Globalisation Flashcards
Name three international organisations that have contributed to globalisation through the promotion of trade policies
- World Bank
- International Monetary Fund (IMF)
- World Trade Organisation (WTO)
What is the role of the world bank?
- lends money and gives grants to the developing world to help fund economic development and reduce poverty
What are two criticisms of the world bank?
- Often puts economic development before social development
- Requires loanees to adopt trade liberalisation policies
Name 2 instances of World Bank investment
In 2014: - gave a $470 million loan to the Philippines for poverty reduction
- Also gave the Congo $70 million for a HEP project
What is the IMF’s aim?
- To maintain a stable international financial system that promotes free trade and globalisation
What is the role of the IMF?
- Provides loans to countries facing short term payment difficulties
What is an example of an IMF Loan?
- In 2008 Greece received a series of loans when facing large debt
What do the IMF require loan recipients to do?
- Open the economy to FDI and free trade
Why has the IMF been criticised?
- For promoting a western model of economic development that works in the interest of developed countries and TNC’s
What is the role of the World Trade Organisation?
- To reduce trade barriers and create free trade
What does the WTO largely deal with?
- the flow of goods and services (commodities)
What is a tariff?
A tax in goods entering or leaving a country
4 ways National Governments can accelerate globalisation
1- Joining free Trade Blocs
2- Privatisation
3- Free market Liberalisation
4- Encouraging business start ups
Name Two Trade Blocs
- The EU
- ASEAN
Outline the European Union
- Trade bloc composed of 28 countries
- Guarantees free movement of goods, capital, and people
- The Schengen area countries have removed border controls
- Single currency of the Euro
What was the Original Political aim of the EU?
- to integrate economies to that interdependence prevents war
- Outline ASEAN
- A free trade area with 10 members
- Working towards the complete elimination of tariffs
- More of a political purpose as opposed to economic
How does Free market Liberalisation promote Globalisation?
- Reduces government intervention in the economy
- Reduces monopolies and increases competition which leads to better and cheaper prices
How does Privatisation promote globalisation?
- Increases efficiency as politics aren’t involved
- Allows for cash injection through FDI
How does Encouraging Business start ups promote globalisation?
- Increases competition and erodes monopolies
What are two indicators of globalisation
- KOF index
- AT Kearney index
What three categories does the KOF index use to gauge globalisation?
- Economic globalisation
- Social Globalisation
- Political Globalisation
How many countries is KOF data available for?
- 207
What correlation does the KOF index show?
- A positive correlation between globalisation and development
