Development Flashcards
Define Globalisation.
Globalisation means the free flow of goods, people, ideas and money. This means that the world is linked together by the flow of trade, business and migration.
Linking countries together (interdependence)
What are the causes of globalisation?
Technology
Trade
Multinational companies
Migration
How is trade a cause of globalisation?
The buying and selling of goods across the world is now easier because of better transportation.
Being able to buy products from across the world gives us better access to a variation of goods.
Products are cheaper in certain parts of the world, so richer countries buy their products and make a profit.
How is technology a cause of globalisation?
The ability to share information more easily contributes to development.
People don’t need to travel to meetings.
Messages reach people in seconds.
Share information more easily.
How is migration a cause of globalisation?
Migration of people promotes the sharing of music, TV and films.
People around the world can move more easily since transport.
The movement of people around the world means workers contribute to economics (influx-intake).
If you go on holiday to a place, you come back home and talk about how brilliant it was.
How are multinational companies cause globalisation?
They employ people from across the globe.
The CEO can run factories in multiple countries without being there.
Large companies manufacture and sell their product in almost every country in the world.
How has India benefitted from globalisation?
Flows of people - in 20123, 734000 people were born in India and worked in the UK (send money home to families)
Flows of ideas and culture- Bollywood movie industry.
Foreign investments - Indian companies eg Tata are very successful.
Improved communication technologies - India and China dominate the global communications market with over 2 billion customers.
What are some advantages of having migrants in the UK?
Brings in working- age people which counters the ageing population.
Some of the migrants are highly skilled so work in the banks and law firms in London.
Brings cultural variety.
Pay taxes.
What are some disadvantages of having migrants in the UK?
Half of these workers are unskilled who take work in sectors such as farming, construction and jobs which suffer from seasonal shortages of labour.
Some argue that migrants take work from local people and strain local services such as houses and schooling.
What are some impacts of globalisation on the Middle East?
They cannot continue to rely on oil so need to diversify their economics: Emirates Airline was the worlds largest airline by 2014
90% of Dubai’s population now consists of desk workers from countries such as India, Bangladesh and Vietnam.
In Qatar in 2014, there were 1.4million migrants working in construction.
Dubai has an acute labour shortage due to their small population.
Many of the migrant workers in Dubai work in horrible conditions for very little pay - some even have their passports taken away from them.
What is a remittance payment?
Remittance payment is when workers send money back home.
What are the advantages of living and working in the Middle East?
More buildings - more tourism - more money - positive multiplier effect.
Offers work opportunities.
What are the disadvantages of living and working in the Middle East?
Overcrowding
Little pay - exploitation - long hours
What is a multinational company?
Companies that have a global presence, they may have offices or factories around the world. For example, Nike.
Why do MNCs chose to locate their factories in LICs/NICs?
Cheap labour due to less strict employment laws.
Currency is worth less so cheaper in general.
Access to cheap raw materials.
No workers rights - can work for long hours.
Increases market - it opens the brand to new people who can buy products.
What is outsourcing?
When MNCs contract other companies/factories to do some of its work instead of opening their own factories.
Why do some MNCs outsource?
More environmentally friendly, no need for new factories.
Cheaper - saves money
No need to pay for machines and workers.
Less time consuming.
Experienced workers.
What are the main risks for MNCs having manufacturing done oversees?
More difficult to control
Increased shipping times.
Ruin their reputation with poorly treated workers.
As the country develops they may introduce new laws eg minimum wage.
Why do countries like VIETNAM want to attract MNCs like NIKE?
Brings a large source of income.
Attracts other MNCs.
Positive multiplier effect - employment - money - buy products - taxes - reinvest.
Why did Nike move from making its products in China to VIETNAM?
China’s currency has increased in value, which made its products more expensive.
What is the profile of workers in Nike’s factories?
They employ a majority of women because pay is rarely equal for women compared to men - therefore, it is cheaper.
What is subcontracting?
Use independently owned factories to produce its product.
How many countries does Nike operate in?
140
Describe the conditions of Nike’s sweatshops?
Workers live on 1.25 dollars a day - which can buy two meals, some peanuts, a drink and that is it.
Up to 10 people share a bathroom, bedroom and cooking space.
The scraps of shoe rubber is dumped near the children’s playground, when burnt this releases toxins.
The sewages are exposed and can flood into the living quarters.
Workers cannot speak out due to the local mafia who use physical abuse to control them.
Cannot break the cycle of poverty - poverty trap.
work 15 hour days, 6-7 days per week.
What are mergers?
Many MNCs merge with companies that sell similar products to gain a greater market share eg Reebok and Adidas formed a merger in 2005.
What is a conglomerate?
The combination of many businesses (often unrelated) operating under one corporate group. Eg Nike bought Cole Hann (shoes) and Converse.
Why do MNCs form conglomerates?
To build a range of different products as a safety net in case one fails.
Why do MNCs form mergers?
To protect their market share - Adidas bought Reebok to protect their market share from Nike.
What is Tata?
Tata’s headquarters are in Mumbai. It is the worlds 60th largest company and employs 580 000 people.
They own subsidiary companies such as;
Jaguar Land Rover
Tetley Tea
Tata chemicals
67% of the earnings cam from outside of India.
Tata owns 38 companies in the UK.
What is Tata Steel?
Tata steel is the steel making subsidiary of Tata Group. In 2006 Tata bought Corus - a large steel making company with plants in the UK.
Buying European factories means that Tata can buy and sell more easily to buyers in Europe. Eg construction companies.
What are the positives of having MNCs (Tata) in the UK?
No tariff for UK production
Job opportunities
What are the negative of having MNCs (Tata) in the UK?
Struggle to sell steal because it is cheaper in China due to lower labour costs and their ability to keep the cost of energy low. In the UK it is sold for less than it costs to make.
15 000 British workers could lose there jobs are they need to close down.
Why is it cheap to buy steel from China?
The UK refuse to put a tariff on Chinese steel as they want to remain friends with China. America put a 236% tariff, which allows their steel to compete, meaning America can sell more steel.
