Globalisation Flashcards
Define globalisation
Globalisation is the increasing connections between places and people across the planet, established through trade, politics and cultural exchanges, and helped by technology and transport.
Define shrinking world
The rapid rate of globalisation has made the world feel smaller because we are more connected to people on the other side of the world using technology.
Define time space compression
the way that time it takes to trade and communicate globally is getting smaller, or compressing.
Define Containerisation
The transportation of cargo in standardised containers that can be seamlessly transferred between oceangoing (ships), rail (trains), and highway (trucks) vehicles without having to unload contents.
Define economies of scale
when mass producing a good results in lower average cost.
Define a TNC
A Transnational corporation is a company that operates across more than one national border.
Define integration
The process by which a company combines different activities around the world so that they operate using the same methods.
Define interdependencies
The process of what happens in one place increasingly has impacts on other places.
Define remittances
Remittances are transfers of money across national boundaries by migrant workers.
Define protectionism
Policies to protect businesses and workers in a country by restricting/regulating trade with foreign nations.
Define a trade barrier
A barrier to free trade that restricts it or makes it harder.
Define a tariff
A tax imposed on imports.
Define a quota
A limit on the quantity of a good a country allows into the country.
Define a subsidy
Financial assistance to a domestic business by a government to make it more competitive against foreign competition (or save it from collapse).
Define free trade
A policy where a government does not interfere with trade by using tariffs, subsidies or quotas.
Define trade liberalisation
A policy of removing trade barriers and protectionism so that trade becomes free again.
Define foreign direct investment
Investment by a foreign business into another business in a different country.
Define a special economic zone
An area set up by the government to attract more FDI by using tax breaks and subsidies.
Define deregulation
The process of removing government rules controlling the way that banks and other financial organisations operate.
What does the world trade organisation do?
WTO ensure that trade moves freely and as smoothly as possible. It deals with rules on trade.
What does the world bank do ?
world bank offers low-interest loans, interest free credit and grants to developing countries. This means that these developing countries can trade more and develop further.
What does the IMF do?
The international monetary fund ensures that the global economy is stabilized, any countries can join if they meet the few requirements. It also does this by stabilizing the world currencies and exchange rate.
Define global shift
The movement of manufacturing and industry to counties which have been recently industrialized E.G- from Europe to China/Asia. It can also be described as the movement off the center of gravity of economic activities to places like China and India.
What are the Benefits of global shift?
1) waged work: TNC’s provide the locals with jobs, and this creates a multiplier effect on the economy which makes it stronger and therefor can develop.
2) poverty reduction: with the creation of jobs and the economy becoming stronger, people start to get an income which reduces poverty levels.
Since 1990, 1 billion people have been lifted out of poverty due to the global shift.
3) education and training: TNCs train the workers, and this educates them. Some of these skills are transferable and can be used for other things.
4) investment into infrastructure: in order to attract TNCs, counties build good infrastructure which can be used for the companies such as ports, power, water supply, sewers. Governments can also make SEZ’s. China built 11,000 KM of new motorways in 2015.
What are the costs of global shift?
1) loss of productive land: construction of factories can get rid of land such as farmland or land which houses/other buildings can be made.
2) worker exploitation: some workers can be treated unfairly and get paid low (exploitation). Workers could be separated from their families.
