The Making of a Global World

(i) The Decline of US Currency: After 1960s, the US was no longer the dominant economic power as it had been for more than two decades The US dollar now no longer commanded confidence as the world's principal currency. Tire dollar could not maintain is value in relation to gold.
(ii) New powers : By the mid-1960s, the E E C and Japan had become international economic powers in their own right. With total reserves exceeding those of the US. with higher levels of growth and trade, and with per capita income approaching that of the US. Europe and Japan were narrowing the gap between themselves and the United States.
(iii) Rise of Western Commercial Banks :
From the mid-1970s, the International financial system also changed in important ways. Earlier, developing countries could turn to international institutions for loans and development assistance. But now. they were forced to borrow from Western commercial banks and private lending institutions- This led to periodic debt crises in the developing world and lower income along with increased poverty, especially in Africa and Latin America.
(iv) Problem of unemployment : The industrial world was also hit by unemployment that began rising from the mid-1970s, and remained high until the early 1990s. From the late 1970s, MNCs also began to shift production operations to low-wage Asian countries.
(v) Rise of China and Soviet Union: China had been cut off from the post-war world economy since its revolution in 1949. But new economic policies in China and the collapse of the Soviet Union and the Soviet* style communism in Eastern Europe brought many countries back into the fold of the world economy.
(vi) Low cost structure in China : The Chinese economy emerged ns a new super power due to low cost structure. Wages were relatively low- in countries like China. Thus they became attractive destinations for investment by foreign MNCs competing to capture the world markets.