12.2 Politics and Economies of Globalisation Flashcards
1
Q
Trade Blocs (3)
A
- International organisations that exist for trading purposes
- Bringing greater economic strength and security to nations
- E.g. the EU / Mercosur
2
Q
IGO’s that are ‘brokers’ of Globalisation (4)
A
- Known as ‘Bretton Wood Institutions’
- IMF
- World Bank
- WTO
3
Q
IMF (3)
A
- An IGO
- Which works to secure financial security
- And sustainable economic development globally
4
Q
SEZ (4)
A
- An industrial area often near a coastline
- Where favourable conditions are created
- To attract foreign TNCs
- Including low tax rates / exemption from tarifs
5
Q
Tariffs (3)
A
- Taxes that are paid
- When importing or exportig goods and services
- Between countries
6
Q
3 Government Policies that allow TNCs to grow in size and influence (3)
A
- Privatisation
- Free-market liberalisation
- Encouraging business start-ups
7
Q
Alternatives to the Bretton Woods Institutions (5)
A
- China Development Bank (CDB)
- Provided nearly $1 trillion
- In financing to foreign governments since the early 2000s
- New Development Bank (NDB)
- Made up of the BRIC nations
8
Q
3 Government Policies that allow TNCs to grow in size and influence
- Privatisation
- Free-market liberalisation (5)
- Encouraging business start-ups
A
- Reduced government restrictions on the way firms operated
- Reflects the belief in a ‘trickle-down’ of wealth
- E.g. the deregulation of the City of London in 1986
- Paved the way for London to become the world’s leading global hub
- For financial services
9
Q
Bretton Woods vs CDB (4)
A
- BW tend to make loans conditional on a country’s commitment to controversial policy reform
- Such as deregulating financial markets and privatizing public utilities
- The CDB offers more expensive development finance
- However, there are no strings attached
10
Q
World Bank (3)
A
- An IGO
- Which works to provide assistance for developing countries
- One of the world’s largest sources of loans and knowledge
11
Q
Limitation of WTO (6)
A
- WTO’s continued lack of success
- In getting its member states
- To reach a global agreement on any aspect of trade
- Not to mention large economies such as the USA and France
Moving towards protectionism
- Raises questions about its long-term role
12
Q
Why global flows may be viewed as threats (3)
- ______________________ can threaten _________________
- Migrants can bring _______________________________
- ____________ can provide citizens with _____________________________
A
- Imports of raw materials/commodities can threaten a nation’s own industry
- Migrants can bring unwelcome cutural change and religious diversity
- Information can provide citizens with knowledge that governments may find threatening
13
Q
Trickle-Down (2)
A
- The positive impacts on peripheral regions
- Caused by the creation of wealth in core regions
14
Q
One very important reason for the acceleration of globalisation in recent decades is the …. (6)
A
- Changing government attitudes in Asia
- Asia’s three most populated countries
- Indonesia, China and India
- Have embraced global markets and reduced barriers to trade
- In all 3 cases, SEZ’s were created and attitudes to FDI were altered
- E.g. by the 1990s, 50% of China’s GDP was generated in SEZ’s
15
Q
Reason why BWI’s are less trusted (6)
A
- The global financial crisis of 2008-09
- Originated in the US and EU markets
- And undermined the entire world economy
- As a result, governments in developing countries
- Have become more sceptical of the financial advice
- That the IMF and World Bank offer
16
Q
3 Government Policies that allow TNCs to grow in size and influence
- Privatisation
- Free-market liberalisation
- Encouraging business start-ups (6)
A
- Methods range from low business taxes
- To changes in law
- Which allow firms to make more profit, e.g. trading hours
- E.g. Hulhumale in the Maldives
- Business profit tax maintained at 15%
- To encourage business start-ups/FDI
17
Q
4 Types of FDI (4)
A
- Offshoring
- Foreign merger
- Foreign acquisition
- Transfer pricing
18
Q
FDI (3)
A
- A financial injection made by a TNC into a nation’s economy
- Either to build new facilities
- Or merge with an existing firm based there
19
Q
Benefits of trade blocs to businesses (3)
A
- Larger market size so access to more customers
- More customers = more sales = higher volume of production = economies of scale = lower costs + lower prices
- National firms can merge to form TNCs
20
Q
WTO (4)
A
- An IGO
- Which advocates trade liberalisation
- And asks countries to abandon protectionist measures
- In favour of free trade
21
Q
3 Government Policies that allow TNCs to grow in size and influence
- Privatisation (6)
- Free-market liberalisation
- Encouraging business start-ups
A
- Successive UK Governments have led the way in allowing
- Foreign investors to gain a stake
- In privatised national services and infrastructure
- Selling to private investors reduces government spending and raises money
- E.g. French company Keolis owns a large stake
- In southern England’s railway network
