Global Systems and Global Governace Flashcards
Globalisation-What?
The increasing connections between places and people across the planet, established through trade, politics and cultural exchanges, and is helped by technology and transport
Types of Globalisation
There are 4 different types of Globalisation:
- Economic Globalisation
- Political Globalisation
- Social Globalisation
- Cultural Globalisation
Economic Globalisation-What?
Countries are connected to each other due to financial reasons
Political Globalisation-What?
Countries are connected to each other for political reasons
Social Globalisation-What?
Countries are connected to each other by the actions of people eg: an American eats a Banana from Ecuador
Cultural Globalisation-What?
Countries are connected to each other by sharing cultures
Interconnected-What?
The ways that geographical phenomena are connected to each other
How can things be connected to each other?
- Environmental Processes
- The Movement of People
- Flows of trade and investment
- The Purchase of Goods and Services
- Cultural Influences
- The Exchange of ideas and Information
- Political Power
- International Agreements
No Globalisation-What?
If everyone stayed in their own country and didn’t interact in any way with other countries
Total Globalisation-What?
If everyone interacted freely, all countries would be fully integrated into the global economy, forming a single society
The Real world is?
Between No Globalisation and Total Globalisation
The Main Dimensions of Globalisation
There are 4 main dimensions of Globalisation:
- Information, Technology and Capital
- Products and Labour
- Services and Marketing
- Production, Distribution and Consumption
Examples of Information, Technology and Capital
- Cheap, reliable and near instantaneous communication between all ports
- Electronic Money flow
- NIC’s proving services to HIC’s (Outsourcing)
- The Internet
Examples of Products and Labour
- People move around the world for employment
- High speed rain and international airports
- Cheap global transport
- Tourists travelling further to reach more exotic destinations
Examples of Services and Marketing
- TNC’s use the same adverts around the world
- Global Brands
- Globalised Marketing
- Services follows flows of information, people and products
Examples of Production, Distribution and Consumption
- TNC’s dictate where their products are made
- Peoples are distributed around the world to meet the demands of HIC consumers
How to Measure Globalisation
To measure globalisation, the KOF scale is used
KOF Scale-What
An index that was introduced in 2002 and is calculated for each country, with 100 being the most globalised
KOF Scales-Aspects Percentage-Economic
36% of a countries score on the KOF scale is due to economical reasons
KOF Scales-Aspects Percentage-Social
38% of a countries score on the KOF scale is due to social reasons
KOF Scales-Aspects Percentage-Political
26% of a countries score on the KOF scale is due to political reasons
KOF index-Categories-Economic
- Trade (% of GDP)
- Hidden Import Barriers
- Capital Account Restrictions
- Mean Tariff Tax
- Foreign Direct Investment (% of GDP)
- Trade in Newspapers
- Taxes on International Trade
- Transfers
- Trade in books
- Portfolio Investment
KOF index-Categories-Social
- TV (per 1000)
- Number of IKEA’s
- Telephone Traffic
- Internet Users (per 1000)
- Foreign born population
- International Tourism
- Number of McDonalds
- Income payments to foreign nationals
- International Letters
KOF index-Categories-Political
- Membership of International Organisations
- International Treaties
- Participation in UN Security Council
- Embassies in Countries
KOF Scale-Positives
+Way to measure globalisation
+Range of categories/factors
+Covers all aspects of globalisation
+Constantly updated-Countries can move up and down
KOF Scale-Negatives
- IKEA and McDonalds are western companies
- Westernised approach to globalisation
- To be a member of the UN Security Council , you have to be invited
- Location based-Some countries cannot enter some groups/agreements
- Data measuring problems
Case Study-Globalisation is Good Film-Taiwan- 30 years ago
- Poorer than many African Nations
- Malnourished
- No natural resources
Case Study-Globalisation is Good Film-Taiwan-Now?
- No poverty
- 10x higher raises than 40 years ago
- Very wealthy
Case Study-Globalisation is Good Film-Taiwan-Early factory features
- 24 hour shifts
- Dangerous Equipment
- Sweatshop like conditions
Case Study-Globalisation is Good Film-Taiwan-Arguments for Sweatshops
- Cheap goods are made
- People get jobs
Case Study-Globalisation is Good Film-Taiwan-Key to their success
- Competition in Markets
- Innovation
- Government support
- Global Success
- Market Deregulation
- Locals are trained
Case Study-Globalisation is Good Film-Taiwan-Americanisation
- Very democratic society
- Western cultures and companies are in Taiwan
- People take American concepts are creating a local variation of it
Case Study-Globalisation is Good Film-Vietnam
- Lots of Sweatshops
- Child labour rates has dropped
- Regulations on sweatshops
- In 50 years, Vietnam’s economy has doubled
- Absolute poverty rate halved
Case Study-Globalisation is Good Film-Vietnam-Positives of Sweatshops
- Long term investment
- People have jobs
- Regularly paided
- Employees get benefits
- Economy stimulated
Case Study-Globalisation is Good Film-Vietnam-Negatives of Sweatshops
- People migrate to work there-Problems in local area
- Job competition
Case Study-Globalisation is Good Film-Kenya-Why is it Poor
- Restrictions
- Need licence to start business, need money to get licence
- 1 in 3 live in absolute poverty
- No land ownership
- No services
Case Study-Globalisation is Good Film-Kenya-Successes
- Mobile phone industry means more are connected
- Cheap clothes market
- Flower exports to Europe
Factors that accelerate globalisation
There are 5 key factors which accelerate the globalisation process:
- New Technologies
- Global Financial Systems
- Improved Transport
- International Security
- Trade Agreements
Factors that accelerate globalisation-New Technologies
- Information can be shared quickly with billions on sites like Facebook and Twitter
- Mobile phones help connect people, markets and trade
- GPS allows people to see where they are
Factors that accelerate globalisation-Global Financial Services
- World Bank provides loans
- Countries can “Bail out” different countries
- 2007 collapse of US housing market lead to a period where banks no longer wanted to lend money- Lead to 2008 Global Financial Crisis
Factors that accelerate globalisation-Transport Systems
- More accessible world-Global transport network for people and goods
- Creates new treats-Quick transport of disease
Factors that accelerate globalisation-International Security
- Open Borders-Reduced security measures e.g.: Countries In the Schengen Area
- Technology-Cyber Attacks and leaks of information
Factors that accelerate globalisation-Trade Agreements
- Countries can pick who they trade with
- World Trade Organisation overseas 97% of trade and ensures trade agreements are followed
- The W.T.O agreement is over 26,000 pages long-World trade is very complex
Global Network-What?
The links between different countries of the world
Network-What?
An illustration or model which shows how different places are located and connected
Nodes-What?
The points on a network map
Flows-What?
The connections between nodes
Global Hub-What?
A well connected node e.g.: A world city
The Shrinking World-What?
Distant places start to feel closer and take less time to reach due to technological advancements. This is sometimes referred to as the Time-Space compression
The Main Causes of The Shrinking World-Telephones
Telephones replaced a 3 week boat trip to talk to someone in another country. This laid the ground for TNC’s to operate in different countries
The Main Causes of The Shrinking World-Air Travel
Faster planes with greater capacity have allowed mass air travel
The Main Causes of The Shrinking World-Internet
Large amounts of data can be moved across cyberspace and allows office staff to work from home
The Main Causes of The Shrinking World-GIS/GPS
GPS, now called GIS is 24 satellites in orbit. GIS’s can collect, analyse and manage satellite data
Containerisation-What?
the development of standardized metal containers for cargo which can be transhipped between train, lorry and ship carriers. Revolutionized haulage by reducing transhipment times and replacing large numbers of labourers with crane technology
Containerisation by Numbers
- There are 17 million shipping containers in the world. At any one time, between 5 and 6 million are in transit on ships
- Containers make around 200 million trips a year
- Ships operate 24 hours a day for about 280 days a year
- Shipping is responsible for 18-30% of all of the worlds nitrogen oxide pollution
- Shipping is responsible for 9% of all the world’s sulphur oxide pollution
- 85% of the pollution is in the northern hemisphere
- Shipping is responsible for 3.5% to 4% of all climate change emissions
Containerisation-Which kind of products
Containerisation only occurs on secondary products
Containerisation-Advantages
+Improves efficiency of transport
+Opens far away markets
+Increases the speed of international trade
+Helps develop emerging economies
Trade Bloc-What?
A trade bloc is where a set of countries trade freely with each other with few, if any barriers. Countries outside this area that wish to trade anywhere within the bloc has to pay an agreed tariff
Trade Bloc-Examples
- European Union (EU)
- Association of Southeast Asia Nations (ASEAN)
- North American Free Trade Agreement (NAFTA)
- Organisation of Petroleum Exporting Countries (OPEC)
- Mercado Comun del Sud (Common Market of the South) (MERCOSUR)
Levels of Integration
There are 4 different levels of integration of Trade Blocs
- Preferential Trade Area
- Free Trade Area
- Custom Union
- Common Union
Levels of Integration-Preferential Trade Area
When countries within a geographical region agree to reduce and eliminate tariff barriers on selective goods imported from other member of the area
Levels of Integration-Free Trade Area
When two or more countries in a region agree to reduce or eliminate barriers to trade on all goods coming from other members
Levels of Integration-Custom Union
A customs union involves the removal of tariff barriers between members, plus the acceptance of a common external tariff against non members. This means that members may negotiate as a single bloc with 3rd parties, such as another bloc. E:G: EU negotiating with MERCOSUR
Levels of Integration-Common Union
A “Common Market” is the first significant step towards full economic integration and occurs when member countries trade freely in all economic resources. This means that all barriers to trade in goods, services, capital and labour are removed
Trade Blocs-Advantages
+Poorer countries get treated well-Richer countries can bail them out
+Single Currency- Stability, travel more easily and trade with others easily
+Policies-Everyone is on the same page
+Untariffed Goods
+Grants to fund initiatives in member states to help the country develop
+Free Border e.g.: Schengen Area
+Easy to import goods and services
Trade Blocs-Disadvantages
- Single Currency-If currency is devalued and collapse, this causes a crisis in many countries eg: Eurozone Crisis
- Free Borders mean that anyone can come in without being checked
- Bigger countries have to pay into the union, smaller countries don’t have to
World Bank-What?
Organisation of 188 countries who work to promote financial cooperation between countries to reduce poverty. This is normally in through the promotion of trade and high employment
United Nations-What?
Known as the “Guardian of International Peace, Security and Human Rights”. It promotes the development of poorer nations through work with the IMF and the World Bank
World Trade Organisation-What?
Deals in the rules of trade between countries ensuring trade flows freely
International Monetary Fund-What?
It is an important source of financial and technical assistance to developing countries, It’s main aim is to reduce poverty
TNC-What?
A global company which operates in more than one country. Headquarters are often in MEDC’s with factories in LEDC’s where workers are cheaper
Advantages of Globalisation
\+TNC 's invest in LEDC countries -Creates jobs for locals \+Lets us experience New cultures \+Raises awareness to local causes \+Can lift people out of poverty \+Can make the world rich \+Creates trade with countries \+Improves economy \+Multiplier Effect occurs in reality
Disadvantages of Globalisation
- Money earned by TNC ‘s go to their Headquarters, not the country where the factory is
- Creates unregulated TNC factories
- Creates market competition between local and international business
- Local businesses may close
- Can make LEDC countries poorer
- Local traditions are eroded
- Countries can isolate themselves to prevent globalisation
- Corruption
Inequality -What?
The unequal distribution of resources (power, wealth income) and opportunities (health, education, employment)
Global Inequality -Who owns what?
According to a report from Oxfam, 62 people own the same as half the world
Global Inequality -How can it occur
Global Inequality can occur within countries as well as between countries. Inequality can occur on the grounds of
- Gender
- Religion
- Social Class
- Racial Groups
- Location
Global Inequality Case Study -Uganda -Location
Uganda is a landlocked country in East Africa
Global Inequality Case Study -Uganda -Should Uganda be poor?
Uganda should not be poor as it is green and fertile and has plenty of resources such as copper and cobalt. However, due to Civil War and HIV/AID, the country has been damaged
Global Inequality Case Study -Uganda -How many life in Poverty?
Nearly a third of the population live below the poverty line and the average life expectancy is 59 years
Global Inequality Case Study -Uganda -Poverty
Poverty is greatest in rural areas, particularly in the north, where the majority of the population are farmers
Global Inequality Case Study -Uganda -Colonialism
When Uganda was in the British Empire, the British East Africa Company strongly influenced the countries exports. Low value crops were exported
Global Inequality Case Study -Uganda -Fish
Fish is a traditional food staple for Ugandans living in the shore of Lake Victoria. Hkwever, this is unsustainable due to overfishing and the predatory Nile Perch which has Caused stocks of fish to be reduced to near extinction. This has caused fish factories to close
Global Inequality Case Study -Uganda -Telephone
A “Village Phone” system has been set up in rural areas . This offers loans for people wanting to start up a mobile phone business. This is an emerging business in Uganda, and can help the country develop and bring people out of poverty
Trade -What?
The action of buying and selling goods and services
Why do we trade?
- Each country has specific resources
- Resources are unevenly distributed
- What one country has, another needs
What is indicated about trade?
- LIC countries need to export large values of primary products in order to purchase manufacturer goods
- Prices of these goods are higher than raw goods
- HIC countries import primary goods, manufacturer them and export them to produce a profit
- HIC countries dictate the terms of trade
Terms of Trade -What?
The cost of goods that a country has to import, compared with the price at which they can sell the goods they export
Trade Deficit -What?
When a country imports more than they export
Trade Surplus -What?
When a country exports more than they import
What is Trade So uneven
S.H.E.E.P
S.H.E.E.P?
Social Historical Environmental Economical Political
Factors that lead to uneven trade -Social
- Poverty
- Diseases
- Civil war in countries
Factors that lead to uneven trade -Historical
- Colonialism
- The country’s history
Factors that lead to uneven trade -Environmental
- Landscape
- Climate
- Natural Resources
- Natural Disasters
Factors that lead to uneven trade -Economical
- Technology
- GDP
- Country’s Wealth
Factors that lead to uneven trade -Political
- Trade Blocs
- Trade Embargoes
- International Relationships
World Trade Models -Wallerstein
-HIC countries give high profit goods to LEDC countries, and receive cheap labour and raw materials from LEDC countries
World Trade Models -Wallerstein-The role of NIC ‘s
- NIC countries (Known as Semi Periphery Countries) get goods from HIC’s and receive Labour and materials from LEDC countries
- They also give goods to LEDC countries, and give HIC countries material and labour
World Trade Models -Frank (Pre Wallerstein)
Core countries (Normally MEDC countries) give goods to Periphery Countries (Normally LEDC countries). Periphery Countries give labour and material to Core countries
World Trade Models -Roston
Roston’s Modernisation Theory used stages, which over time a country goes through
World Trade Models -Roston-Stages -One
A countries works with primary goods, normally these are LIC countries
World Trade Models -Roston-Stages -Two
A country in this stage works with secondary goods. These are normally LIC countries
World Trade Models -Roston-Stages -Three
A country works with both secondary and tertiary goods. These countries are normally NEE countries. To reach this stage and higher, a country needs Foreign Direct Investment, normally by a TNC
World Trade Models -Roston-Stages -Four
Countries at this stage work with tertiary goods as well as primary and secondary. These are normally HIC countries
World Trade Models -Roston-Stages -Five
Countries at this stage work with quarterly goods as well as primary,secondary and tertiary goods. These countries are always HIC countries
Primary Goods -What?
Raw materials
Secondary Goods -What?
Manufacturing and assembly goods
Tertiary Goods -What?
Services
Quarterly Goods -What?
IT and technology services
Changes to World Exports
- Asian countries import and export less to USA
- Exports to China has increased
- USA import and export less
- China import and export more
Changes to World Exports-Reasons for
- Outsourcing
- Cheaper to produce in some countries than others
- Increase in technology and Transport
- Globalisation
Foreign Direct Investment -Types
There are two types of Foreign Direct Investment:
- Greenfield Investment
- Brownfield Investment
Foreign Direct Investment -Types-Greenfield Investment
A country builds factories in new countries
Foreign Direct Investment -Types-Brownfield Investment
A company develops through the acquisition and mergers of other companies
Economy of Scale -What?
Producing a narrower range of goods and services means that a country can produce in higher volumes and at a cheaper cost per item
Product Dumping -What?
The exporting of goods at a price that is lower than the foreign market than the price of the product domestically
Protectionism and Tariffs -What?
A country may protect important domestic industries by imposing additional taxes on imported goods and/or encouraging exports
Comparative Advantage -What?
A country specialises in producing goods that can be produced efficiently and at the lowest opportunity cost
Over Specialism -What?
If demand falls or if the same goods can be produced more cheaply overseas, then production needs to shift to other products. Specialised production centres tend to be less able to diversify
Fewer Domestic Monopolies -What?
Domestic prices may be kept high when a single firm controls a large proportion of the domestic market. Imports from overseas competitors help to lessen this effect
Decline of Local Industries-What?
New home grown industries may find it difficult to grow and become established when faced with existing foreign competition, where costs are lower
Purchasing Power-What?
Increasing trade results in increased competition that lowers prices and allows consumers to be able to buy more for their money
De-Skilling-What?
Traditional skills and crafts may be lost when production technology replaces manpower, so called “Screwdriver Jobs” may dominate
Increased Employment-What?
Increased production for export is likely to result in hob creation and due to the multiplier effect, further jobs will be created
Transfer of Technology-What?
Application of new technologies is incentivised as this may lead to design improvements and cost savings, as well as supporting innovation and enterprise
Labour Intensive Industries-What?
The biggest cost for most industries is labour, this is particular true for consumer manufacturing industries. By squeezing this cost, even if working conditions are compromised, profits can be maximised
Advantages of International Trade
- Economy of Scale
- Comparative Advantage
- Fewer Domestic Monopolies
- Purchasing Power
- Increased Employment
- Transfer of Technology
Disadvantages of International Trade
- Product Dumping
- Protectionism and Tariffs
- Over Specialism
- Decline of Local Industries
- De-Skilling
- Labour Intensive Industries
International Trade-Case Study-Songxia-What Product?
In Songxia, China, 1/2 a billion umbrellas are made a year in more than 1200 factories
International Trade-Case Study-Songxia-Transport Links
Songxia has very good road connection to other cities were umbrellas are exported. This gives them access to the domestic and international market
International Trade-Case Study-Songxia-Cheap Production Costs
People get jobs making umbrellas, even if they have to work long unsocial hours
International Trade-Case Study-Songxia-Government Support
Tax incentives for producers of umbrellas, as well as preferential treatment for all parts of the supply trade
International Trade-Case Study-Songxia-Songxia Umbrella Industrial Park
This industrial park strengthens local businesses and raises brand awareness domestically and internationally
International Trade-Case Study-Coal Mining in Zambia-What Happened?
11 African workers were shot by Chinese mangers during a protest about working conditions. This lead to the Zambian Government to seize the mine due to the poor health and safety conditions
International Trade-Case Study-Coal Mining in Zambia-Tax
The Chinese owners avoided tax by lying about how much coal they produced
International Trade-Case Study-Chinese Steel-Effects on Market
Cheap Chinese steel caused European plants to close
International Trade-Case Study-Chinese Steel-Price
The price is too competitive It should be sold at a rate below the cost to make it
International Trade-Case Study-Tata Steel, Port Talbot-What Happened?
Tata Steel wanted to sell its UK businesses, this lead to calls for the UK the nationalise the steel industry. The Chinese government wanted to help, but in 2015, the EU imposed dumping laws for steel imports from China. Brexit put more doubt into who, if anyone would buy the plant. Fortunately, they found a buyer
International Trade-Case Study-Banana Wars-Causes
- A six year trade quarrel between the USA and the EU
- USA filed a complain to the WTO about the EU’s scheme giving banana producers from the colonies in the Caribbean special access to the EU market with free trade rules
- The USA won and the EU had to change its policy
International Trade-Case Study-Banana Wars-EU deal with Caribbean
- Each Caribbean country has a quota of bananas that they can sell to the EU tariff free, so they can develop quickly without the need for aid
- This annoys TNC’s in Central America, as they have to pay tariffs to export to the EU
International Trade-Case Study-Banana Wars-What did the USA do in response?
-The USA enforced a 100% tariff on all products from the EU
International Trade-Case Study-Banana Wars-Why did the USA care?
- Its economy was in debt
- Could not allow any forms of European Protectionism
- Pressured by TNC’s (Del Monte) that dominate the banana industry
International Trade-Case Study-Banana Wars-What was Threatened?
- The Banana Wars threaten the idea of Free Trade
- Threatened EU Exports
- Threatened the whole Caribbean economy, as Bananas are vital for them to grow and develop
The Issues with Banana Production-Environmental
- Open Sewer System
- Toxic chemicals sprayed in plants
The Issues with Banana Production-Social
- No workers union
- Poor living conditions
- Health affected
- No one to support workers
- No Job security
- No Wage increases
- Come into contact with chemicals
Who owns the Banana Market?-2002
- 70% is owned by TNC
- Caribbean markets share is small
Who owns the Banana Market?-2013
- 44% is owned by TNC’s
- Non TNC’s are more Fairtrade than the TNC’s
- Banana production is fairer than in 2013
Fairtrade-What?
A value-based organisation and trademark that aims to tackle injustices of the globalised economy. Fairtrade aims to pay farmers a guaranteed minimum price, offer fair terms of trade and make payment of an additional development premium for reinvestment
Fairtrade-Aim
The aim of Fairtrade is to raise awareness of trade injustices and imbalances of power in the conventional trade structures and to advocate or change policies to favour equal trade
Fairtrade-Who does it Benefit?
This benefits the workers-makes people aware of their poor conditions
Fairtrade-Timeline
Late 1940’s-First Fairtrade products sold in USA
Late 1950’s-First Fairtrade products sold in Europe
1969-Firsy “World Shop” that sells Fairtrade products open in the Netherlands
1973-First Fairtrade coffee sold
Late 1980’s-Fairtrade products are labelled, consumer awareness has increased, TNC influence has decreased
Fairtrade Case Study-El Guabo Banana Producers-Ecuador
El Guabo Banana Producers are one of the largest producers of Fairtrade Bananas. The use of Fairtrade has benefited the company
Fairtrade Case Study-El Guabo Banana Producers-Ecuador-Economic Benefits
- Stabilised incomes and improvements to living conditions
- Guaranteed fair wage and long term supply contract, including access to new markets
- Producers able to raise additional capital for reinvestment
- Migrant labourerers help to buy their own land
Fairtrade Case Study-El Guabo Banana Producers-Ecuador-Social Benefits
- Health care benefits to families of cooperatives
- Provision of education and medical supplies
- Affiliation with social security system
- Support for the poorest groups
- Improved education provision
- Marginalised groups helped to find employment
Transnational Corporation (TNC)-What?
A company that operates in more than one country
Transnational Corporation-Characteristics
- Has a global network/reach
- Large number of staff
- Large turnover
- Global Brand present in many markets
- Involved with many different products/sectors
Assembly Industries-What?
Manufacturing operations that take the products of many different industries and put them together to make finished goods
Parent Company-What?
The original business that a TNC has developed around, and whose directors still make decisions that affect the company as a whole
Branch Plant-What?
A factory built in a country by a TNC which has its headquarters elsewhere
Glocalisation-What?
The local sourcing of parts in places where TNC assemble their products close to their target markets. This also allows the customisation of products to local tastes, customs or laws
Consumption-What?
The purchase and use of commodities as well as services
Tertiary Sector-What?
AKA The Service Sector. Consists of businesses that produce no physical products
Reasons for Growth of TNC-What?
- Cheap Labour
- Mergers and Takeovers
- Flexible Workforce
- Availability of Funding for Expansion
- Fewer Environmental Restrictions
- Globalised Transport Network
- Technological Differences
- Governmental Encouragement
- Cheap Land
Cheap Labour-What?
Lower wage demands from LIC’s and also from the unemployed in HIC’s, means that labour is cheap
Mergers and Takeovers-What?
Allows big businesses to buy out smaller competitors or increase their market share-which could lead to a monopoly
Flexible Workforce-What?
Willingness to travel to jobs overseas or to be retrained in situ
Availability of Funding for Expansion-What?
TNC’s from emerging economies have heavily invested overseas to increase their portfolios
Fewer Environmental Restrictions-What?
Environmental controls may either be less or weakly enforced in some countries
Globalised Transport Network-What?
Containerisation has revolutionised the movement of goods by creating a standard transport product that can be handled anywhere in the world
Technological Developments-What?
Refrigeration allows perishable fruit and vegetables from LIC’s to be transported to HIC Markets
Governmental Encouragement-What?
Financial incentives such as tax breaks
Cheap Land-What?
Areas suffering from effects of deindustrialisation will sell land for factory production at a reduced rate
Horizontal Integration-What?
Improving links between different firms in the same stage of production
What does Horizontal Integration allow?
This allows a small number of firms to own a large share in the market
Vertical Integration-What?
An industry where one company either owns or controls multiple stages in the production and distribution chain
What does Vertical Integration give a company?
Economic advantages over their rivals
Advantages of TNC- Host Country
- Increases Employment
- Improves Skill levels
- Socio-Economic Multiplier effect
- Foreign currency is brought in, improving the balance of payment
Disadvantages of TNC-Host Country
- Profits go to Home country
- Low Skilled Jobs
- Non Local Managers are brought in
- Can only be short term
- Negative Multiplier effect
Advantages of TNC-Parent Country
- Overseas Investment
- Adds to countries income
- High skilled Jobs
- Wider share of markets
Disadvantages of TNC-Parent Country
- Workforce may have to relocate
- TNC’s do not pay full tax
- Can cause global recession and market crashes
TNC Case Study-Coca Cola
- Every day, 1.9 billion products made by Coca Cola are consumed
- The world 3rd most valuable brand
- Grown due to marketing, investment and worldwide acquisitions
- Over 20 different brands, generate over $45 billion and year in revenue and sales in nearly 200 countries
TNC Case Study-Coca Cola-Social Impacts-Positive
+Training and education programs to create empowerment of 5 million female entrepreneurs by 2020
+The Coca Cola Foundation awards grants to companies that focus on development and sustainability
+Massive Employment Opportunities in related industries
TNC Case Study-Coca Cola-Social Impacts-Negative
- Harsh Working conditions in some bottling plants
- Millions have been spend to deny the links between Coca Cola and Obesity
- Workers are encouraged to abandon union membership in some LIC’s like Guatemala
- Coca Cola funded a research institution that recommended people consume sports and soft drinks
TNC Case Study-Coca Cola-Economic Impacts-Positives
+Franchises mean that many local bottlers profile from sale, supports local businesses
+Investment in New plants and Research and Development Labs in developing Markets like Asia and North Africa
+Investments in new markets create economic boom in the market
TNC Case Study-Coca Cola-Economic Impacts-Negatives
- Long hours worked for little pay
- Majority of Profits return to shareholders in USA
- Bottle plants are vulnerable to the effects of decision of Atlanta (Where the Company is based)
TNC Case Study-Coca Cola-Environmental Impacts-Positives
+Uses marketing to increase awareness of recycling
+Creates sustainable agriculture schemes (e.g: Rainwater Harvesting System in China)
+Replenishes the water it uses by funding local water projects
TNC Case Study-Coca Cola-Environmental Impacts-Negatives
- Exhaustion of local water supplies (in 2012, they used more water than 25% of the world population)
- Water Pollution, as seen in Kerla, India
- Pesticide residue identified in some Coca Cola products
Global Governance-What?
Groups of the world coming together to set institutions, laws, treaties, rules and norms on how to tackle issues that are common to all countries and cannot be dealt with by any one particular country
Actors in Managing Global Affairs
- Nation States
- TNC’s
- International and National Organisations
Reactive-What?
Reacting to an event after in happened
Proactive-What?
creating or controlling a situation rather than just responding to it after it has happened.
National Governments-Reactive Response
Legislate and invest, to implement international initiatives, laws, targets or agreements
National Governments-Reactive Response-Example
The UK government’s recent support for renewable energy sources, to reduce dependence on fossil fuels and climate changing emission is, in part a response to new EU laws on dirty power stations
National Governments-Proactive Response
Lobby for and contribute to international discussions, votes and decisions
National Governments-Proactive Response-Example
Some national governments have more influence than others on the UN Security Council. China, France, Russia, the UK and the USA are all permanent members of the group and often take leadership roles in conflict resolution
TNC’s-Reactive Response
Compensate and adopt new codes of conduct or working practices imposed by legislation or socio-economic pressure
TNC’s-Reactive Response-Example
In the wake of the collapse of the 8 storey factory in Bangladesh, Primark paid compensation and provided emergency aid to the victims of the disaster
TNC’s-Proactive Response
Sponsor and support the work of NGO’s and international organisations
TNC’s-Proactive Response-Example
Tobacco companies and others sponsor anti-smoking NGO’s in LIC’s, to publicise the health risks of smoking, thereby protection themselves from the sort of law suits seen in the HIC’s
International Organisations-Reactive Response
Respond to global events to offer advice to national governments and publishes the work of NGO’s already on the ground
International Organisations-Reactive Response-Example
The World Health Organisation was late to offer guidance on how to contain the Ebola Virus in the early stages of the epidemic
International Organisations-Proactive Responses
Sponsor, facilitate and publish international issues and agreements to address them
International Organisations-Proactive Responses-Example
IN 2013, the UNI Global Union sponsored and created a legally binding document to protect the working conditions of the garment industry in Bangladesh
The Two Schools of thought in Global Politics are
- Liberalism
- Realism
What do Liberalists do?
- Emphasis broad ties among states
- Decrease military power
- Developed in 1970 as realism was seen as outdated
- Want to increase globalisation, international trade
- Believe that Power Politics can not longer decide matters
What do Realists do?
- The state is the main actor in domestic and international affairs
- The State makes important decisions, but other players decide how the State operates
- The State only works to increase their power over other states-Power States Outlast Weak States
Tragedy of the Commons-What?
What an individual benefits from overusing a resource, but the whole community pays for the use and don’t benefit in the long term
Why is it important to protect the global commons?-Globalisation
Due to Globalisation, increased population growth and other reasons, the commons are being damaged. The world is becoming urbanised
Why is it important to protect the global commons?-Climate Patterns
Shifts in climate patterns in the world can be caused by changes in the global commons
Case Study-Antarctica-Location
- A continent on the South Pole of the Earth
- At 60 degrees south
- Surrounded bu Southern, Indian, Atlantic and Pacific Oceans
- Made of 8 million KMsquared of land in 2 blocks beneath 14 million KMsquared of Ice, which is 4KM thick in places
- 99% is covered in Sheet ice
- Coastline in fringed with Ice Shelves, with the Ross Ice Shelf, and the Ronne Ice Shelf being the two largest
Case Study-Antarctica-Climate
- The coldest, windiest and driest continent
- Average temps of -49 degrees, lowest at -89 degrees
- Average wind speed is 50MPH, can reach 200MPH
- Very low precipitation
- Thick Ice Sheets due to the accumulation of small inputs of snow and frost which exceed melting rates over very long periods of time
- Known as a “Polar Dessert”
Case Study-Antarctica-Physical Geography
- Most is mountainous, rocky and covered in glacial ice
- Ice free areas are due to local factors
- Has Nunataks
- Divided in Greater and Lesser Antarctica by Transarctic Mountains
- Highest point is Mount Vinson at 4892M
- Marine conditions support diverse ecosystem
- Coast is warmer than centre
Nunatak-What?
A nunatak is an exposed, often rocky element of a ridge, mountain, or peak not covered with ice or snow within (or at the edge of) an ice field or glacier. They are also called glacial islands
Case Study-Antarctica- Antarctic Convergence Zone
In this zone, North flowing waters from Antarctica meet warmer south flowing waters. This zone is between 32KM to 48KM wide and varies according to latitude and season. Cold water sinks beneath warmer waters causing upwelling currents. Leads to high marine productivity, due to the conditions
Case Study-Antarctica- Antarctic Circumpolar Current
-The largest global surface current, it flows eastwards, driven by westernly winds and is also known as the West Wind Drift. This blocks warmer waters from traveling south towards the Antarctic
Life in Antarctica
The majority of life is marine based, as the climate in the sea is not as harsh as on the land. Organisms are more likely to thrive in the marine conditions
The Importance of Krill
Krill is very important food source in the Antarctica. It is eaten by a lot of animals in the food chain. It is
Krill and the Baleen Whale
Krill is very important to the Baleen Whale as it is their only food source
Case Study-Antarctica-Human Geography
Antarctica is the only continent with no permanent human l habitation. There are however, permanent human settlements, where scientists and support staff live for part of the year on a rotating basis
The Main Bases on Antarctica
- Amundsen-Scott (USA)
- McMurdo (USA)
- Davis (Australia)
Threat-What?
A statement of an intention to inflict pain, injury, damage or other hostile action on someone or something. It can also be a person or thing likely to cause damage or danger
Threats to Antarctica
There are 4 main threats to Antarctica:
- Whaling and Fishing
- Climate Change
- Mineral Extraction
- Tourism
Threats to Antarctica-Whaling and Fishing-What?
The declining number of Whales and Fish in the seas of the Arctic
Threats to Antarctica-Whaling and Fishing-What is the Fishing Threat
- Only Large Scale operation in Antarctica
- Potential over Fishing of species
- Effects on the food chain
- Habitats Destroyed
- Non target species are killed by fishing equipment
- Overfishing of Krill
- Some countries have unauthorised fisheries
Threats to Antarctica-Whaling and Fishing-Key Evidence
- Began in the early 1900’s and grew very quickly
- In 1910, Antarctica provided 50% of the World’s Catch
- 1991-The Convention on the Conservation of Antarctic Marine Living Resources imposes Catch Limits
- Krill Numbers has dropped by 80% since the 1970’s-Caused by less Sea Ice
Threats to Antarctica-Whaling and Fishing-What does the Threat impact on?
- Fish
- Whales
- Krill
Threats to Antarctica-Whaling and Fishing-IWC- What?
IWC stands for International Whaling Commission
Threats to Antarctica-Whaling and Fishing-IWC-Aim
Aims to Conserve the Whales of the world
Threats to Antarctica-Climate Change-What is the Threat?
- Rising of Temperatures by 3 degrees
- Melting of snow ice-Increased Colonisation of Plants
- Disruption of Penguins Colonies have Changed
- Krill number have declined-Associated with reduced Sea Ice Cover
Threats to Antarctica-Climate Change-Why has the Threat Arisen?
The threat has arisen due to a rise in Carbon Emissions, due to:
- Globalisation
- Trade
- Transport
Threats to Antarctica-Climate Change-Which area is Most Threatened by Climate Change?
The Antarctic Peninsula is most threated. The southern Ocean temperature has risen by 1 degree since 1955
Threats to Antarctica-Climate Change-What dies the Threat impact on?
- Penguins-Their numbers are declining
- Whales-They rely on Krill
- Krill-Their numbers are declining
Threats to Antarctica-Climate Change-Trade and Globalisation
International Trade, and particular International Transport increases the Climate Budget, which helps contribute to Climate Change
Threats to Antarctica-Mineral Extraction-What is the Threat?
Mining for minerals on the Continent
Threats to Antarctica-Mineral Extraction-Why has the Threat Arisen?
-Future Demand for the resources of Antarctica
Threats to Antarctica-Mineral Extraction-The Minerals of Antarctica
- Silver
- Gold
- Cobalt
- Copper
- Chromium
- Iron
- Molybdenum
- Manganese
- Nickel
- Lead
- Titanium
- Uranium
- Zinc
Threats to Antarctica-Mineral Extraction-What Will Happen in 2048?
In 2048, the Current agreement on mineral extraction ends. If an agreement is not decided by then, it becomes “Open Season” on mineral extraction, potentially bringing Commercial Mining to the Continent for the first time
Threats to Antarctica-Tourism-What is the Threat?
- The continent is under pressure as the result of the shrinking world
- Modern Transport makes it quicker to get there
- Damage caused by Tourists:
- Rubbish
- Pollution
- “Everyday Pollution”
- Waste from Ships
Threats to Antarctica-Tourism-Main Reasons for Growth in Tourism
- Bucket list destination
- 37000 arrivals to Antarctica in 2014
- Peaked at 46000 in 2007
- Attracted to scenery and Wildlife
- Due to the Antarctic Treaty, only 100 people are allowed onshore at one time-to protect the environment
Threats to Antarctica-Antarctic Treaty-What?
Introduced in 1961, it is designed to protect and conserve the environment, plant and animal life on Antarctica
Threats to Antarctica-Tourism-Who does this Threat Impact?
- Wildlife
- Landscape
- Scientists-Can’t observe the environment
- Tourists-Environment is damaged, they can’t go
Threats to Antarctica-Tourism-Arguments for
- Economic benefits to tour companies
- People gain joyful experiences
Threats to Antarctica-Tourism-Arguments Against
- Pollution
- Disturbs Wildlife
- Oils spills from ships-Kill Martine Life
- Could Introduce non-native species
- Plants are Destroyed
Management of Antarctica-Antarctic Threaty System
- Created due to the lack of sovereignty over the region
- Signed in 1959 by 12 nations, with 52 countries having signed up since then then
Management of Antarctica-Antarctic Threaty System -Goals
- peace
- Corporation
- Science
- Prevents Military Tests
- Prevents other claims to continent
- Only permits Science activities that are supervised
Management of Antarctica -Protocol on Environmental Protection
- Created in 1991
- Bans all mineral resource activity
- Promotes monitoring in order to minimise the impacts of human activity
Management of Antarctica -Flora and Fauna
- Prevents removal of native flora and Fauna
- Prohibits non native species
- Identifies and designates specially protected species
Management of Antarctica -waste Management
- Identifies type of waste that have been removed
- Establish rules for the storage and disposal of waste
- Planning for the removal of waste
Management of Antarctica -Marine Pollution
- Restricts the use of heavy fuel oil
- Prohibits the discharge of oil and garbage in Antarctic Treaty Area
- Creates rules of what can be discharged
Management of Antarctica -Protected Areas
-Specific areas of interest are identified and Protected
Management of Antarctica -NGO -Antarctic and Southern Ocean Coalition
This NGO designates marine protected areas and Marine Reserves. These create areas for scientists to study climate change
Management of Antarctica -NGO -Oceanites
-This NGO does penguin counting to see how climate changes effects them
Management of Antarctica -NGO -Greenpeace
This NGO intervenes with environmental causes and applies pressure to change policies that will benefit the environment
Common -What?
A shared resource or area
Global Common -What?
These are resources,domains or areas that lie outside the political reach of one nation
The 4 Global Commons
- The seas
- The Atmosphere
- Antarctica
- Outer Space
The Unofficial 5th Common
The Internet
The Common Heritage of Mankind -What?
Defined territorial areas and elements of humanity common heritage should be helped trust for future generations and be protected from explotation
The Common Heritage of Mankind -principals
- Some localities belong to all humanity
- the resources there belong to all of humanity
- We must take into consideration future generations
- And the needs of developing countries
