G3A Globalisation Case Studies Flashcards
1
Q
Factors of Economic Globalisation
World Trade Organisation
A
- 159 countries
- Forum for trade agreements
- Agricultural Agreement led to cut of tariffs on all agri-goods - 36% of MEDCs, LEDCs exempt
- Supervises 95% of global trade
- Rich countries such as the US can block imports of clothing from developing countries through high import duties and quotas
- Does not monitor poor labour rights in countries such as El Salvador where labourers earn $0.30 per hour
2
Q
Factors of Economic Globalisation
European Union
A
- Regional agreement between 28 countries
- Ensures development and international stability through tariffs that protect intra-regional trade
- Within the Schengen area, free movement of people, goods and services
- Of the top 500 largest corporations by revenue, 161 have EU headquarters
3
Q
Factors of Economic Globalisation
Information Technology
A
- 6.8 billion cell phone subscriptions worldwide at the end of 2012
- Total number of users reached more than 2.7 billion by 2013 (39% of global population)
4
Q
Factors of Economic Globalisation
Transport
A
- In 1940s, London to Brisbane took 11 days and $20,000 - now only takes 22 hours and $2000
5
Q
Factors of economic globalisation
Foreign Direct Investment
A
- 1066 foreign companies invested in the UK during the years 2004-2005 and made up almost half of the new projects
- In 2004, FDI totalled £38 billion in London and 32% of the UK stock market was foreign owned
6
Q
Causes and Effects of Global Shift
Toyota in the UK
A
- UK had an open door policy so government and local authorities welcomed investment
- Strong Japanese affinity for the UK as they are both islands with colonial histories
- English is the international language of business, Japan’s second language
- Abundance of skilful workforce in Burnaston (20,000 job applications by the end of 1992)
- Transport links to the EU; M1 and M6 were directly on the link road where the plant is
7
Q
Causes and Effects of Global Shift
Call Centres in India
A
- Operating costs 10-60% lower
- Salaries 10-15% cheaper
- Operators demand uniformity of language, dress and lifestyle and knowledge of western culture
- Loss of tradition as workers at call centres are required to dress in a Western fashion + hours influenced by American / UK holidays
8
Q
Causes and Effects of Global shift
Movement into Eastern Europe (Slovakia)
A
- Volkswagen plants in Slovakia output 250,000 cars a year (Mexican plant output = 500,000), whilst Peugeot outputs 300,000 and Kia 200,000
- Attracts investment due to good infrastructure - highway, railway, airport, skilled labour
- Lowest business cost base of any EU country - 7 tesco stores in 1996
- Subsidies to Kia of 228million EU
- Free land to Peugeot created 10,000 jobs
9
Q
Causes and Effects of Global Shift
Mattel (caravan capitalism)
A
- Mexicali plant lasted 7 years from 1968-1975
- 3000 jobs were lost in the USA due to the closure of plants
10
Q
Causes and Effects of Political/ cultural globalisation
USA
A
- Output of US economy $14 billion nearly 3x times second placed Japan $5 billion in IMF 2009 report
- US dollar = global reserve currency
- USA has world’s second largest army behind China, however 25,000 aircraft (China, India and Russia combined only have 10,000)
- Defence budget in 2009 was $515bn, second to China’s $62 bn
- Americanisation through Coca-Cola, also English = global language
- Widespread geographical influence for example the military base at Diego Garcia which allowed US to counter Soviet influence during Cold War
11
Q
Causes and Effects of political/ cultural globalisation
Bhutan
A
- Attitudes in young people have changes - violence has increased
- Dress style has changed from traditional to hip-hop - loss of culture
- Loss of family due to TV
- Graffiti in sacred places
- Car ownership doubled in Timpu
12
Q
Causes and Effects of Political/ Cultural Globalisation
Fair Trade
A
- Low income developing countries account for >40% of the world’s population but is involved in <3% of all trade
- UN estimates that poor nations are denied $700 billion due to unfair trade
- If Africa received 1% increase in its share of exports, it would receive 5x what is does in aid
- Banana plantation workers earn 6x more thorugh Fair Trade
13
Q
Causes and Effects of political/cultural globalisation
Tanzania
A
- Main export is coffee and tea (55% GDP) however many of these are grown in MNC controlled farms who control wages
- Babati Agricultural Project aims to involve locals and increase prosperity in the region through bottom-up schemes
14
Q
Winners from Globalisation
**Nokia, **
A
- Jucu, Romania
- 3500 workers in new workforce size (from 2000)
- One German worker’s = 10 Romanians
- Creation of formal jobs (£ 180/ week) leads to income tax
- Council fixed the road in Jucu to accomodate Nokia
- However 2300 Nokia employees in Germany became unemployed with a further 2000 workers indirectly affected
- The factory in Jucu closed down five years later
15
Q
Winners
India
A
- Risen due to policy change which formerly restricted foreign competition
- FDI in 2000 rose to $2 billion
- Revenue from Indian software exports grew to $4 billion 2000
- Benefitted from filter down business from the developed world e.g. cheaper labour costs, number of countrieshave ICT shortages
- However there are hgh levels of poverty - 40% live on less than $1 a day
- Rapid growth has also led to transport and pollution problems
