Globalisation Flashcards
What are the A8 countries?
They are 8 countries that joined the EU in 2004 (Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia)
What is the AT Kearney Index?
A US based global management consultancy firm made to rank cities from most to least globalised
Define brownfield site.
A site that has been previously used, usually for industrial reasons, but is now unused and abandoned e.g. old factories
Define capital.
Money or property, especially when it is used in business.
Define capitalism.
An economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.
Define carbon footprint.
The amount of CO2 that a person or organisation produces by the things they do and measures the harm done to the environment.
Define communism.
A political and economic system that seeks to create a classless society in which the major means of production, such as factories, are owned and controlled by the public.
Define consumerism.
The belief that it is good to buy and use lots of goods and services.
Define cultural erosion.
The loss of traditional or indigenous cultures e.g. languages and cuisine
Define cultural diffusion.
The way cultures merge and spread around the world.
Define cultural imperialism.
The promotion and imposition of the values and beliefs of one culture over another.
Define cultural landscapes.
The landscapes that have been affected, influenced or shaped by human existence/action.
What is the development cable model?
A model identifying the key development factors a country needs to successfully develop.
What is the development gap?
It is the widening difference in levels of development between the worlds richest and poorest countries.
What is diaspora?
The dispersion or spread of a group from their original homeland.
What is ecological footprint?
The amount of land needed by a person group or society in order for them to have enough food or resources to live and continue to exist the way they are.
What is economic migrant?
A person who moves to a different country in order to get a better job.
What is economies of scale?
The reduction of production costs as the value of production and increases.
What is ethical shopping?
Purchasing products and services that minimize social and/or environmental damage
What are ethnic enclaves?
A geographical area where a particular ethnic group is spatially clustered and socially an economically distinct from the majority group.
What is fair trade?
An organisation which encourages people to buy things that have been produced ethically.
What are food miles?
The distance between the place food is grown and where it is eaten.
What is foreign direct investment (FDI)?
International investment from one country to another for the purpose of constructing physical capital
What is the Genie index?
A measure of the degree of inequality in a society
What is a global hub?
A highly globally connected city or a home region of a large global connected community.
What is the global production network?
It is complex chains of global suppliers used to make a product.
Define global shift.
The movement of industrial work abroad usually two Asian countries from the West.
Define globalisation.
The process by which countries become more interconnected and by which people culture finance goods and info transfer between countries with few barriers.
Define glocalization.
The process of making a global market suitable to local tastes.
What is GDP (gross domestic product)?
The value of all goods and services producing a country in one year except for income received from abroad.
What is GNI (gross nationally income)?
The total value of all goods and services producing the country in one year including foreign flows.
What are heavily indebted poor countries?
A group of 37 developing countries with high levels of poverty and debt overhang which are eligible for IMF and World Bank
Define homogenization.
When cultures mix and produced new what diverse cultures.
What are host countries?
Where migrants move to/their destination
What is the human development index (HDI)?
The summary measure of human development.
Define hyper-urbanisation.
Rapid increase of urbanisation
What is the informal sector?
A part of the economy that has been the taxed or monitored by any form of government.
Define interdependence.
When countries depend on each other for things like food energy or resources.
What is the international monetary fund (IMF)?
An international organization that tries to encourage trade between countries and to help poor countries develop economically.
What is ‘just in time’?
The process where goods are produced our boards just before their needed so the company doesn’t need to store them for a long time
What is the KOF index?
A measure of globalisation via social political environmental factors and scale out of 100
Define the knowledge economy (new economy).
An economy based around knowledge technology and information also known as the quaternary sector.
What is the Lee model of migration?
A model that accounts for the push and pull factors of migration as well as intervening obstacles.
Define liberalism.
A political theory that places the individual in their rights at highest priority.
What is the Lorenz curve?
A graphical presentation of equality where a deeper Curve means less equality
Define megacities.
A city with a population of one million or more.
Define neoliberalism.
A political and economic philosophy that emphasizes free trade, deregulation, globalization, and a reduction in government spending.
What is a non-governmental organisation (NGO)?
An organization which helps people, protects the environment etc and which is not run by the government for example charities.
Define offshoring.
When TNCs moved part of their own production process overseas
Define outsourcing.
When TNCs contract another company to produce goods rather than doing it themselves.
What are post-colonial migrants?
Migrants that move to a country that has colonised their home country currently or in the past
Define purchasing power parity (PPP)
The purchasing power of different currencies for example how much you can buy with £10.
Define quotas.
A limit placed on the number of goods that can be imported from a certain country.
Define remittances.
When someone sends money back to family/friends/etc in their home country.
Define refugee.
Someone who has been forced to leave their country especially during war, for political/religious reasons or due to environmental disasters
What is the shrinking world theory?
The idea that our perception of the world is shrinking as technology like planes improve
Define source countries.
Where migrants originally come from.
What is spatial division of labour?
The distribution of different stages of economic activity across certain areas
Define special economic zones (SEZs).
An industrial area, often near a coastline, where favourable conditions are created to attract TNCs. These include low tax rates and exemptions from tariffs and export duties
What is the Sovereign Wealth Fund?
A state owned investment fund that invests in real and financial assets such as stocks.
Define subsidies.
Grants given by governments to increase their profitability of key industries.
Define sustainability.
The practice of using natural resources responsibly so that they can support present and future generations.
Define switched on countries.
An area experiencing a lot of globalisation
Define switched off countries.
An area which is not experiencing a lot of globalisation .
Define tariffs.
The taxes that are paid when importing or exporting goods and services between countries
Define trade blocs.
A group of countries which group together to boost trade via trade liberalisation between members and boost economic growth.
Define trade liberalization.
The removal of trade barriers.
Define Transition Town.
When local communities become climate proactive by reducing fossil fuel dependence and by shifting production closer to home.
Define transnational corporations (TNC)
A major company with a global reach and a presence in at least two countries.
Define urbanisation.
A process where an increasing proportion of population lives in urban areas such as towns.
What is the World Bank?
A United Nations agency with the primary role of financing economic development, with focuses on natural disasters.
What is the World Trade Organization?
The only international organization dealing with rules of trade between nations.
What is an example of economic globalisation?
-The growth of TNCs
- Improvements in ICT
- Online purchasing like Amazon
What is an example of social globalisation?
- International immigration leads to families that cross national borders and cities become more multi-ethnic
- Global improvements in health & education
- Social interconnectivity through phones, email etc
What is an example of political globalisation?
- Growth in trading blocs
- Global action against disasters
- World Bank, IMF, WTO
What is an example of cultural globalisation?
- “Americanisation”
- Glocalisation and hybridisation
- Able to share cultures online
- Increased migration means faster spread of culture
Why is post 1940s globalisation unique?
- Lengthening of connections
- Deepening of connections
- Faster speed of connections
What are the different global flows?
- Capital e.g. between businesses or remittances
- Commodities e.g. raw materials, food or manufactured goods
- Information e.g. social network, TV
- Tourists e.g. due to cheaper flights or more disposable income
- Migrants e.g. economic migrants, political or environmental refugees
What were important innovations in transport that have causes time-space compression?
- Steam power
- Railways
- Jet aircraft
- Container shipping
What were important innovations in communications that have causes time-space compression?
- Telephone/telegraph
- Broadband & fibre optic
- GIS & GPS
- Internet & social networks
What is an IGO?
An intergovernmental organisation
They work to encourage globalisation by promoting free trade policies and FDI.
E.g. IMF, World Bank, WTO
What is the role of the World Bank?
- Was formed to finance economic development
- Uses bank deposits from wealthy countries to provide loans for countries in need
- Impose strict conditions on its loans concerning repayment and economic growth
- Long term
What is the role of the IMF?
International Monetary Fund
- Lends money for development purposes
- Primary focus is maintaining international financial stability
- Recipients must run free market economies, allowing TNCs to enter more easily
- Their rules can be controversial as strict financial conditions may cut back on public spending
- Short term
What is the role of the WTO?
World Trade Organisation
- Promotes free trade without barriers (subsidies and tariffs)
- Trade liberalisation
- Has failed to stop the worlds richest countries from subsidising their own food producers
What are roles of national governments in globalisation?
- Create political barriers to prevent global flows e.g. reduce migration, stop the import of goods
- Adopt policies that promote globalisation
What policies help promote globalisation?
- Free market liberalisation
- Privatisation
- Encouraging business start ups e.g. reduce taxes for start ups
- Encouraging investment from other governments e.g. from sovereign wealth funds
What are advantages to trade bloc memberships?
- Bigger markets without extra taxes
- National firms can become TNCs
- Protection from foreign competitors and political stability
What are disadvantages to trade bloc memberships?
- Loss of sovereignty
- Interdependence
- Compromising to follow policies
What is the role of the EU?
- 28 member states
- Single currency in most states for easy movement of goods
- Removal of international border controls
- Subsidises EU farmers
- Goes against WTO rules
What is the role of ASEAN
- 10 states e.g. Malaysia, Indonesia, Singapore
- Promotes free trade & eliminates tariffs
- Supports Indonesian manufacturing
- Promotes peace (no nations allowed nuclear weapons)
What are the policies the UK has in favour of globalisation?
- Free market liberalisation, due to beliefs that government intervention slows markets and as wealth increases it will trickle down to the poor -> deregulation of capital
- Encouraging business start-ups
- Privatisation -> in 1980s
What year did Chinas Open Door Policy occur?
1978
What was Chinas Open Door Policy?
China allowed international businesses to enter the country as it needed Western tech and investment to develop its economy.
This economic boom led to 300m people migrating from rural to urban China (urbanisation)
TNCs quickly outsourced/relocated to Chinas SEZs due to tax incentives and cheap labour.
What % of Chinas exports came from foreign companies connected to SEZs by 2005?
50%
Why is China said to be open to globalisation?
- Large amounts of FDI from international TNCs
- Exports rare earth minerals
- Foreign TNCs allowed to invest in China’s domestic markets
Why is China said to be closed to globalisation?
- Media censorship e.g. Google and Facebook aren’t allowed so have government run versions instead
- Strict quota that only 34 foreign films allowed to be shown in cinemas every year
- Strict control of TNCs in some sectors
What are the ways we can measure globalisation?
- KOF index
- AT Kearney Index
What is the KOF index?
Measures globalisation by these factors:
- Economic globalisation (37%) e.g. volume of FDI, cross border transactions
- Social globalisation (39%) e.g. cross-border contact, information flows, TNC presence
- Political globalisation (24%) e.g. memberships in IGOs, no. of foreign embassies
What are the pros and cons of the KOF index?
+ Indicators are weighted
+ Added into 1 value
+ Scale from 1 to 100
+ Many variables (24)
+ Only measures international transactions
What is the AT Kearney Index?
Measures globalisation by these factors:
- Economic integration e.g. volume of global trade, FDI
- Personal contact e.g. telephone calls, travel, remittances
- Technological connectivity e.g. internet users, amount of servers
- Political engagement e.g. participation in IGOs, and peacekeeping
What are the pros and cons of the AT Kearney Index?
+ Weighted system
+ FDI, internet and telephone traffic weight doubled
+ 0-1 scale
+ Allows for comparison over time
+ Covers 96% of world GDP and 84% of global population
- Weightings controversial
- Smaller countries wrongly make top due to proportion of FDI
- Not statistically significant
How are some countries switched off from globalisation due to their environment?
- Distance from market discourages FDI
- Wilderness
- Low agriculture potential
- Lack of energy and mineral deposits
How are some countries switched off from globalisation due to their politics?
- Corruption
- Weak commitment from government to develop
- Civil/tribal conflicts
- Exclusion from trade blocs
How are some countries switched off from globalisation due to their economy?
- High levels of government debt
- Weak education and low skilled work force
- Poor infrastructure
- Dependence on a single industry
What is our switched off case studys?
- The Sahel Region
- North Korea
Why are countries along the Sahel more switched off?
- Mismanagement of natural and human resources, dating back to colonial times
- Landlocked countries e.g. Chad struggle to attract FDI due to it
- Arid conditions and desertification make infrastructure more expensive and agriculture much harder
- Low literacy rate (40%)
- Low life expectancy (average 50yrs)
- Seasonal tourism
- Wide spread disease like malaria and rabies
What are some ways that countries in the Sahel region have been able to globalise?
- Some farmers now grow cash crops for TNCs e.g. cotton in Mali
-> however wages are low so workers lack spending power - Sharing of culture online e.g. Mali folk musicians have large following on Youtube
Why is North Korea switched off from globalisation?
- Has been an autocracy for 70 years
- Purposefully politically isolated
- No undersea cable connection
- Citizens have no access to internet or social media
What is our switched on case study?
China
Why is China switched on to globalisation?
- Open Door Policy of 1978
- Shang Hai container port -> busiest container port in the world
- Educated and skilled workforce
- Easy access to important trade routes and partners
- Large workforce
- SEZs
What is horizontal and vertical integration?
When a TNC expands its operations to provide similar goods and services at either the same point on the supply chain or at different points
E.g. horizontal = car manufacturer buying a motorbike manufacturer
E.g. vertical = car manufacturer buying a steel plant that makes car parts
Why do TNCs go global?
Motive - To maximise profits -> minimise costs via cheap labour and increase revenue via expanding markets
Means - They have the means to do so
Mobility - Due to improved transport and communications -> containerisation, fibre optic cables, reduction in communication costs
How do TNCs accelerate globalisation?
- Complex global supply chains -> via offshoring and outsourcing (e.g. mini’s engine built in Brazil but the car is made in the UK) + economic liberalisation
- Development of new markets -> shift towards Latin America, Asia and the Middle East due to increasing wealth
- Glocalisation (e.g. McAloo Tiki in Indian Mcdonalds) -> includes sourcing products locally which lowers transport costs etc
What are our case studies for TNCs?
McDonalds and Amazon
What are some facts about the TNC McDonalds?
- 70m people use their restaurants every day
- 2nd largest fast food company in world
- 38,000 restaurants
- Most restaurants are franchises so profits circulate locally with some going back to HQ
- Participate in glocalization (McDonalds in India buys 96%+ of their supplies from India)
- Most restaurants look very similar even when in different countries
- Prices for food reflects the country’s state of development (e.g. Big mac = $5.67 in Norway and $1.79 in Malaysia) -> ‘Big Mac Index’
Define franchise
A type of business that is owned and operated by individuals but is branded and overseen by a much larger company (usually a TNC)
What are some facts about the TNC Amazon?
- Largest e-retailer in the world
- 2nd largest employer in the world
- 180 countries served
- Claims of tax avoidance
- Worker exploitation reported
- Reduces in person spending -> affects smaller, local businesses
What are some negative impacts of TNCs -> Foxconn?
Foxconn:
- Worlds largest electronic manufacturer, main factory in Shenzhen SEZ in China
- Employees have long hours, unfair pay ($1 a day), cramped working conditions, poor accommodation, lack of toilet breaks and lack of air conditioning
- Bad conditions have lead to high suicide rates in the factory
What are some negative impacts of TNCs -> Shell?
- Decades of environmental damage and pollution due to oil spills -> 9m barrels in 50 years
- Huge political power in Nigeria as 90% of the countries revenue comes from oil exports
- Drinking water contaminated
