Global Systems and Governance Flashcards
The flow of globalisation
The roots of globalisation lie in international trade and the increasing accessibility of markets, which open up to the wider global community.
The increased flow of capital, labour and investment have been both a cause and an ongoing consequence of the globalisation process.
Globalisation
The way it is defined reflects whoever is writing it (economists, geographers etc.)
The process by which places and environments become more interconnected, interdependent in real time as part of a shrinking world.
Shrinking world
Time-space convergence has led to extensive networks of people and places. ICT enables interactions by providing affordable instantaneous connectivity. Over time network connections have become faster and more inclusive of all people in society not just privileged groups
Economic globalisation
Growth of TNCs has accelerated cross-border exchanges of raw materials, components, finished manufactured goods, shares etc.
ICT supports the growth of complex spatial divisions of labour for firms
The internet has allowed extensive networks of consumption to develop
Political globalisation
Growth of trading blocs allows TNCs to merge and acquire firms in neighbouring countries, while reduced protectionist barriers helps markets to grow
G7/8 and G20 groups meet regularly to discuss global concerns such as the global economy and the environment
World Bank, IMF, WTO harmonise national economies
Social globalisation
International migration has created extensive family networks that cross national borders
Global improvement sin education and health can be seen over time, with rising life expectancy and literacy
Social interconnectivity has grown over time due to the speed of universal connections such as mobile phones, email and social media
Cultural globalisation
Successful western cultural traits have come to dominate in some nations - sometimes called the Americanisation or McDonaldisation of tastes and fashion
Glocalisation is amore complex outcome that takes place as old local cultures merge and mould with globalising influences e.g. music/art
Flows of globalisation - services
Advancing technology means they can serve the needs of customers worldwide.
High-level (prevalent in NY, London etc.) - to businesses - finance, investment, advertising
Low-level - banking, travel, call centres
Flows of globalisation - products
Transaction costs have been reduced by the improvements in flows of data and the ease with which capital can be transferred to pay for transactions.
Transport and time costs have reduced (containerisation)
Protectionist barriers have reduced global trade
Flows of globalisation - information
Governed by the movement of people and the speed of data and communication transfers
Transfer of cultural ideas, language, industrial technology, design and business management support
Flows of globalisation - capital
Aid and remittance payments
Foreign direct investment - mainly by TNCs into the physical capital or assets of foreign enterprise
Repatriation of profits by TNCs back to home country
Flows of globalisation - labour
Some restrictions on immigration, however, still been a massive rise in the numbers of migrants, mainly to seek better employment opportunities.
Developing countries → developed countries
A lot of movement is short distance within the same region. NA, Europe and Gulf countries attract migrants from further afield.
Brain drain - skilled workers from a poorer country leave to seek better employment.
Global marketing
The process of promoting, advertising and selling products. When a company becomes a global marketer, it views the world as one single market and creates products that fit the various regional markets. It will usually develop a recognisable brand and employ one marketing strategy to advertise products to customers around the world.
Generates EoS
International Division of Labour
The spatial distribution of different stages of economic activities across the globe, where countries specialize in producing goods or services based on their comparative advantages, resource availability, or economic development levels.
Impact of globalisation of international division of labour
Globalisation has created a new international DoL with two main groups:
- Highly skilled/paid, decision-making, research and managerial occupation which are more developed countries and assembly occupation in developing countries
Changes to the international division of labour - NEEs
Original NEEs were ‘tiger economies’ Singapore, Hong Kong, South Korea, Taiwan.
Then went to BRIC economies and now MINT countries. Countries move away from NEE classification by developing their own industrial and commercial bases and their own TNCs
Global shift of production
1954 - around 95% of manufacturing was concentrated in Western Europe, NA, and Japan
Products were also consumed in the country of origin
FDI by TNCs into developing countries has changed this
Lower land values and labour costs and government incentives led to relocation of production-side businesses
Global shift from developed countries to lower wage economies of manufacturing
Consequences of global shift
Deindustrialisation in richer countries
1983-2013 employment in secondary sector ↓ 30% in UK
50% of manufacturing jobs are in developing world
Location choices for businesses in globalisation
Places with high-skilled/educated workers
Limited government regulation or deregulation initiatives
Opportunities to build factories and access to hi-tech capital
Ebbs and flows in car production - USA
Since 1994, Ford have relocated much of their component assembly to maquiladora plants in Mexico due to cheaper production costs and non-tariff barriers that are part of NAFTA
At the same time Toyota have invested in new plants and technology , revitalising the industry
Ebbs and flows in car production - UK
Lost a lot of car industry in 1980s
Investment from Japanese companies, Honda, Nissan, Toyota. The UK is now one of the most productive car manufacturers in Europe
Investment from TNCs such as Tata who bought Jaguar Land Rover from Ford in 2008
Global shift of distribution and consumption
Consumption still lies predominantly in the developed world.
Manufactured in NEEs are largely exported and sold to Europe, NA, Japan
Dyson, UK based company; manufacturers + assembles products in Malaysia and sells products in the UK and other parts of Europe
Changing patterns of distribution and consumption
As NEEs develop, their populations are becoming more affluent and starting to demand similar consumer products to those being exported from their own countries
It is likely that in the future their will be a definitive shift from west to east
Forecasted changing patterns of distribution and consumption
Fastest growing trade route will be India → China
Western finance companies have potential to benefit from trade in services to Asia-Pacific
The service industry
Provision of services has become less attached to goods - e.g. financial sector has no relation to manufacturing
High level services have concentrated in certain places different from old centres of manufacturing
Decentralisation of low-level services to developing world
Call centre UK → India, Middle East, southern Africa where employment costs are ↓ 10-20%
Factors in globalisation - gov. support
↑ exports is a goal for most gov.s
UK gov. have UK Trade and Investment department who offer support and advice on all aspects of trade to encourage businesses
Factors in globalisation - financial
Trade has been hindered by problems in exchanging finance and exchange rate concerns
Deregulation of financial markets allowed arrangements for the removal or relaxing of barriers to move finance
High-speed electronic trading systems means financial transactions can be quick and secure
Factors in globalisation - transport
↑ size and speed of aircraft
Low-cost airlines
Standardised containers
Computerised logistics systems
High speed rail systems
Factors in globalisation - security
World Customs Organisation protects against terrorism and smuggling
However increases costs and create delays for the shipment of goods
Advantages of trading blocs
↑ Competitiveness
↑ Representation in world affairs
Free movement of trade
↑ Mobility of labour
Support particular sectors of a national economy (CAP in EU)
Share tech advancements
↑ Education and healthcare standards
Democracy, human rights
Political integration? - EU
Disadvantages of trading blocs
Loss of sovereignty - decisions are centralised
Loss of financial controls to a central authority such as European central bank
Pressure to adopt central legislation - Bosman ruling
Certain economic resources are damaged by having to share (UK sharing its traditional fishing grounds)
Trade diversion
NAFTA
Signed by USA, Canada, Mexico in 1994
Introduced due to challenge from trade blocs in other parts of the world
Aims of NAFTA
Gradual elimination of all trade barriers
Promotion of economic competition between members
Increased investment opportunities
Generally improved cooperation between member states
Successes of NAFTA
Trade between member countries tripled between 1993 and 2007.
Manufacturing grew in USA, ↑ unemployment
Mexico receives increased FDI as TNCs establish plants in the country in order to gain access to Mexico’s NAFTA perks
Mexican workers receive higher wages
Drawbacks of NAFTA
Some Canadian companies have closed due to competition from low-cost US firms
Some US firms have moved to Mexico and American jobs have been lost
Food surpluses from Canada and US could be dumped in Mexico, reducing food prices and impacting agricultural economy
Maquiladoras - US-owned manufacturing plants exploit Mexican workers
World Bank - roles and criticisms
Provides loans to developing countries for capital programmes. Official goal is reduction of poverty.
Achieves these aims but
Criticised for environmental damage, dependency of countries on loans, western influence + power imbalance
IMF
188 countries working to raise global monetary co-operation, secure financial stability, facilitate international trade. Success in economic stabilisation and co-operation but
Loans come with imposition of austerity measures and loss of sovereignty
WTO
Deals with rules of trade between countries, deals with disputes between countries.
Promotes free trade but
Favouritism towards wealthier nations and trade liberalisation can harm developing economies
Positive effects of flows of labour
Reduces unemployment
Reduces geographical inequality between workers
Addresses skill gaps
Multiculturalism
Remittances benefit home countries
Negative effects of flows of labour
Brain drain
Unemployment in developed countries if there is outsourcing
Greater risk of pandemics
Outsourcing
Taking manufacturing or service jobs from HICs and having them undertaken by organisations in a LIC/NEE
Positives of outsourcing
Provides jobs and investment in one country
Negatives of outsourcing
Structural unemployment from deindustrialisation
Globalisation impact on inequality
Reducing global inequality through the transfer of capital and income (communication and transport is condensing the development continuum)
BUT
Increasing inequality within countries as richer members of society cope better with changes in jobs and technologies (UK 1980s - outsourcing meant loss of jobs for secondary sector workers, but London had opportunities with high-level service sector jobs
- Gini coefficient
Geopolitical issues and globalisation
Argument that globalisation will lead to greater stability and decrease likelihood of conflict between nations.
BUT
Conflict can be caused by shortages of food, water and energy - Malthusian Trap - planet can never cope with consistently growing population
Rapid communications can hasten spread of civil conflicts within countries
Trade can be used as a weapon in conflict
Arab Spring
Globalisation contributed to the Arab Spring in 2010
- Spread of information + ideas on social media - became tools for organising protests, and exposure to global norms such as democracy and human rights
- Economic inequality - globalisation bringing about income inequality and youth unemployment in area fuelled dissatisfaction
Patterns of international trade
2022 - $25t in trade compared to $6t in 2000
China and the USA are the largest exporters of goods
Advantages of international trade
Specialisation in comparative advantage
Economies of scale
Fewer domestic monopolies as there is overseas competition
Transfer of technology
Increased employment
Disadvantages of international trade
Over-specialisation leads to risk
Decline of emerging industries
De-skilling as production technology replaces manpower
Exploitive industries
Dumping
Protectionism and tariffs
Fair trade
Promoting ethical production by ensuring fair wages, safe working conditions, and environmental sustainability for farmers and workers in developing countries. It combats exploitation, supports communities, and encourages responsible consumerism through certified products like coffee, chocolate, and textiles, fostering a more equitable global trade system
G20
Forum of 19 countries + EU which aim to bring together major economies
85% of global trade
G77 + China
Group of economies aiming to promote the collective interests of developing countries with economic + technological collaboration and narrowing the wealth gap
China is not part of the group but is involved heavily in discussions due to its influence in developing countries
China in Africa
China is Africa’s largest trader:
China imports raw materials + exports machinery + electronics
China is involved in infrastructure development such as Mombasa-Nairobi railway
Provides significant loans
China contributes to UN peacekeeping missions in Africa
Criticisms of China’s role in Africa
Debt trap diplomacy - concerns about debt sustainability and China’s bargaining power if countries are unable to repay loans
Economic dependence
SDT
Special + differential treatment
Implemented by the WTO
Gives developing countries have more favourable trade terms, such as:
- ↓ trade barriers
- longer time to implement trade barriers
- technical assistance
- preferential market access
Generalised system of preferences
Example of SDT
Allows developing countries to export certain goods to developed countries at lower tariffs and free trade
Problems of SDTs
Over-reliance on scheme may discourage diversification of industries (as preference is only on some goods) or domestic development in some countries
Ethical investment
Money + financial resources are allocated in a way that prioritises environmental + social sustainability
e.g. aligning with UN’s SDGs, green energy, corporate social responsibility, investment in ethical businesses
Facts about TNCs
Over 60,000 TNCs
Employ 45mil people
75% of trade
Why do TNCs operate around the world
Escape trade tariffs
Lowest cost location for their production
Reach foreign markets more effectively
Exploit natural resources available in foreign activities
Primary sector TNCs
e.g. Royal Dutch Shell, BP
Production near source of unexploited resource - usually in developing countries
New technology (e.g. fracking) means some can now be in HICs
Secondary sector TNCs
e.g. Toyota, Volkswagen
Manufacturing in developing countries -especially south (east) Asia:
- low labour costs
- investment in education
- strong work ethic and little regulation
Car manufacturers locate in USA in EU to gain access to markets
Tertiary sector TNCs
e.g. BT
More ‘footloose’ - will locate in areas with:
- low labour costs
- good education
- proximity to markets
- language also important
Quaternary sector TNCs
e.g. GlaxoSmithKline
Footloose, tend to be located in centres of knowledge development (e.g. universities)
Social benefits of globalisation
TED - Chinese workers not that worried about poor conditions as they come from worse rural areas and see the opportunity to work for TNCs as positive and chance to grow
Transfer of ideas and traditions
Social negatives of globalisation
Poor conditions for workers in LICs
Chinese workers coming to the city want opportunity to learn - too little investment in education
Worker alienation
Foreign cultures (i.e. Westernisation) is ↑ cultural homogenisation (but there is ‘glocalisation’)
Economic positives of globalisation
Lower prices, more choice
TNCs have access to more markets
Economies of scale
Foreign competition may weaken domestic monopolies
Greater innovation
Access to cheaper raw materials
Economic negatives of globalisation
Vulnerability to economic shocks
Free trade can hinder industries in developing countries
Still some protectionism
Worker exploitation
Diseconomies of Scale
Environmental positives of globalisation
↑ awareness
Environmental negatives of globalisation
More transportation - ↑ emissions
Depletion of non-renewables
TNCs outsourcing production to less environmentally regulated countries
↑ waste from packaging
IMF-enforced spending cuts to many countries’ environmental spending
Global governance
The way in which global affairs affecting the whole world are managed through norms, laws, regulations + institutions
As the world becomes more interdependent, global governance is increasingly important for achieving sustainable development across all nations
Recent international issues
Reduction of poverty
Financial instability - GFC
Human rights violations - modern slavery
Trade and investment inequalities - emergency aid for LICs is low
Reducing environmental issues - climate change - Paris Agreement
Civil conflict / terrorism - Arab Spring + 9/11
Need for global governance
Food shortages - governance needed to regulate food production
Changing demographics - ↑ in migration + ease of migration
TNCs - global companies have more power over capital and resources than some governments
Conflict + terrorism - cross-border intelligence, arms trading etc.
Shortage of resources - governance needed to regulate resource management + trade (deforestation)
Key players in global governance
National governments
Regional trading blocs
Coordinating groups of countries (G8)
International regulators (IMF)
International development agencies (UN)
NGOs
TNCs
United Nations
International organisation designed to make the enforcement of international law, security, economic development, social progress + human rights easier for countries (advisory, no jurisdiction)
- 193 countries
- HQ in NY
Positives of the UN
Maintaining international peace and stability
Promoting cooperation between states and international development
Negatives of the UN
Some have argued that certain UN actions have actually exacerbated inequalities and injustices
e.g. peacekeeping causing countries to be reliant on international aid
Millennium Development Goals
2000
Anti-poverty
Sustainable Development Goals
2015
17 goals focussing on development disaster risk reduction, climate change, and global sustainable development
However, market-driven solutions + corporate partnerships can marginalise smaller local, or indigenous communities
International action on climate change
COP 29 - Baku
Climate change is considered to be outside the political reach of any one nation
UN Framework Convention on Climate Change (UNFCCC) is the body responsible for overseeing negotiations on reducing greenhouse gas emissions between nations
Pairs Agreement was the first legally-biding climate deal was struck
Main aim to keep global temperatures below ↑ 1.5C
However, there has to be negotiations which take many years - Paris Agreement started in 2020
US leaving twice under Trump
Common land
Common land is land which is owned by one or many person(s) but over which other people have certain traditional rights, such as to allow their livestock to graze, or collect firewood
Global commons
Resource domains or areas that lie outside the political reach of any one nation. Intl. law recognises 4: the High Seas, the atmosphere, Antarctica, Outer Space.
There is also cyberspace but this is not recognised
Pressure on the global commons
Historically, access to resources in the global commons has been difficult (with the exception of fishing and whaling) but technological advancements and increasingly scarce resources has put pressure on the global commons to provide extra resources. These changes mean that the concept of common heritage is being put under pressure
The Tragedy of the Commons and examples
Is a phrase used to refer to the conflict for resources between individual interests and the common good
Common access resources are likely to be over-exploited. If individuals act in their own self-interest, this will be contrary to the interest of the whole group, because the resource will become depleted.
High seas- overfishing
Atmosphere - pollution
Antarctica - loss of wilderness
Outer space - space debris
Legal issues and institutional framework
The UN is currently the only universal and inclusive multi-lateral forum. They have to ensure the coordination, cooperation and coherence required in intl. policy-making if the benefits of the global commons are to be assured for all.
However, naturally, frameworks have been described as ‘complex and fractured’. Many of the older agreements do not fully consider the environmental impacts of human activities
