American University in Central Asia Week 1

American University in Central Asia Week 1:

Days of classes: 1. Tuesday - 8: 00 -9: 15 Lecture I need two students’ telephone numbers to contact if it is needed: 1. 2.

Education: 1. Master of Public Administration, University of North Texas; 2. Master of Arts in Development economics, Nagoya University, Japan; 3. Master degree in Banking, International University of Kyrgyzstan, Bishkek.

Professional experience record: Head of Economy and investment department, Office of the Prime Minister of the Kyrgyz Republic Head of Economy and strategic development department, Office of the Prime Minister of the Kyrgyz Republic Deputy Minister, Ministry of Economic Regulation KR Advisor to the Minister of Economic Regulation Central agency on development, investments and innovations, Head of the Strategy and program Service Administration of the President of the Kyrgyz Republic, Expert Microfinance company, Chair of the Board Consultant, Private and Financial Sector Development Unit, Department of Eastern Europe and Central Asia, World Bank HQ Director, Informational Future Foundation National Bank of the Kyrgyz Republic, Chief economist

Teaching approach: Student’s presentations Lectures Discussions Q&A sessions

There will be two exams (a mid-term and a final), numerous quizzes, and one project. Course grade will be determined as follows: Mid-Term Exam Final Exam Attendance Project 25% 25%

Exams are comprehensive and cumulative. Any material in the readings or discussed in class is fair game for the exams. The format for the exams will include multiple choice, short answer and essay. Make-up exams will be filed with the Department of Economics office, and will be monitored by office personnel. Make-up exams will have an all-essay format.

1. No cell phones (Silence your cell phone) 2. Students are not allowed to enter the classroom after the beginning of the lecture/seminar

Cheating is a significance offense against AUCA’a academic policy, the university, and your fellow classmates. Cheating will merit, at a minimum, a zero for a grade on the assignment. Further actions may be warranted and will be determined by the professor on a case-by-case basis and very likely may include a grade of "F" for the class.

Date Week 1 Subject Introduction: Why study economic geography? Paul Knox Chapter Rowntree 1 1, 2 2, 3 3, 4 Part 1 “Economic patterns and the search for explanation Week 3 Global patterns and trends Geographical dynamics of the world economy Part 2 “Rise of the core economics” Week 5 Pre-industrial foundations. Evolution of the industrial core regions 4, 5 8, Week 7 Globalization of production systems. Spatial reorganization of the core economies 6, 7 9 Part 3 “Spatial transformation of core and periphery Week 9 Midterm exam Week 11 Dynamics of interdependence: transformation of the periphery. Agriculture: the primary concern? 8, 9 10 Week 13 Industrialization: the path to progress? Services: going global? 10, 11 11, 12, 13 Week 13 Project submission 12, 13 14 Part 4 “Adjusting to a new global economy Week 15 International and supranational institutionalized integration. Reassessment of the local in the age of the global: regions and localities within the world economy Final Exam

The task of the student of economic geography is to make sense of the world – the real world – and the ways in which its economic landscapes are changing.

How can we cope with the local, regional and national implications of a succession of what are literally headline-making events? Bitter trade disputes between: Developed and underdeveloped countries? US vs Europe and Japan

Furthermore, how should we approach the local, regional, and national implications of less newsworthy but equally profound changes in the world economy, such as the remarkable developments that have taken place in international finance and banking?

How should we interpret specific changes: The deindustrialization of traditional manufacturing regions The economic revival of formerly “lagging” regions The spread of branch factories to newly industrializing countries The emergence of high-technology complexes The consolidation of global financial and corporate control functions in a few cities The unprecedented rates of urbanization in China’s coastal regions?

Our task is to develop an understanding both of the general economic forces and socioeconomic relationship within the world economy and of the unique features that represent local and historical variability. General universally applicable Unique something that is distinctive

The idea of “economic organization” = mode of production Five major modes of production: 1. Subsistence 2. Slavery 3. Feudalism 4. Capitalism 5. Socialism

Based on differences in the relationship between the factors of production (land other natural recourses, labor, physical and human capital). Also, different modes of production are characterized by different forces of production (technology, machinery, means of transportation) and by different proportions of different social classes).

Economic logic of different modes of production results in substantially different forms of spatial organization. Feudalism – self-sufficient domains with little trade, capitalism requires a highly developed system of market towns and etc. The “classic” sequence (europe): from subsistence economies through slavery, feudalism, merchant capitalism and industrial capitalism to advanced (globalized) capitalism.

Sequence differ regionally: In NA – classic In Japan, feudalism was displaced by statesponsored industrial capitalism In Russia, an embryonic industrial capitalism was displaced by socialism As a result of these variations, important regional differences have come about within the world economy

Each economic landscape should be interpreted, therefore, as the product of the combination of broad economic forces interacting with local, cultural, political and environmental factors: a product of both the ‘general’ and ‘unique’

Stage I Water style (around 1785 in England). Early mechanization based on water power and steam engines, the development of cotton textiles, pottery and iron working, and the development of river systems, canals and turnpike roads for the assembly of raw materials and the distribution of finished products. II Steam transport style (late 1820 s) Development of coal-powered steam engines, steel products, railroads, world shipping and machine tool. III Steel and electricity style (late 1870 s) Development of the internal combustion engine, oil and plastics, electrical and heavy engineering, automobiles, aircraft, radio and telecommunications IV Fordist style (around 1915 in the USA) Exploitation of nuclear power, development of limited-access highway, durable goods consumer industries, aerospace industries, electronic and petrochemicals. V Microelectronics and biotechnology style (late 1970 s) Most recent (and still incomplete) technology system is based on microelectronics, digital telecommunications, biotechnology, robotics, fine chemicals and information systems.

The spatial division of the labor of key industries within national economies was based on different regional industrial specializations. National economies were regionally differentiated. Agglomeration was a major feature of economic organization across a large number of manufacturing industries.

In addition to regional specialization and regional dispersal, four other spatial division of labor can be identified: 1. Functional separation with management/research activities in major metropolitan regions, skilled labor used in ‘old’ manufacturing areas and unskilled labour used in regional peripheries to take advantage of lower wages and/or a disorganized (non-union) labor force

2. Functional separation with management/research in major metropolitan regions, and semi-skilled and unskilled labor used in regional peripheries 3. Functional separation with management/research and skilled labor in more advanced industrial regions and unskilled in the global periphery 4. Division between areas with investment, technical change and job expansion, and other areas with stagnant and progressively less competitive production and job loss.

Transportation and communications technologies have provide a ‘permissive’ environment in which firms could decentralize manufacturing and primary production activities yet maintain central control.

Under the new international divisions of labor (NIDL), investment and production are no longer organized primarily around national economies. The actual process of production, most obviously perhaps in the examples of automobile, electronics is now global.

Interesting facts: Between 1961 and 1976, the number of employees of German firms outside Germany increased tenfold. Today 30 largest globally operating Finnish companies employ more than 50% of their employees outside Finland.

Emergence of international devices for coordinating and steering capital beyoud national control (Eurodollars) and offshore financial canters.

1989 1992 1995 1998 2001 2004 Spot transactions 317 394 494 568 387 621 Outright forwards 27 58 97 128 131 208 Foreign exchange swaps 190 324 546 734 656 944 Estimate gaps in reporting 56 44 53 60 26 107 Total ‘traditional” turnover 590 820 1190 1490 1200 1880

THE MOST IMPORTANT CHALLENGES FACING THE WORLD IN THE 21 st century are associated with globalization, the growing interconnectedness of people and places through converging processes of economic, political, and cultural change. Once-distant regions are now increasingly linked together through commerce, communications, and travel. Many observers argue that globalization is the most fundamental reorganization of the planet’s social and economic structures since the Industrial Revolution.

global communication systems that link all regions on the planet instantaneously, and global transportation systems capable of moving goods quickly by air, sea, and land; transnational conglomerate corporate strategies that have created global corporations more economically powerful than many nation-states; international financial institutions that make possible 24 -hour trading with new and more-flexible forms of monetary flow; global agreements that promote free trade; market economies that have replaced state-controlled economies, and privatized firms and services, like water delivery, formerly operated by governments; an abundance of planetary goods and services that have arisen to fulfill consumer demand (real or imaginary); and, of course, an army of international workers, managers, and executives who give this powerful economic force a human dimension.

# Region 1 North America 2 Latin America 3 The Caribbean 4 Sub-Saharian Africa 5 Southwest Asia and North Africa 6 Europe 7 The Russian Domain 8 Central Asia 9 East Asia 10 South Asia 11 Southeast Asia 12 Australia and Oceania

Global The Consumer Culture Geopolitical Component Environmental Social Concerns Dimensions

Economic changes also trigger fundamental cultural change. Accompanying globalization is the spread of a global consumer culture that often erodes local diversity. This frequently sets up deep and serious social tensions between traditional cultures and new, external globalizing influences.

Because globalization is not limited to national boundaries, it has a major geopolitical component.

Beyond geopolitics, the expansion of a globalized economy is also creating and intensifying environmental problems throughout the world. Transnational firms in particular disrupt local ecosystems in their search for natural resources and manufacturing sites.

Globalization has a clear demographic dimension as well. Although international migration is nothing new, increasing numbers of people from all parts of the world are crossing national boundaries, often permanently. Migration from Latin America and Asia has drastically changed the demographic structure of the United States, just as migration from Africa and Asia has transformed western Europe.

This map shows the geographical pattern of major religious traditions found throughout the world. For most people, religious tradition is a major component of cultural and ethnic identity. While Christians of different sorts account for about 34 percent of the world’s population, this religious tradition is highly fragmented. Within Christianity, there about twice as many Roman Catholics as Protestants. Adherents to Islam make up about 20 percent of the world’s population. The Sunni branch within Islam is three times larger than the Shiite. Hindus make up about 14 percent of the global population.

Further, one of the most pressing problems facing the world today is that human activities are changing Earth’s climate through global warming. Just what the future will bring is not entirely clear. However, even if the forecast is uncertain, there is little question that many forms of life— including humans—will face difficulties adjusting to the changes brought about by global warming

National economies are no longer the sole building blocks of the world economy. For an increasing production of agricultural and manufactured commodities and for some services, production and markets have become worldwide. This shift has had important consequences for the spatial distribution of economic activities both globally and within countries.