Development and Globalisation Flashcards
1
Q
Name some common developmental indicators?
A
GDP/Capita IMR Doctor access Literacy rate Birth Rate Death Rate
2
Q
What is HDI?
A
Human Development Index - a compound measurement of development (better than single indicators)
3
Q
Economics issues in LDCs?
A
- low incomes (Ethiopia GNI/capita is $380
- poor trade links/presence (10% of population in LDCs, 0.4% of trade)
- debt: money must go towards high interest repayments
- trade in low-profit goods, mostly primary resources e.g. minerals
- trade deficits
- economic instability and lack of diversification
4
Q
Social issues in LDCs?
A
- limited health care (30,000 patients/doctor in Ethiopia)
- high IMR (75/100,000 in Ethiopia)
- high levels of malnutrition and disease
- low education and literacy levels (30% in Ethiopia)
- lack of access to clean water and sanitation
5
Q
Demographic issues in LDCs?
A
- low life expectancy (56 in Ethiopia)
- rapid natural population growth leading to food shortages
6
Q
Political issues in LDCs?
A
- not truly democratic
- corruption
- war and conflict
7
Q
Cultural issues in LDCs?
A
- conservative religion hampering development
- inequality between genders and ethnic groups
8
Q
What are the benefits of National Groupings?
A
ECONOMIC BENEFIT:
- reducing barriers to trade, thus increasing trade (NAFTA)
- larger market for business
- comparative advantages as countries can specialize to maximize productivity
PROMOTING DEVELOPMENT:
- tackle issues of global concern e.g. UN Millennium Development Goals which highlighted global issues
TO INCREASE SECURITY AND PEACE
- less likely to go to war with an economic partner and also agree on policies to increase regional and global security
9
Q
Positive consequences of National Groupings?
A
- increase development due to increased trade
- increasing QoL
- can support declining regions or industries e.g. EU rural development policy
- freedom of movement
- better global representation for smaller countries
- reduced conflict and improved relations
- global security e.g. NATO
10
Q
Negative consequences of National Groupings?
A
- loss of some self-determination
- sharing resources, some will lose out
- can reduce extra-group trade
- richer states must support poorer ones
11
Q
What is the EU? (National grouping CS)
A
Closely integrates economic and political union:
- single market
- many countries with a single currency
- common laws and policies e.g. CAP
12
Q
Positive Impacts of EU? (National grouping CS)
A
- trade increased (not just displaced but created outright), 12-23% GDP from EU since 1970
- Euro means price consistency and less uncertainty about XRs
- support for industry e.g. CAP
- increased security from external threats e.g. biometric passports, Schengen DB
- freedom of movement
13
Q
Negative Impacts of EU? (National grouping CS)
A
- joining can be expensive e.g. environmental requirements must be invested in
- sharing resources e.g. CFP means British fishing grounds are now open to other states
- extra-EU tariffs stifle extra-EU trade and are protectionist
- unskilled immigration fueling tension and driving down wages
- loss of some self-determination
14
Q
Economic and environmental sustainability…
A
are often in conflict
15
Q
Timber Industry in Sarawak? (Economic/Environmental Sustainability CS
A
- one of largest tropical hardwood exporters (19mil m^3 in 1990), becoming vital to the national economy
- this has caused widespread deforestation (70% of forests gone) leading to habitat loss, soil erosion and flooding
- rate of logging became so great that they were going to run out in under a decade
- since 90’s, forest management plans in place with a 25 year cutting cycle
- illegal logging still occurs
16
Q
Commercial Agriculture in Sarawak?
(Economic/Environmental Sustainability CS)
A
- rising since 1990’s -> mostly palm oil (6% of exports)
- plantations require forest clearing
- monoculture reduces biodiversity
- use of chemicals and waste causes water and soil pollution
- still rising due to demand causing continued harm
17
Q
Other Industries in Sarawak? (Economic/Environmental Sustainability CS)
A
- since 2000, increased investment in manufacturing/construction
- these industries require power, usually coal generated
- this contributes to GG emissions
- not currently environmentally sustainable
18
Q
What/Where is the Great Barrier Reef? (Sustainable tourism CS)
A
- largest coral reef system on Earth
- NE coast of Australia
- tourism accounts for 87% of area’s economic output
- generates over AU$5bn annually
19
Q
Negative Impacts of tourism on GBR? (Sustainable tourism CS)
A
- coral reefs are very sensitive to pollution through waste, litter and boats
- coral can be damaged by boat anchors and careless divers
- GBR has passed a point of no return and will never fully recover
- tourists disturb wildlife e.g. seabird nests upsetting local equilibrium
- culturally and economically important area to indigenous people - this can be obstructed by tourism
- developments can damage coastal ecosystems which sustain the reef
20
Q
GBRMPA steps to make tourism more sustainable?
A
- established a zoning system of activities to protect the most sensitive areas
- fishing permits are capped and there are strict regulations
- operators pay AU$3.50 per visitor per day to GBRMPA
- operators play a vital role in reporting damage and helping fund research to monitor decline
21
Q
How does aid help development?
A
Allows investment in areas aimed at improving QoL e.g. healthcare
22
Q
Problems with providing aid?
A
- corruption, a lot of aid money simply disappears
- logistical issues delivering aid, particularly w/ poor infrastructure
- bilateral aid can be tied to benefit the donor country
- dependence on aid can develop
23
Q
How does trade help development?
A
- increasing economic growth by creating employment and wealth
- increasing the country’s capacity to reinvest in QoL
24
Q
Problems with trade?
A
- less developed countries cannot compete in global market due to low-tech processes or against HIC subsidies e.g. US agriculture
- conflict/disease/problems domestically means money cannot be invested in trade
- can have negative social impacts e.g. depressing wages and poor working conditions
- primary goods generate little profit and are unreliable
- lack of diversification makes growth fragile i.e. if one good reduces in demand could stall economy
25
Consensus regarding trade and aid?
Combination of the two is required
26
What/Where is Sudan? (Trade vs Aid CS)
- one of poorest countries in Africa
- long periods of civil war and conflict
- economy has been growing at 5% annually but this had not translated into and improvement in living standards
- half the population live off less that $1 per day
27
Aid in Sudan? (Trade vs Aid CS)
- 2007, over $2bn in aid (5% of GNI)
- 70% of this was humanitarian
- comes from different sources
- a lot of short-term food aid but this does nothing to address the cause
- some is used to promote education e.g. USID funded construction of 150 schools
- conflict and corruption makes delivery difficult
28
Trade in Sudan? (Trade vs Aid CS)
GROWTH OF OIL IS DRIVING TRADE AND THE ECONOMY
- 1999, Sudan began exporting oil and it is now their main export with a trade surplus
- driven economic growth and improved their international standing and importance
- most wealth generated remains concentrated at the top
- little is being spent on development
- 40% of GDP is still agricultural, which is very unreliable
- barriers to trade and WTO rules lock Sudan out (HIC subsidies and average 20% tariffs)
29
What is Globalisation?
The process of the world's economies, political systems and cultures becoming more integrated and interconnected.
30
What triggered Globalisation? (mainly in the 80's)
- telephone network improvements and satellites made global communication instantaneous
- mobile communications becoming readily available
- the internet has enabled the transmission of vast amounts of data very quickly over long distances
- transport advances (reducing air-cargo costs, containerization, etc.)
31
Four factors promoting Globalisation?
Flows of:
- capital
- production
- services
- people
32
What are TNCs?
- companies that operate in 2 or more countries
- in 2010, accounted for 25% of global GDP
- quickly spread capital, tech and culture
- can exert huge political pressure (see Nigeria)
- main driving force between globalisation
33
General Structure of TNCs?
- HQ'd in HICs for skilled labour
- R&D in HICs for educated, skilled labour
- often regional R&D centres (Samsung in Warsaw)
- factories in RICs or NICs
- factories in target markets to avoid tariffs
34
Why have TNCs grown so rapidly in recent years?
- now able to exploit low costs in NICs
- take advantage of govt policies designed to encourage business
- operate where labour and environmental laws are lax
- access to growing markets
- economies of scale, increasing profits
- control supply chain to minimize costs
35
Impacts of TNCs upon Country of Origin?
ECONOMIC:
- profits repatriated from abroad
- skilled employment
- deindustrialization and wider decline
SOCIAL:
- range of products increases
- prices go down
- unemployment leading to social decline
ENVIRONMENTAL:
- reduces local pollution
36
Impacts of TNCs upon Host Countries?
ECONOMIC:
- increased employment and wealth -> multiplier
- TNCs may out-compete local businesses
- little profit remains in the host country
SOCIAL:
- investment may lead to a more skilled workforce
- increase productivity
- keep wages low and treat workers poorly
- managerial positions are likely to be filled by employees from origin countries
- urbanisation
- decisions are made with little consideration for the host country - could just leave one day
ENVIRONMENTAL:
- causes pollution
- construction will destroy habitats
- some investment in sustainability, maybe
37
What is Wal-Mart?
- largest retail TNC
- owns numerous chains e.g. ASDA
- still HQ'd in Arkansas
- manufacturing shifted to NICs e.g. electronics in China
- expanding in emerging markets e.g. Bharti Enterprises in India
- exported the US' idea of a supermarket globally, where everything is under one roof (not popular in India)
- some glocalisation by buying locals chains
38
Impacts of Wal-Mart in USA, the origin country? (TNC CS)
SOCIAL:
- provides huge range of goods - gardens to tyres
- most are open 24/7 for convenience
- most jobs are poorly paid so the govt has to support employees, effectively subsidising Wal-Mart ($85mil in CA)
- poor working conditions e.g. denying meal breaks lawsuit
ECONOMIC:
- provides thousands of jobs
- provides cheap goods
- contributed to decline in manufacturing
- out-price local businesses (for every 100 jobs created, 50 local ones lost)
ENVIRONMENTAL:
- produces vast amounts of pollution
- increases traffic increasing pollution
39
Impacts of Wal-Mart on host countries? (TNC CS)
ECONOMIC:
- jobs in construction, manufacturing and retail (209k jobs in Mexico)
- use of local companies and farmers ($8bn annually in Canada)
- local suppliers can use Wal-Mart to expand
- pays very little to suppliers
- local companies out-competed
- most profits sent back to US
SOCIAL:
- skilled jobs in LEDCs (policy to fill managerial roles with locals)
- offers a reliable wage
- poor working conditions e.g. 80hr working weeks in Bangladesh
- donates hundreds of millions to give appearance of trying to improve conditions
ENVIRONMENTAL:
- invests in eco-friendly e.g. in Puerto Rico 23 Wal-Marts have solar panels
- uses huge amounts of land e.g. 29000m^2 shop in Hawaii
40
What are the Asian Tigers?
- first generation NICs in the 1960s
| - HK, Singapore, SK, Taiwan
41
Attraction of NICs?
- cheap labour
- abundance of cheap land and materials
- reasonable infrastructure
- business friendly environment
- reduced tariffs
- lax labour and environmental regulations
- expanding domestic markets
42
Why do NICs move?
Wages rise, companies move elsewhere, new NICs are created.
| Cyclical.
43
China as an NIC? (NIC CS)
- since 70's, China's GNI/Capita has growth consistently at 10%
- since 1978, the govt has allows and encourage privatisation, causing growth
- tariffs and taxes cut to encourage trade - exports rose 20% annually in the 80s
- encouraging the growth of private business
- SEZs setup to draw in FDI, mostly through tax breaks
- investment in education and infrastructure
- joined WTO in 2001, further opening China
Companies moved en masse to China
44
Negative Consequences of China's growth? (NIC CS)
- wider gap between rich and poor (coastal vs interior)
- pollution, acid rain, air quality
- poor working conditions, 130 injured in 2010 by toxic chemical in Suzhou Apple Factory
- poor working culture, spates of suicides at many factories
45
India as an NIC? (NIC CS)
- annual 7% growth since 1997
- mostly based of service industries
- services account for 56% of GDP
Why?
- good supply of skilled, educated labour (500k engineering graduates annually)
- English is widely spoken
- cheap labour
- extensive communications infrastructure
46
Local Companies driving growth in India? (NIC CS)
- migrants returning to India in the 90s recognized the IT needs of HICs and setup businesses to satisfy them
- low labour costs meant more competitive pricing
- TNCs began to outsource to these companies to reduce costs
47
TNC Relocation driving growth in India? (NIC CS)
- skilled, English speaking workforce suited for back-office roles e.g. customer support
- average salary in India is 1/10 of UK at £1200
- KPMG employs people in 10 cities in India
48
Negative Impacts of India's Growth? (NIC CS)
- TNC profits leave the country
| - increasing wealth divide
49
What has recent economic growth been mainly driven by?
Emerging Markets (China responsible for 20% of growth since 2000)
50
New technologies role in growth?
- new sectors
- increasing productivity
- R&D investment
- automation to have drastic effects to come
