Global Systems (booklet two) Flashcards
What are some reasons for the growth of The Asian Tigers?
Cheap labour due to fewer regulations
Reasonably well educated
Culturally want to succeed - prepared to work
Offered tax incentives - encourages FDI
Geographical locations, ports - easily import and export products.
Good infrastructure.
What roles did cumulative causation play in the transtion of the Asian Tigers from LEDCs into advanced economies?
A region’s economy grows due to its comparative advantages (e.g. location, labour, natural resources)
Then gains new advantages (e.g. improvements in infrastructure, skilled labour, tax revenues) which enable it to attract further investment = strong economic growth
The Asian Tiger’s comparative advantage was the cheap labour and well-educated workforce.
What are the economic impacts of rapid economic development?
More disposable income
More jobs - attract more investment (FDI)
More taxes paid
Better infrastructure/transport
Better jobs due to better education (higher pay)
Growth in GDP
Low wage jobs - exploited
Growth was so rapid that shares and house prices became over-priced
What are the social impacts of rapid economic growth?
More jobs
Better healthcare/education
Migration into the area due to more opportunities
Westernisation - loss of traditional culture
How has globalisation helped the population of Vietnam?
One of SE Asia’s fastest growing economies driven by exports of cheaply made goods e.g. Nike shoes and Samsung phones
Ford enabled the infrastructure to develop
Vietnam has boosted an annual GDP growth of over 5% for the past five years straight.
Exports account for 90% of the GDP.
Average annual income has surged from 290 dollars to 2100 over 2 decades.
What are some benefits of global systems?
Remittances Inflow of FDI Creation of jobs Cuulative causation Provision of loans Capital flows to MEDCs Income for social development Transfer of technology and skills Improvements to local infrastructure Increased global political stability and cooperation Increased global environmental cooperation More opportunities for global travel.
How have the consequences of greater globalisation effected Bangladesh?
Haven’t fully benefitted from globalisation and global systems.
40 dollars a month is the average wage
78%of Bangladesh’s GDP is from the textile industry.
1/50th pay of American counterparts
20000 items of clothes per day on each floor.
13 billion dollars of export in 1 year.
Work someimes 100 hours overtime per week.
Unsafe working areas
Pressure from retailers to keep prices down.
Don’t pay tax so Governments have little money to improve.
Easy to avoid the compliance standard checks.
How did global systems negatively impact Senegal?
Trade liberalisation removes restrictions on trade.
Senegal got money from the World Bank - told them to focus on exports to repay debt (traded nuts).
Other developing countries sold groundnuts - more on market so price decreased - could no longer get as much money.
Ended up spending more on debt from groundnuts than education and healthcare.
How did global systems impact Dubai migrants?
Migrants from India and Bangladesh go to work in Dubai (1 million migrant workers) (2/3 of the population)
Some wait 7 months for work with no pay so cannot repay their loans
The agencies provide no help, so they have no options.
What are some of the costs of global systems?
Loss of small-scale, local businesses
Skill and wage level of jobs created
Exploitation of workers
Fickle nature of TNCs
Repatriation of profits
Lack of tax revenues for LEDC/NIC government
Increased inequality within countries
Environmental degradation
Americanisation
Exposure to financial crises in other countries (exportation is dependant on demand)
Increased conflict over resources or trade.
What is the trend in relation to the core-periphery and the development gap?
Countries in the periphery are experiencing the quickest rate of development, therefore potentially shortening the development gap. (MEDCs are seeing less growth).
Describe the statistics presented by Oakes on two-speed development?
Within country inequality has increased across the board.
Global interactions are responsible for a growing wealth divide within nations.
What is the Gini coefficient?
A measure of inequality - a value between 0 and 1
0 = perfect equality
1 = complete inequality.
Why do countries trade with each other?
They don’t have the resources to satisfy their own needs
To get cheaper, or better quality products
Allows countries to specialise = they can produce a narrow range of products at high volumes.
What is comparative advantage?
The ability of any economic actor to produce goods and services at a lower opportunity cost than other economic actors.
World output increases when the concept of comparative advantage is applied as countries decide what goods and services they should specialise in producing.
What factors have limited trade in the past?
Protectionism - any attempt by a country to impose restrictions on trade in goods and services.
Tariffs and Tax
Non-tariffs
What is an import licence?
This is a licence issued by a national government authorising the importation of goods from a specific source.
What are import quotas?
These set a physical limit on the quantity of goods that can be imported into the country.
What are subsidies? (non-tariff).
Grants or allowances usually awarded to domestic producers to reduce their costs and make them more competitive against imported goods.
What are voluntary export restraints?
A diplomatic strategy offered by the exporting country to appease the importing country and deter in from imposing trade barriers.
What are embargoes? (non-tariff).
The partial or complete prohibition of commerce and trade with a particular country. Usually put into practice for political reasons.
What are trade restrictions?
Other import restrictions may be based on technical or regulatory obstacles such as quality standards of goods being imported or how they are produced.
