GLOBAL ISSUES

Explain globalization and global issues.
Globalization: The term globalization means the emergence of global society in which economic,
political, and cultural events in one part of the world quickly come to have significance for people in other
parts of the world.
Note: Globalisation is as a result of advances in communication, transportation and information
technological, and cultural linkages that connect individual communities, businesses, and governments
around the world.
Globalisation also involves the growth of multinational corporations (businesses that have operations or
investments in many countries) and transnational corporations (businesses that function in a global market).
 Global Issues: Refer to all those developments and problems which affect the welfare of the
people in all the countries.
 Thus global issues include; human rights, and good governance, war and peace; world refugee
crisis, world debt crisis, world energy crisis, international trade, global warming, HIV and AIDS,
tourism, global credit crunch among others.
Discuss Bilateral and Multilateral Aid.
 Foreign Aid: refers to the International transfer of funds, goods and services in form of loans and
grants from one country to another. There are two (2) types of foreign aid. These are Bilateral and
Multilateral Aid.
i. Bilateral Aid: Is the assistance from one country to another. For instance, Zambia
receives aid from Swedish International Development Agency (SIDA) or from United
States Agency for International Development (USAID).
ii. Multilateral Aid: Is assistance from International Agencies formed by several countries.
These lending agencies do not belong to one country. For instance, the African
Development Bank (ADB), the Arab Bank for Economic Development (ABEDA), the
International Monitory Fund (IMF), the World Bank and the European Union (EU).
 Bilateral and Multilateral Aid usually come in form of grants and loans. The grants and loans
may come in form of financial assistance, capital goods like machinery or technical expertise
(skilled labour)
i. Grants: Are gifts from International Agencies to a government or from one government to
another. They are not to be paid back.
ii. Loans: Refer to transfers of funds, goods and services from one financial entity to another
which must be repaid usually with interest. A hard loan refer to a loan given at a high rate
of interest, while a soft loan is a loan given at a low rate of interest or is repaid without any
interest.

iii. Tied Aid: Refers to loans and grants which have „strings‟ or stipulated condition of use.
For example the recipient country may be required to spend the loan on a specified project
or to allow the donor country to build military bases in the recipient country.
Foreign Aid and Development: There is an International debate on whether foreign aid hinders or
promotes economic development in Third World countries. The following are some of the arguments for
bilateral and multilateral aid.
Arguments for:
 It provides foreign capital needed by the recipient country to supplement its locally available
investment resources.
 It provides more foreign exchange if the loan or the grant is invested in a project which produces
capital goods.
 It provides new technology and skills which the local people can later acquire by mean of training.
 Food aid alleviates famine in case of natural disasters such as floods, droughts and earthquakes.
 Foreign aid also promotes International Corporation between the donor and the recipient countries.
Arguments against:
 Loans and Grants: „Tied to Donor‟ have to be spent on buying goods and services from the donor
country. Many offers of these goods and services are more expensive and lower quality than those
from other sources.
 Loans and Grants: „Tied to Projects‟ can only be spent by the recipient country on projects
agreed upon with the donor country. Therefore, tied aid undermines the economic and political
independence on the recipient nation.
 Profits from Foreign Investment: are usually externalized, and rarely re-invested in the recipient
nation.
 Loans must be repaid with interest and the larger the loan the larger the debt service burden. This
has led to the worsening of debt burden in the Third World Countries. On the other hand, the
repayment of high interest on loans enriches the donors. Therefore, foreign aid tends to make the
rich countries richer and the poor countries poorer.
 Foreign Aid promotes dependence syndrome in the recipient country thereby impact negatively on
the general work culture of the people.
 Recipient countries may be force to support the donor country in foreign policy for them to receive
aid.
 Technical assistance given by donors is not always appropriate or beneficial to the needs of the
recipient country, and it may require the importation of expensive machinery from the donor nation.
Discuss International Trade.
International or External or Foreign Trade refers to the buying and selling of goods and services between
two and more countries.
Importance of or reasons for International Trade: Nations like individuals, engage in trade for various
reasons. Among them are;

i. Uneven Distribution of Resources: No nation has all the natural resources to use in
industrial economy. For example Iraq and Kuwait have plenty oil while Zambia does not
have.
ii. Climate Differences: Varying climate conditions does not allow the growing of certain
crops. For example Mediterranean type of climate favours the growth of apples which may
not do well in a tropical type of climate.
iii. Specialization: Each country is specialized in a given line of industries for a country
cannot be specialized in all. Sometimes, two countries may agree to specialize and trade
with each other if each country has a clear cut advantage in producing a particular
commodity. This is referred to as comparative cost advantage. This happens when the
average cost of producing a particular commodity in one country is cheaper that in another.
iv. Technological differences: Some countries do not possess the technological capacity to
produce certain products such as aircraft, motor vehicles, mining and agricultural
machinery and computers. Thus, a country has to buy these from other countries.
v. Supplement Domestic Product: Due to high demand on local products a country may
import to add to domestic production. For example Zambia produces cooking oil locally
but it imports from COMESA countries in order to supplement to local products, mainly
the reason or to avoid shortages of goods and services in the country.
vi. Earn Foreign Exchange (Forex): Foreign Trade enables a country to earn foreign
exchange (the more foreign exchange the country has, the more stable the economy will be)
vii. Promote International Cooperation: Trade promotes International peace, cooperation
and political friendship.
Important terms in International or foreign Trade
a) Terms of Trade: Means the rate at which nation‟s exports are exchanged for imports from
another nation. For example, the rate at which British tractors are exchanged for Zambian copper,
that is how many tonnes of copper are required to pay for the tractor.
b) Favourable Terms of Trade: means the prices for your country‟s exports are relatively higher
than the prices for its imports.
c) Unfavourable Terms of Trade: Means the prices of your country‟s exports are relatively lower
than the prices of imports.
d) Balance of Trade: Is the difference between the value of visible imports and exports over a
particular period. For example if the value of Zambia‟s visible imports is equal to her visible
export we say that Trade is balanced.
e) Favourable balance of payments: Takes place when a country receives more foreign exchange
from exports, but spends less forex on imports. This is called balance of payment surplus.
f) Unfavourable balance of payments: occurs when a country receives less foreign exchange from
its exports but pays more foreign exchange on its imports. This is also called a balance of payment
deficit.
State the role of the World Trade Organization (WTO)
WTO is an International body dealing with the global rules of trade between nations. WTO was established
in 1995 to replace the General Agreement on Tariffs and Trade (GATT) of 1947. The WTO is not a
specialized agency of United Nations, but it has Cooperation, agreement and works closely with the UN.

Functions or roles of the WTO
i. Helps trade flow as free as possible by reducing and eventually eliminating tariffs (trade
taxes) and other barriers such s quotas imposed by various nations.
ii. Sets its trade negotiations among its members.
iii. Interprets trade agreements and impartially settles trade disputes between nations.
Principles of WTO
This trade organization is based or centred on the following principles:-

1. Non-discrimination: All member states are treated as equal trade partners.
2. Free Trade: There should be free trade and all trade barriers should be reduced through
   negotiations.
3. Predictability: Foreign Companies, Investors and Governments should be confident that tariffs
   and other trade barriers will not be raised arbitrarily (wrongly or with wrong motives)
4. Competition: There should be free competition in International Trade. Unfair practices such as
   export subsidies and dumping products at below costs to gain market share are discouraged.
5. Special privileges for the less developed nations. The trading system should be more beneficial
   for less developed countries (LDC)
   Note: WTO is made up of 146 member countries and its headquarters are Geneva, Switzerland.
   Council of Minister (Commerce) is among the organs of WTO and Zambia is a member.
   Explain debt crisis and debt relief.
    Debt Crisis is a situation where a country borrows beyond its capacity to pay back
    The following are causes of debt crisis in Zambia.
   i. Unfair International Trade: Exports are cheaply obtained while imports are very
   expensive, in developing countries, thus causing balance of payment deficit (unfavourable
   balance of payment).
   ii. Debt Servicing: Is the process of paying interest on outstanding loans which has worsened
   debt. This means that the larger percentage of GDP is spent on servicing loans at the
   expense of development.
   iii. Spending loans on Consumption: Loans are usually diverted to buy consumption
   products instead of intended projects, hence; the country has to borrow more to repay
   outstanding loans.
   iv. Falling Copper prices from 1970s and Liberation Wars: As copper prices have
   continued to fall even to0date, oil, machinery and other import product prices keep on
   increasing. With increased wars in neighbouring countries has made Zambia to have more
   refugees to look after.
    Debt relief and the highly indebted poor countries (HIPC) Initiative. This was a World Bank
   and IMF programme aimed at reducing the debt burden of the world‟s poorest countries that were
   unable to pay their debt. This programme had the following initiatives:-
   i. Reduce the huge debt burden of the highly indebted poor countries to sustainable levels
   (levels that these countries may manage)
   ii. Provide funds for poverty reduction in form of debt relief (debt cancellation)

iii. Highly indebted poor countries (HIPC) to meet the conditions of the Structural Adjustment
Programmes (SAP) set by the World Bank and IMF
 Some of the Structural Adjustment Programme Conditions were:-
i. Privatize state owned enterprise.
ii. Reduce its tariff barriers (custom duties) to encourage imports.
iii. Impose restrictive fiscal and monitory policies to control spending by wage freeze and
retrench excess employees.
iv. Remove controls on prices and withdraw subsidies on essential commodities.
Note: Zambia qualified HIPC initiative in December, 2005 and 3.8 billion US dollars was cancelled.
 The benefits of the HIPC Initiative.
i. Debt Relief Funds: The money was spent on Poverty Reduction Programmes such as
rehabilitating infrastructure like colleges, schools, health centres, bridges and roads.
ii. Reduced external debt payment levels.
iii. Reduction in the total debt stock: This is the total amount of money a debtor owes a
creditor, thus, Zambia‟s reduced.
Discuss the effects of debt crisis in Zambia.
 Spends the larger portion of its GDP on servicing the debts at the expense of development.
 Have limited money to fund social sectors such as education and health as it spends on servicing
loans.
 Its sovereignty if compromised as the donors dictate on how the economy should be managed.
 The situation perpetuates external dependence and the country remains desperate because of the
debt burden.
Explain Millennium Development Goals.
 The Millennium Development Goals (MDGS) are eight (8) global development targets agreed upon
by world leaders at the United Nations Millennium Summit in September, 2000. The summit‟s
Millennium Declaration bind all the 189 UN Member States to achieve these eight goals by the year
2015.
 The following are the eight (8) MDGS

1. Eradicate extreme poverty and hunger: By 2015 reduce by half the proportion of people
   living on less than one US dollar a day and those who suffer from hunger.
2. Achieve universal Primary Education: By 2015 ensure that all boys and girls complete
   Primary School Education.
3. Promote Gender Equality and Empower Women: Eliminate the gender gap in Primary and
   Secondary School enrolment preferably by 2005 and at all levels by 2015.
4. Reduce Child Mortality: By 2015 reduce the mortality rate among children under five by two
   thirds.
5. Improve Maternal Health: By 2015 reduce by three quarters the ratio of women dying in
   child birth.
6. Combat HIV/AIDS, Malaria and other Diseases: By 2015 stop and begin to reverse the
   spread of HIV/AIDS and the incidence of malarial and other major diseases.

7. Ensure Environmental Sustainability: By 2015 integrate the principles of sustainable
   development into country policies and programmes and reverse the loss of the environment
   resources. For example, forests. By 2015 reduce by half the proportion of people without
   access to safe drinking water and by 2020 achieve significant improvement in the lives of at
   least 100 million slum (shanty compound) dwellers weld-wide.
8. Develop a Global Partnership for Development by 2015: This is to ensure an open trading
   and principle system that includes commitment to good governance, development and poverty
   reduction both at national and international levels.
   Analyse Zambia’s efforts towards the attainment of the Millennium Development Goals
   (MDGS).
    The Zambian government took the following measures to implement the MDGS.
9. Poverty reduction

• Introduction of Poverty Reduction Strategy Paper (PRSP)
• Creation of Citizen‟s Economic Empowerment Commission.
• Provision of subsidised fertilizer to sustenance farmers.
• Attraction of Foreign Investments and reopening mines.
• Creation of Economic Zones.

7. Education sector

• Introduction of free basic education from Grade one to Seven (1-7)
• Introduction of School re-entry policy, to allow pregnant girls to go back to School
  (positive discrimination).
• Building more schools and increasing school enrolment.
• Train and deployment of more teachers in basic schools

7. Gender Equality and Women Empowerment.

• Introduction of the Ministry of Gender.
• Implementation of affirmative action policy in the selection of students in colleges and
  universities.

7. Child Mortality

• Universal vaccination of children under five years (kick out polio, child week
  programmes)
• Implementation of roll-back malaria programme.

7. Maternal Health

• Implementation of compulsory antenatal and postnatal health programmes.
• Implementation of family planning and child spacing programmes.

7. Combating HIV and AIDS, malaria and other diseases.

• Encouragement and implementation of free voluntary counselling and testing (VCT)
• Introduction of HIV and AIDS programmes at places of work.
• Free indoor residual or house spraying to control malaria.
• Provision of free mosquito nets to pregnant women and nursing mothers.

7. Environmental Sustainability

• Strengthening the capacity and operation of Zambia Environmental Management
  Authority (ZEMA)
• Implementation of annual Tree Planting Programmes.

• Enforcing Annual Fish Bans

1. Global Partnership of Anti-corruption Policies.

• Implementation of Anti-corruption policies.
• Strengthening of the Human Rights Commission
• Strengthening partnership with regional and international organisations; such as SADC,
  COMESA, EU and ACP (Asia Caribbean and Pacific) countries.
   Note: The Millennium Development Goals initiative came to the end in the year 2015.
• The MDGs have been replaced by the Sustainable Development Goals (SDGs)
• The SDGs also known as Global goals are a universal call to action, to end poverty, protect
  the planet and ensure that all people enjoy peace and prosperity.
  The following are some of the areas covered under the SDGs.
• Ensure that there is no poverty.
• Zero hunger.
• Good health and wellbeing.
• Quality Education
• Gender Equality
• Clean Water
• Affordable Energy
• Industrial innovation and infrastructure.
• Climate action
• Life below water/life on land