|WITNESS HISTORY 14>>)) AUDIO
A Changing World
In 2001, Mongolia's prime minister declared that "in order to survive we have to stop being nomads." His words—and his plans to settle 90% of Mongolia's people in cities by the year 2030—came as a shock to a people who have been nomadic herders for centuries. At the same time, his idea seemed inevitable. Listen to the Witness History audio to hear more about how Mongolians are struggling to modernize without losing their traditions.
Logo for the international aid organization CARE
t A Mongolian nomadic family uses a satellite dish on their tent to feed their solar-powered television.
Chapter Focus Question What are the major issues facing the world today?
Industrialized Nations After the Cold War
Section 2 Globalization
Social and Environmental Challenges
Security in a Dangerous World
Advances in Science and Technology
Note Taking Study Guide Online
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A euro coin
Turkish people hold red and blue balloons, symbolizing Europe and Turkey, to celebrate Turkey's decision to apply to the EU.
WITNESS HISTORY 0)) AUDIO
The Nations of Europe Unite
"Resolved to mark a new stage in the process of European integration ... Recalling the historic importance of the ending of the division of the European continent and the need to create firm bases for the construction of the future Europe. . . Desiring to deepen the solidarity between their peoples while respecting their history, their culture, and their traditions ... [We] have decided to establish a European Union .. 99
—The Maastricht Treaty on the European Union, 1992
Focus Question How did the end of the Cold War affect industrialized nations and regions around the world?
Industrialized Nations After
the Cold War
Terms, People, and Places
European Union surplus
default Pacific Rim Vladimir Putin
Reading Skill: Compare and Contrast Create a chart to compare and contrast developments in industrialized nations after the Cold War.
Europe Russia/ Asia United States
1991 Germany • reunified
Examine social, political, and economic trends in Europe after the Cold War.
Analyze how the United States' and Russia's shifting roles have affected the balance of global power.
Understand how important economic changes have affected Asia since the end of the Cold War.
The end of the Cold War saw old empires crumble and new nations emerge. It also marked the beginning of a new global economy—an economy in which economic ties among nations and international trade would become driving forces in shaping global patterns.
The New Face of Europe
With the collapse of the Soviet Union and the end of the Cold War, the division between communist Eastern Europe and democratic Western Europe crumbled. Trade, business, travel, and communications across the region became easier. At the same time, new challenges emerged. Many European nations faced common problems such as large-scale immigration from the developing world, a rise in anti-foreign discrimination, and rising unemployment, especially among the young. As a region, Europe had to forge a new path in bringing its eastern and western sides closer together.
Germany Reunifies In 1990, East and West Germany were reunited after more than 45 years of division. Unification brought great national pride and excitement—but it also brought challenges. East Germany's economy and infrastructure were weak and had to be modernized. Unemployment rose in the former East Germany with the closing of communist-era factories, whir r re outdated and inefficient. In 2004, U.S. President George W 1 sh announced that he would withdraw tens of thousands of American troops from Germany—stationed there since World War II—prompting fears of weakening the economy.
734 The World Today
Reunification brought social problems as well. Racist groups such as neo-'Jazis, a hate group that models itself after the Nazi party, blamed im .rants for the hard times and viciously attacked foreign workers. The vast majority of Germans condemned such actions, however. At the turn of the millenium, Germany still faced economic and social challenges but remained a strong European leader.
The European Union Takes Shape Like NATO, the European Economic Community expanded over the years to add the nations of Eastern Europe. In the 1990s, the group became the European Union and agreed on policies to promote a freer flow of capital, labor, and goods among European nations. By the early 2000s, more than a dozen countries had joined the EU, with an increasing number of applicants coming from Eastern Europe and former Soviet republics. In 2002, the euro became the common currency for most of Western Europe. By then, EU passports had replaced national passports. The expanded EU allowed Europe to compete with economic superpowers like the United States and Japan.
Yet some Europeans have had mixed feelings about the changing economic and social makeup of the EU. Most of the EU's Eastern European members have weaker economies than their Western European neighbors, the result of years of communist control. Older members of the EU fear that these nations will weaken the EU's economy overall. Other Europeans worry about the changing religious demographics of the EU. Many Eastern European nations have large Muslim populations—especially Turk-v, currently a candidate nation. Some Europeans are concerned that if t& U changes too much too quickly, it will be less stable.
NATO Evolves With the end of the Cold War, the Warsaw Pact dissolved. As the nations of Eastern Europe made the transition to democratic, capitalist states, most wanted to join NATO. Poland, Hungary, and the Czech Republic joined in 1999, soon followed by other countries. In 2002, a NATO-Russia Council was set up.
The European Union
30'W 20-W 10.W
Map Skills By 2005, 25 countries had joined the EU.
Locate (a)The Netherlands (b)Turkey (c) Germany (d) Croatia
Identify Which nations are applicant nations?
Draw Inferences How does geography help explain why these nations applied for EU membership later than many other nations?
0 200 400 km
200 400 mi
• Member of EU Applicant nation I Non-EU nations
With a changing Europe, NATO has had to reassess its purpose. Many NATO policymakers have come to believe that NATO's primary-"-oa1 should be that of peacekeeper and protector of human rights. Duri...~the early 1990s, NATO sent peacekeepers to Bosnia and Kosovo. More recently, terrorist attacks in Europe and elsewhere have forced NATO to examine its role in the global war on terrorism.
Checkpoint What challenges has Germany faced since reunification?
Global Power Shifts
inflation—(in FLAY shun) n. a rise in prices linked to an increase in the amount of money available
Demonstrators gather in Moscow in 2004 to protest Putin's policies. What point do you think the protesters were making by holding up photos likening Putin to Adolf Hitler?
When the Cold War ended and the Soviet Union collapsed, the balance of global power shifted. With the Soviet Union gone, the United States emerged as the world's sole superpower.
Russia Is Remade After the breakup of the Soviet Union, Russia struggled to change to a market economy. President Boris Yeltsin privatized many industries and collective farms, but unemployment and prices still soared. Criminals flourished, and ruthless gangs preyed on owners of new businesses. Meanwhile, Russia's government—known for its widespread corruption—did little to stop the criminal activity. In 1998, Russia barely avoided financial collapse. It defaulted, or failed to make payments, on much of its foreign debt. High inflation and the collapse of the ruble, Russia's currency, forced many banks and businesses to close. People lost their savings and jobs.
In 2000, Vladimir Putin was elected president in Russia's _nd
free election. Putin projected toughness and competence, promising to
end corruption and build Russia into a strong market economy. He also secured Russia a consulting status with NATO. However, Putin repeatedly came under fire for increasing the power of the central government at the expense of people's civil liberties. The international community began to question his policies, concerned that he was becoming more autocratic than democratic.
The United States Becomes the Sole Superpower As the world's only superpower, the United States had a great deal of global influence, both politically and militarily. In 1991, President George H.W. Bush waged the Persian Gulf War, driving Iraq from Kuwait and jump-starting peace talks between Israel and Palestine. His successor, President Bill Clinton, initiated peacekeeping operations in Haiti and the former Yugoslavia. And as you read, President George W. Bush took the U.S. back to war in the Middle East in the 2000s.
After the Cold War, the growing American economy supported
the global economy. An economic boom in the 1990s helped pro‑
duce a budget surplus, or money left over after expenditures.
But from the late 1990s to the early 2000s, the American economy swung up and down. Slow economic growth and soaring military expenses led to huge budget deficits. A deficit is the gap between what a government spends and what it takes in through taxes an jther resources.
t Checkpoint How did the collapse of the Soviet Union affect the United States?
736 The World Today
Changes in Asia
As e Cold War ended, Asia experienced the susses and downturns of being part of the global economy.
The Pacific Rim A rising force in the global economy is the Pacific Rim, the vast region of nations that border the Pacific Ocean. The Pacific Ocean first became a highway for world trade in the 1500s. By the mid-1900s, links across the Pacific had grown dramatically. By the 1990s, the volume of trade across the Pacific was greater than that across the Atlantic. Some analysts have predicted that the 2000s will be the "Pacific century" because of this region's potential for further growth.
The Asian Tigers and Japan For decades, Japan dominated the Asian Pacific Rim. This small island nation rebuilt itself after World War
II to become an economic powerhouse, moderniz- ,ZOO°—"""`~n°e taa 150,w 12 ing and excelling at Western economics while at
the same time preserving its own traditions. By the 1990s, however, Japan Pacific Powerhouse
began to suffer from a long economic downturn. The countries of the Pacific Rim have
In the meantime, Japan's neighbors—including Taiwan, Hong Kong, gee ra hi is cultural, and economic n mic ties. . trade Singapore, and South Korea—surged ahead. Although they differ in routes, shown on the map above.
ter- - of culture and history, all had quickly modernized and industrialize'..ey the 1980s. All four were influenced to some degree by China and its Confucian traditions of education, loyalty, and consensus. Each stressed education as a means to increase worker productivity.
Because of their economic success, they earned nicknames such as the "Asian tigers" or the "four tigers." The Asian tigers first focused on light industries such as textiles. As their economies grew, the tigers concentrated on making higher-priced exports, such as electronics, for developed nations. Their extraordinary growth was due in part to low wages, long hours, and other worker sacrifices.
. Checkpoint What are the Asian Tigers?
Indian i Ocean
— Ocean trade routes
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Terms, People, and Places Comprehension and Critical Thinking • Writing About History
For each term, person, or place listed at 3. Determine Relevance How did the Quick Write: Write a Thesis Statement
the beginning of the section, write a collapse of the Soviet Union affect orga- To persuade someone in an essay, you must
sentence explaining its significance. nizations such as NATO and the EU? have a strong opinion on a subject and
Note Taking 4. Draw Conclusions Do you think an express it clearly in a thesis statement.
American investor would choose to Write a single sentence that expresses the
Reading Skill: Compare and invest large sums of money in Russia? main point you want to make about devel‑
~,itrast Use your completed chart to Why or why not? opments in the industrialized world after
answer the Focus Question: How did 5. Analyze Information Why is the the Cold War.
the end of the Cold War affect industri- Pacific Rim seen as an important link in
alized nations and regions around the the global economy? world?
Chapter 22 Section 1 737
WITNESS HISTORY y,))) AUDIO
A Connected World
"Few topics are as controversial as globalization. That is hardly surprising. It is the defining feature of our time. Bringing distant markets and people across the world together is a huge change that affects everyone, whether they are peasants in India, students in London, or bankers in New York.»
—Mike Moore, director-general of the WTO, 2000
Focus Question How is globalization affecting economies and societies around the world?
Russian immigrants sell caviar at a kiosk in Brooklyn, New York.
Describe the ways in which countries around the world are interdependent.
Understand how international treaties and organizations make global trade possible.
Analyze the costs and benefits of global trade.
Terms, People, and Places
globalization World Trade Organization An Interdependent World
interdependence (WTO) One major effect of globalization is economic interdependence.
outsourcing protectionism Interdependence is the dependence of countries on each other
multinational bloc for goods, resources, knowledge, and labor from other parts of the
corporation sustainability world. Improvements in transportation and communication, the spread of democratic systems, and the rise of free trade—the buying and selling of goods by private individuals and corporations in a free market—have made the world increasingly interdependent. The spread of goods and ideas has even led to the development of a global culture. All of these links, from economic to cultural, have created both challenges and opportunities.
Doing the World's Work The world's rich and poor nations are linked. The nations of the developed world control much of the world's capital, trade, and technology. Yet they increasingly depend on largely low-paid workers in developing countries to produce manufactured goods cheaply. Companies in ind -ial nations also choose to outsource jobs. Outsourcing is the practice of sending work to the developing world in order to save money or increase efficiency. Many technological jobs have been outsourced to India, Russia, China, and the Philippines.
Globalization defines the world of the post-Cold War. Globaliz ,3n refers to the process by which national economies, politics, culres, and societies become integrated with those of other nations around the world. Globalization began on a small scale 500 years ago, with the European Age of Exploration. By the 1990s, globalization was occurring at a dramatic, unprecedented pace.
Reading Skill: Compare and Contrast As you read, use the Venn diagram to track how globalization has affected developed and developing nations.
Depend on outsourcing
738 The World Today
Multinational Corporations Grow Globalization has encouraged
the e of huge multinational corporations. These corporations have Vocabulary Builder
br ies and assets in many countries and sell their goods and services asset—(As et) n. any property that has throughout the world. Proponents of multinational corporations point out exchange value that they invest in the developing world, bring new technology to industries, provide jobs and technical assistance, and improve infrastructure. Critics feel that multinational corporations have too large an influence on the prices of goods, take large profits out of developing countries, and pay workers low wages, thus lowering their standard of living.
Financial Crises Affect Everyone One aspect of economic interdependence is financial interdependence in the world's markets. This means that an economic crisis in a country or a region can have a global impact. An example of this is the Asian financial crisis that affected the Asian tigers in the late 1990s. In 1997, a financial crisis struck Thailand and quickly spread to other Asian countries from Singapore to South Korea. The Asian financial crisis worsened Russia's economic woes and contributed to a recession in Japan, Asia's economic powerhouse. The fallout continued to spread around the globe as affected countries were unable to repay loans.
Oil: A Volatile Natural Resource In an interdependent world, natural resources—especially energy resources—play a huge role. All nations, for example, need oil for transportation and for products ranging from plastics to fertilizers. Any change to the global oil supply can have a major impact on economies and lives around the world
example, in 1973 OPEC limited oil exports and raised oil prices, sending economic shock waves around the world. Since then, whenever oil prices have risen sharply, people have faced economic uncertainties. Although people have invested in developing alternative fuels or conserv‑
ing energy, the world has remained largely dependent on oil. jmer~ct
For: Audio guided tour
World Oil Resources and Consumption Web Code: nb.-3421
Atlantic MEXI G N Ocean
NEZUELA KU BITS
... )M ' r.._h SAUDI
M Major oil reserves Imo] Major oil consumers
Major oil reserves and consumers
32.0 Total reserves (billions of barrels)
2.1 Total consumption (millions of barrels)
Map Skills World oil resources are distributed—and consumed—unequally.
Locate (a) China (b) Saudi Arabia (c) Iraq (d) Iran
Identify Which nations contain major oil reserves and are also major oil consumers?
Predict Given what you have read about the developing world, which nations are likely to become major oil consumers in the future?
Chapter 22 Section 2 739
The Far-Reaching Effects of Debt In the 1980s, bank interest rates rose while the world economy slowed. Developing nations that ha" borrowed capital to modernize were hard hit. As demand for their good,ell, poor nations could not repay their debts or even the interest on their loans. Their economies stalled as they spent their income from exports on payments to foreign creditors.
The debt crisis hurt rich nations, too, as banks were stuck with billions of dollars of bad debts. To ease the crisis, lenders lowered interest rates, gave some nations more time to repay loans, or even canceled debts. In return, they required debtor nations to adopt reforms such as privatizing state-run industries. They argued that more efficient private enterprises would bring prosperity in the long run.
Checkpoint What effect can a reduction in oil production in one country have on other countries around the world?
Global Trade Organizations and Treaties
Many international organizations and treaties link people and nations around the world. They have various goals, including encouraging development, settling economic issues, and promoting free trade. Free trade is a key part of global trade today.
International Organizations Expand The United Nations is an international organization whose responsibilities, along with its membership, have expanded greatly since 1945. The UN has acted in a peacekeeping role from Cambodia to Congo to the Balkans. In addil` ~it deals with political, social, economic, and cultural issues. Other int~rnational organizations deal specifically with economic issues. The World Bank, for example, offers loans and advice to developing nations. The International Monetary Fund (IMF) was established after World War II.
r ,Coffee Producers, 2003
4offee is the most popular drink in the world today, other than water. Each year, people consume over 500 billion cups of coffee. Coffee is believed to have originated in the Kaffa region of Ethiopia, which gave the drink its name. Demand for coffee slowly spread tam Africa to the Middle East and then to Europe. Eventually it reached Asia and the Americas. Coffee has had a tremendous cultural impact, shaping diets and social customs. Coffee has also dramatically influenced the global economy. After crude oil, it is the world's most actively traded commodity.
Colombia • 1111 X10 4P 0 •
Vietnam f.. . . . . . 40.
Indonesia qp qW qp r 4W 4W India •••40e Mexico • 4P 1 4P 4 Guatemala ••• 4 Uganda • • • 4 Ethiopia • 40 • Peru •404
• Represents 1 million bags of coffee
SOURCE: U.S. Department of Agriculture
Its goal is to promote international monetary cooperation and encourage glo' ' economic growth. It also monitors economic development and prorcies advice to developing nations. Other organizations include nongovernmental organizations (NGOs). NGOs, which are usually not affiliated with governments, perform a variety of functions including monitoring human rights, disaster relief, and economic development.
Treaties Guide Global Trade The General Agreement on Tariffs and Trade (GATT) was signed in 1947 to expand world trade and reduce tariffs. In 1995, more than 100 nations joined to form the World Trade Organization (WTO) to strengthen GATT. Its goal was to set up global rules to ensure that trade flows as smoothly and freely as possible. One of the WTO's basic policies is its opposition to protectionism, or the use of tariffs and other restrictions that protect a country's home industries against competition. The Group of Eight (G-8) is an international organization of industrialized nations that meets yearly to discuss a wide range of economic and other issues. The G-8 consists of Great Britain, Canada, France, Germany, Italy, Japan, the United States, and Russia.
Regional Trade Blocs Promote Trade Many nations have formed regional blocs, or groups, to promote trade and meet common needs. Among the largest is the EU. NAFTA (North American Free Trade Association) is a regional trade bloc that went into effect in 1994 to facilitate trade among the United States, Canada, and Mexico. APEC (Asia-Pacific Economic Cooperation) promotes trade among Pacific Rim nations. OPFC, representing oil-producing countries, regulates the production of oil ~,tabilize the market. Organizations like these work to lower trade barriers among countries in their regions and promote the free exchange of goods and services. Some deal with both economic and political issues.
• Checkpoint Why was the IMF established?
The Fair Trade Movement CERTIFIED The fair trade movement seeks to ensure that
coffee growers receive fair prices for their crops
and have decent living and working conditions.
Coffee that has met these conditions is stamped
with the fair trade logo.