Global Sustainability

GLOBAL SUSTAINABILITY
LEARNING
EXPOUND THE RELATED
CHARACTERISTICS OF
SUSTAINABILITY AND
OBJECTIVE STABILITY OF
ECONOMIC SYSTEMS.
INTRODUCTION
• THE GLOBAL ECONOMY HAS REALLY FACED SO MUCH UNCERTAINTY AND RISK. ASIDE FROM
COLLAPSING FINANCIAL MARKETS, THERE WERE RISING UNEMPLOYMENT, DEEPER
INEQUALITIES, SHRINKING MIDDLE CLASS, EXTREME INDEBTEDNESS, AND INABILITY OF THE
GOVERNMENTS TO IMPLEMENT REALISTIC REFORMS.
• ANOTHER CHALLENGE COMES FROM CLIMATE CHANGE AND AVAILABILITY OF SCARCE
RESOURCES WHICH DEMAND FOR DEVELOPMENT OF NEW TECHNOLOGIES IN KEEPING
ECONOMIES GROW.
ACCORDING TO THE THE DEPARTMENT OF
ECONOMIC AND SOCIAL AFFAIRS (DESA)
• THE WORLD IS FACED WITH CHALLENGES IN ALL THREE DIMENSIONS OF SUSTAINABLE
DEVELOPMENT—ECONOMIC, SOCIAL AND ENVIRONMENTAL. MORE THAN 1 BILLION PEOPLE ARE
STILL LIVING IN EXTREME POVERTY, AND INCOME INEQUALITY WITHIN AND AMONG MANY
COUNTRIES HAS BEEN RISING; AT THE SAME TIME, UNSUSTAINABLE CONSUMPTION AND
PRODUCTION PATTERNS HAVE RESULTED IN HUGE ECONOMIC AND SOCIAL COSTS AND MAY
ENDANGER LIFE ON THE PLANET.
• ACHIEVING SUSTAINABLE DEVELOPMENT WILL REQUIRE GLOBAL ACTIONS TO DELIVER ON THE
LEGITIMATE ASPIRATION TOWARDS FURTHER ECONOMIC AND SOCIAL PROGRESS, REQUIRING
GROWTH AND EMPLOYMENT, AND AT THE SAME TIME STRENGTHENING ENVIRONMENTAL
PROTECTION
STABILITY
• THE TERM “STABILITY” CAN MEAN FIRMNESS IN POSITION,

PERMANENCE, AND RESISTANCE TO CHANGE.
• IT DESCRIBES IT AS “AVOIDING LARGE SWINGS IN ECONOMIC
ACTIVITY, HIGH INFLATION, AND EXCESSIVE VOLATILITY IN
EXCHANGE RATES AND FINANCIAL MARKETS” (IMF,2012).
SUSTAINABILITY
• THAT DEVELOPMENT THAT MEETS THE NEEDS OF THE

PRESENT WITHOUT COMPROMISING THE ABILITY OF THE
FUTURE GENERATIONS TO MEET THEIR OWN NEEDS.
SUSTAINABLE
ECONOMIC
MODEL
• ECONOMIC SUSTAINABILITY CAN
REFER EITHER TO THE CONTINUED
SUCCESS OF AN ECONOMY OVER
TIME OR MORE RECENTLY TO THE
WAY AN ECONOMY OPERATES IN
A SUSTAINABLE MANNER,
PROTECTING SOCIAL AND
ENVIRONMENTAL ELEMENTS.
KEY FACTORS:
1. THE COMPLEXITY OF MARKETS

SUSTAINABLE 2. PLURALISM OF DEVELOPMENT
ECONOMIC MODELS
MODEL 3. VARIETIES OF CAPITALISM
COMPLEXITY OF MARKETS
• THE MARKETS ARE BELIEVED TO BE THE MOST SUBSTANTIAL ELEMENT OF ECONOMIES.

HOWEVER, THE MARKETS ARE NOT SIMPLE ACTIVITIES TO CONSIDER.
• THERE IS AN INCREASING NUMBER OF COMMODITIES, DIVERSIFIED PREFERENCES AND NEEDS
OF ACTORS, MORE SUPPLIERS AND MORE BUYERS, FASTER COMMUNICATION, AND MORE
SOPHISTICATED GLOBAL RELATIONS AMONG OR BETWEEN MARKETS WHICH CANNOT FIT
INTO SIMPLE MODELS.
ASSUMPTIONS IN ECONOMICS REGARDING
MARKETS
• FIRST, WITH MARKETS, IT IS EASIER TO FORMULATE MODELS,

BUT USUALLY THEY PARTLY COINCIDE WITH REALITY.
• MOST MODELS SEEM TO BE OVERLY OPTIMISTIC, TO THE POINT THAT
IT DOES NOT CONSIDER ANY POSSIBILITY OF UNFORESEEN PROBLEM.
• SECOND, IS THE STRONG ASSUMPTION THAT MARKETS TEND
TO MOVE TOWARDS A STATE OF EQUILIBRIUM SET OUT BY THE
FORCES OF DEMAND AND SUPPLY.
VARIETIES OF CAPITALISM (VOC)
• WHAT IS CAPITALISM
• THE PRODUCTIONS OF GOODS AND SERVICES ARE PRIVATELY OWNED
AND OPERATED FOR A PROFIT. IT PROVIDES BUSINESS OWNERS AND
EMPLOYEES THE FREEDOM TO MANAGE THEIR INCOMES. THE ONLY
GOVERNMENT INVOLVEMENT IS TAXATION AND STANDARD REGULATORY
LAWS.
• IT CONSIDERS “FIRMS” AS THE MOST
IMPORTANT ACTORS FOR WELFARE CREATION
IN NATIONAL ECONOMIES BECAUSE THEY
PROVIDE INNOVATIONS AND NEW
VARIETIES PRODUCTS. IN ACHIEVING THEIR GOALS, THEY
MUST HAVE ACCESS TO RESOURCES,
OF PARTICULARLY CAPITAL AND LABOR.
CAPITALISM
(VOC)
THEORETICAL MODELS: LIBERAL MARKET ECONOMY
(LME) FROM COORDINATED MARKET ECONOMY
(CME).
• LME IS CHARACTERIZED BY DYNAMIC ACCESS TO RESOURCES, WHICH MEANS, THAT IT IS EASY
TO CHANGE CONDITIONS OF TRANSACTIONS OR RESIGN FROM IT. CAPITAL, IN LMES, IS
DERIVED OFTEN FROM STOCK MARKETS, WHERE ASSETS CAN QUICKLY CHANGE OWNERS
AND THEIR VALUE IS ESTIMATED BY PRICE MECHANISMS.
• CME TRANSACTIONS ARE MORE STABLE AND LONG TERM ORIENTED. CAPITAL IS PROVIDED BY
BANKS WHICH CREATE LOYALTY-BASED RELATIONS WITH FIRMS. THE LABOR MARKET IS
CHARACTERIZED BY LONG TERM CONTRACTS AND RELATIVELY LOW DIFFERENCES IN WAGE
LEVELS. THE COMPANIES PRODUCE THE SKILLS AND COMPANIES INVEST IN ORDER TO CREATE
A SPECIFIC, RARE QUALIFICATIONS WHICH FIT IN TO THEIR PRODUCT PROFILE.
Market Economy
• it is necessary to adjust economies to market forces which
make some scarce resources more expensive to ensure their
sustainable, responsible use.
• For example: if obtaining capital is very expensive, a
better approach is to use financial leverage, as its basis, in
GROWTH order to acquire debt to one’s advantage that would lead
to financial sustainability.
Advancement of Technology
• Technological progress can increase productivity and save
resources. For example, the use of hybrid or electronic
vehicles, bio-agriculture, recycling techniques, and
communications; all of which can contribute to faster and
better quality of growth.

Global Sustainability

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Global Sustainability

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GLOBAL SUSTAINABILITY

• THE TERM “STABILITY” CAN MEAN FIRMNESS IN POSITION,

• THAT DEVELOPMENT THAT MEETS THE NEEDS OF THE

1. THE COMPLEXITY OF MARKETS

• THE MARKETS ARE BELIEVED TO BE THE MOST SUBSTANTIAL ELEMENT OF ECONOMIES.

• FIRST, WITH MARKETS, IT IS EASIER TO FORMULATE MODELS,

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