Globalisation (1) Flashcards
What is globalisation?
A process of opening up world trade and markets to TNCs
What does globalisation involve?
- flows of capital
- flows of ideas
- communication
- trade
- flows of products
- flows of labour
How are economies of scale being affected by globalisation?
Trade and production are getting cheaper which in turn can make products cheaper.
Why flows of people increasing?
Job opportunities cause people to move around the world and holiday and leisure drive international movement.
What is globalisation influenced by?
- new technology
- communications and information systems (communication has become much easier)
- global financial systems (banks)
- transport systems
Threats of globalisation:
- possible spread of disease globally
- security has become easier to breach as measures have been reduced
What influences countries financial position?
- Past occupation and colonisation may alter a countries finance. Countries involved in running colonies are generally rich in the modern-day while those involved such as India and Nigeria (members of the British colony may be LICs.
- corruption
- disease
Advantages of international trade?
- Economies of scale make production cheaper and allow more production
- Increasing trade increases competition leading to competitive pricing and lower prices for consumers
- increased competition decreases chances on monopolies forming
- transfer of technology can increase global conditions and efficiency and save money
- increased employment and job creation
Disadvantages of international trade?
- Over specialisation - production may be moved to countries where it can be done more chea[ply and therefore remove jobs from the original location
- Product dumping - products may be sold so cheaply they cost more to make then sell which can lead to exploitation of goods and people
- exploiting labour-intensive areas and taking advantage of the lack of laws such as health and safety
Name some international trade blocks:
- OPEC
- EU
- ASEAN
- NAFTA
- MERCOSUR
What is FDI?
Foreign direct investment
Why do countries do FDI
HICs invest in LICs to create infrastructure and once these countries become more developed they will expect trade returns and opportunities
What is an exmaple of FDI
China investing in Africa
What is an economy of scale?
Cost advantage of large scale output of a product as savings are made by spreading out the cost over more units
What are international flows of capital?
All financial transfer between companies for investment, trade or production
What are remittances?
Transfers of money from migrants to relatives back home
What is migration?
Generally now the outmigration of labour from poorer to richer nations
What are BRIC countries?
Brazil, Russia, India and China. Rapid economic advances during 1990s
What are MINT countries?
Mexico, Indonesia, Nigeria, Turkey. Recently emerging economies after the year 2000.
What is repatriation of profits?
Sometimes known as economic leakage. TNCs will extract profits from abroad and bring back to their HQ
What is aid?
Either from NGOs, as bilateral agreements between 2 governments or via multinational organisations such as the UN which puts aid from many nations together
What is the IMF?
International Monetary Fund which aims to allow economic stability and foster international trade.
What are the impacts of flows of labour?
- Most migrants have some level of education
- Can afford to move, therefore not very poorest in giving nation
- Long term issue as people stop sending remittances after 2/3 generations
- Inter-continental as well as long distance
What are flows of services?
An economic activity which is traded without the production of material goods
What are high level services?
Services to business, such as finance, advertising
What are low level services?
Services to consumers, such as banking, travel, communication
What are the impacts of flows of services?
- Easily traded in a globalised world, no locational grounding, offices and call centres can be located anywhere
- Low level services may be outsourced to developing nations, eg call centres in India
What are the impacts of flows of products?
- Gloablisation means more products need to be transported from pace of manufacture to chosen market
- Containerisation makes shipments quick, easy, cheap
- Removal of taxes and encouragement of global trade groups allow for greater levels of trade
- Some objections caused by protectionism
What are flows of information?
Both migrants and technology allow flows of information, recent and historic migrants allow for multiculturalism and information sharing
What are factors in globalisation?
- Communication development
- Transport development
- Financial development
- Information Systems
- Security development
- Trade agreements
- Management systems
What are financial factors in globalisation?
Linked to technological developments as well as relaxed trade barriers allowed by governments, the movement of finances around the world has grown hugely.
What is protectionism?
Putting barriers in place to prevent and reduce trade in order to maintain internal markets and own manufacturing industries
What is trade and finance liberalisation?
Groups such as the WTO encouraging governments to remove tariffs and barriers to trade, to encourage free movement of goods
What is the world customs organisation?
An intergovernmental organisation noted for its work in areas covering the development of international conventions, instruments and tools on topics such as commodity classification, valuation, rules of origin etc
How is air freight a factor in globalisation?
Faster, more places reached, fresh goods transported in large quantities, anywhere in the world, cheap, ease of ordering goods
How are warehouses and robotics a factor in globalisation?
Anything can be ordered from anywhere in the world and arrive potentially next day due to ease of robotics, less likely to make mistakes and very quick. Robots run 24/7
How are budget airlines a factor in globalisation?
Makes more places accessible for normal people, travel on a budget, competition between airlines increases the number of destinations around the world, encourages travel.
What are trade blocs?
A type of intergovernmental agreement where regional barriers to trade (tariff + non-tariff) are reduced or eliminated among countries
What are the advantages of trade blocs?
Allows trade between many countries
One economy, one workforce
Travel between countries is easy, free travel
Encourages growth of economies, risk sharing
Trade of services and people as well as goods
What are the disadvantages of trade blocs?
Countries surrounded by trade blocs but not in them struggle to trade
Hinders development of countries outside the trade bloc
Creates problem sharing, if one country suffers, all do
Uneven reward for input
Migration issues, often uncontrolled
Lack of national control and identity
