Describe the factors that led to the end of the Bretton woods System and the beginning of globalisation.
Describe the factors that led to the end of the Bretton woods System and the beginning of globalisation
MOST of the countries did not benefit from the rapid growth of the western economies experienced in 1950. Therefore, they organised themselves in a group of 77 (called as G- 77) and demanded a New International Economic Order (NIEO). NIEO meant a system that would give them control over their own natural resources, more development assistance, fairer prices for raw material and better assessment for their manufactured goods in developed market.
- From the middle of 1970, the international financial system changed in an important way. Developing countries could no longer turn to international institutions for loan. They were now forced to borrow from western commercial banks and private lending institutions. This led to a debt crisis in the developing world.
- The industrial world was also hit by unemployment and MNCs began to shift production operations to low wage Asian countries. Countries like china became attractive destination for investment by foreign MNCs, competing to capture the global market. This stimulated world trade and capital flow led to the emerging of globalisation.