7.4 global networking

Question 1

What are some examples of capitalism?

Answer 1

private property
right to make a profit
privatized services
buying and selling of goods

Question 2

What are some examples of communism?

Answer 2

government ownership of property and land
state owned businesses
wages determined by government
profits taken by the gov

Question 3

What is the world dominant economic system since the end of the world war?

Answer 3

free market capitalism

Question 4

Why has free market capitalism grown and socialism/communism weakened?

Answer 4

-The collapse of socialist economies in the USSR and Eastern Europe
-China’s movement away from a socialist economy towards state capitalism
-Reform in communist Cuba, allowing limited private ownership of buisness

Question 5

Which 5 states are still communist to some extent?

Answer 5

North Korea
Cuba
Vietnam
Laos
China

Question 6

Who has encouraged free trade and capitalism?

Answer 6

IGOs, such as the World Bank, IMF and WTO

Question 7

Who is the World economic forum and what do they do to promote capitalism? (WEF)

Answer 7

A swiss non-profit organisation that promotes globalisation and free trade via its annual meeting at Davos, which bring together global businessmen and political elite

Question 8

Who is the IMF and how do they help to promote capitalism?

Answer 8

They promote global economic security and stability and assists countries in reforming their economies and stabilise currencies. Economic reforms often mean more open access to developing economies for TNCs

Question 9

How can the IMF be a hinder to developing nations?

Answer 9

They help to manage issues like international debt. However, in the 80s and 90s, it imposed conditions on many borrowing countries that forced developing countries to cut spending on health and education inn return for stabilizing or extending debt repayment

Question 10

What is an example of the IMF helping a developing country?

Answer 10

The IMF didn’t allow Cote d’Ivoire to receive aid until 2013, when they government agreed to set up commercial courts and allow free elections. After economic reforms, US$4.4 billion of debt was cancelled, but cancellation of a further uS$10 bn of debt depended on reform of the country’s electricity sector to allow companies to react to worldwide price changes.

Question 11

Why is there a ban on Ivory coast exporting diamond?

Answer 11

because the country used them to finance a civil war in 2005

Question 12

Why can Ivory Coast now transport cocoa again?

Answer 12

Because they agreed to minimum wages and investment in road infrastructure was achieved in 2011

Question 13

What was funding towards education and training dependent on in Ivory Coast?

Answer 13

creating a more competitive banking sector

Question 14

How do the world Bank help to promote capitalism?

Answer 14

They make development loans to developing countries, but within a ‘free market’ model that promotes trade and privatization, which benefits large TNCs. They also focus on humanitarian crises with the aim of eliminating poverty and reaching development goals

Question 15

How does the world trade organisation help to promote capitalism?

Answer 15

They regulate global trade and aims to reach open trade and reduced protectionism.

Question 16

What is the WTO focused on at the moment and why is it not always successful?

Answer 16

Currently their focused on poverty reduction through use of removing farm subsidies . However, not in many developing countries, cheaper imports undercut local farmers who are put out of work

Question 17

Why are the IMF WTO and World bank all set up in favour of developed countries?

Answer 17

In the IMF and World Bank, not all members are equal as their individual voting rights are dependent on the amounts they have invested into the fund. On the other hand, the WTO gives everyone an equal vote, but they’ve never had a vote as it usually is based on mutual agreement

Question 18

What is the Dell Theory of conflict prevention?

Answer 18

In 2005, Freidman developed his McDonald’s observation that no two countries both with a McDonald’s in have ever gone to war into his Dell Theory of Conflict prevention. It says that no two countries that are both part of a major global supply chain will ever fight in a war. They want TNCs to locate a part of the supply chain within their country rather than just selling things to them

Question 19

Define the term ‘brand value’

Answer 19

A way of measuring cultural impact on global consumers

Question 20

In 2015, what is noticeable about the top 16 companies in brand value?

Answer 20

-12 are from the US, one from Korea and Japan each and 2 from Germany
-Ten of the top 16 are involved in ICT and comms, three are car brands and 2 are food and drink
-The top Chinese company was Lenovo at position 100

Question 21

What are the characteristics of Westernization that is leading to a global culture of food, the arts and media?

Answer 21

-consumerism
-capitalism
-white culture with English as the dominant language
-a culture which ‘cherry picks’ and adapts selective parts of world cultures and absorbs them

Question 22

What is a specific example of a company fueling Westernization?

Answer 22

McDonald’s:
36,000 restaurants worldwide
65 million people served a day
750 people buy it every second

Question 23

What evidence is used to suggest that TNCs respond to, rather than override, global cultural differences.

Answer 23

In India, McDonald’s has had to adapt its menu to suit local tastes and the Hindu and Muslim regions
Therefore glocalization or hybridization occurs

Question 24

What shows that cultural traffic is not always West to elsewhere?

Answer 24

In the UK the curry is the most popular takeaway
Sushi is becoming increasingly popular
American football and baseball have had a hard time being exported to the rest of the world.

Question 25

Who dominates the media sector and what does this allow them to do?

Answer 25

The USA- which gives them the ability to constantly reinforce its cultural message and values in a hegemonic way

Question 26

How does intellectual property law protect R&D and new developments?

Answer 26

patents for new inventions
copyright for artistic work
trademarks to protect designs

Question 27

What has to be done if a person wants to use someone’s pre-designed design or invention?

Answer 27

They have to pay a royalty fee

Question 28

Where do most royalty fees go?

Answer 28

85% go to the US, EU and Japan

Question 29

What does the domination of global royalties reflect?

Answer 29

• existing developed countries are paid for inventions and art they created decades ago
• developed countries are best placed to invest in R&D, so patent holders also tend to be patent developers
  -education and skill levels are higher in developed nations
  -Westernization tends to spread US and European music, film, TV and brands

Question 30

What statistic shows the rise of patents and R&D in CHina?

Answer 30

In 2012, Chinese innovators applied for 652,000 new patents vs only 542,000 in the US

Question 31

How is the global power of TNCs changing?

Answer 31

In 2015, the top ten TNCs in revenues held only 3 US ones
Some Chinese companies are growing rapidly
American car companies are losing ground

Question 32

What statistic shows that TNCs are powerful economic forces?

Answer 32

In 2013, TNCs accounted for nearly 80% of all global trade which was over US$20 trillion

Question 33

What are SAPs?

Answer 33

Structural adjustment programmes. These are economic policies formed by the IMF and World Bank in response to African debt crisis

Question 34

What are examples of SAP conditions?

Answer 34

-reduction in gov spending to promote privatisation
-deregulation
-large scale trade liberalization

Question 35

How has SAPs affected Africa?

Answer 35

-considered to have done more harm than good
-increase in equality
-increased unemployment
- decreases quality of services
-increases debt

Question 36

What is an example of a country have to pay interest and therefore more than they initially borrowed?

Answer 36

In 1978, Nigeria had borrowed $5bn. By 2000, they had paid back $16bn but still owed $31bn

Question 37

Why haven’t SAPs worked in Africa?

Answer 37

African countries weren’t ready to implement these measures. Most rich countries built their economy through protectionism and only opened their economies when they were strong enough to compete. In contrast SAPs force African countries into free market capitalism with domestic economies that aren’t strong enough to compete, causing economic decline

Question 38

What factors occurring in Africa meant they weren’t prepared for SAPs

Answer 38

corruption
national leaders ‘flogged’ water/electricity companies when it suited them
used international loans to pursue conflict, meaning no development

Question 39

Why did Superpowers curse the ability of SAPs to be successful?

Answer 39

SAP policies opened up African markets to create a cheap source of raw commodities of which western countries could exploit while also selling their products to African consumers with little competition from domestic industries
It can be argued SAPs were implemented to further develop western countries at the expense of untapped African economies