global systems Flashcards
What is global systems
Organisations, groups or activities which link different parts of the world
What is globalisation
Is the integration of countries across the globe
What is interdependence
Where a country relys on another
Why is globalisation increasing
-increase in interdependence
-increase in technology (communication)
-increased in trading blocs
-increase in infrastructure
What are the advantages of globalisation for people
-increase choices
-freedom to travel
-cultural experiences
What is the issues of globalisation
-can cause domestic unemployment
-trade can affect uk businesses
-conflict
What is real time communication
The process of communication becoming instant “real time” where there is little to no delay
What are the different types of globalisation
Economic- flows of goods and capital
Social-spread of people and ideas
Political- spread of government policy’s
What is the KOF index
A measure of globalisation which examines economic, social and political factors to designate countries with a score of 1-100. The higher the score the more globalised
What are trade agreements
A formal agreement between two or more countries which aim to remove trade barriers or liberalise protectionism. For example nafta or the eu
Financial systems
Removal of government barrier to help move money around countries. Has made is easy to purchase goods globally.
Transport in globalisation
Improvements in transport has made it faster and cheaper to get around the world. It has also made it cheaper to produce. Containerisation is the process of transporting lots of goods at once via a cargo ship which brings about EOS
Security and globalisation
Globalisation increases global security, greater supply chain security will ensure the movement of goods around the world. People will not order goods if they feel they won’t receive them.
Communication globalisation
Increase in real time communications from satellite technology and fibre optic cables
What are the flows that occur in globalisation
-flows of money/capital
-flows of labour
-flows of products
Flows of labour
-immigration
-migration
-NEE to HIC countries
Flows of capital
-FDI. Usually from TNCs
-core/ periphery model. Suggested that lower income countries (periphery) have less control than higher income (core) countries.
-repatriation profits. Profits from TNCs back home
-remittance payments. Payments from foreign workers to family back home
Flows of products
-reduction in tariffs
-reduction in costs of trade
-transport and times. Containerisation
-regulatory barriers
What is division of labour
Where labour is split up into sections where certain people or groups are assigned different tasks to increase productivity.
What is global shift
The movement of an industry to different economies. Usually manufacturing industry’s or low payer work which moves from HIC to lower income countries.
Why does global shift occur
Because lower income countries can produce at lower costs. Labour is cheaper elsewhere and the same with raw materials.
Why did de-industrialisation lead to global shift
Because the manufacturing industry became obsolete in HIC countries so moved elsewhere where goods could be produced cheaper
Detroit
Faced consequences of global shift as there was a decline of manufacturing in this area. Global TNCs such as ford were big players in Detroit and provided the majority jobs. In late 20th century these companies moved out as it became cheaper to manufacture elsewhere and it left the area with little employment opportunities. The area faced huge economic disparity following the movement. The population fell by 61% and unemployment rates rose to 8.3%.
How does global shift affect domestic firms and areas in HICs
It leaves areas such as Detroit rundown and increase unemployment. Increased social immobility in these areas.
How do lower income countries benefit from the movement of businesses (global shift)
They benefit from more opportunities and their economy will start to grow
Negatives of globalisation for Lower income countries
-exploitation
-can increase economic inequality
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What are maquiladora plants
These are manufacturing warehouses built on the border of Mexico.
How did nafta play a role in global shift out of America
It allowed American businesses to move to Mexico where it was cheaper to produce. And also allowed for goods to be imported back into the country cheaply and quickly
What is neoliberalism
The unrestrained free market capitalism. This idea promoted free trade and was popularised in 1980 by Margaret thatcher and Ronald Reagan
Positive of neoliberalism
-country’s can become more interdependent
-free trade allowed for countries to focus on doing what they are best at (comparative advantage)
Who are the world bank and what do they do
They are a global organisation set up in 1944 during WW2 to help rebuild Europe and Japan after the war. They lend money to countries to help build their economy and living standards. They provide low interest loans or zero interest loans.
An example of what they do is when they gave India $1.1 billion for solar panels to provide electricity to 1.1 million homes
What is the IMF
International Monetary Fund, established in 1945 and consists of 183 countries. They provide loans to help regulate and stabilise the financial system globally. They help to prevent economic crisis in countries.
For example a $1.8 billion loan to Greece to help the recession. However this loan has to be repayed at the cost of investment in the country and also the cost of reducing trade barriers.
What is the world trade organisation
Set up in 1995 to replace the general agreement on tariffs and trade. Deals with global rules of trade and aims to facilitate trade by reducing barriers. Helps to lower trade barriers and open markets.
For example daha in qatar in 2001, reduced imports taxes by 30% so agriculture produce could be traded easier between HICs and LICs
what is an EPZ
export processing zone. Customs area where one is allowed to import plant, machinery, equipment and material for the manufacture of export goods
what is a maquiladora plant
an industrial manufacuring warehouses in mexico where tnc companys such as ford make products and export it bakc across the border into the usa
what is the golden arches theory
a theory in which any country with mcdonalds in will not be in conflict
up until 2008 this theory was true until russia and georgia got into conflict and mcdonalds backed out
how does globalisation and free trade prevent conflict
it creates interdependence where countrys rely on each other for their products
comparative advantage
where a country can produce a product at a lower opportunity cost
how has globalisation increased civil conflict
it has led to tension as global tncs have exploited areas for their resources
for example oil companys in canada and conflict with indigenous people
how has globalisation and free trade led to a reduction in civil conflicts
has helped to increase FDI into lower income countrys and reduce inequality
what is developmentalism
where a country develops its domestic markets and industrys before opening up to free trade
why is free trade bad for LICS
it exploits them and keeps them from becoming rich. top down theory in which richer countrys benefit more.
also seen to increase the gini index and increases inequality as rural areas do not benefit as much
why is free trade good for LICS
it can increase their economic growth and provides them with opporutnities to focus on their comparative advantages
for example china has seen a rise in their GNI by $8500
what is fair trade
a strategy used to help the poorest people where they are paid double for their goods
why is fair trade not succesful
itts associated with higher fees and increased costs of products which are less likely to be purchased in a market
what is a tnc
a business which has operations in more than one country
what is the spatial organisation of tncs
they have a HQ based in a major city of their home country and then smaller regional HQS in other higher income countrys.
their branch plants are based in lower income countrys
where is common production of tncs
in lower income countrys
what are the reasons for growth of tncs
-cheap labour
-globalisation
-increased transport and technology
-government incentives
-fewer restrictions and free trade
evidence of tncs in countrys
-increased GNI
-increased employment
-higher investment
why do tncs operate in more than one country
-to escape trade tariffs
-to find lowest cost production
-to reach new markets
-to exploir resources
production of tncs in primary sector
will be based wherever their is unexploited resources usually in developing countrys
production of tncs in secondary sector
will be primarily in developing countrys such as south east and south asia where there is low labour costs and trained workers
production of tncs in service sector
will be based where there is good education and proximity to their markets
vertical integration
where a business controls the whole supply chain to benefit from greater EOS
horizontal integration
where a company diversifys its operations by expanding by a merger or takeover which gives a broader capability at the same stage of production by removing competiton
shell in nigeria
exploit nigeria for its oil, oil takes up 80% of Nigerian economy and many people do not see the profits from this. people in nigeria do not have access to clean water or electricity and shell do not contribute to the water issue by polluting the waters.
