4.1.3 - FACTORS CONTRIBUTING to INCREASED GLOBALISATION Flashcards
What is GLOBALISATION?
the PROCESS by which the World is Becoming INCREASINGLY INTERCONNECTED as a RESULT of Massively INCREASED TRADE & CULTURAL EXCHANGE
What are 8 FACTORS CONTRIBUTING to INCREASED GLOBALISATION
(A) - TRADE LIBERALISATION
(B) - POLITICAL CHANGE
(C) - REDUCED COST of TRANSPORT and COMMUNICATION
(D) - INCREASED SIGNIFICANCE of GLOBAL TNC’S
(E) INCREASED INVESTMENT FLOWS (FDI)
(F) MIGRATION (within & between economies)
(G) GROWTH of the GLOBAL LABOUR FORCE
(H) STRUCTURAL CHANGE
What is TRADE LIBERALISATION?
the PROCESS by which INTERNATIONAL TRADE is MADE EASIER Through REDUCTION of TARIFFS and BARRIERS
- 1947 GATT Created - RAISED LIVING STANDARDS worldwide as it ALLOWED DEVELOPING Nations to EXPORT Their GOODS To MORE INDUSTRULAISED ONES, Without Having to Pay HUGE TARIFFS
What are the BENEFITS of GATT ( General Agreement on Tariffs & Trade )?
- meant NEW JOBS for UNSKILLED WORKERS
- Labour Intensive Production Manufactures in Developing Nations, ENJOYED COMPARATIVE ADVANTAGE because of LOW LABOUR COSTS
What are 2 BENEFITS of TRADE LIBERALISATION?
- CONSUMERS BENEFIT as liberalised trade can HELP to LOWER PRICES and BROADEN the RANGE of QUALITY GOODS & Services AVAILABLE - as they’re now allowed to buy imported goods
- COMPANIES BENEFIT as liberalised trade DIVERSIFIES RISKS and CHANNELS RESOURCES to where RETURNS on Investment are HIGHEST
What are 4 DRAWBACKS of TRADE LIBERALISATION?
- COMPETITON can INTENSIFY between businesses, between NATIONS and PROFIT MARGINS can END UP being SQUEEZED
- EMPLOYMENT that has been CREATED by Lower Trade Barriers, MAY Only be TEMPORARY
- INCREASE TRADE can mean POLLUTION or OVER-CULTIVATION of Land to KEEP UP with NEW DEMAND
- DEVELOPING Nations become ECONOMICALLY DEPENDENT on INDUSTRIALISED Ones
Explain the Increasing Globalisation FACTOR - POLITICAL FACTOR
- POLITICS now Happens on a GLOBAL SCALE - Regular MEETINGS - power devolved to Govs in Trading Blocs and Organisations e.g. WTO
- LED to LESS PROTECTIONIST POLICIES and MORE TRADE between nations
- G7 Countries - Major Advanced Economies
Explain the Increasing Globalisation FACTOR - REDUCED COST of TRANSPORT and COMMUNICATION
TRANSPORT :
- COST of Transporting Goods LONG DISTANCES has been REDUCED by CARGO CONTAINERS
- Can GAIN a Business EOS as they can SHIP HUGE QUANTITIES at ONCES
- CHEAPER AIRFLIGHTS for Business People for MEETINGS
COMMUNICATION :
- COMMUNICATION & TRADE via INTERNET = Exploitation in Globalisation
- MESSAGES SENT INSTANTLY and Directly - Email, Zoom
- FAR FLUNG Countries are NO LONGER ISOLATED from the Global Marketplace
Explain the Increasing Globalisation FACTOR - INCREASED SIGNIFICANCE of TNCs
- has been caused by LARGE COMPANIES SETTING UP or BUYING EXISTING BUSINESSES in Other Countries
- called MNCs , from Developed Countries ( G7)
- e.g. Starbucks, Coca cola
Explain the Increasing Globalisation FACTOR - INCREASED FDI
- BUSINESSES OUTSIDE of Important Market TRADE BLOCS will INVEST in a BUSINESS or SET UP PRODUCTION Inside It to GET ROUND TARIFFS , e.g. Nissan in UK
- led to globalisation –> MORE COMPANIES in MORE COUNTRIES
- can Give a COUNTRY INCOME GENERATION, JOBS, GDP GROWTH
Explain the Increasing Globalisation FACTOR - MIGRATION
- many countries maintain extensive legal barriers to prevent foreigners seeking work or residency from entering their national borders
- but in the EU there is FREE MOVEMENT of PEOPLE BETWEEN NATIONS to WORK
- Immigration provides a Source of LOW INCOME, able-bodied workers
Explain the Increasing Globalisation FACTOR - GROWTH of the GLOBAL LABOUR FORCE
- Global Labour Force is ONE that is FREE to SEEK BETTER JOBS in OTHER COUNTRIES
- can CAUSE RESENTMENT from HOST NATIONS, where CITIZENS FEEL that Their JOBS are being TAKEN By IMMIGRANTS
Explain the Increasing Globalisation FACTOR - STRUCTURAL CHANGE
- an ECOMONIC CHNAGE that occurs when an Industry change the way it operates
- as country develops it moves away from Primary Sector Business and Employment TO MANUFACTURE as it becomes INDUSTRALISED …
