Global Systems Flashcards
Define Interdependence
The natural dependence between things
Give a key feature of ECONOMIC interdependence in the world bank
Promotes shared prosperity by fostering the income growth of the bottom 40% of each country
Give a key feature of POLITICAL interdependence in the world bank
They aren’t tied to any particular country
Give a key feature of SOCIAL interdependence in the world bank
End extreme poverty by decreasing the percentage of people living on less than $1.90
Give a key feature of ENVIRONMENTAL interdependence in the world bank
They support environmental initiatives
Give 3 intergovernmental organisations
World Bank
IMF
WTO
(Act as ‘brokers’ of globalisation) - Bretton Woods, 1944
The world bank etc. play a pivotal role in world affairs by……………..political and economic………….for development and……………… worldwide
Harmonising
Frameworks
Investment
Why were these global systems created
Fight against protectionism
Seen as a direct response to the Great Depression and, due to leading industrial nations blocking foreign imports with tariffs in the early 20th C, damaging exports for others.
Thus industrialised countries suffered declining economic output, swing the seeds for fascism in Germany and Italy
Why are these sytems beneficial
Co-constructed a global legal and economic framework that enables and promotes free trade and FDI within global systems, with TNC’s thriving in this environment
What does the Non-profit making World Bank do
Provides advice, loans and grants on a global scale, aiming to reduce poverty and promote economic development
How much money did the World Bank distribute in loans and grants in 2017
$42 billion
Give 2 examples of the World bank achieving its aim of promoting economic development and reducing poverty
+ give a counter-argument for the good it does
ECONOMIC - Help given to the Democratic Republic of Congo to kick-start a mega-dam project
POVERTY - $470 million granted to the Philippines for a poverty reduction program
Some may argue that economic development CAN be accompanied by rising inequality
Give a key feature of ECONOMIC interdependence by the IMF
Lends money to actual governments to stabilise the economy and currencies - co-operating with 68 countries
Give a key feature of POLITICAL interdependence by the IMF
When it lends money to governments, it may interfere with that nation’s politics to secure money being returned
How much money did the IMF lend to Grecce to help end a period of financial crises in 2010 and what was the effect
Just under $40 billion
Greece’s economic growth rising from a declining -0.5% in 2015 to +2% in 2018
Unemployment falling from 25% - 19%
What is are the cons of the IMF
IMF rules and regulations are controversial, in return for help, recipients must run free-market economies that are open to investment by foreign TNC’s - however, does little to negatively affect the lives of many, other than promoting economic growth
Governments may be required to cut back on public spending (healthcare, housing and education) in order for the debt to be repaid. - though prevents economic crises in the benefactors country and makes investment more secure and likely
What is a key feature of ECONOMIC interdependence for the WTO
Creates a level playing field and gives countries equal economic growth and development, reduces obstacles to international trade
What is a key feature of POLITICAL interdependence for the WTO
Provides the legal framework for the implementation and monitoring of those agreements + settles disputes
What is a key feature of SOCIAL interdependence for the WTO
The opening of national markets to international trade will encourage and contribute to sustainable development, raise people’s welfare, and reduce poverty + foster peace and stability
What is a key feature of ENVIRONMENTAL interdependence for the WTO
Permits members to take measures to protect the environment + public health.
These measures must be applied in the same way to both national foreign businesses, but mustn’t use environmental protection as a means of disguising protectionist policies
What does the WTO do
Advocates trade liberalisation on a global scale (especially for manufactured goods), attempts to settle disputes and encourages countries to abandon protectionist policies in favour of UN-taxed trade.
Give 2 examples of the WTO creating a more equal global society
Manufactured goods mainly originate from the BRIC’s
Persuaded China to increase its exports of ‘rare earth’ materials for phone manufacturing in other countries - less protectionist attitude
Give a perceived con of the WTO
Difficulty to agree - round of negotiations in 2001 were stalled for 14 years.
However only due to being made up of 162 states, demonstrating its increased equality and interconnectivity as every voice is heard
Give a quantitative data source and what it is
Lorenz Curve
A way economists measure what portions of the population are responsible for the income within a group of people, such as a nation
Give the Pros of the Lorenz Curve as a data source
Visual representation of statistics
The perfect equality line allows for every country comparison
Give the Cons of the Lorenz Curve as a data source
Exact x-axis percentage not easy to decipher
Issues with an accuracy of initial data (Gini coeficient)
Can’t display data for lots of countries as lines would overlap
Give 3 quantitative data sources
Lorenz Curve
Oxfam 2016 Report
Gini Coefeicuant income inequality chart
