle- or high-income countries. Furthermore, income elasticities for animal products, processed foods, and eating out are much higher than those for cereals and other staples at all income levels. Thus, income growth generates a shift toward animal products and a larger demand for processed products and food away from home, especially in the transition between low and middle income levels, while at higher income levels, demand for luxury goods (including health) becomes more prominent, and consumption of meat and fats is reduced.These pattems are consistent with cross-country developments in the distribution of undernutrition and obesity and help to explain why obesity is concentrated in the wealthier part of the population in low- and middle-income countries yet is high in lowsincome groups of affluent economies. In recognizing income growth as perhaps the most important factor in influencing malnutrition, itis important to also acknowledge the significant causal link between nutrition (health) and economic growth in poor countries; thus, income growth is not a genuinely exogenous contributor to better diets. Food systems: development and impact on diet Food systems in middle- and low-income countries have changed dramatically over the past 20 years. Multinational retailers have followed multinational food manufacturers, soft drink Companies, and fast - food chains into food and drink sectors in virtually all countries and have introduced the types of supply-chain controls previously seen only in the developed world. Domestic firms, driven by competition and learning from new market entrants, have followed suit. From an analytical perspective, itis diffcult to determine whether observed changes in supply chains caused dietary change or were a response to growing consumer demand for soft drinks, fast food, and packaged groceries linked to general economic development, but there is plenty of circumstantial evidence that multinational firms have created demand as well as satisfied it. Such firms also provide employment and generate income, which multiplies through the economy and brings its own nutritional change. The rapid expansion of supermarkets in developing countries, examined by Reardon and Berdegue, Reardon and Swinnen, Weatherspoon and Reardon, and Reardon et . al. in a series of articles, happened in response to a number of forces, many of them interconnected: @ rising incomes (also associated with higher ownership of consumer durables such as refrigerators and cars, which facilitate supermarket shopping) @ urbanization @ greater female participation in the labor force (increased opportunity cost of time) @ desire to emulate Western culture, spurred on by the globalization of media and advertising, In Latin America, supermarkets deliver 50-60% of retail food sales. This trend is mirrored in Southeast Asia, Eastern Europe, and Central Europe, followed closely by Africa, which is led by South Afica, where a “spectacular” rise of supermarkets has occurred since 1994. The continuing spread of multinational food and soft drink manufacturers and fast food franchises has also been well charted. Global inflows of foreign direct investment (FDI) in the food sector have increased from less than $10 billion in 1992 to over $40 billion in 2007. Wilkinson shows that US investments in Mexico have concentrated on convenience and highly processed foods, especially snacks, beverages, instant coffee, mayonnaise, and breakfast cereals. However, as pointed out by Regmi and Gehlhar, such products are amenable to foreign investment because they are not location specific; technology and capital are mobile in the world food economy, whereas primary processed products, such as fresh or frozen meat, frozen and canned fruit and vegetables, and dry milk powder, are more closely associated with their production location and can be readily exported. Thus, it would be a surprise if FDI was not concentrated in highly processed products. Fast food chains and soft drink companies have also been blamed for unhealthy eating habits in developing countries. Pingali and Khwaja charted the growth of McDonald's restaurants from 951 stores in the Asia Pacific region in 1987 to 7,135in 2002; since then, the numbers have continued to rise, though more slowly. Pepsico, another global food and beverage corporation (main brands Pepsi and Frito-Lay) trebied its sales outside North America and Mexico between 2000 and 2007.OF potentially far greater importance for diets are the domestic food manufacturers, including fast food and soft drink firms, that have sprung up to imitate global brands at much lower prices, thereby generating much higher sales. International trade increases the availability of foods and provides a further competitive impetus for the modernization of domestic competitors. Between 1992 and 2008, the total trade in food and agricultural products more than doubled, from $40 billion per annum to $80 billion (UN Comtrade database). The share of processed food in food and agricultural exports grew from 54% to 69% for high-income countries and from 49% to 67% for Asia between the 1970s and 2000s. The main impetus for this was the declining cost of moving products around the world, which resulted from technological developments in transport, handling, and information technology. Preferences for Western foods are said to have been encouraged by imports displacing traditional staples, beginning in the era of colonization. More recently, sophisticated marketing activities of global food manufacturers, soft drink companies, and fast food chains have been highlighted as changing preferences toward Western foods. Hawkes noted that “marketing aims to develop in consumers the habit of drinking or eating the product regularly.” To this end, children and young adults have been particular targets of marketing that aims to change consumption habits over the long term. Methods include: @ targeted television and web advertising sports and event sponsorship @ products targeted at local tastes © special offers/price promotion for market growth Limited evidence suggests that supermarkets (and convenience stores) have reduced the prices of packaged foods relative to fresh produce, particularly in the early stages of Supermarket penetration in a country. A study in Brazil found supermarket prices for packaged foods to be as much as 40% lower than prices in traditional outlets. By contrast, fresh fruit and vegetables were more expensive in supermarkets. Supermarkets and large manufacturers are said to work “symbiotically": the latter are able to supply the large volumes (at high standards) demanded by the supermarkets, which in turn are able to deliver a market for the manufacturers’ products. The economies of scale on both sides enable the delivery of reduced prices for processed products. ‘Supermarkets and multinational manufacturers further influence consumption by offering a wide variety of previously unavailable products, including refrigerated products, especially dairy items. Provided there is a market for such products (which there must be, or they wouldn't continue to be available for sale), the supermarkets, again in a symbiotic relationship with large manufacturers, can influence consumption of different product categories. In developed countries, snacking has been associated with increases in energy intake. There is limited empirical evidence from developing countries, but the tendency toward consumption of snack foods, largely associated with increased availability, is reported for urban India, where rapid increases in Consumption of biscuits, salted snacks, and prepared sweets also have been observed. Vepa suggests that processed foods, mainly in the form of snack products, may represent as much as 1,000 kcal in the daily diet of high-income consumers, In summary, processed foods now account for 80% of global food sales, and, although spending is still low in developing countries, itis increasing rapidly. In addition, spending on food service accounts for 22% of food budgets in Brazil and Indonesia, and 15% of urban food, spending in China The impact of all these changes on nutrient intakes has not yet been confirmed, even in developed countries, but processed foods, fast foods, and soft drinks have all been linked toTutrition transition and the obesity epidemic, and are Ikely to be equally involved in widening the girths of the expanding middle classes in poorer countries. Whether they have increased the availability of affordable, safe, and palatable eneray to the chronically hungry has not been researched, Impact of other trends A number of other factors have been linked to aspects of dietary change since 1992. Agricultural growth, for example, has been shown to have a strong impact on calorie availability and malnutrition reduction, especially in highly malnourished populations. The strong links found between public agricultural investment and growth in the agricultural sector and between agricultural growth and calorie supply and nutrition suggest a lost opportunity to improve nutrition over the last 2 decades by investing in agriculture. Perhaps most important, though difficult to separate from other changes associated with economic development and changes in food systems, are the various influences associated with urbanization, which include more sedentary lifestyles and growth in the participation of women in the workforce. Between 1990 and 2010, the global urban population topped the rural population, rising from 42% to 51%. The urban population has doubled in lovrincome food deficit regions, such as Africa and China, and has increased by 20% in Europe and 30% in North America (FAOSTAT, 2012). n China, the urbanization that took place during the 1990s has been associated with an increased intake of edible oils, animal foods, and caloric sweeteners, a reduced intake of fresh foods (especially vegetables), and an increased intake of processed foods. Among the causes of dietary shift during the urbanization process is the existence of price differentials between urban and rural areas. Between 1992 and 2008, the female labor force increased by 20% in countries belonging to the Organisation for Economic Co-operation and Development (OECD), an increase of about 48 million women, Low-income and lower-middle-income countries have experienced 58% and 46% growth, respectively, which represents about 156 million women entering the workforce. These dynamics of females in the workforce have potentially conflicting effects on nutritional status. Some authors have suggested a causal relationship between maternal employment and rising chiklhood obesity rates, mainly based on US data, but recent studies have found the effect of maternal working hours on children’s diets to be very limited or even positive. The evidence from developing countries, though scarce, suggests that increased female participation in the labor force has positive effects on children’s nutritional status. Importance of Agricultural, Trade, and Food Policies in Influencing Diets In this section, the importance of various policy developments over the past 20 years in determining dietary changes is examined. Policies can influence diets through their effects on prices, food availability, food preferences, and incomes. Policy measures may have domestic and/or global implications; for example, a measure that increases domestic farm production of some commodity may lower domestic consumer prices and, at the same time, lower the demand for imports or expand exports. Ifthe country is large enough, this would lower the global price of the commodity, with implications for producers and consumers in other countries, Trade policy reform The major achievement in the past 20 years has been the signing of the Uruguay Round Agreement on Agriculture (URAA) in 1994. This represented the first time food and agriculture were specifically addressed in multilateral trade agreements. Bound tariffs were introduced, and a tariff reduction formula was adopted, though it was applied by most countries in ways that minimized the reduction in applied tariffs. The URAA also included commitments to reduce‘export subsidies and, perhaps most importantly, introduced rules governing domestic agricultural support. Subsequent progress in addressing concerns about nontariff barriers was made with the Sanitary and Phytosanitary Measures Agreement and the Technical Barriers to Trade Agreement of the newly created World Trade Organization (WTO) in 1995. The Doha Round has thus far failed to further capitalize on progress, and frustration with the stalled multilateral talks has contributed, in part, to the creation of over 200 regional agreements notified with the WTO, together with various bilateral treaties As part of the WTO, the Trade-Related Investment Measures Agreement has facilitated substantial progress in the liberalization of investment, which has freed up FDI and has restricted discrimination against foreign-owned firms. In addition to increasing the volume of international trade, liberalization has changed the relative prices of food groups and increased the range of produicts available to consumers. Changes in relative prices and in availability induce changes in food consumption and diets, but they can also have longer-term nutritional implications by helping to shape consumer preferences. However, arguably the most important impact of multiléteral trade agreements has been their effect on incomes, both farm and nonfarm; the ability to specialize has facilitated global efficiency in sourcing, thereby enabling production and processing of agricultural and food products in regions that have a comparative advantage—_most frequently, developing countries. This has increased food availability, kept prices down, and stimulated job creation and rapid global economic growth for most of the past 20 years, all of which have been major drivers of dietary change. Trade economists have used partial and general equilibrium models to simulate the impact of trade liberalization. These models study the distributional consequences of reform on different types of farmers as well as on the prevalence of poverty within and between countries at different stages of development. Of course, both income and price affect food consumption, as discussed in the previous section. Prices tend to be modeled as a by-product of analyzing farmers’ incomes and production, and they are often unreported, as is their impact on consumption. URAA.induced reform has tended to raise worid food prices by reducing incentives for overproduction by the major developed countries, notably the United States and members of the EU, though this has come about mainly through domestic policy reforms (e.g., lowering of intervention payments and a move to direct payments to farmers) rather than removal of tariffs, and the magnitude is likely quite small Increased prices help exporting countries but (at least in the short run) harm importing countries. Within countries, the urban poor lose if food prices increase (at least in the short run). However, there are opposing forces for farmers in developing countries, given that the vast majority are both sellers and buyers of food, depending on the season. In the longer run, price changes in developing countries feed through labor markets to influence incomes of even the landless poor. For example, the World Bank reports a study of Bangladesh that suggests the average landless poor household loses from an increase in rice prices in the short run but gains in the long run as wages rise over time. WTO trade reforms are complemented by a proliferation of regional and bilateral agreements; indeed, 248 regional trade agreements formally reported to the WTO are currently in force. In generai, these agreements involve not only tariff removal but also harmonization or mutual recognition of standards to remove non tariff barriers. More than one-third of global trade is between countries that have some form of reciprocal regional trade agreement. The implications of regional agreements are not, in principle, different from those of multinational agreements,‘Although models indicate relatively minor price changes for agricultural commodities, trade liberalization may have induced other, less quantifiable changes in food supply systems. Thow and Snowdon relate the cautionary tale of how exports of unhealthy byproducts of sheep (mutton flaps from New Zealand) and poultry (turkey tails from the United States) found their way into the hearts (via the stomachs) of Fijians and Samoans before imports were eventually banned, In India, market liberalization in the mid-1990s stimulated a rapid increase in imports of low- priced vegetable oils, which corresponded with a simultaneous increase in consumption. It also stimulated a switch in the type of oils consumed, away from traditional peanut, rapeseed, and cottonseed oils and toward imported palm and soybean oils. These developments may also, at least in part, be attributed to domestic policy decisions about what products to prioritize. Indeed, Drewnowski and Popkin argue that the nutrition transition typically begins with major increases in imports of oilseeds and vegetable oils. Non Tariff bar S The Sanitary and Phytosanitary Agreement and the Technical Barriers to Trade Agreement were intended to stop the creeping use of non tariff barriers as protectionist replacements for reduced tariff barriers. In requiring the adoption, wherever possible, of international standards and specifically referencing the Codex Alimentarius Commission, these WTO agreements raised the importance of Codex standards and politicized them. In the 2002 Codex Evaluation, member states were surveyed, and two-thirds of high-income country respondents and 90% of low-income country respondents found Codex standards very important to their food exports, while more than 80% of country respondents in all income classes found them very important for ensuring the safety of food imports. In addition to public standards such as Codex, private standards have been developed as a result of the globalization of supply chains. Gereffi and Christian cite Kentucky Fried Chicken, McCain FoodsMcDonald's, and Wal-Mart as examples of global food corporations who set their own standards for their supply chains, By contributing to a reduction in the use of nontariff barriers as trade barriers and promoting confidence in import standards, public as well as private standards have effectively increased the availability and diversity of food products traded and consumed. The principle by which removal of non tariff barriers makes a wider range of foods available at lower prices and, hence, enhances diversity of diets was described by the European Commission in justifying the use of the mutual recognition principle in the creation of the Single Market: “European consumers can thank the principle of mutual recognition for the increase in the range of products on sale at everdecreasing prices. Selling their products on a market which covers half a continent enables businessmen to make economies of scale and hence reduce their costs, to the greater benefit of the man in the street. Freedom of movement, as achieved through mutual recognition, attacks national rules which tie consumers to a given product, e.g., by laying down a particular composition for this or that foodstuff. This type of rule, apart from arbitrarily depriving consumers of the opportunity to discover the specialties and traditional products of other Member States, whose composition differs from that laid down by the law of the importing country, prevents the interpenetration of markets —to the detriment of both business and consumers.” Thus, public and private standards could be argued to promote the globalization of diets, although it is unknown whether this has been assessed quantitatively. Liberalization of international investment Between 1991 and 1999, 1,035 changes (across all sectors) were made to FDI regulations worldwide. Many of these changes happened within the context of trade agreements and investment treaties: the number of bilateral investment treaties rose from 181 in 1980 to 1,856 in 1999.Investment liberalization has inevitably led to the spread of multinational enterprises at all stages of the food chain, with implications for diets as discussed above. The specific role of Policy as opposed to other forces promoting globalization has not been adequately quantified, though Traill found openness to inward FDI to be an important stimulus to the spread of supermarkets in middle- and low-income countries. More commonly, assessment is based on case studies. For example, as part of the North American Free Trade Agreement, Mexico abolished many restrictions on foreign investment in the Mexican Foreign Investment Act of 1993, and between that year and 1999, American food processing investment in Mexico more than doubled — to $5.3 billion — and WalMart de Mexico is now the largest retailer. Effect of liberalization of agricultural policy on domestic consumption In OECD countries, the period since 1992 has been marked not only by a reduction in overall levels of support but also by significant movement from a reliance of producers on market price support to the use of other forms of support that have progressively been delinked from production levels, Market price support, by setting a floor for prices received by producers for certain commodities and thereby driving a wedge between domestic and international prices, has long been implicated in the overproduction of protected commocities. A movement toward alternative forms of support that eliminate the direct link to production levels of specific crops, such as area-based payments, has gone a longway to restore the link between production and international price signals. Since support for agricultural policies in OECD countries has traditionally involved raising prices paid to producers by keeping consumer prices high, reform has had the effect of lowering consumer prices, hence tending to raise consumption. Farm prices, however, are often only a small fraction of final prices paid by consumers, In non-OECD countries, agricultural support has traditionally been much lower. Indeed, the implicit taxation of producers to keep consumer staple prices low is a prominent feature of agricultural policy in India, and average implicit taxation of producers in 1! agriculturebased countries in sub-Saharan Africa declined from 28% in 1980-1984 to 10% in 2000-2004, The fact that developing countries have had much lower support levels than developed countries implies that policies have had much less impact on diets. On the other hand, levels of both processing and value addition are also lower in developing Countries, and thus a farmgate commodity price effect is likely to translate more strongly into a consumer food price effect. On the whole, it seems that domestic agricultural policy is only of a second order of importance in terms of influencing diets. Effects of food policies targeted at consumers, Various policies affect diets by targeting consumers directly. Consumption choices may be affected through three routes: @ by providing direct access to free food @ by Supporting access to food through income subsidies @ by altering the absolute and relative price levels of foods and of foods relative to nonfoods. The range of policy actions that influence diets through income and price measures and fall under the second and third routes mentioned is very broad, and the focus here is limited to those measures whose ultimate goal is to change diets and nutrition outcomes. Food aid Food aid has the potential to alter diets, though “abuse” has been limited by the URAA, and by the 1999 Food Aid Convention. The former ruled out the direct or indirect tying of food aid to‘commercial exports and also stipulated that food ald should be based on free provision to the maximum extent possible or on highly concessional terms. The latter coordinates multilateral food aid interventions among donor countries, with a stated aim of decoupling food aid from export promotion measures, and places a growing focus on nutrition and food fortification. Trends over the last 20 years show a substantial reduction in global food aid shipments, down from 12.3 million metic tons in 1991 to 5.4 million metric tons in 2010, and while there are still reports of distortions, e.gshipments of maize to pastoral areas in the Hom of Africa in the 1990s and 2000s, causing protein-heavy pastoral diets traditionally based on animal products to shift toward carbohydraterich diets based on grain, there is not much evidence to indicate substantial widespread effects. Additionally, although emergency food aid programs have been found to improve nutritional outcomes by buffeting short-run shocks, as described by Quisumbing, there is evidence that food aid is too unreliable and too poorly targeted for even the most vulnerable households to be able to depend on it for any length of time. Arecent review explores a range of failures and successes and cites fooc-for-work interventions as the more likely way to generate positive nutritional outcomes for people at risk of hunger, especially children. Domestic foodtassistance programs, price subsidies, and taxes In developed countries, domestic food- and nutrition-assistance programs have grown in relevance and have improved their targeting of atisk groups in the population. The United States is at the forefront: in 2010, there were 15 programs with a total federal expenditure of $68.2 billion, while about 14.5% of US households were food insecure at least some time during the same year. The main “food stamp” program (the Supplemental Nutrition Assistance Program) covers about 40 million people every month. Eligible recipients are provided with electronic debit cards that can be used in approved retail stores to purchase food. Eligibility is based on household financial resources, and able-bodied adults are also required to accept employment or training programs referred by the Supplemental Nutrition Assistance Program office. Some have argued that participation in food stamp programs increases the likelihood of becoming obese, especially for women, but this evidence becomes weak once counterfactual trends are taken into account; moreover, rates of weight growth were faster among nonparticipants than among participants, In contrast to food stamps, the Women, Infants and Children program in the United States and the Healthy Start program 'in the United Kingdom are targeted at infants and pregnant and lactating women in low-income groups. In these schemes, the use of food vouchers is restricted to purchases of “healthy” foods such as fruit and vegetables and milk. This type of program has been relatively successful in achieving the prescribed nutrient goals without increasing calorie availability and, according to the US Department of Agriculture, is one of the most successful and cost-effective nutrition intervention programs: participant children have higher mean intakes of iron and vitamins without increased intakes of food energy, fat, or cholesterol. Improved growth rates and reduced rates of fetal death and infant mortality have also been shown. In many developing countries (including India, Ethiopia, and Bangladesh), there are domestic fooc-for-work programs based on the principle that able-bodied vulnerable recipients are paid with food in exchange for public unskilled work. When they are welktimed and welltargeted, these programs are generally found to be effective. Other types of domestic food-assistance programs use price subsidies as an instrument to address food insecurity and maintain price stability. For example, the Indian Public Distribution System, a large-scale program offering subsidies for wheat, rice, edible oils, and sugar to poor households, was found to have a significant (albeit reiatively small) effect on calorie intakes.On the other hand, there is some evidence that price subsidies contribute to rising obesity rates in some developing countries; even when Subsidies are calibrated to promote healthier eating in the target population, their effectiveness may be reduced by the income effect, manifest by recipients who spend their effective increase in real income on non - subsidized (energy-dense and cheap) foods. Conclusion Over most of the past 20 years, stable or falling food prices combined with rising incomes have stimulated increases in calorie intake and promoted the dietary transition away from starchy staples and toward consumption of livestock products and processed foods, although, in the developed world and among the middle classes in developing countries, these same factors have hastened the obesity epidemic. The main forces behind these changes have been technological changes in agriculture, food processing, food distribution, and international trade, along with economic growth (aided by international trade and liberalization of investment) In the many regions in which dietary change has been observed, the balance of evidence indicates that income growth and modernization of food systems have been the dominant forces of change, and these changes are closely linked (through cause and effect) to urbanization and the increased participation of women in the workforce. The liberalization of international investment, when linked to trade reform, has been an important precondition for globalization, whic, in tur, has been an important force driving changes in food systems. The impact of these changes on preferences and lifestyles is critical, as is their impact on the availability of a range of foods that satisfy new demands. Income growth, in tandem with globalization patterns, has exerted an important influence on, dietary change ‘since 1992. This includes positive effects in the form of hunger reduction and improvement in dietary quality, as well as negative effects associated with overnutrition. Although direct evidence remains scarce, the available information suggests that countries experiencing increases in income inequality are most vulnerable to overnutrition problems ‘The price effects of trade and agricultural policy reforms have not had a major impact on diets. Consumer policy vehicles like food aid and fooc-assistance programs do not seem to have had major effects on dietary quality, but they have been effective in their basic goal of assuring minimum calorie requirements are met, particularly in times of widespread emergencies Reference: Traill, W Bruce. (2014 September). Importance of government policies and other influences in transforming global diets. Retrieved from https://academic.oup.com/nutritionreviews/article/72/9/5911859411 Class Activity 1.For your class participation in the next two weeks, you will be joining a debate. The class will be divided into groups consisting of four (4) members. You will be choosing a topic related to the different trends and issues of globalization that you want to debate on. The debate must be recorded and uploaded in the google classroom for others to view. Anyone from the classcan share their insights to the debates by placing their thoughts on the comment section of the videos,Midterm Output You are now on the second half of your preparation for your final output. You will be making a draft on how your TED Tak will be presented. Below is a template that you need to fill up. You will be writing the entire sequence including the spiels or the lines that will be used in your presentation. Remember, all the information that you will place will be subject to checking to avoid plagiarism. It will also serve as a quide of the professorto check that of your template and your presentation bear the same content. Milestone 2: TED Talk Presentation Plan Template Minute Topic Content Minute 2° Minute 3 Minute 4° Minute 5 Minute 6" Minute 7 Minute 8” Minute Create a copy of this template that you will use in submitting your output. Submit your finished milestone on the date assigned to you by your professor. Go to Milestone 2 Folder in google classroom to submit your work. Process of submission is similar to your Milestone 1