Globalisation Flashcards
How has Containerisation increased globalisation
Container ships are fuel efficient
Carry more good which means more trade can occur increasing connection between nations
Why do TNC’s Outsource
Labour is cheaper
Cuts production costs
Increases profits
What is an e-tailer
an online retailer (e.g Amazon)
How do Global relationships benefit Amazon
Strong interconnections are what allow Amazon to deliver to nearly anywhere in Europe and America in 1 day, despite most of their products being made in China
What are economies of Scale
The process of Low operating costs and Bulk buying that result in a very low manufacturing cost.
What is meant by the term ‘A throw away society’
People in the 21st century tend to buy more things because they are so cheap however more than 30% of it is thrown away before a year.
What 2 terms refer to how the transfer of goods and information has become quicker
A shrinking World
Time-Space Compression
What are the economic impacts of globalisation
Spread of global Capitalism by TNC’s
Cheaper labour aboard supplies cheaper goods in richer countries
Trillions of $ exchanges electronically everyday
Why is the IMF often thought of as controversial
In return for loans it forces countries to privatise their government assets
Often these assets are sold to foreign TNC’s
Many believe that they are selling to TNC’s who then send the wealth back to their original country and not the country who needs it.
What Negative impacts did Pakistan joining the WTO have
They opened up their fishing waters to foreign competition
Before this they had an exclusion zone so only local fisher men could fish
Now huge Trawlers from India etc, take most the catch
Many fishermen now cant afford to feed their family
What is a Trade Bloc? (give examples)
Where countries group together and reduce tariffs on trade from said countries
This promoted trade between these countries and increases global relationships
E.g EU, NAFTA and potentially CANZUK in the future
What were the two strategies used by the conservative government in the 80’s to promote international growth?
Tax breaks (subsidies) - Have encouraged large TNCs to relocate to London
Grants and subsidies - Have encouraged TNCs to set up manufacturing plants in the UK e.g Nissan, Sunderland
What policy did the Chinese government introduce to improve economic relations, and when?
Open door policy of 1978
Western TNCs saw advantages of outsourcing to China
What areas does China use to encourage investment?
Special Economic Zones
they offer tax incentives and cheap labour
How have flows of FDI changed globally?
China is the largest recipient of FDI
BRICS countries receive a majority of FDI
The BRICS redirect FDI to nations in South America and Africa
How has where top TNCs are based changed in recent years?
In 2006, 6/10 of the the top 10 TNCs were based in USA
By 2015, only 2/10 were based in USA
More are now based in China
Why are TNCs so crucial in the spread of globalisation?
Their expansion involves the free flow of capital, labour, goods and services.
Why is mobility crucial for TNC expansion?
Faster and cheaper transport make shipping cheaper
Rapid communication systems allow businesses to operate on a global scale for a fraction of the cost
New production technology makes manufacturing cheaper
What the potential issues with outsourcing?
Workers work for low wages
Work long-hours
Products could be made using toxic substances that are illegal in developed countries
Could lead to human rights violations
What is Glocalisation?
Glocalisation is where a company alters its product to be more suited to a different demographic
What is meant by the term ‘a two-speed world’? What are the two speeds?
Some say that being more connected improved economic development. They are said to be ‘Switched on’
Others say that globalisation leads to corrupt policies. They are known as ‘Switched off’
What are the 4 mechanisms of globalisation?
Flows (trade and migration)
Technologies
Movements
Media
These indicators help to improve connections which is crucial for globalisation
What two indexes can be used to measure globalisation?
KOF index
Kearney Index
What 3 factors are measured in the KOF index?
Economic globalisation - volume of global trade
Social globalisation - information flows
Political globalisation - number of foreign embassies
Why do the US and China not score as well on the KOF index as one might expect in relation to their GDP?
Because the KOF index measures international trade, though these countries do have international trade they have very large domestic markets which are not taken into account in the KOF index
What are the 4 factors measured in the Kearney index
Political engagement - participation in IGO’s
Technological connectivity - number of servers
Personal Contact - telephone calls, remittances
Economic Integration - Volume of international trade and FDI
What are the advantages of the Kearney index over the KOF index?
Uses more holistic indicators and also volumes of trade as well as FDI
Means countries like USA score better on this index than the KOF index
How many of the top 15 most globalised countries on the KOF index were European?
13 out of 15
Why might countries struggle to ‘switch on’?
Geographical location
Unstable economy
High debt
Corrupt government
Why is Zambia struggling to ‘switch on’?
It is landlocked so unable to easily ship goods
Heavily in debt to countries such as China
Produces lots of copper but copper price is falling
Why is Tanzania struggling to ‘switch on’?
80% of population are employed in agriculture (mostly cotton farming)
Due to overproduction cotton prices regularly fall
GDP fluctuates
However, some of their debts are being cancelled allowing them to invest in schools and healthcare
What is the global shift?
The shift of manufacturing from Europe and the USA to Asian countries like China