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Other Geo > Global interdependence > Flashcards

Global interdependence Flashcards

1
Q

what problems does trying to be involved in international trade present for LICs

A
  • primary products are low/fluctuate in value
  • overdependence on one or two goods is dangerous for a country (one commodity dependency)
  • manufactured goods sell at high prices
    -trade barriers are often used by HICs to prevent imports from damaging their own economy
  • rich countries use a lack of trade restrictions in poorer countries to get rid of excess goods where overproduction has occurred (dumping)
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2
Q

Trade in goods (merchandise)

A
  • china became the worlds biggest trader in merchandise in 2013 - trade surplus of $259 billion (2.8% of GDP)
  • then USA, Germany and Japan made up the top 4
  • South Korea, Mexico, Brazil, India, Thailand and Malaysia are worth noting
  • Affluent countries with small populations, such as the Netherlands, Belgium and Switzerland are also worth noting
  • the least developed countries’ share of total global merchandise exports totalled only 1.1% compared to 75.5% of the G20`
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3
Q

Trade in services

A
  • USA remains firmly in the leading position in global trade in commercial services
  • UK 2nd
  • Japan less significant
  • India in top10
  • least developed countries (LDCs) have shown pleasing progress
  • between 2000 and 2013 this grew by an average of 14% per year in LDCs
  • e.g. Cambodia - leading LDC tourist destination - Ethiopia - expansion of air transportation services (Ethiopian)
  • share has been decreasing in North America and Europe but increasing in Asia
  • Asia’s exports of commercial services rose from 21.7% to 26.2% whilst Europe’s share fell from 51.8% to 47.2%
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4
Q

WTO role

A
  • to ensure trade flows as smoothly, predictably and freely as possible
  • trade without discrimination
  • not completely a free trade body as it allows tariffs and trade restrictions under certain conditions
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5
Q

WTO how does it attempt to settle trade disputes

A
  • countries bring disputes to the WTO if they think their rights under the agreements are being infringed
  • judgements are made by independent experts and are based on interpretations of the agreements and individual countries’ commitments
  • the system encourages countries to settle their differences through consultation
  • if this fails, a staged procedure is followed
  • a country’s membership is at stake if they do not adhere to a settlement of a dispute
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6
Q

criticisms/disadvantages of WTO

A
  • free trade benefits developed countries more than developing countries - less protection for developing businesses
  • process of settling disputes takes a long time (350 out of 614 settled)
  • trade rules are still unfavourable towards developing countries - developed countries were allowed ‘tariff protection’ when they were emerging but not now
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7
Q

successes/advantages of WTO

A
  • 350 trade disputes settled since creation
  • increased number of disputes brought to them - showcasing the WTO as a forum for settling trade disputes
  • WTO regulations and co-operation helped avoid a major trade war; significant during 2008/09 recession
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8
Q

stages of the Butler model

A
  1. Exploration
  2. Involvement
  3. Development
  4. Consolidation
  5. Stagnation
  6. Rejuvenation (A)
  7. slight increase (B)
  8. Stabilised (C)
  9. Slight Decrease (D)
  10. Decline (E)

Everyone In Devon Can Sing, Dance and Rap

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9
Q

Butler model critique

A

still valid:
- applies to countries with varying levels of development
- lack of timescale aids applicability and flexibility
- Christaller’s ideas still hold true (adventurous tourists seeking authentic, uncommercialised experiences will shy away once it becomes popular)
- destinations still dominated by TNC tourism
- tourism is still quite unregulated

Outdated/Flawed:
- findings were not based on empirical research
- doesn’t account for external shocks
- Malthusian view of tourism and carrying capacity
- stage descriptions are subjective
- model loses applicability when initial attraction is not physical
- can’t be applied to destinations with differing markets depending on the season
- wide range of new, niche tourism

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10
Q

what is meant by allocentric tourism?

A
  • tourist who seeks new experiences and is keen to meet strangers
  • Curious about different places and cultures
  • Will make own travel arrangements
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11
Q

what is meant by psychocentric tourism?

A

Unadventurous traveller who will have little interest to seek out strange places
- Happy to keep returning to same place and will use travel agents package tour

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12
Q

why is tourism considered to be volatile and vulnerable to external shocks?

A
  • Perceptions/image of a place can change instantly
  • Trade – Tourism has no powerful governing body to intervene/compensate -Completely at the hands of the tourism markets
  • Natural phenomena initially draw interest from tourists… tourism if unmanaged may well destroy such initial attractions - Difficult to stop less developed nations becoming greedy in terms of economic benefits of tourism
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13
Q

what is the tourism multiplier effect?

A
  1. Substantial rise in per person incomes
  2. Higher business and personal tax base increases local government spending power
  3. Improvement of physical and cultural infrastructures
  4. Establishment of hotels and other tourist facilities
  5. Expansion of local job opportunities and population
  6. Inflow of business and capital to satisfy increased local demand
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14
Q

what are the economic leakages in tourism?

A
  • Transport costs paid to airlines and other carriers
  • Payments to foreign owners of hotels and other facilities
  • The cost of goods and services imported for the tourist industry
  • Remittances sent home by foreign workers
  • Foreign debt relating to tourism
  • Payments to foreign companies to build tourist infrastructure
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15
Q

facts about cruise ship tourism

A
  • Uses heavy fuel oil – bad for the environment
  • Uses around 1,200 tonnes of fuel
  • Releases the same amount of CO2 as 5 million cars travelling the same distance
  • 500 cruise ships
  • Alternatives could be diesel but is 1/3 more expensive, using local energy instead of the engine generator, using a filter to reduce emissions
  • Fish in Kotor, Montenegro have reduced significantly
  • Venice has statistically more excess lung cancers found in population compared to the rest of Italy
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16
Q

environmental impacts of tourism

A
  • Overuse of local water sources for recreational activities
  • Overuse of local resources such as energy which is already in short supply
  • Land degradation due to increased construction of tourism and recreational facilities
  • Air and noise pollution – tourism now accounts for 60% of air travel, a single transatlantic flight emits almost half of the CO2 emissions produced by all other sources consumed by an average person yearly, noise pollution can disturb wildlife
  • Solid waste and littering – cruise ships in the Caribbean are estimated to produce 70,000 tons of waste each year
  • A person on a cruise ship, on average generates 3.5kg of waste compared with 0.8kg on land daily
  • Sewage – tourism increases sewage pollution and sewage run off
  • Aesthetic pollution – due to large buildings taking over sky lines
  • Deforestation
17
Q

Examples of Niche tourism

A

Medical tourism:
- Thailand in 2017 saw 2.4 million hospital visits related to medical tourism
- South Korea has the highest number of cosmetic procedures per capita in the world
- In 2020, the global medical tourism market was around 44.8 billion which is expected to grow every year by 21.1% from 2020 to 2027
- The number of medical tourists around the world is expected to grow by 25% every year

Slum Tourism:
- Involves tourism to impoverished areas, particularly in India, Brazil, Kenya and Indonesia
- Provides an opportunity for tourists to see the ‘non-touristy’ areas of a country or city
- Comuna 13, Medellin was one of the most dangerous neighbourhoods in Medellin but is now known for its street art
- Rainbow village, Indonesia - small slum village which has been transformed by vibrant paint and designs
- About 25,000 tourists arrive in Comuna 13 every week
- About 5 million passengers pass through the Rainbow village every year

18
Q

Nepal case study economic impacts of tourism

A

Positives:
- total 7.8% of GDP (2017)
- total 1.03m jobs (2017)
- 49th ranked/185 for growth of tourism industry

Negatives:
- Well behind other nations at same level of development (Maldives – 32% Bahamas – 19%) of GDP
- 9 in 10 jobs are in the same three sectors (food and beverages, transport and accommodation) low skilled, menial and low paid
- 70% of jobs are informal
- Seasonality of the tourism (short seasons)
- Vulnerability of tourism to external shocks
- ‘Visit Nepal’ 2020 target was 2 million and 3.5 million in 2025 but actually got 230,000 visitors in 2020

19
Q

Nepal case study social/cultural impacts of tourism

A

Negatives:
- Impact on house structure - 60% now live in home of modern style (erasure of culture)
- Impacts on family structure - shift to nuclear family
- Impact on religion - Animism (the main religion) is fading and locals have started celebrating other festivals e.g. Christmas
- Impact on moral behaviour - Gambling, theft, drug addiction, linguistic acculturation (erasure of native language) demonstration effect (adopting western clothing), commercial hospitality and retaliation
- impacts on physical products - food and drink being commercialised, dances are performed for show and theft of religious and cultural objects

Positives:
- discovering a sense of worth and pride in the host population
- develops social and cultural understanding

20
Q

what is a trade surplus?

A

a positive or favourable balance of trade

21
Q

what is a trade deficit?

A

occurs when the value of a country’s imports exceeds the value of its exports

22
Q

what is a tariff?

A

An import barrier that charges tax on imported goods in order to protect domestic industries from foreign competition and to raise revenue for government

23
Q

What is a quota?

A

An important barrier that sets a physical limit on the quantity or value of goods that may be imported into a country

24
Q

economic and social progress since Doi Moi reforms

A
  • economic growth of 6-7% rivals china
  • Vietnam was the largest exporter of clothing and second largest for electronics by 2017
  • since 2010, GDP growth has been at least 5% per year and in 2017 peaked at 6.8%
  • GDP per capita was barely $230 in 1985, it was more than 10 times that in 2017 ($2,343)
  • women’s employment rate is within 10% of that of men
25
Q

Ghana tomatoes key points

A
  • Italian + Chinese imported tomatoes dominate Ghana’s market
  • Global trade rules + unreliable power reasons for factory closures
  • country’s economy 50% dependent on agriculture
  • imported tomatoes from 1,600 tonnes in 1996 to 121,000 in 2015
  • Ghana -> Italy growing migration stream - 47,000 and 16,000 in last 5 years - the route is illegal
  • ‘caporalato’ - Ghanaians being exploited by modern slavery practices in Sicily and S Italy
  • 60 million tonnes exported from China - 10x more than Italy (some of their tomato pastes contain less than 30% tomato - filler is soya paste)
  • Ghana tried to impose a 40% tariff on imported tomatoes but was forced to reduce this to 10% by WTO and China
  • Ghana is also large a large market for imported meat (chicken - 95% imported), Rice (Thailand) and powdered milk
26
Q

Rwanda trade key points

A
  • Kigarme wanted to protect the textile industry which was near to collapse
  • seen across sub-Saharan Africa e.g. Ghana - market liberalisation in 1980s has led to a sharp drop in textile and clothing jobs
  • East African Community (EAC) accounted for 13% of global imports of used clothing
  • Wanted to increase tariffs with the eventual aim of phasing out all use-clothes imports
  • Kenya, Uganda and Tanzania wanted to do the same but pulled out due to threats from US because they benefit much more from Agoa than Rwanda e.g. Kenya exports to the US amounted to $600 million in 2017 compared to Rwanda’s $43 million
  • The US suspended Rwanda from Agoa in retaliation which means that they no longer have duty-free access to 6,500 exported products
27
Q

criticisms/weaknesses of Fairtrade

A
  • scale: 1.6m fairtrade farmers but there are 1bn in total
  • small, inefficient farm size - small economies of scale of farming in LICs
  • lack of control - minimum price gives a ‘floor value’ so farmers have a guaranteed lowest income, but as a farmer in an LIC you remain a ‘price traker’ not a price setter’
  • do Fairtrade genuinely operate in the world’s least developed countries?
  • top-down co-operative system has led to corruption as money is not trickling down to workers
28
Q

What is unpayable/unserviceable debt

A

used to describe external debt when the interest on the debt is beyond the means of a country, thus preventing the debt from ever being repaid

29
Q

what is debt service ratio

A
  • the proportion of a country’s export earnings that it needs to use to meet its debt repayments
  • some countries need to put aside 20-30% of their export earnings to meet their debt repayments
30
Q

Odious debt

A

debt incurred as HICs loaned to dictatorships or other corrupt leaders when it was known that money would be wasted

31
Q

what does the IMF and World bank do?

A

IMF:
- lender of last resort when there is a currency crisis or economic collapse
- leads to cuts in spending (austerity measures) -> health, education, etc.
- loss of sovereignty
- embracing free trade + reduce tariffs/quotas

World Bank:
- Funds development projects which are mostly long-term

32
Q

What are the origins of debt?

A
  • after decolonisation many LEDCs started borrowing money to invest in infrastructure projects
  • this was available due to OEPC countries putting money into western banks for interest which meant that LEDCs could take out money on low interest rates
  • dictators used this money for themselves
  • interest rates increased making loan repayments increase
  • many LEDCs currencies also fell in value making repayments more expensive
  • lack of investment meant very little income and meant that countries fell behind on debt payments and started to default meaning they were forced to take out strict loans from the IMF and World Bank
33
Q

Problems caused by Debt

A
  • reduced investment in essential services such as schools and hospitals
  • reduced investment in infrastructure projects
  • high levels of unemployment
  • increased tax on individuals and companies to pay off debt
  • increased reliance on aid
  • imposed reform in order to get debt
34
Q

criticisms/weaknesses of Fairtrade

A
  • scale: 1.6m fairtrade farmers but there are 1bn in total
  • small, inefficient farm size - small economies of scale of farming in LICs
  • lack of control - minimum price gives a ‘floor value’ so farmers have a guaranteed lowest income, but as a farmer in an LIC you remain a ‘price traker’ not a price setter’

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