Global systems and global governance Flashcards
What are the 5 dimensions of globalisation?
- Economic
- Cultural
- Political
- Social
- Biological
Capital flows?
The movement of money for the purpose of investment,trade or to produce goods/provide services.Usually regarded as investment into a production operation
Globalisation?
A process by which national economies,societies and cultures have become increasingly integrated through the global network of trade,communication,transportation and immigration.
Labour?
Factor of production defined as the aggregate of all human physical and mental effort used to create goods or provide services.
International trade?
The exchange of capital,goods and services across international borders.Inbound trade is define as imports an outbound trade as exports.
Give an example for the dimension of politics in globalisation?
- trading blocs
- governmental and global institutions
Give an example for the dimension of the economy in globalisation?
- trade and aid
- TNCs
- capital flows
Give an example for the dimension of society in globalisation?
- migration
- social networks
What is economic globalisation caused by?
-Increase in free trade
- Growth of transnational corporations
- Faster,cheaper transport
- global marketing
What is political globalisation caused by?
- Poorer countries
- decline of centralised (communist) economies.
- Growth of western democracies and their influence on poorer countries
What is cultural/social globalisation caused by?
- Migration
- Global communication networks
- Impact of the western culture through media,sport,leisure and celebrity
What are the factors of production?
- Land
- Labour
- Capital
- Enterprise
What is capital as a factor of production?
This refers to any physical resource that can be regarded as a man-made aid for production such as buildings,factories,machinery.
What is enterprise as a factor of production?
This is very particular form of human capital describing those who take the risk of establishing businesses and organising the production of goods or provision of services.
Whats is economic globalisation caused by?
- Increase in free trade
- Growth of transnational corporations
- Faster,cheaper transport
- global marketing
Whats is political globalisation caused by?
- Poorer countries
- decline of centralised (communist) economies.
- Growth of western democracies and their influence on poorer countries
Whats is cultural/social globalisation caused by?
- Migration
- Global communication networks
- Impact of the western culture through media,sport,leisure and celebrity
What is BRICS?
group of 5 countries:
- Brazil
- Russia
- India
- China
- SOuth Africa
What are economic leakages?
Loss of income from economic system
What is profit repatriation?
Profits sent back to base country by TNCs
What is diaspora?
Large group of people with similar heritage who have settled in places all over the world
What is FDI?
Investment made by TNCs or governments into a foreign country?
What is economies of scale?
Cost advantages that result from larger size operation like buying in bulk or specialized equipment
What are the types of capital flows?
- FDI
- Repatriation of profits
- Aid
- Remittance payments
- Migration
What are remittance payments?
Transfers of money by foreign workers to family in home country
How does migration affect capital?
- Skilled and talented workers move to richer countries - pa tax and spend money there
- Do send home remittance payments
What is deregulation of world financial markets?
Activities of institutions like banks, insurance companies and investment companies can go international
When was the deregulation of world financial markets?
Late 20th century
What places attract migrants from further afield?
North America, Europe and Gulf states
What are gulf states?
Middle East: Qatar, UAE, SA
What country has the largest flow of labour?
Asia, between 2005 and 2010 5 million workers have moved from south Asia to East Asia
Where do most migrants move over?
Short distances in close regions despite cross border movements
What are conglomerates?
Collection of different companies that report to one parent company (TNCs)
What is economies of scale?
Cost advantages that result from larger size
What is the flow of information governed by?
- Migration
- Communication transfers
- Speed of data
What can flow of information consist of?
- Cultural ideas
- Language
- Business
- Technology
How has flow of information been made easier?
- Global telephone networks (faster, cheaper)
- Email and internet
- Media coverage
What is economic globalisation characterised by?
Long distance flows of goods,capital and services as well as information and market exchanges.
What is political globalisation characterised by?
The diffusion of government,policy and development of market economies in former communist states
What is Cultural/Social globalisation characterised by?
Spread of ideas,information and images.
What is the core-periphery model?
The core assumed that global power in concentrated in the hands of a relatively small block of developed nations.Periphery countries were seen as those that are less developed and have been exploited an suffer from a lack of investment.
What is more free flowing financial or labour markets?
Financial
Why is the labour market less free flowing than the financial market?
Because there is more restrictions on immigration
Why do migrants cross international borders?
For better employment opportunities.
What percentage of somalis rely on remittances?
40%
How much does remittances account for in the GNI and Investment of somalia?
- 50 % of the GNI
- 80% of all investment in the country
How much FDI,Exports,international aid and remittances does somalia receive a year?
Remittances-$1.2 billion
International trade-$800 million
Exports-$500 million
FDI-$100 million
What conditions in somalia worry UK and US financial institutions?
- It’s informal economy,with little government regulation
- The lack of anti-money laundering laws
- The lack of due diligence,SARs for money transmitters
- The fact that some remittances may end up in the hands of terrorist group Al-Shabaab,which receives donations from domestic and foreign sympathisers.
Containerisation?
A system of standardised transport that uses large standard size-steel containers to transport goods.The containers can be transferred between ships,trains and lorries,enabling cheaper and efficient transport
Tariffs?
A tax or duty placed on imported goods with the intention of making them more expensive to consumers so that they do not sell at a lower price than home-based goods-a strategy of protectionism
Protectionism?
A deliberate policy by government to impose restrictions on trade in goods and services with other countries-usually done with the intention of protecting home-based industries from foreign competition.
What are services?
Economic activities that are traded without production of material goods
What 2 ways can services be split into?
- high level service
- low level service
What is a high level service?
Service to business such as:
- finance
- investment
- advertising
What are low level services?
Service to consumers:
- travel
- tourism
- call centres
- banking
Why are high level services footloose?
They can locate anywhere and serve customers worldwide
What is international movement of trade facilitated by?
The reduction in costs of trade which includes transaction,tariffs and transport and time costs.
How has transaction costs been reduced?
By improvements in flows of data and the ease with which capital can be transferred to pay for transactions
How has transport and time costs been reduced?
Been reduced by the process of containerisation which has enabled more complex and long distance flows of products.
Why has tariffs reduced?
Because of work put in by the world trade organization work to remove regulatory barriers.
Why has decentralisation occured over time?
A result of FDI from TNCs into developing countries able to take manufacturing tasks at competitive prices
What has happened to low level services?
Decentralized e.g call centres from UK to India
What is marketing?
Process of promoting, advertising and selling products or services
What happens happens to a company when it becomes a global marketer?
- Views the world as one single market
- Creates products that fit various regional markets
- Develop recognisable ‘Brand’
Why do companies employ one marketing strategy?
Sell product same everywhere creating economies on scale which is cheaper
Give an example of a company that uses global marketing?
Coca cola, tweeks minor elements for different regionals like formula and bottle design
What did globalisation do to labour?
It created a new international division of labour with two main recognisable groups
What are the two main recognisable groups of labour?
- Highly skilled,highly paid,decision-making,research and managerial corporations which,on a global scale,are largely concentrated in more developed countries
- The unskilled,poorly paid assembly occupations,which tend to be located in developing countries that have lower labour costs
What has happened in the last 40 years?
Many countries that were classified as less economically developed have become newly industrialised countries.
What does MINT stand for?
The new emerging developing countries Malaysia,Indonesia,Nigeria and Turkey.
In 1954 how much of manufacturing was concentrated in the industrialised economies of Western Europe,North America and Japan.
95%
Where is most product consumption in the world?
HICs
Give an example of a company that moved manufacturing?
Dyson, UK based vacuum cleaner manufacturer, moved to Malaysia but still sells products in UK
How is product consumption changing?
Emerging NICs are becoming more competitive and demanding similar consumer prices
What future patterns of product consumption is predicted?
- Asia more competitive, exports to other countries in Asia
- Fastest growing trade route between India and China
What is Maquiladora?
Manufacturing operation located in free trade zones in Mexico
What does Maquiladora do?
Import materials for assembly then export final product with not tariffs
Why have links between countries increased?
- Development of computer and internet
- English as global language
- Few boundaries for flow of data
Why do manufacturers move around the world?
- Availability of skilled or educated workforce
- Access to large markets (no tariffs, trade agreements)
- Government incentives (tax breaks, enterprise zones)
- Cheaper labour
How has transport contributed to globalisation?
- Quicker
- Large quantities
- Efficient
What ways has transport improved?
- Increased size of aircraft and low-cost airlines
- Containerism
- Computerised logistic system
- Handling and distribution efficiency
What security threats does trade face?
- Supply chain security
- Crime and anti-terrorism
- Anti-smuggling
- Food and bio-security
What is global shift?
TNCs relocating there production to developing countries with lower wage economies.
What has the transfer of technology by TNCs allowed developing countries to do?
Allows countries in developing world to increase rate of productivity without raising their wages to same price as developed countries.
What is a consequence of global shift?
Deindustrialisation
What factors have combined to accelerate globalisation since 1990s?
- Communications-ICT/Mobile phones and the internet revolution
- Transport-Faster transport by air
- Collapse of communism-more countries develop market economies
- TNCs-Growth of TNCs through mergers and expansion
- Capital/investment-Increasing capital mobility
- Global marketing-Rise in significant global brands
- Travel-Increased business,personalo and tourism travel
- Migration-Ideas and information spread via movement of people
- Trade-Role of WTO;more free trade;trading groups e.g EU
- Containerisation-Vast quantities can be shipped at lower price
What is the UK trade and investment department job?
They offer support and advice on all aspects of trade to encourage businesses,especially first-time exporters,to trade their goods overseas.
What are dry ports?
Ports inland and nearer to businesses.
Why do developing countries like pakistan encourage the use of dry ports?
To lower the transport cost and save exporter time as all shipment arrangements and customs documentation are completed locally before the goods are shipped
How have security threats been treated?
- Initiatives (WCO, EU) which have minimum standards
- Tightened measures on terrorism, not leave stable door open
What does NAFTA stand for?
North american trade agreement.
What is CARICOM?
A trade bloc made up of a Caribbean community 20 countries
What is MERCOSUR?
A coalition of countries in south America which makes
What companies invested in for cost advantages (economies of scale)?
- Technologies (robotics)
- Global marketing and distribution networks
- Globally capable management
