Globalisation Flashcards
define globalisation
widening and deepening of global connections, interdependence and flows (goods/services, capital, information, people etc).
define time-space compression
shrinking world effect due to improvements of communications and travel tech
define remittance
economic migrants sending money earnt abroad back to families in home country
what is the WTO
-world trade organisation
-oversee world trade and reduce trade barriers to create free trade
what is the IMF
-international monetary fund
-provides loans to countries in economic crisis (eg. greece in 2008 - unable to pay debts)
- acts as a business and expects money back w interest
what is the world bank
-aims to reduce poverty by providing grants to developing world to fund infrastructure projects /eradicate disease etc.
-acts as a business and expects money back w interest
what is FDI
-foreign direct investment
-financial capital flow from one country to another for the purpose of constructing physical capital eg. building a factory in another country
4 types of globalisation
- Economic - growth of TNCs, info and communication tech supporting spatial division of labour (eg. working from home, international conferencing), growth of world trade and investment
2.Cultural - ‘Westernisation’ of food, clothes, music, values eg. by social media
3.Political - growth of trading blocs, world organisations
4.Social - social interconnectivity due to communication tech, growth of diverse communities due to int migration
what is trade protectionism
practice of shielding a country’s domestic industries from foreign competition by taxing imports eg. Trump imposing tariffs on steel from China
what is a quota
gov-imposed restriction that limits the number/value of goods that can be imported/exported during a period of time
definition of trade deficit
the amount/value by which a countries imports exceeds the amount/values of its exports (more imports than exports)
what is a subsidy
a grant from the state to help keep the price of a commodity low or help a critical industry survive
what is a tariff
a tax on goods entering or leaving a country
definition of free trade
trade left to its natural course without restrictions eg quotas, tariffs
what is a trading bloc and give examples
-groups that encourage free trade
-can have simple agreements to reduce tariffs on a small number of goods, or complex agreements that involve common regulations and creation of economic policies
-EU -european union
-NAFTA- north american free trade agreement
-ASEAN - association of south east asian nations
advantages of trading blocs
-peace encouraged between members
-opens up trade to bigger markets
-freedom of movement and common currencies make trade easier eg EU
-common policies eg. working conditions/human rights
disadvantages of trading blocs
-interdependence
-loss of some financial controls
-pressure to adopt centralised policies eg. migration
-some countries pay in more than they receive leading to separatist movements eg. Brexit
how has the UK promoted economic growth
1.Gave life-long tax breaks to companies if they located in Canary Wharf, London
2. Encouraging business startups - gave grants and subsidies to locate manufacturing plants in UK eg. Toyota, Derby
3. Privatisation - selling public services to companies (eg. train service) to make more profits and attract TNCs as they would gain a stake in vital services
features of China’s open door policy
-introduced in 1978
-4 SEZs (special economic zones) with separate financial and tax rules to encourage businesses and TNCs to set up there
-joined the WTO and became more involved in western and international marketsre
result of Chinas open door policy
-before 1978, china was an isolated dictatorship suffering from famine and a poor economy
-increased chinas exports dramatically, improving their economy and creating jobs for locals
-increased living standards and wages, reducing poverty
-projected to overtake USA as biggest economy in the world by 2025
what are the 2 measures of globalisation
-KOF index
-AT Kearney index
what does the KOF index measure
-social, economic and political aspects of globalisation
-shows how interconnected countries are
-measures:
1.FDI
2.Tariff rates
3.Tourist flows
4. TV ownership
5.No. of UN peacekeeping missions participated in
6. Trade w other countries
what does the AT Kearney index measure
-investor confidence and potential for FDI in a country
-measures:
1.FDI flows
2.No. of internet users
3.Membership of int organisations and treaties
4.Int travel and tourism
Human reasons for being ‘switched-off’ to globalisation
-lack of skills and literacy deter inward investment
-politically isolated
-ethnic clashes and civil war
-corrupt govs
-debt
-poor hygiene and disease