Following the abandonment of the Bretton Woods system in 1971, the US and Great Britain started to spread their market-oriented policies leading to what we call today, globalization. The European Commission defines globalization as 'the process by which markets and production in different countries are becoming increasingly interdependent due to the dynamics of trade in goods and services and the flow of capital and technology accelerated by the fall in tariff barriers through the impetus of international institutions, notably the World Trade Organization (WTO) and the reduction in transportation and communication costs'. Twenty years ago, a new wave of countries who had been kept away from international trade for a long time appeared in Latin America, Asia, Africa and more recently in Eastern Europe after the collapse of the former Soviet Union in 1991. Czinkota and Ronkainen characterized Emerging Markets by their GNI per capita which should not exceed $ 9.265 according to the World Bank (WB), by their impressive economic growth and by the democratization of their political structure and adoption of neo-liberal reforms.
[...] The Feenstra-Hanson theory (1997 cited by Lee and Vivarelli, 2006) holds that FDIs have increased income inequalities within emerging countries by raising the wages of workers working for foreign companies. In of the poorest South African people received of the produced wealth, while 10% of the richest got 2007), even though, Chile's “income poverty fell from 45.1 to of the population between 1987 and 1998, and again to by 2000" (Mideplan cited in Journal of Human Development, 2003) Moreover, the membership of most emerging countries such as Brazil and the Baltic countries to the WTO has accelerated their involvement in global exchanges as their trade volume has exploded. [...]
[...] To conclude, the impact of globalization in emerging markets needs to be balanced. However according to the optimistic view of Dollar and Kray (2001, cited by Lee and Vivarelli, 2006): “trade is good for growth, growth is good for the poor and so trade is good for the poor” Referencing list Alsbridge plc, Cruz, H., (n.d) “High Inflation Rates and Wage increase Is this the end of Nearshoring in Eastern Europe?” 1 Anderson, J., Head of Asia-Pacific Economics for UBS, (2009), “Economist: New Nail in the Decoupling Theory Coffin”, available at: http://english.caijing.com.cn/2009-05-26/110171421.html [26 May 2009] Bank of England, Spange, M.; the Bank's Monetary Assessment and Strategy Division, and Young, C.; the Bank's International Economic Analysis Division, (2007), Macroeconomic impact of globalization: theory and evidence”, Quarterly Bulletin, Q1 Berberoglu, B., University of Nevada, (2004) impact of globalization on Eastern Europe and the Former Soviet Union: Prospects for Post-Soviet Development in the Age of Globalization”, the annual meeting of the American Sociological Association, San Francisco, August 14 Berend, I T., (2006), “Transforming Central Europe and the Impact of Globalization” Brahic, C., (2008), of China's carbon footprint blamed on exports”, available at: http://www.newscientist.com/article/dn14412-33-of-chinas- carbon-footprint-blamed-on-exports.html. [...]
[...] Speaking from an economic point of view, emerging markets have been enjoying their switch to market-oriented economy. Globalization has fostered their economic growth, and boosted their trade exchanges leading to a positive trade balance. Although the WTO has contributed to the success of emerging economies, its practices remain unfair with them. Emerging countries are bound with agreements such as intellectual property which allow a large amount of money to be transferred from developing countries to developed countries (Rusdy Hartungi, 2006). [...]
[...] According to the Quantity theory of Money advanced by Fisher (1911) and Friedman (1956), capital inflows have led to a surplus of liquidity in emerging markets and have sharply increased the price of basic commodities such as food and fuel. Consequently, in April 2008, Russian inflation exploded from to in a year, leading to lower purchasing power of the poorest households (World Bank report, 2008). Inflation scares investors and reduces their capital investment expenditures; thus Russia's FDI fell by an annual rate of 45% during the first half 2009. [...]
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