2A. Global systems and global governance Flashcards
what are the concepts behind global systems growth
Global flows have deepened over time, a sense of connectivity from the imported food and TV programmes and a use of global social media
Global flows have lengthened over time, products and services are sourced routinely from distance places and far away continents
Global flows have grown faster over time, in recent years people have begun to talk to one another in real time using technologies like WhatsApp
what are flows
the connections that link people and places together
human systems depend on flows of money, people, ideas and commodities
what are the component parts of globalisation
economic globalisation - driving force behind global systems growth, the expansion of large businesses in developing and emerging economies accelerates cross border exchanges of raw materials and goods, ICT supports the growth of complex spatial divisions of labour for firms
cultural globalisation - diffusion and adoption of languages, fashions and foods that originated in powerful and influential states, glocalisation and hybridization are a more complex outcome that takes place as old local cultures merge and meld with globalising influences
social globalisation - international migration has created extensive family networks that cross national borders, world city societies become multi ethnic and pluralistic (many different types of people, with different beliefs, opinions, and needs), global improvements in education and health with increased life expectancy and literacy levels
political globalisation - the growth of trading blocs allows TNCs to merge and make acquisitions of firms in neighbouring countries, reduced trade restrictions and tariffs help markets to grow
define interdependent
‘relations of mutual reliance between different things or people’. In other words, it’s about people, places or countries who support and need each other
describe the important capital flows
Huge amounts of money cross national borders annually in the form of foreign direct investment by large TNCs purchasing overseas assets
Vast flows of money a generated by investment banks pension funds in private citizens who trade globally and shares and currency for profit
International lending and debt relief loans - can be an important financial flow for states at all levels of economic development
international aid flows - for example aid from the UK direct towards Commonwealth countries
remittances - money sent home by migrants remittances can be a peer-to-peer financial flow money travels directly from one family member to another
describe the flows of people (migrants and tourists)
Migration is directed many tours developed world destinations like New York and Paris however world cities in developing world countries like Mumbai Lagos and Dubai have also begun to function as major global hubs for immigration
International migration is relatively regionalised in general largest labour flows connect neighbouring countries like the US and Mexico
describe merchandise flows (raw materials and manufactured goods)
raw material trade in food and minerals helped link states together
rising industrial demand for materials and increasing global middle-class consumer demand for food, gas, and petrol are responsible for the growth and resource consumption globally
60 years ago the majority of high-value manufactured goods were both produced and sold in North America Europe and Japan factories in these regions made use of raw materials imported from Asia, Africa and South America
The rise of South Korea and China innovation habitant transformed the global past of trade for manufactured goods Koreans Samsung in China’s Huawei have become major players in the production of telecommunications and home media devices
Large of fast-growing African economies like Nigeria and South Africa are increasingly viewed as important markets by Asian manufacturing companies giving rise to greatly increased volumes of south south trade
describe the flows of services
Tourism - the value of international tourist trade had doubled between 2005 in 2015 similarly the number of international tourist arrivals has also doubled in that same period much growth and activity has been generated by touristic movements
Financial services - insurance free-market liberalisation is playing major role in fostering international trade and financial services, within the EU cross-border trade and financial services has expanded in the absence of barriers large banks insurance companies are able to sell services to customers in each of EUs member states
online media and retailing - faster broadband and powerful handheld computers have allowed companies like Amazon and Netflix to stream films and music on demand directly to consumers delivery companies like DHL have reaped benefits of e-commerce growth
describe the global flows of ideas and information
The Internet has brought real-time communication between different places allowing different ideas and perspectives to be shared
social media growth has been a worldwide sharing concerns ranging from climate change to animal welfare
some global technology has also been used to destabilise democracies and to foster local resistance against globalisation.
what forces shape global systems growth
Political decision-making at National International scales – policies will allow and promote cross-border flows of trade people and ideas
transport and communications technology innovation - supports increase cross-border flows of trade people and ideas
financial goals of TNCs - profits can be increased by expanding trade and production into new markets
describe a shrinking world
Technologies and innovation have made it feel like the world is smaller
time and space have been compressed by technological advancements and transports making the world feel small
i.e. it takes less time to travel around the world
what is a TNC
transnational corporations which are defined as enterprises that are involved with the international production of goods and services, foreign investments or income and asset management in more than one country
what is foreign direct investment
Transnational corporations put capital into local economy meaning people have more disposable income to spend on transport housing and local services
Low income countries highly encourage FDI as even a relatively small investment can have a larger effect on their economy due to the multiplier effect
what is the multiplier effect
the ‘snowballing’ of economic activity. e.g. If new jobs are created, people who take them have money to spend in the shops, which means that more shop workers are needed
the effect on national income and product of an exogenous increase in demand. For example, suppose that investment demand increases by one. Firms then produce to meet this demand. That the national product has increased means that the national income has increased
define outsourcing
The use of other companies for products or services for example the increase of call centres in India
define offshoring
the movement of production and manufacturing to another country
reduces labour costs, exploit lower taxes and regulations
could lead to job losses in the TNCs country of origin
why do TNCs offshore and outsource
Most TNCs are based in developed countries that invest in other countries to do manufacturing and production work
they do this because it allows them to avoid trade barriers and expensive tariffs
they also lower the wage bill by paying workers less
they can get around environmental laws as the pollution and waste is not in the country of origin
define glocalisation
PlayStation is the process of adapting brands and products to suit the local market for example taste laws and culture many TNCs sell identical products in all countries have some change their goods to appeal to local community
for example McDonald’s has vegetarian outlets in some parts of India due to local seeking Hindu beliefs and car manufacturers change the side of the steering wheel depending on the country the car is being sold in
define global shift
global shift is the filtering down of manufacturing industry from developed countries to lower wage economies
Global shift is the movement of manufacturing and industry to countries that have recently industrialised
Global shift is historically the movement of manufacturing and service jobs to China and India but recently China has been moving from the secondary to the tertiary sector and has started outsourcing and exporting its manufacturing to countries like Bangladesh and kenya
Large amount of service jobs are still moved to India due to the massive population and English commonly being spoken well among the population this is the reason why there are so many call centres
how does transport accelerate globalisation
Globalisation is centered around trade and trade is centered around the ability for these goods to move from place to place this transportation is made possible by container shipping high-speed rail and air travel
The development of transport technologies has increased efficiency in the production line making products for transport and enabling it to be done at a larger scale, reducing costs
it is also meant that companies do not need to manufacture all the components of products on the same site leading to an increase in outsourcing and offshoring (can exploit the lenient laws, regulations and young, highly skilled workforce)
Ease of transport has allowed an increase in migration this contributes to the rise of diaspora and remittances which are other driving factors of globalisation
how has transport developed
container shipping - standardised so they could be able to hold the same volume of product and be placed on any ship/stacked on top of eachother, also reduced theft
standardisation are important om globalisation because it means that systems in place are the same globally, so no extra considerations need to be made in order to ship things to different parts of the globe
air travel - air travel increases the speed of transporting goods and services it takes less than 12 hours to deliver goods across the world it also allows people to move from one country to another a lot faster it also decrease the cost of transportation so cost per item will reduce when operating on a larger scale
high speed rail - allows goods to be transported efficiently countrywide encourages population growth and flow which leads to a country’s economic growth
how does communications and technology accelerate globalisation
telephone - allows virtually free telecommunications and videoconferencing, sellers can advertise their goods at no cost so products can be viewed and sold all over the world, supervisors can control warehouses remotely
5G -increases communication efficiency
internet/fibre optics - reduced cost of transmitting and communicating information meaning companies can outsource tasks at a lower cost, the Internet has made it easy to access goods and services produced from anywhere in the world
mobile banking - allows foreign direct investment to take place increasing interconnectedness of countries
in 2007 Kenya Safaricom introduced iM-pesa which is a simple mobile phone service that allows credit to be directly transferred between phone users 1/2 of Kenya’s GDP is now sent through this system, women in rural areas are now able to secure loans by using their m-pesa bills as proof of good credit
how does government and international organisations accelerate globalisation
improved security through UN - political stability is fundamental to globalisation because it encourages investment, trade and economic growth, the UN is an integral part of global stability as it resolves conflict and maintains please
platform for nations to collaborate on various issues which creates a cooperative environment essential for the global exchange of goods, services and ideas
EU trade agreements - these trade agreements typically involve the reduction of tariffs and non-tariffs, making it easier for EU businesses to access foreign markets, protection of foreign investments encourage cross-border investments flows contributing to the globalisation of capital
By reducing trade barriers EU agreements can encourage the development of global supply chains
IGOs - intergovernmental organisations like the world trade organisation and European Union negotiate and oversee trade agreements
the International monetary fund provides financial assistance to advise member countries facing economic crises
the World Bank provides funding for development product projects in member countries helping economic development and lowering economic inequality around the world
what is neoliberalism
“eliminating price controls, deregulating capital markets, lowering trade barriers” and reducing, especially through privatization and austerity, state influence in the economy
Political approach that favours free-market capitalism, deregulation and reduction in government spending, has been adopted since the 80s
it focuses on free trade, promoting the removal of tariffs meaning more exchange of goods and services across borders
define deregulation
The removal of restrictions or regulations especially in a particular industry financial deregulation amuse barriers to capital movement making it easier for investors to invest across borders encouraging the flow of capital
excessive deregulation can increase the risk of financial crises like the 2008 gfc
what are special economic zones
A special economic zone (SEZ) is an area in a country that is designed to generate positive economic growth. An SEZ is normally subject to different and more favorable economic regulations compared to other regions in the same country, including tax incentives and the opportunity to pay lower tariffs.
