Globalisation Flashcards
What is globalisation
The variety of ways in which a place becomes more interconnected socially, globally, politically and culturally to the wold it.
What is economic globalisation?
The growth of transnational corporations accelerates cross border exchanges of goods and materials as well as finished goods. The digital economy has acted to catalyse economic flows of both capital and commodities.
What is social globalisation?
International immigration has created extensive social networks that cross national borders. Global improvements in education and health can be seen over time with increasing life expectancy and literacy levels. Remittances.
Political globalisation
The growth of trading blocks like NAFTA and the EU and BRIC’s allows for TNC expansion, merging and acquisitions. Other political financial organisations like the world bank and IMF and WTO encourages political engagement.
Cultural globalisation
There has been an emergence of a global culture after mass migration with some cultural traits being preserved and some being adopted globally like technology ie I Phones.
Global capital flows
At a global scale major capital flows are routed daily though the worlds stock market. A range of businesses also move capital regularity. In 2019 global flows reached 6.6 trillion per day.
Commodity flows
Valuable raw materials such as oil and coal have always travelled between nations however recently these have increased..
Tourist flows
Many of the worlds air passengers are holiday makers using Budget airlines. In recent times developing countries have also began utilising airlines.
Information flows
The internet has catalysed the flow of information,
Migration
The permanent flow of people is one the most opposed flows with governments having a divided approach.
Development of railways
In the 1800’s railway networks expanded globally. By 1904 there was 9000 km of railways. Railway links connected Moscow with Japan. Today railway construction remains a priority for the government with China constructing over 35,000 km of rail since 2000.
Development of telegraph communications
This was the first major electronic method of communication and it allowed for central office to devolve from manufacturing and for easier communication between elements of an organisation. Instead of orders or information taking days to travel from America to Europe communications could be made faster. This encouraged the expansion of corporations across the Atlantic because of how communication became more continent.
The development in steamships contributing to the sinking world affect.
Britain became the leading power in the 1800s using steam technology to move goods and armies quickly along trade routes into Asia and Africa. This allowed for the global flow of goods to be more efficient and faster. This encouraged further globalisation by connecting more places which contributed to the shrinking world affect.
This paved the way for cheaper goods to be shipped from abroad and stimulated docklands in Liverpool and London.
Aviation
The invention of aviation was quickly developed and by 1995 easyJet began to run short flights. By 2020 the company brought in £6.4 billion pounds.
Aviation also encouraged shipping by flights.
This grew globalisation because people could now travel further and faster for less money which resulted in the shrinking world affect.
Containerisation as a factor causing the shrinking world affect
Containerisation was the process by which instead of different sized boxed being loaded miscellaneously onto a barge which then required a substantial amount of effort to sort at the docks- a slow and inefficient process. By loading products into a set sized unit, which can be loaded and unloaded in an organised manner with a set sized crane the process of shipping became cheaper, more efficient, and faster.
This led to the shrinking world effect because goods could move further and faster.
Mobile phones as a development in global communication
The first telegraph and telephone across the Atlantic in the 1860’s replaced a three weeklong journey for mail. This revolutionised how business was conducted. In parts of Africa where these lines have never been laid some countries are ‘leap frogging’ this technology and are going straight onto mobile phones.
The Internet and social networking as a factor causing the time space compression.
The internet and social networks are started as part of a scheme funded by the us department of defence after the second world war and they laid the key infrastructure. This was a way of linking important research computers in different locations. Since then connectivity
Time space compression
This is the perception that the size of the earth reduces as flows take less time.
Bretton woods organisations
These organisations were established after the second world war as a means of boosting the world economy.
World Bank
The world bank lends money on a global trade. With headquarters in Washington. An example includes a $470 million loan to the Philippines for the reduction of poverty. Loans are also given directly to countries. Distributed 64bn in loans in 2018 however strict conditions are imposed. All presidents have been USA citizens.
IMF (International monetary fund)
The imf channels loans from wealthy countries to poorer ones. In return recipients must agree to run free market economies that are open to FDI. This allows TNC’s to easily invest in the emerging economy. USA exerts significant pressure over this organisation despite the fact there has only ever been a European President.IMF rules are strict and controversial, especially the strict financial conditions imposed on borrowing governments. This can lead to the IMF forcing governments to cut funds to health, education, sanitation, and housing programs.
WTO (World trade organisation)
Based in Switzerland the WTO advocates for trade liberalism especially for manufactured goods. It asks counties to abandon protectionist attitudes in favour of untaxed trade. The two has failed to stop the UK and the USA from subsidising its own farming industries. This is harmful to farmers in developing countries as they cannot trade on a level playing field.
Free market liberalism
The process by which the government does not involve itself in trade and leaves markets to determine supply and demand. This is a right wing economic policy.
Definition and explanation of trade blocks.
Voluntary international organisations that exist for trading purposes bringing greater economic strength and security to the nations that join.
Free trade is encouraged between these blocks.
As a country joins a firm that operates in that country now has access to every citizen of that trade block. This enlarged market increases demand for a product and globalisation.
The EU, ASEAN (association of southeast Asian nations), BRICS and NAFTA.
For example, with NAFTA US firms can take advantage of cheaper manufacturing in Mexico.
Special economic zones
Areas of a country which has different economic policy to other areas.
Chinas open door policy 1978 to date.
Prior to 78 China was poor and politically isolates country. China was ‘switched off’ to global flows. Millions had died from famine in rural areas. The earliest reforms began in rural areas, Agri communities were dismantled, and farmers were allowed to profit for the first time. Strict controls on the number of children were introduced to curb growth. Chinas transformation into an urban nation gained rapid momentum. 300 million people moved into special economic zones in search of a better life. Only strict regulation prevented the complete emptying of cities. This initial surge of low wage migrants gave China the nickname ‘workshop of the world’ and large tnc’s were quick to set up locations. By the 90’s over 50% of Chinas GDP is created in these zones. 400 million people have escaped poverty.
Chinas open door approach to global flows
- Fdi from China and its TNC’s is predicted to total over 1.25 trillion- 100bn of this is to the UK.
- China agreed to export more rare earth metals.
- Foreign tnc’s are allowed to invest in some sectors including its rail freight and chemical industries.
Chinas closed door approach to global flows.
- Technology companies like google and Facebook have little to no access in China.
- Chinas government sets a strict quota of 34 foreign films to be shown/yr.
- There are strict controls on tnc’s in some areas. For example, coca colas acquisition of Haiyan juice in 2008.
KOF Index
An index for measuring the level of social, economic, cultural globalisation. according to this index in 2018 Switzerland and the Netherlands are the most globalised. Validity of criteria such as participation in UN peacekeeping missions and TV ownership. GDP ranking sees china as the largest economy however it ranks China 80th because it’s less political engaged.
A.T Kearney index
An index ranking global cities New York, London, Paris, Tokyo, and Hong Kong as the most globalised cities. The measure ranks political engagement, business activity and cultural experience. Data counts can include number of embassies, museums and TNC headquarters.
Offshoring
Moving production overseas to reduce labour or other costs.
Outsourcing
Contracting another company to preform a duty the firm was originally doing. this allows the firm to benefit from the economies of scale of other firms. This results in a global production network. For example, 2500 suppliers provide elements for minis mini cooper.
GPN Growth owes much to trade liberalism expansion efforts. However, this brings risks because natural hazards such as the 2011 tsunami can disrupt global supply chains. Horsemeat entered supermarket supply in 2013.
To tackle this some TNC’s are re-shoring to bring their manufacturing closer to home.
Reshoreing
Bringing production back into the home county of a TNC to ensure that production networks maintain security.
Switched off places
Places that are unconnected to global flows and are ungloabalsied. IE North Korea
Case study for switched off places
The Sahel- poverty affects most people in this region. LDC’s lacking a coastline may struggle to attract FDI
Subsistence farmers
Farmers which farm for themselves as well as their families but are not cash croppers.
Global shift
the international reallocation of different types of economic activity.
Global shift has seen manufacturing industries in places like the UK and EU shift to developing nations in places like Asia and Africa.
Costs and benefits of global shift
Benefits of global shift.
Reduction in poverty and waged work. Education and training, investment in infrastructure.
Poverty reduction and a waged work as a factor boosting global shift.
Since 1990 a billion people have escaped $1.25/ day poverty. Most of these people live in Asia and 600 million of them alone live in China. By 2030 it is predicted that Asia will be home to 3 billion middle class people.
Education and training as a benefit of global shift.
Following significant improvements in Asian education, albeit unevenly, a growing educated class has been at the forefront for Asia’s quaternary sectors research in biotechnology and medical science.
Infrastructure investment as a benefit of global shift.
TNC’s invest in overseas operations which is accompanied by an increase in infrastructure investment to make the factory more efficient (water, energy connections to a certain area, mobile data signal) which is at the benefit of other TNC’s who may wish to invest in said area as well as citizens. These infrastructure investments may result in the loss of older informal settlements as well as recreational spaces.
Environmental and resource pressure as a benefit of global shift.
The flip side of economic growth is the acceleration of environmental decline associated with TNC’s. forested land has been sacrificed to globalisation, logging, and cash cropping. Since 1990 Nigeria’s forests have halved in size. Productive crop land is then over exploited which can result in soil erosion.
Unplanned settlements as a cost of global shift.
When migrating to areas which have attractive pull factors link jobs, healthcare and other opportunities, migrants often opt to settle in informal settlements should affordable housing not be accessible. An example of this is Mumbi’s Dahari slum.
Deindustriablsation definition
the decline of a regionally important manufacturing industry. The decline can be charted either in terms of the workforce numbers or output and production measures.
During the 1960-70’s significant deindustrialisation occurred in the UK and many people became U/P this left many cities with a high proportion of u/p mainly due to a mismatch of skills. Following the closure of the mines and factories many cities became stuck in a cycle of decline. This led to the following environmental and social problems. - High unemployment- Detroit has yet to replace many of the jobs that were lost when many of the automobile industry left the city.
- Crime- losers of globalisation often are more vulnerable and many turn to the informal economy to provide work for example drugs. When areas are switched off to global flows, they may become switched to illegal global flows of people trafficking and drugs.
- Depopulation- as jobs are no longer available people move out. Wealthier citizens leaver earlier than poorer ones as they can afford the move. This then leads to only the poorest citizens remaining because they cannot afford to move. This also leads to a destabilisation of the housing market.
- Dereliction of factories and homes from depopulation. This leads to contaminated materials leading into the environment and water table.
Rural- urban migration
when migrants move from rural areas to urban areas
Environmental sustainability of urban growth.
- Environmental sustainability: water pollution from untreated sewage and air pollution from industry and exhausts, create challenges for city planners. The severity of these problems depends on their economic and physical context: Athens and Rome still suffer from smog due to anticyclone weather conditions. On the other hand, India suffers from significant rainfall and flooding due to sewer failures.
Social sustainability of urban growth.
- Social sustainability: provision of adequate urban housing, health care and education are a major challenge for planners in developing countries. Mass migration into Lagos (Nigeria) means these cities have doubled in size since 2000. The challenge in many developed countries is to regulate housing price especially in places like London which have a strong greenbelt. Social suitability is hard to meet unless housing needs are met.
Elite international migration
highly skilled or socially influenced individuals. Their wealth derives from their inherited assets or their profession. Some migrants live as ‘global citizens’ and have multiple homes in different countries. Many governments welcome these migrants. An example of these are Russian oligarchs whose families benefited from the deconstruction of the Soviet Union. Many live in London and invest money.
Global hub
is a global connected place or city like London.
Low waged international migrants.
these migrants are drawn to global hubs in large numbers. Many countries are home to low paying workers working in cleaning, hospitality, or construction. An example of these is India people moving into the UAE to take advantage of low paying jobs, with the wages can be sent home as remittances. About 45% of the population of the UAE are migrants from India, Pakistan, and Bangladesh. 15 billion is returned to India every year in the form of remittances.
Internal migration
also known as rural to urban migration is the main driver for migration within a city in developing countries but does play a lesser role in Europe and north America.
Social costs and benefits of migration.
Cost- host
Social tensions and prejudices may arise.
Cost- source
Loss of key workers.
Closure of university courses.
Benefit- host
Fills vacancies.
Will do work that workers may not choose to otherwise do.
Benefit- source
Migrants may return bringing new skills.
Political costs and benefits of migration.
Cost- host
Political parties change their polies to benefit the people.
Cost- source
Loss of key workers.
Loss of workforce- factor of economic production.
Consumption falls so economy shrinks further.
Benefit- host
Contribute to the economy.
May start their own businesses.
Benefit- source
Migrant remittances may contribute a significant share of GDP.
Government spending costs like benefits are transferred to the host country. Education.
environmental costs and benefits for migration.
Cost- host
As more infrastructure is built more cost to the environment.
Cost- source
Decline and deprivation to build environments.
Benefit- source
Less pressure on natural resources.
Changing diets in Asia.
Changing diets in Asia: traditional diets in Asia are low in meat and high in vegetables. Rising affluence is causing an increase in meat consumption which increases land pressure.
Forced assimilation of cultural is called cultural imperialism.
People across the world were forced to adopt British.
Modern day globalisation takes place through the exposure to brands and other entities.
One form of this is that over 4 billion people speak a basic form of English.
TNC’s as a vector speeding cultural diffusion.
The global distribution of food and clothes and other goods by TNC’s has played a major role in shaping the global culture. Glocalization takes place which is essentially a sophisticated form of cultural imperialism.
Global media as a vector spreading cultural diffusion
Disney has exported its stories all over the globe.
The BBC’s reach all over the globe helps to maintain influence all over the globe.
Some places gain a window into western culture and history through shows like Downton abbey. OTOH shows like strictly or BGT are completely re-filmed for other countries.
Migration and tourism as a vector speeding global culture.
Migration brings enormous cultural challenges to places. Today’s tourist introduced cultural change to the cultural places that they visit.
Migration can affect the culture of host regions. The cultural change may only be partial.
Hyper globalisation
western culture is emerging because of cultural erosion in different places.
Types of cultural erosion
Loss of language, loss of traditional food, loss of traditional music, loss of traditional clothes, loss of social relationships.
Hyper globalisation
Extreme globalisation. Hyperglobalists are optimistic about the emergence of a global culture because with it comes with reduced discrimination based on sexuality, gender, or race.
Cultural change in France
France: France is fiercely protective of its culture and intelligence, particularly in a world heavily influenced by the internet and the English language. The French government is extremely protective about its culture. Under local contact law, 40 percent of TV must consist of French productions. French music is also heavily protected on French radio stations.
China as a case study for cultural change.
China: the great firewall of China prevents users from using the BBC or Facebook services. Chinas government sets a strict quota of 34 foreign films per year. A greater percentage of Chinese people now celebrate Christmas.
Nigeria as a case study for global change
Nigeria: after news broke about oil spills damaging Nigeria’s Ongoiland, Ken Siro- Wiwa led protests which gained media attention. He was executed in 1995.
Development definition
is the measured in the west in many ways using both single and composite measures. When assessing the value of different measures, it is helpful to distinguish between issues of validity and reliability.
For a measure to be valid there should be broad agreement that it has relevance. To be reliable a measure must use trustworthy data.
Income per capita and GDP
average income for a group of people. Calculated by taking net income and dividing it by the total population.
GDP is a widely used measure. It is the final value of the output of goods and services inside a nation’s borders. Each country’s annual figures. GDP is not easy to estimate because it is translated into USD for comparison which leads to some countries having an over or underrepresented GDP. In addition to this the cost of comparable goods is not included. In a low-cost economy where goods are cheaper 1USD goes further and so a nations GDP figures should be increased to match this.
Economic sector balance
A country or region’s economy can be crudely divided into 4 economic sectors, Primary, secondary, tertiary, and quaternary. The share each of these takes indicates the development and level of globalisation a country has.
HDI
This is a composite measure that ranks countries according to economic criteria (GDP per capita, adjusted for purchasing power) and social criteria (life expectancy and literacy). This is then produced on a ranking from 0 to 1. In 2019 Norway ranked first and Niger ranked last place.
Gender inequality measures GII
This is a composite measure measuring gender inequality related to 3 aspects of the global economy. These are -reproductive health -Empowerment -Labour force participation.
Air pollution indicies
This shows air quality and highlights that air quality is often low in developing nations. Air quality usually improves as a nation develops. The measures consider the air quality outside people’s homes as well as inside them.
Trends in widening inequality
A steep rise in world money supply during the globalisation era has been accompanied by a changing pattern of global wealth. Absolute poverty has fallen consistently alongside a rise in average incomes in every continent since 1950. Many countries have also advanced from LIC to MIC. There is also a growing wealth divide within nations.
The Gini coefficient is a useful analytical tool that can help explore these patterns and trends further. It does this by ranking 0-100 the scale.
Major environmental issues are linked with globalisation including climate change and biodiversity loss. Large scale global flows of cheap food are good news for European and north American nations however this has led to habitat and biodiversity loss on a continental scale. The negative impacts of agribusiness operations penetrate deeply into many of the world’s poorer regions like southeast Africa. Intensive cash cropping (is a product which is grown to make a profit- not subsistence farmers) and cattle ranching has led to groundwater depletion and the removal of mangrove forests.
Contrasting trends in economic development
Since 1970 the average Asian income has risen above poverty levels. This has been driving by the modernisation of Japan, China, and south’ Korea. Incomes some African households remain closer to the poverty line.
Large income gains have been made in Tunisia and other parts of north Africa. Elsewhere port towns are also emerging in places like Cape Town. The emergence of these port towns is directly because of globalisation.
Open borders
When 2 bordering nations have a free border movement agreement like is in presence in the EU.
Post accession migration
from when, in 2004, eight eastern European countries joined the EU and the open borders area increased dramatically. This then led to unseen levels of migration.
Extremism in Europe
In some EU states, nationalist parties command significant support. Nationalist parties often oppose immigration. This is just one example of how immigration has developed and is now assuming its place on the EU political stage.
Environmental tensions over water in southeast Asia.
Trans boundary water conflicts in southeast Asia can, in part, be lined with a globalisation. In recent years tension and conflict has grown between user groups and countries. TNC’s and fdi have catalysed commercial growth which has resulted in increasing pressure on the water supply. India is also set to become water scarce by 2025 and the lack of access to clean water could lead to conflict in the region.
Censorship as an attempt to control the spread of globalisation
Around 40 world governments limit their citizens freedom to access online information. However, a dark web still exists which is harder to control.
For example, in China there is internet censorship and has been for the last 70 under the rule of the communist party. Facebook, Instagram, tic tok are all banned under the great firewall of China which limits cultural globalisation.
Limited immigration as an attempt to control the spread of globalisation
Laws can be strengthened to reduce the quantity of economic migrants. However irregular immigration is hard to tackle.
Since 2010 a five-tier point system has been in place in the UK designed t help control immigration by checking that economic migrants possess the skills or resources that the economy needs. After the GFC significantly fewer migrants left the UK.
Trade protectionism as an attempt to control the spread of globalisation
Despite the efforts of the Bretton woods institutions to limit trade protectionism countries like the UK and USA still subsidize their farming industries. Including International Monitary Fund.
Resource nationalism
describes an emerging attitude for state governments to take measures ensuring that domestic industries and consumers have priory access to a countries resource. Cultural groups I am nation may sometimes take a view that external firms may not access a countries resource and exploit them for their own, external, gain. Landscape can be threatened as was seen to the ogni people with their ongoing conflict with shell in Nigeria.
First nations in Canada
Canada is home to six groups of indigenous people who are known as the first nations. Many of these groups resist the attempts of many oil companies to ‘switch on’ Canadas oil production capabilities. Concerns include the death of fish in polluted rivers as well as the increased consumption of alcohol and drugs as consumed by the oil people.
Consumer societies
A society in which the production and consumption of a food and service is the most important social and economic activity.
Ecological footprint
A cute measurement of the area of land in which is required to a person or society with the energy, food, and resources needed to live and absorb waste.
Transition towns
a settlement where individuals and businesses have adopted the bottom up imitative with the aim of making their community more sustainable and less reliant on global trade.
Private environmental actions
In the absence of sustainability some environmentally minded citizens adopt an ethical consumption strategy by purchasing local sourced food and commodities. These citizens boycott supermarket goods with a high milage and local pressure groups play a key role in promoting local sourcing.
Eden Project
Feeds 90% of the 600,000 visitors from local sources.
Todmorden- a transition town
A small town in the south Pennines has become a transition town with much of the food on sale being grown locally. This campaign aims to encourage consumers and growers to work together for the long term good of the planet.
Ethical purchase
a transaction in which the consumer has contemplated the social and environmental implication of their consumption.
Ethical purchases are increasingly available thanks to the work of NGO’s, charities, and businesses with a growing social responsibility agenda.
impacts of fair-trade consumption schemes
The fairtrade foundations certificate offers a higher, fairer, price to farmers and some manufactures.
Fairtrade products include coffee, bananas, and wine.
The Waitrose foundation has also embraced fairer trading principles by improving pay for farmers in its own supply chains.
Fairtrade is effective at communicating its mission however some customers cannot afford the higher price or simply choose not to pay it.
However, as the scheme grows it becomes harder to ensure that money has fairly been distributed.
It is not possible for all farmers to join this as the price is fixed.
Supply chain monitoring as an ethical consumption scheme
Large businesses increasingly accept the need more cooperate social responsibility.
The largest TNC’s have many products which results in greater risk of exploitation somewhere in the supply chain which thusly requires significant monitoring.
Apple invested in a screen supplier which exposed workers to toxic which resulted in poisonings.
Places such as GAP or Nike now prohibit worker exploitation in their factors, but it is hard to completely monitor the entire workforce for all their suppliers.
What’s out of sight cannot necessarily be seen.
NGO Action as a vector boosting ethical consumption
Charity ‘war on the want’ helped south African fruit pickers. It flew a woman named Gertrudia to a Tesco shareholders meeting and this resulted in Tesco telling its suppliers that it would source another suppler if they did not supply female toilets. NGO’s have limited financial resource. This can limit the rate in which they can achieve their goals.
Many people remain uncorroded with worker exploitation.
Role of recycling
At the end of their life goods are sent to waste in landfill sites. An alternative of this is recycling. This reduces the rate by which new natural resources are used. However, the transport of waste to recycling cites such as China does present a significant rescore consumption.
Recycling can be viewed as the first step of the ambitious move toward the circular economy. This move calls for a more careful management of materials.
NGO’s like keep Britain tidy have had significant sucsess in reducing litter and therefore increasing sustainability.
What is globalisation and its forms?
Globalisation is the process of increasing interconnectivity between countries.
Globalisation has increased connectedness of the world’s economic, social, cultural and political systems.
economic globalisation: the growth of TNCs, which have a global brand image and presence; the spreading of investment around the world; rapid growth in world trade
cultural: unifying and diversifying; people using increasingly similar: food, clothes, music, values - many of which are ‘western’ in origin (from North America and Europe)
political: spreading ideologies, global organisations (e.g. the UN), the dominance of western democracies in political and economic decision making; spreads the view that democratic, consumerist societies are the most ‘successful’
environmental: agreements (Paris), pollution affecting other countries, species being spread to other countries; global warming is a global threat requires a global solution
demographic: increasing migration and tourism makes populations more fluid and mixed
The increase in connections that globalisation has done
Widening and Deepening of Global Connections
Widening of connections: links to new places, often farther away.
Deepening of connections: number and type of connections increase, and volume of flows grows.
Interdependence
Globalisation increases interdependence
This means that the success of one place depends on the success of other places.
Economic problems in one country can quickly spread to its trading partner and quickly affect people in distant places.
In April 2011, staff at a Honda factory in Swindon had to work only two days a week due to a shortage of parts following the Japanese tsunami.
The German DAX (stock market) lost 1.2% within minutes after the tsunami.
Flows
Increase in flows of:
goods and services (including commodities)
products and commodities, that can be bought, and are often made or grown in other countries
capital
flows of money between people, banks, businesses and governments
people (including migrants and tourists)
information
e.g. data transferred between businesses and people, often using the internet
Developments in technology and transport as a factor increasing globalisation
Technological developments in transport and communication in the 19th century promoted globalisation and led to the development of TNCs.
The 19th Century saw the development of the railway, telegraph and steam ship.
The 20th Century saw the development of the jet aircraft and containerisation.
These increase globalisation by reducing transport costs per unit output - so products are affordable for customers in a distant market, setting up a new flow of goods/information
Harnessing new forms of energy allows larger loads to be transported
e.g. coal in the railway steam engine, oil in internal combustion, and jet engines in lorries and aircraft
Larger loads produce an economy of scale - a reduced cost per unit output
Developments in transport technology have been encouraged by growth in trade - the exchange of goods and services between people and companies, which is increasingly cross-border between countries rather than just within a country. Transporting goods and people around the world has become cheaper over time.
1800’s globalisation
19th Century
Faster steam trains replaced horse-drawn and canal transport.
1802: invented
1830s public railways (Liverpool and Manchester))
The electric telegraph was the first long-distance instant communication technology (1830s). The Trans-Atlantic telegraph cable in the 1860’s replaced a 3 week boat journey with instant Morse Code messages.
Steam ships replaced sailing ships and increased speed and cargo capacity dramatically (1840s)
1900 globalisation progress
20th Century - developments accelerated
Jet Aircraft
The Boeing 747 ‘jumbo jet’ introduced in the 1960s lowered the cost of international air travel, bring international tourism within the purchasing capabilities of the middle class.
They reduced travel time for passengers to hours, rather than days, replacing steam ships.
Containerisation
Reduced transport costs for goods by dramatically lowering costs of ‘break bulk cargo’ (products that have to be loaded individually)
less time spent when products change transport type, e.g. at a dock = more trade = cheaper
Dramatically sped up goods trade and reduced costs, making consumer goods cheaper.
Most goods are transported like this.
Ubiquitous, standardised metal/steel boxes quickly transferable from a ship to a lorry or railway. (the containers are inter-modal)
Process is easily mechanised; containers are unloaded by crane, increasingly automatically. In the past, cargo was loaded manually in crates or stacks.
Reduced labour costs as fewer dockworkers required to unload loose commodities or pack awkwardly shaped products into the hold.
Fewer losses from theft.
The world’s fleet if 9500 container ships can carry up to 18,000 twenty-foot shipping containers each.
Container ships are so efficient that the transport costs of moving an iPhone or television from China to the UK are less than £1.
Shipping cost reduced as fewer days are wasted queuing at a port waiting to unload.
Faster transport times increase the distance perishable products can be transported, e.g. cut flowers from Kenya, opening up more distant markets and reducing losses.
Shrinking World
The Shrinking World
The physical distance between places remains unchanged, but new technologies reduce the time taken to transport goods/people/communicate information.
The process of time-space compression.
Time-space compression is an effect of increased connectivity with more distant place, and an effect of the shrinking world.
There is also more widespread knowledge about distant places, so they feel less exotic. The friction of distance has been reduced.
In the 1700s, the fastest transport was a three-masted frigate (HMS Dolphin) which took two years to navigate the globe.
In the 1930s, propeller aircraft (the Lockhead Vega) took 8 days.
In the 1990s jet aircraft (Concorde) took 31 hours.
Mobile phones as a globalising advance in technology
These have become common since their invention in the mid-1990s, even in many developing countries.
With smart phones, smart tablets and smart watches in the 2000s extended they information flows to locations beyond landline networks.
Reduced mobile phone costs expanded usage from an expensive business tool to an ubiquitous consumer product.
Used even in countries with a lack of communications infrastructure. By 2015, 70% of people in Africa owned a mobile phone.
The internet as a globalising advance in technology
Internet access became common from the mid 1990s, followed by fast broadband.
Close to 50% of the world’s population uses internet.
Broadband internet in the 1980s and 90s meant that large amounts of data could be moved quickly through cyberspace.
Social Networks as a globalising advance in technology
Social networks and Skype allow people to communicate instantly and without charge (with an internet connection). In 2014, 5 billion Facebook ‘likes’ were registered each day.
The development of social media (Facebook 2006, Instagram 2010, WhatsApp 2010) enabled much cheaper communication between friends and family than landline telephone.
This has led to space-time compression, where the cost (time or money) of communicating over distance has fallen rapidly, so people can communicate regardless of distance.
Since 2003 Skype has allowed cheap, direct, face-to-face communication, allowing migrants to maintain stronger bonds with their distant family.
Economic Banking as a globalising advance in technology
The rise of mobile phones means they can be used for economic banking, revolutionising life for individuals and businesses. In Kenya:
The equivalent of one third of the country’s GDP is sent through the M-Pesa system annually. This is a mobile phone service that allows credit to be directly transferred between phone users.
People in towns and cities use mobiles to make payments for utility bills and school fees.
In rural areas, fishermen and farmers use mobiles to check market prices before selling produce.
Women in rural areas can secure micro-loans, using their M-Pesa bills as proof they have a good credit record.
Electronic banking extends capital flows beyond the physical banking network
In-store barcode recording automatically orders a replacement from a distant supplier, reducing warehouse and wasted transport costs. .
E-banking allows migrants to transmit remittances of money back to their home countries.
It has been a huge benefit to businesses, since they can:
Keep in touch with all parts of their production, supply and sales network, locally and globally.
Transfer money and investments instantly.
Instantly analyse data on sales, employees and orders from anywhere within their business.
Fiber Optic Cables as a globalising advance in technology
Land-based and sub-sea fibre optic cables in the 2000s increased the speed and volume of data transmission through cyberspace, and allow instant, global communications.
More than 1 million kilometres of flexible undersea cables carry the world’s data.
Global positioning systems (GPS) use continuously broadcasting satellites as beacons to triangulate information.
Delivery vehicles can continuously locate and transmit their position whilst satellite navigation (SATNAV) systems reduce costs from vehicles getting lost.
Satellite-based television has meant that popular channels are available worldwide, in many languages.
Electronic banking extends capital flows beyond the physical banking network
Historic World Trade
The amount of world trade increased fairly slowly from the 1970s to the mid 1990s.
There was a huge growth in export trade after 2002
A sharp dip in 2008-2009 due to the global recession / global financial crisis
It returned to ‘normal’ levels in 2011, but growth has been slow ever since.
In 2014, there is about US $19 trillion world trade in goods, compared with less than $1 trillion in the early 1970s.
A number of organisations have helped to promote free trade and end ‘protectionism’. In the past, many countries protected their own industries and businesses by:
Demanding payment of taxes and tariffs on imported goods, so making them more expensive than home-produced goods.
Using quotas to limit the volume of imports, protecting home producers from foreign competition.
Banning foreign firms from operating in services like banking, retail and insurance.
Restricting, or banning, foreign companies from investing in their country.
Protectionism reduces total trade volume, whereas free trade (no taxes, tariffs, or quotas) increases it. Certain international economic or political organisations promote free trade policies and foreign direct investment (FDI).
At the Bretton Woods Conference in the USA in 1944, Allied Powers agreed to set up three IPEOs, the World Bank, the International Monetary Fund and the World Trade Organisation (although this was not founded until 1995). They had the economic objective of rebuilding the world economy following WW2.
They also had the political objective in promoting free-market democracy in the face of the looming cold war thread of command economy one-party communism.
World Bank
Has the role of lending money and giving grants to the developing world to fund economic development and reduce poverty.
In 2014 it gave a US $470 million loan to the Philippines for a poverty reduction programme and a $70 million grant to the Democratic Republic of Congo for the Inga 3 mega-dam HEP project
The World Bank requires recipients to adopt trade liberalisation policies and to open up to FDI by removing legal restrictions and capital controls. It also requires them to adopt structural adjustment programmes to reduce government budget deficits.
Developing countries may therefore prefer to borrow from China, or the Chinese-led Asian Infrastructure Investment Bank, which doesn’t impose such conditions.
in 2010 China loaned $110 billion - more than the World Bank
Deals with flows of capital
Often involves government spending cuts, privatisation of state owned firms and opening up to foreign competition.
Has helped developing countries develop deeper ties to the global economy but has been criticised for having policies that put economic development before social development.
In theory it had the least to do with free trade, but in practise it requires people to open up to it.
IMF
Aims to maintain a stable international financial system, and this promotes free trade and globalisation.
The IMF provides loans to countries facing short-term balance of payment difficulties.
e.g. in 2008 Greece received the first in a series of IMF loans when its foreign currency earnings were insufficient to pay its existing debt obligations.
Recipients must adopt structural adjustment and trade liberalisation programmes, including measures opening up the economy to FDI and free trade.
The IMF has been criticised for promoting a ‘western’ model of economic development that works in the interests of developed countries and their TNCs.
Deals with flow of capital.
Since 1945 the IMF has worked to promote global economic and financial stability, and encourage more open economies.
WTO
An international organisation that works to reduce trade barriers (both tariff and non-tariff) and create free trade.
Headquartered in Geneva, Switzerland
WTO was created to replace GATT rounds (General Agreement on Tariffs and Trade) in 1995.
A series of global agreements has gradually reduced trade barriers and increased free trade, although the latest round of talks began in Doha in 2001, seeking to reduce tariff on agricultural products, to benefit developing countries, and have not been agreed yet.
WTO’s ‘most favoured nation’ requires a country to treat all WTO members to the same low barriers as the most favoured.
GATT Rounds agreed repeated reductions on tariffs on manufactured goods. Mainly benefits developed and emerging countries.
Deals with the flow of goods and services (commodities), not specifically about FDI
FDI
Foreign Direct Investment is the financial capital flow from one country to another for the purpose of constructing physical capital, i.e. building a factory in another country.
Free trade blocks as a factor accelerating globalisation
A free trade bloc is an agreement between a group of countries to remove all barriers to trade, e.g. import/export taxes, tariffs and quotas.
Trade blocs lead to globalisation through:
Specialisation
Countries specialise in goods being produced which have a comparative advantage (e.g. can produce at the lowest cost) and trade these products for other members’ specialisms.
Firms producing a country’s specialisation become TNCs as they sell outputs through the bloc.
The European Union:
A single market trade bloc composed of 28 members and a population of 512 million.
It guarantees the free movement of goods, capital and people.
The Schengen area countries (26) have removed barrier controls.
A single currency, the euro, has been adopted by 19 members.
Uniform product labour and environment regulations.
Integrated economic policy areas, e.g. Common Agricultural Policy, Structural Funds to assist regions within member countries with a GDP per capita of less than 75% the EU average.
The founding Treaty of Rome in 1957 committed members to work towards an ‘ever closer union’
Political globalisation with the European Parliament and some foreign policy determined at EU level
The original political aim was to integrate economies, so that interdependence prevents war.
ASEAN (The Association of South East Asian Nations)
A free trade area with 10 members with a population of 625 million
A uniform low tariff is applied between members for specified goods. It’s working towards the elimination of tariffs sector by sector.
Agreed to create a single market by 2015, however this was not achieved.
Political globalisation: ASEAN aims to co-ordinate response to regional political issues. It’s more political than economic.
ASEAN pledged to remain nuclear weapons free in 1995.
‘ASEAN way incorporates a culture specific approach to conflict resolution. Seeks consensus and avoids public criticism of member nations.
e.g. ASEAN members won’t comment on Burma’s internal policies
Free market liberalism as a factor accelerating globalisation
This involves promoting free markets and reduces government intervention in the economy
Competition between firms leads to innovation and lowest cost production
Outcome is higher output, lower prices and greater choice - higher SOL
It was initially promoted in the 1980’s by UK Prime Minister Margaret Thatcher and US President Ronald Reagan.
It means ending the monopoly provision of some services like telephones, broadband, gas and electricity, so you can choose your supplier based on quality and price.
It has created competition in once restricted markets.
It involves removing price controls, breaking up monopolies (e.g. trade union monopolies of labour supply) and encouraging competition - including foreign competition, which increases efficiency further and promotes globalisation.
Foreign competition can be encouraged by removing legal restrictions on foreign ownership and removing capital controls, allowing inflows of FDI (and outflows)
Privatisation as a factor accelerating globalisation
Since the 1980s many governments have sold of industries they once owned (so-called ‘nationalised industries)
In the UK the steel, car, electricity, gas and water industries were all state-owned but are now privately owned
However, many governments still own big slices of industry, even in big countries like France.
It may increase efficiency as the profit motive minimises loss (government reluctant to sack workers, leading to higher labour costs)
Permitting foreign ownership allows an injection of foreign capital through FDI, introduces new technologies and promotes globalisation.
Encouraging Business start-ups as a factor accelerating globalisation
Grants and loans are often made to new businesses especially in areas that are seen to be globally important growth areas such as ICT development, pharmaceuticals or renewable energy.
There could also be low business taxes, well-enforced contract laws, minimum regulation and efficiency bankruptcy procedures, which encourage new firm creation.
It creates innovation and competition in new production techniques, erodes excess profit of monopolies, lowers prices and increases household PP.
Where legal restrictions on foreign ownership and capital controls are also removed, foreign new businesses will be attracted to start up, promoting globalisation.
e.g. The UK Government’s support for ICT start-ups in Tech City (Silicon Roundabout) in the Old Street area of London.
What is a trade block
A trade bloc (not free trade) is a group of countries that agree to reduce trade barriers between them. They promote free trade between members, increasing economic globalisation.
This ranges from a free trade area where tariff barriers are removed between members (but a common external tariff is adopted) to a single market, where all tariff and non-tariff barriers are removed, and there is a common external tariff and free movement of people. There are all non-tariff barriers (e.g. limiting number of Japanese cars imported); the euro prevents changing currency rates affecting deals.
Problems with trade blocks
Problems with trade blocs:
Trade distortion
Imposition of common external tariff makes goods from non-members expensive. Trade distorted as the switch from cheaper non-member producer to more expensive member producer. Prices rise and SOL falls.
Short term unemployment
Specialisation shifts resources to industries which have a comparative advantage.
Firms being specialised away from will shut down. Workers’ employment lost (though there are new jobs in the expanding specialised industry and in new demand areas from increases purchasing power)
new jobs likely to benefit new workers and older ones less likely to retrain
Cultural erosion
cheap uniform products across the bloc replace more expensive local variants.
Sovereignty loss
nation gives up determination of some areas of economic (and in single market, immigration) policy
Attitudes to FDI
Attitudes to FDI have changed in developing and emerging countries.
During the period of decolonisation in the 1950s, 1960s and 1970s, many newly independent countries rejected international trade as exploitative.
They preferred self-sufficiency through import substitution.
However, four Asian countries (Singapore, Taiwan, South Korea, Hong Kong) chose export led growth.
They experienced much faster economic growth than countries following import substitution, and became known as ‘Asian Tiger economies’.
By the 1980s, most countries had changed their attitudes towards FDI and globalisation.
They no longer viewed FDI as exploitative (paying low prices for resources, low wages to workers, demanding low taxes and polluting the environment.)
Instead they viewed FDI as positive - creating new jobs, better paying than the existing alternative (e.g. subsistence farming) with reliable wages and better working conditions, which introduced new technology and were reliable tax contributors.
As a result, FDI by developed country TNCs expanded to new areas, initially to the Asian Tigers, then to other Asian and South American countries, and since 2000 also African countries.
Subsdies
Subsidies are payments by the government to a company to promote a particular activity.
Governments may provide subsidies to attract FDI, e.g. a subsidy to cover relocation costs, payment per worker employed &c.
WTO usually prohibits subsidies to domestic firms as this acts as a trade barrier - the government payment allows a firm to accept a lower market price, undercutting the price of imports.
WTO may accept a subsidy for FDI, e.g. in SEZs, as this promotes trade
Special economic Zones
Special economic zones are enclaves where investors receive special tax, tariff and regulatory incentives.
About 50 million people in more than 100 countries work in such locations.
SEZs are used by some countries to attract FDI, spreading globalisation to new regions.
Successful SEZs need good infrastructure, close proximity to trade routes or emerging markets, minimum bureaucracy and rule of law (contract security, minimal corruption, freedom from crime and violence.)
Example: In the 1960s President Suharto of Indonesia created the Jakarta Export Zone with attractive legal and economic conditions designed in consultation with US and European TNCs.
The World Bank funded infrastructure improvements for ports, power supplies and roads. Gap and Levis FDI followed.
SEZs and similar models are attractive to FDI for a number of reasons:
They are tariff and quota free, allowing manufactured goods to be exported at no cost.
Unions are usually banned, so workers cannot neither strike nor complain.
Infrastructure such as port facilities, roads, power and water connections are provided by the government, providing a subsidy for investors and lowering their cost.
All profits made can be sent to the company HQ overseas.
Taxes are usually very low, and often there is a tax-free period of up to 10 years, after a business invests.
Environmental regulations are usually limited.
Chinas 1978 open door policy
Under Chairman Mao Zedong, communist China was ‘switched off’ from the global economy. Most people lived in poverty in rural areas.
In 1978, Deng Xiaoping introduced the ‘Open Door Policy’, slowly introducing economic liberalisation and opening up to FDI while maintaining a strict one party political system.
SEZs were created on the coast, such as the Pearl River Delta Zone, the Shanghai Economic Zone, attracting a rapid inflow of FDI.
In 1980 it created the Shenzhen Special Economic Zone.
Exports soared from $2 billion in 1980 to $200 billion in 2000.
China joined the WTO in 2001, guaranteeing other countries would lower tariffs on exports from China.
By 2006, China was receiving $60 billion in FDI per year.
China experienced rapid economic growth, reaching 10% p.a. in the 1990s. 400 million people were lifted from poverty.
Legal restrictions were relaxed on FDI in some sector’s of China’s domestic economy, e.g. rail freight and chemicals.
China agreed to remove export restrictions on ‘rare earth’ minerals, following a WTO ruling.
The Chinese government’s sovereign wealth fund and Chinese TNCs are now a major source of FDI in other countries.
Information flows are controlled. Google and Facebook access is limited. The Chinese Youku is the social media provider.
Cultural erosion is limited - a quota of 34 foreign films per annum in Chinese cinemas.
FDI restrictions in some sectors. Coca-Cola’s attempted acquisition of Huiyan Juice was blocked in 2008.
In many Chinese SEZs wages are now high by global standards and countries like Vietnam are more competitive.
These have contributed to ‘made in China’, with FDI pouring in over the last 30 years. Western consumers benefit from low-cost goods, but there are question marks about pay and working conditions in SEZs. Apple was subject to negative publicity in 2010 when working conditions in its supplier factories (owned by Foxconn) making iPhones and iPads, came under scrutiny.
Indicators of globalisation
An indicator is a measure of an individual aspect (of globalisation), e.g. the amount of FDI.
Indices express indicators as a percentage - either of the highest actual total or of the maximum possible total.
They may be expresses as whole numbers out of a maximum 100, or as a decimal fraction (in 1/100ths) out of a maximum 1.0.
Indices may be composite measures, combining several indicators.
Each component indicator is expressed as a percentage.
Component index values can then simply be added and the mean value calculated to give the overall index value.
Alternatively, component index values might be scaled (weighted).
Each component multiplied by a fraction of 1.0 and then the components are added.
KOF Index of globalisation
AT Kearney
KOF index of globalisation
Produced annually by the Swiss Institute for Business Cycle Research
KOF = konjunkturforschungsstelle
It’s a composite index combining 24 indicators spread across three categories:
Economic globalisation
Measured by indicators like cross-border trade, FDI, tariff rates and money flows.
Social globalisation
Measured by international telephone calls, tourist flows, resident foreign population and access to foreign internet, households with a TV set, and ‘global affinity’ (presence of international TNC retail outlets), international mail, import and exports of books.
Political globalisation
Measured by: foreign embassies in a country, membership of international organisations, number of UN Peacekeeping missions participated in, trade and other agreements with foreign countries.
Each indicator is converted into an index value. Where data is missing, the most recently available data is substituted.
Scaled average calculated to give a separate index value for each country.
Mean of three category indices calculated to give the overall globalisation index.
2015’s data is available for 207 countries.
Index calculated since 1970 (158 countries 1970-2006)
This allows comparisons over time.
Economic globalisation has risen faster than political or social since 1970.
Developed countries top the list, with emerging countries mid-way and developing at the bottom. Positive correlation between globalisation and development?
In 2016, the Netherlands and Ireland topped the list, then Austria, Switzerland. There were only two non-European countries in the top 15, Singapore and Canada.
Small European countries top the list. This is because:
The USA and BRICs have lower index values because the KOF index measures international interactions - internal flows between diverse regions in large countries (each the size of a small country) are not recorded. Large parts of the interior of the USA are not well connected to the rest of the world.
Small countries have short distances to neighbouring countries, fewer domestic attractions and a smaller domestic market.
High European indicator value reflects the very large interactions within the EU. Suggests the decision to join a trade bloc effective in promoting globalisation.
Many of the most globalised countries have culturally mixed populations, many residents living abroad and foreigners living in their country.
But:
Technological developments mean that some indicators look dated, e.g. international mail, given the rise of email and social media, and trade of books given ebooks.
Trade flows will not include informal economy flows. Will understate degree of globalisation in developing and emerging countries.
Choice and weighting of indicators is value of judgement, and may contain cultural bias (e.g. no. of McDonald’s restaurants)
Fewer missing or estimated data is increasing accuracy and comparability.
Large number of indicators incorporates wide range of international connections.
Kearney index
Produced annually by the AT Kearney management consulting firm in conjunction with Carnegie Endowment for International Peace’s ‘Foreign Policy’ magazine.
It uses 12 indicators spread across 4 categories:
Economic integration
Trade and FDI flows
Technological connectivity
Number of internet users, internet hosts and secure servers.
Political engagement
Membership of international organisations and treaties, contribution to UN peacekeeping, level of governmental transfers (e.g. aid)
Personal contact
International travel and tourism, international telephone traffic, personal cross border financial transfers (e.g. remittances)
Index value calculated for each indicator based on its relative position on the scale - with the highest actual value scoring 1.0 and the lowest 0.
FDI, internet usage and international traffic telephone weighted double.
Overall index value calculated.
But:
Only includes 62 countries, though these include 84% of the world’s population and 96% of global GDP.
First published in 2008.
Small European countries dominate the top 20, though the USA is 4th and Canada is 6th. Smaller countries have higher FDI indicators due to small domestic markets.
Heavy weighting given to ICT connectivity enables the USA to gain a high index score despite low political engagement in terms of treaties signed.
There is also an AT Kearney Global Cities Index, which measures how economically successful cities are.
In 2016, London, New York, Paris, Tokyo and Hong Kong were ranked as the most successful global cities.
What is a TNC
Transnational corporations (TNCs) are firms with operations in more than one country.
For example, Wal-Mart Stores had a 2016 turnover of $482 billion, the equivalent of Poland’s GDP and 2,300,000 employees.
When a firm changed from a national company to a TNC by opening operation in another country (FDI), it creates international connections, spreading globalisation.
Growth in size and number of TNCs is encouraged by the creation of trade blocs, removing international barriers, and changing government policies to encourage economic liberalisation, including removing capital controls and legal restrictions, and creating SEZs.
Firms aim to maximise profit, becoming a TNC helps to do this by reducing costs, or generating higher revenues from new markets.
New foreign operation may be part of production process in a lower cost location, or a retail outlet to access new markets and increase revenue.
Offshoring and outsourcing
Offshoring
This is the process of moving part of a company’s own production process to another country, e.g. building a new factory in China, where wage rates are lower.
Especially to SEZs in Asian countries.
It reduces costs as wage rates are lower, tax rates are lower, proximity to raw materials reduces transport costs, less environmental regulation.
However, some firms are vertically integrated, carrying all stages of the production process out themselves, e.g. Royal Dutch Shell.
Outsourcing
This is the process where a firm contracts with another company to obtain goods or services from it.
E.g. BMW, the German TNC, outsources component production to 2,500 different suppliers for the Mini - the engine is made by Brazilian suppliers, where the wage rate is lower, windscreen made in France where there are no tariffs because it’s in the EU etc.
Outsourcing is more flexible than offshoring as the TNC can quickly shift supplier if a cheaper source becomes available.
However, less direct control over the production process can lead to problems, e.g. in 2013 Tesco discovered that its Romanian supplier was mixing horsemeat into budget beefburgers.
This is usually administration and data processing - Bangalore in India is known for this.
Outsourcing and offshoring lead to the production of global production networks. These reduce costs, allowing TNCs to make larger profits, and/or lower prices.
Much of China’s rapid economic growth has been fuelled by western TNCs locating manufacturing plants in its SEZs, creating jobs and boosting exports, taking advantage of China’s economic liberalisation since 1978.
Glocalisation
Glocalisation
Some TNCs sell identical ‘authentic’ products in all countries, e.g. Lego, Louis Vuitton handbags
Glocalisation is the process of adapting brands and products to suit the local market conditions, such as taste, laws or culture.
E.g. Cadbury’s chocolate is sweeter in China due to local tastes
McDonald’s only has vegetarian outlets in some parts of India due to the local Hindu and Sikh beliefs
Volvo driving seats positioned on the different sides of the car
Dutch ‘big brother’ refilmed using local participants
MTV avoid overtly sexual music videos in the Middle East due to local culture and religion
Drawbacks of TNC’s
GPNs may make TNCs more vulnerable to shocks in different parts of the world that halt production. 2011 Japanese tsunami halted component supplies to offshore Nissan factory in Sunderland.
In 2013, the Rana Plaza textile factory in Bangladesh collapsed, killing 1,100 workers and halting supplies of outsourced garments to Benetton and Wal-Mart.
TNCs have been accused of exploiting workers in the developing/emerging world by paying them low wages.
Outsourcing jobs can lead to job losses in the home country.
Local cultures and traditions can be eroded by TNC brands and western ideas.
Politically switched off locations
Political
North Korea is a hereditary autocracy ruled by Kim Jong-Un.
It’s run as a one-party system with a command economy organised on the communist system.
Since 1955 it has followed the policy of Junche ‘self-sufficiency’, minimising trade with other countries.
Emigration and foreign tourism by ordinary North Koreans is prohibited.
Ordinary North Koreans have no access to internet or social media. There are no undersea data cable connections.
This is because there is a personality cult where all successes are attributed to the wide leadership of Kim, and the internet and foreign travel would not maintain this.
NK had GNI per capita (PPP) US$ 4,600 in 2014 & medium human development (no official UN HDI figure).
However, it does trade with China, and set up the Kaesong Special Economic Zone, employing 52,000 people on the border with South Korea.
The Sahel Region is an area of west Africa just south of the Sahara Desert, e.g. Chad, Mali, Niger, Burkina Faso…
They all have low GDI per capita - Chad $2100, Burkina Faso and Mali $1600, Niger $908.
And low HDI - Mali, 0.419; Burkina Faso, 0.402; Chad, 0.392; Niger, 0.348
Colonial era borders divide/combine different ethnic/religious groups
Political parties based on ethnicity/religion lead to political instability with frequent coups or civil wars, e.g. Tuareg attempted succession in Mali in 2012.
This leads to poor long-term investment, slowing development.
High level of corruption and uncertainty over contract enforcement makes it unattractive for FDI
Economically switched off areas
Economic
Sahel region
poor infrastructure and low literacy levels of the working age population make it unattractive for offshoring FDI
low income levels mean it lacks market size to attract retail outlet FDI. Few households other than elite can afford to purchase imported goods or engage in foreign tourism.
Rural parts of Sub-Saharan Africa, especially the Sahel, are dominated by a subsistence farming economy with food produced to eat, not sell. These places are also poor, and their capacity to create connections is limited.
Physically switched off areas
Physical
All four Sahel region countries are landlocked, rely on poor quality roads, and freedom of passage through neighbouring countries to access coastal ports.
Resulting high transport costs may make exports unattractive in foreign markets and deter FDI
The Himalaya mountain countries of Nepal, Bhutan and Chinese Tibet are isolated by terrain and winter snow, limiting their connections to the outside world - although tourism is changing this.
Environmental switching off to globalisation
Physical
All four Sahel region countries are landlocked, rely on poor quality roads, and freedom of passage through neighbouring countries to access coastal ports.
Resulting high transport costs may make exports unattractive in foreign markets and deter FDI
The Himalaya mountain countries of Nepal, Bhutan and Chinese Tibet are isolated by terrain and winter snow, limiting their connections to the outside world - although tourism is changing this.
Anomalies of Switched off places
However, some TNCs have invested in primary resource extraction e.g. cotton production in Mali.
Although only 4% population have access to internet nearly 8% own mobile phones & higher proportion have access to one.
Mali folk music have large Youtube following.
Niger is active participant in UN Peacekeeping operations.
What is global shift
Global shift is the relocating of the global economic centre of gravity to Asia from Europe and North America, over the last 30 years.
This has particularly involved:
The shift of manufacturing jobs from Europe, Japan and North America to China.
The shift of service and administration jobs to India, especially Bangalore.
Global shift was driven by improvements in transport and communications, plus the lowering of trade barriers and economic liberalisation, opening up to FDI.
Labour-intensive manufacturing was attracted to Asia by the large pool of workers willing to work for low wage rates.
History of global shift
The History
The shift began in the 1950s with cheap mass-produced goods, e.g. toys and textiles, relocating to Japan.
Asian Tiger Economies (South Korea, Taiwan, Hong Kong, Singapore) quickly followed in the 1960s and 70s.
In the 1980s and 90s most other Asian countries opened up to globalisation, as well as South America and the communist bloc.
However, there is a time lag of 10-15 years between the removal of trade barriers and large FDI flows.
Benefits of global shift
Benefits of Global Shift
Waged work
Factory work provides a reliable, regular wage, since subsistence farming income is vulnerable to weather and disease.
Low wages of $2-3 per day are still double or triple rural income.
The long 12 hour working day, six days a week may be ‘sweatshop’ conditions, but subsistence farming required even more.
Over time, as education levels rise and the supply of rural labour decreases, wages rise and there is a shift to more capital intensive production of higher-technology products, e.g. cars and computers. Wage rates of $10 per day.
Poverty reduction
The world bank defines extreme poverty as an income less than $1.25 per day (2005)
Since 1990, 1 billion people have been lifted out of extreme poverty, primarily due to global shift
Incomes rise either due to waged work in factories, or a rise in incomes for commodity producers supplying Asian factories.
Some 600 million Chinese were lifted out of poverty between 1992 and 2015.
Education and training
TNCs invest in training and skills development to improve workforce productivity, and some skills are transferable.
Economic growth generated by global shift in manufacturing used to finance investment in education and training
Households use higher income to pay for more of children’s schooling.Increase income tax and corporation tax used by government to fund state education.
The top 5 countries in the OECD’s 2015 PISA tests for maths and reading: 1) China (Shanghai), 2) Singapore 3) South Korea 4) Japan 5) Taiwan
Investment in infrastructure (roads, ports, airports and power infrastructure)
Attracting manufacturing FDI requires initial investment in basic infrastructure, e.g. ports, power, water supply, sewers.
Initially investment in a few coastal locations (SEZs) but this later expands to link up SEZs to cities inland.
China built 11,000 km of new motorways in 2015 alone.
Disadvantages of global shift
Disadvantages of Global Shift
Loss of productive land
construction of factories, infrastructure and housing for workers occupies land previously used to generate agricultural output.
Land lost often flat coastal or flood plain land with highest fertility and productive potential.
Air and water pollution from industrial activity can render more agricultural land unusable.
Unplanned settlements
New manufacturing job opportunities prompts rural-urban migration
Rapid urban population growth outpaces formal housing construction leading to unplanned settlements.
Slums or shanty settlements form on the city edge or on spare land within the city.
Households add an extra storey to their homes to rent out or add dwellings to garden.
Environmental or resource pressure
Industrial activity can produce serious air and water pollution.
Pressure on natural resources, especially water supply, as new factories and offices demand resources.
Rapid industrial expansion can outpace environmental regulation creation and enforcement (or corruption may circumvent)
Manufacturing activity creates demand for addition commodities as raw material inputs.
Construction of supporting built environment (infrastructure, housing) also needs large resource input.
Created new domestic and global flows of commodities, driving up commodity prices and leading to mineral depletion.
Commodity extraction creates environmental pressure elsewhere, e.g. deforestation for timer (Togo lost 60% of forested area since 1990) or mining expansion.
Other
Workers may be required to live in dormitories with restrictions on their free time. They would be separated from their families, with their children staying with grandparents in the village.
Rapid loss of tradition such as local food and dress as the pace of urban and industrial change is so rapid.
New developments tend to be unplanned and sometimes poorly built, lacking key public services.
Global shift shown through- manufacturing in China
Manufacturing in China
China opened up to globalisation in 1978 with Deng Xiaoping’s Open Door Policy. Joined WTO in 2001.
Special Economic Zones set up including Shenzen in Pearl River Delta, Guadong Province, and in Shanghai.
Low wages attract initial FDI in the 1990s for cheap toys and textiles. Since 2000s also higher tech like computers and cars.
Waged work lifted 680 million Chinese people out of extreme poverty since 1980.
Extreme poverty rate in China has fallen from 84% in 1980 to 10% in 2016 (though 20% still earn less than $2 per day, which the World Bank classes as poverty.)
Wage rates rising - workers in Honda car factory (Japanese TNC) earn $10 per day. Low wage manufacturing shifting to Vietnam and Bangladesh.
Workers face long hours at repetitive tasks. Foxconn (Taiwanese TNC) produces iPhones outsourced by Apple, and operated 70 hour weeks in a Shenzen factory. 14 suicides in 2010.
Initially health and saftey standards are low. In the 1990s 2500 lost a limb or finger each year in Yongkang metal factories.
Education free and compulsory for 5-15 year olds. Literacy rate risen from 20% in the 1950s to 84% in 2015.
7 million university graduates in 2014, 15x higher than in 2000.
Car ownership increased from 1% in households in 2000 to 20% in 2015.
Infrastructure expansion, e.g. Three Gorges HEP dam, high-speed rail (HSR) link Shenzhen-Shanghai-Beijing.
Technology transfer as local companies adopt TNC techniques. New Chinese TNCs, like Huawei smart phones.
Global shift shown through services in India
Services in India
India opened up to globalisation in 1991 with Prime Minister Manmohan Singh’s economic liberalisation.
Much of initial globalisation through outsourcing rather than manufacturing.
India had a comparative advantage as it is English speaking, a legacy of the British Empire.
Early investment in Indian Institutes of Technology produced a large pool of IT literate workers.
Large TNC FDI in 2000s in call centres and back office functions, e.g. data entry, by firms including Microsoft, British Airways, HSBC and American Express.
Computer software design outsourced by TNCs such as Texas Instruments.
Broadband access exceptionally high in Bangalore and other tech-city hubs.
Technology workers earn $10 per day.
Inequality increased. India has more billionaires per capita than the UK, and more people in extreme poverty than the whole of Africa.
New Indian technology TNCs, e.g. Infosys founded in 1981 and had revenues of $9 billion in 2015.
In 2015 Prime Minister Narendra Modi launched a ‘Make in India’ regime to encourage manufacturing FDI.
However, in 2015 the World Bank ranked India 142nd in ‘ease of doing business’ due to a lack of proper bankruptcy laws, average 4 years to resolve contract disputes and legal restrictions on foreign ownership in some sectors.
Environmental problems from globalisation in China
In China (which is an emerging country?):
Since 1980 China has undergone an industrial revolution similar to the one the UK underwent from 1770 to 1900.
Severe air pollution in cities like Beijing, where air pollution is regularly above the World Health Organisation safe limits.
Beijing’s six million cars and coal-burning power stations are the source of this pollution, close to 50% of the world’s coal is burnt in China.
Around 50% of China’s rivers and lakes and 40% of its groundwater is polluted - so much that it is unsafe to drink untreated.
Over 20% of China is subject to desertification and severe soil erosion, which can create major dust storms.
Combined with deforestation, desertification has forced many farmers off their land and into cities as the farmland has been over-exposed.
The WWF reported that in the last 40 years almost half of China’s land-based vertebrate species have been lost and biodiversity has suffered.
These environmental issues have human consequences as people live in the polluted environment. Air pollution in northern China has been estimated to reduce life expectancy by nearly five years.
Examples of environmental problems in developing countries
2006 Dutch TNC Trafigura disposed of hazardous waste in Abidjan, Ivory Coast (HDI 0.462) where costs lower than Amsterdam. Hydrogen sulphide in waste produced toxic gas. 17 people died, 30,000 required medical treatment for stomach pains.
Togo (HDI 0.484) lost 60% of rainforest area to supply timber to manufacturing industries. Nigeria (HDI 0.514) forest area halved.
Living Planet Index compiled by Zoological Society of London shows 61% decline in biodiversity in tropical areas from 1970-2008.
Rural Urban Migration
Rural-urban migration (push and pull factors), and/or natural increase, is responsible for the growth of megacities (Mumbai or Karachi); rapid urban growth creates social and environmental challenges.
Migration is a permanent move from one place to a new place, for one year or more.
Rural-urban migration means people moving from the countryside to cities.
A megacity is a city with a population of over 10 million.
Rural-urban migration feeds the growth of the world’s megacities. In developing and emerging countries abuot 60% of urban growth is caused by rural-urban migration and 40% by high birth rates in cities (internal growth or natural increase). China has seen 150 million internal rural-urban migrants since the Open Door Policy leading to the creation of 7 megacities.
Developing world cities like Lagos and Karachi have very high growth.
Lagos had 1.4 million inhabitants in 1970, but now has about 21 million.
Karachi had 400,000 in 1947, 9 million in 1998 and now has almost 15 million.
Population growth due to rural-urban migration from the poor provinces of Punjab and Sindh.
This creates social challenges:
Housing is in short supply, leading to the growth of slums and shanty towns that lack water, sewers and power supplies.
Poverty is rife, because wages are low and jobs are in short supply; many people have dangerous informal jobs.
Lack of taxes means that the city governments struggle to supply essential health and education services.
Lack of water and sanitation means disease and illness are common in slums.
And environmental challenges:
Sprawling slums at the city edge cause deforestation and loss of farmland and increases flood risk.
Wood fires, old vehicles and industry means that air pollution levels are high.
Rivers and lakes are polluted with sewage and industrial waste, making health problems worse.
Critical resources, especially water, are in short supply because of souring demand.
International Migration
Migrants are especially attracted to global hub cities, those with an unusually high density of transport, business, political and cultural connections to the world, like London, Dubai or New York.
Different types of migrants are attracted:
HQs and offices of TNCs are often located in global hubs, so high-paid professional workers (lawyers, stock-market traders, bankers) are attracted to these places and this creates huge wealth.
These global elite migrants often employ maids, drivers, nannies and gardeners.
This attracts low skilled migrants such as Indian and Bangladeshi migrants moving to the United Arab Emirates or Filipinos migrating to Saudi Arabia.
In 2015, 27% of the UAE’s population was from India.
Further low skilled, low wage migrants are used as construction workers for office and apartment blocks in global hubs.
Some cities, like London and New York, attract exceptionally wealthy migrants. An example is Russian oligarch billionaires (exceptionally wealthy business people) investing in property in London and living there some of the time. This happens partly so the oligarchs can easily send their children to the UK’s elite private schools, and partly to move money out of Russia and invest it in London property.
Benefits to the source of international migrants
Remittances boost the incomes of families.
(25% of Nepal’s GDP in 2014)
Less unemployment (Polish employment halved since it joined the EU in 2004)
Contact with other cultures
Reduces pressure of large population.
More habitats, more sustainable - less demand for commodities.
Costs to the source of international migrants
Source - Costs
Loss of skilled and educated workers (brain drain)
Negative multiplier effect
Families are broken up as young males tend to migrate.
Older people can’t see family and may have no one to care for them.
Mass emigration can be seen as a failure to provide for people at home.
Governing party lose popularity and face difficult decisions.
Deterioration of built environment.
Benefits to the hosts of international migration
Host - Benefits
Migrants filling low wage, dirty or difficult work, e.g. Polish vegetable pickers near Peterborough.
They fill skills shortages (Indian doctors)
Contact with a different culture
Counteract ageing population
Cheap care, cleaning….
Government may benefit from popularity due to the increased economic benefits from migrants.
Value
Costs to the host of international migration
Host - Costs
Increase cost of education - staff need to be employed for those with first language not English.
‘Benefits tourists’
Undercutting
Social tensions
Demand for education, health and housing rises.
Cultural tensions with migrant population
Can lead to demand for more housing and therefore loss of green space and possible overcrowding.
Built environments deteriorate. Expansion of urban areas.
How globalisation has spread a westernised culture
Globalisation has spread a ‘westernised’ global culture which originates in North America and Europe. This is a culture based upon:
Wealth creation, earning money in order to buy consumer goods and high levels of consumption.
Private enterprise, where people own business rather than the government owning them.
Success, which is measured by how wealthy you are and how much ‘stuff’ you buy.
Fashion, technology and trends, which are important in western culture.
An attitude that the physical environment should be exploited for its natural resources to create wealth.
Cultural diffusion as a result of globalisation
Cultural diffusion occurs as a result of globalisation; TNCs, global media corporations (P: role of TNCs), tourism and migration create and spread an increasingly ‘westernised’ global culture
Cultural diffusion is the exchange of ideas between different people as they mix and interact as a result of globalisation.
Western culture has been spread by cultural diffusion:
Migrants move and spread their ideas and customs
Tourism brings people into contact with new cultures
TNCs spread their brands and products around the world.
Global media organisations like Disney, CNN and the BBC spread a western view of world events.
Changing diets in Asia
Impacts on both the environment and people (Changing diets in Asia).
Western culture is viewed as having both positive and negative impacts on the physical environment and people. The spread of a western diet (high fat, high sugar, fast food based) is changing diets around the world, especially in Asian cities, with the spread of McDonald’s, KFC and other fast food. This has been linked to rising obesity and diabetes in many emerging countries. A fast-food, consumer culture is also very wasteful in terms of resources such as discarded fast food packaging and fashion items worn only once or twice. This can be linked to deforestation and excessive water use in industry, as well as air and water pollution.
The spread of global culture
The spread of a global culture has also led to new awareness of opportunities for disadvantaged groups (Athletes at the Rio 2016 Summer Paralympics) particularly in emerging and developing countries. (P: opportunities for these groups)
On the other hand, western culture has tended to improve opportunities for some traditionally disadvantaged and discriminated groups such as women, the disabled and LGBT. Global media coverage of the Paralympics, Gay Pride marshes and high profile cases of sex discrimination may help erode sexism and prejudice in developing and emerging countries.
Cultural erosion
Built environment
Traditionally Korowai live in wooden longhouses with palm-thatched roofs raised on ironwood stilts 10m above the forest floor, raised deep above the rainforest.
Their built environment has changed since 1987 when they were encouraged to move into villages in a clearing by the river, such as Yaniruma
These house several hundred people with buildings constructed from clay bricks with corrugated iron roofs.
They contain schools and they are periodically visited by health care workers.
Language
Education in villages takes place in Indonesian
Some Korowai migrated to the town of Jayapura and their children speak don’t speak the Korowai language
Food
Sugary drinks, e.g. Coca-Cola, and alcohol, e.g. Bintang Beer, is available in the villages
Korowai used to carry out cannibalism of captured members of other tribes as a criminal punishment - but this is thought to have been eradicated.
Music
Traditional Korowai music uses pig-skin drums. Radio and television introduced the global music culture.
Clothing
Korowai traditionally only wear a loincloth, however most people now wear shorts and t-shirts, including Manchester United and Barcelona football shirts.
Social Relations
Introduction of Christianity, by Dutch missionaries in the 1980s reduced the practice of polygamy and levirate marriage.
Enforcement of Indonesian law eliminated slavery from inter-clan raids.
Role of clan leader, traditionally the strongest warrior, diminished with a new elite system based on wealth.
Natural Environment
Ecosystem de-valued as sustainable shifting-cultivation abandoned for sedentary village life.
Employment for logging companies or hunting of animals, e.g. tree kangaroo (now endangered), for sale as bush meat in villages or Jayapura town.
Natural environment viewed as a resource for economic growth and higher income.
Result is the over-exploitation of sago palms in the area around villages, deforestation for timber and agarwood exportation, and threatened species being overhunted to extinction.
Oppositions to globalisation
Protest groups such as Occupy Wall Street and the Global Justice Movement argue that globalisation has:
Dramatically increased resource consumption through exploiting the natural environment, leading to problems like deforestation, water pollution, global warming and biodiversity loss.
Exploited workers, especially in emerging countries, who suffer low wages, dangerous working conditions and lack any form of union representation.
Passed political and economic power into the hands of TNCs and uncaring governments, especially at the expense of ordinay people.
Created increased inequality, i.e. a small group of very rich, powerful people (sometimes called the 1%) at the expense of others.
Caused cultural erosion, meaning that traditional lifestyles are degraded by the spread of western culture, and local dress, art and architectural styles are lost.
Levels of development
Development: the improvement of quality of life (level of happiness, wellbeing or contentment, resulting from a way of living) of a country’s population. Quality of life includes social, economic, cultural, political, demographic and environmental aspects.
Globalisation has led to increased development in some countries, but has also widened the gap between rich and poor in some cases.
The development gap can be:
between countries, e.g. in 2015 people in Luxembourg had incomes of $105,000 per year compared with only $220 in South Sudan
within countries, e.g. in China’s coastal cities incomes per capita are over $10,000 whereas in the rural west they are under $2000.
Levels of development can be measured using single and composite indicators. They all vary in validity (how relevant), reliability (how accurate), and comprehensiveness (do they capture entirety?).
Single indicators (e.g. life expectancy, GDP per capita) measure one variable. They’re easy to use and understand, but may not give an accurate representation of development (aren’t very comprehensive)
Composite indices combine more than one variable into a single measure. (HDI, GII)
Economic indicators of development
Economic Indicators
These qualify well-being in terms of real income
Income per capita
the mean income of a group of people
misleading where there is high income inequality, since very high incomes pull up
may be the best single indicator of development since higher income is often needed to raise aspects of QoL, e.g. health, education
Gross National Product (GNP)
measures output produced by country’s factors of production wherever located
Gross National Income (GNI)
GNP discounted for depreciation - lost value through machinery wear and tear
includes TNC profits and remittances sent home
Gross Domestic Product (GDP)
measures the total output of goods and services produced in a country over a year
GDP per capita calculated by dividing GDP by total population of country
Usually expressed in US $/year
However, price level/cost of living varies significantly between countries; same money income will buy different quantities of goods and services, generating a different QoL.
Purchasing Power Parity (PPP) GDP per capita has become a popular may of comparing economic development between countries because unlike nominal GDP it takes into account the cost of living within countries.
Social indicators of development
Social Development
Examples are:
The Human Development Index (HDI) is the combination of life expectancy at birth, income and years in education. (before 2010 used literacy and school enrolment)
combines economic development (GNI per capita (PPP)) ad social development
expressed on a scale between 0 (lowest) and 1 (highest)
a few rich people cannot distort the average life expectancy and mean years of schooling from typical value
countries have different rank positions for HDI and income per capita depending on political decisions (e.g. those that focus on output and military spending)
The Gender Inequality Index (GII) combines the reproductive health of women, their participation in the workforce and empowerment to measure gender-based development.
reproductive health combines maternal mortality ratio and adolescent fertility rate - indicator of women’s status in society
empowerment is measured by political representation in parliament and women’s access to higher education (secondary and above)
participation measures percentage of women of working age in labour force
measured on a scale from 0 (no inequality) to 1 (most unequal) (so kinda opposite to HDI)
compiled by the United Nations Development Programme since 2010
modern western culture values increased inequality as an improvement, but the validity of this is debated (harmony with natural and religious systems, social harmony, roles of men and women?)
This indices focus on social development as well as economic development and are usually viewed as a better reflection of development progress.
Development can also be measured using environmental indicators such as WHO air pollution levels. However these tend to be local, i.e. for specific cities, so can’t be used to compare countries.
Air pollution is the introduction of harmful substances into the atmosphere, e.g. SO2, NOx, particulates and volatile organic compounds. Linked to respiratory diseases (lung cancer, asthma) and heart attacks.
However, Yale University’s Environmental Performance Index measures countries’ overall environmental quality on a scale from 0 to 100, using both indoor air quality, particulate and nitrogen dioxide concentration.
Emerging countries with large secondary economic sectors score poorly.
Context of economic and social development models
Reliability
All development indicators face problems with this
All data is out of date as soon as it is collected
Developing and emerging countries may lack the resources to collect accurate data
Comprehensiveness
Single indicators are less comprehensive measures of QoL than composite, since they only capture one aspect of QoL compared to several.
Validity
There is a broad agreement that economic indicators are relevant to QoL, however there is less of a consensus on whether some social, cultural and political measures constitute improvements to QoL, and/or their relative importance to it.
Development indicators are often measured at a national scale, and conceal variation at a regional or local scale within a country. Varies space to space and between different groups of people.
Then some weird stuff about economic sector balance and the Clark-Fisher model.
Context of the winners and losers
A 2016 report from Oxfam stated that the wealth of the world’s richest 1% of people is equivalent to the wealth of the other 99%. This degree of income inequality is not new, but may have become starker in the last few decades. Within countries inequality is measured using the Gini coefficient with income divided into quintiles (20% intervals) plotted as a Lorenz curve.
Haiti is the most unequal country as the richest 20% of people have 65% of the wealth, compared to 36% in Sweden.
Mexico is in between with the richest 20% owning 55% of wealth.
Sweden, Mexico and Haiti have all experience globalisation to some degree, but the outcome is that Mexico and Haiti are more unequal than Sweden.
Winners of globalisation
There were about 1800 billionaires worldwide in 2016; most have made their wealth through ownership of global TNCs
Developed countries have proven very good at maintaining their wealth, despite the rise of emerging countries like China
The rising middle class of factory and call centre workers in Asia, whose incomes have risen as they have gained outsources and offshored jobs.
People who work for TNCs in developed countries who have a high income and reasonable job security, although they lead high-stress lives.
Losers of Globalisation
Isolated, rural populations in Asia and Sub-Saharan Africa where subsistence farming still dominates and global connections are thin.
Workers (especially male ones) in old industrial cities in the developed world who have generally lost jobs.
Workers in sweatshop factories in emerging countries; they suffer exploitation (but may still be better off than in the rural areas they migrated from)
Slum dwellers in developing world cities like Lagos, as the reality of urban life is often much worse than they expected.
economic and environmental impact
he environmental impact of development and globalisation is often measured using an ecological footprint, a measure of the resources used by a country or person over the course of a year, measured in global hectares.
One way of measuring economic development is using income per capita.
Comparing trends between China and Sweden:
Sweden’s income per person has risen hugely, but it’s ecological footprint has not (about 8 hectares per person in both 2012 and 1972)
This suggests that economic development in Sweden has not affected the quality of the environment and that environmental management maintains biodiversity, water and air quality.
China’s ecological footprint has steadily risen (about 1 hectare in 1970 to 3 in 2012), however it is still more than half less than Sweden’s.
Since 2001, rising Chinese incomes correlate with very large increases in ecological footprint ($3,180 PPP in 2001, and $15,500 in 2016). Likewise, Sweden’s PPP has risen from $29,710 in 2001 to $50,000 without very little change in ecological footprint.
This suggests that economic development in China has a very large environmental impact.
Some countries can take advantage of globalisation without damaging their environment whilst others cannot.
Racial tenstions
For a large number of countries a significant part - or even a majority - of their total population consists of immigrants.
In 2015, 84% of the UAE’s population was immigrant, 29% in Switzerland, 14% in Germany and the USA, and 11% in the UK.
Globalisation has contributed to immigration and there are now large diasporas from many countries resident in other countries. A diaspora is the name given to the dispersal of a population overseas; since 1700 about 10 million Irish have emigrated overseas, creating the Irish diaspora.
Several factors have increased the pace of migration:
Open border to migration, such as within the EU since 1995
FDI, encouraging TNC workers to move overseas
Deregulation of some job markets, allowing foreign qualified workers/
Humanitarian crises, like the Syrian civil war and war with Islamic State, which has created large numbers of refugees (5 million in the case of Syria) which have been fleeing to Europe since 2011.
Most EU countries, as well as many other countries, now have culturally mixed populations. Large scale migration is not without costs. Migrants need housing, jobs, education for their children and other services. At a certain rate of immigration all of these will come under strain and this risks a rise in tensions with some of the host country population who may view the migration as ‘too many, too fast’. There is evidence in Europe that migration has increased social and political tensions and even led to a rise in extremism.
The UK Brexit vote in 2016 to leave the EU had the scale and pace of immigration as a key area of debate.
Anti-immigration political parties have been rising in popularity since 2010, for example UKIP in the UK, the Front National in France, the Dutch Party for Freedom and Freedom Party of Austria.
In 2014, 51% of the Swiss voted in favour of stopping mass immigration in a national referendum.
Even in the USA, a country of immigrants, the benefits of migration from Mexico and elsewhere have been questioned - with one of President Trump’s key election policies being that he would built a wall between them.
Few people in developed countries vote for extremist political parties that seek to ban immigration or return immigrants to their home country. However, such sentiments are more common than they once were.
Efforts made to control the spread of globalisation
Some countries have attempted to limit the impact of globalisation using government policy:
The internet is banned in North Korea, because the Supreme Leader Kim Jong-Un does not want his people to have access to ‘western’ ideas.
In China, the internet was very widely used by 52% of the population in 2016, but it is censored; some searches for politically sensitive topics like the Tiananmen Square protests get no results because the Chinese Communist Party seeks to prevent ‘unhelpful’ discussion.
Since 2010 the UK has sought to reduce immigration using a points system, but with only limited results because EU immigration cannot be controlled.
Other countries like Australia also use a points based immigration system to match immigrants to actual economic needs and job vacancies.
This awards points to potential immigrants based on education, skills, language proficiency and other criteria so that migrants are matched to a country’s needs.
Trade protectionism is still common: oil exports are banned in the USA so all domestically produced oil must be used in the USA; India restricts foreign companies investing in its retail sector to protect Indian small shopkeepers from competition.
These restrictions are generally the exception rather than the norm, as most countries operate within a system of global free trade and open access to information , and broadly welcome the economic advantages of globalisation.
Attempts to retain cultural identity
The First Nations are the original population of Canada, existing before European immigrants. They consist of Indian bands such as the Cree and Lenape.
How the First Nations of Canada attempts to retain its cultural identity and prevent it from being eroded by cultural globalisation:
An Assembly of First Nations promotes the rights and needs of First Nations at a national level within Canada.
After decades of being taught to be ‘Canadian’ in boarding schools, modern First Nation schools teach native languages and traditions.
Within Indian Reservation territories, bands are largely self-governing allowing them to make key decisions about their future.
Festivals and other meetings help preserve the First Nations tradition of oral histories and other traditions.
There are about 100 First Nations and Inuit Cultural Education Centres funded by the Canadian Government to help preserve and develop First Nation cultures and traditions.
To some extent, tourism helps preserve some aspects of First Nation culture, but also dilutes it.
The Fort McKay First Nation (mainly Cree and Dene peoples) in Alberta negotiated a 20 km exclusion zone between its Moose Lake Reserve lands and any oil sand extraction.
They also negotiated contracts for First Nation companies to provide $100 million p.a. services to oil extraction companies operating in the traditional hunting areas of the Athabasca region.
Localism
There are several different responses to the social and environmental ethical issues raised by globalisation and globalised consumer products.
A key response in developed countries has been a move towards localism: the idea that food and goods should be grown locally, supporting local jobs and reducing transport, and thus being more sustainable, rather than being sourced globally.
For example, buying local products, trying to trade with other local businesses and building local community movements around sustainability issues.
This is often promoted by local groups and NGOs.
Transition towns
Founded in 2006 the non-governmental organisation (NGO) ‘Transition Network’ encourages towns to grow their own food in community gardens (not import it) and reduce energy used in transport, e.g. cycling and recycle waste/reuse materials. Some towns like Totnes, Exeter and Stroud even have their own local currencies to encourage local trade.
These initiatives are small scale, but some elements like ‘grow your own’ could have a big impact if widely adopted and promoting local sourcing becomes more widespread.
Sustainable Development: Meeting the needs of the current generation without compromising the ability of future generations to meet their own needs. it includes environmental, economic and social sustainability (quality of life).
A consumer society
A consumer society is a community that often buys new goods and services and places high value on the ownership of new products. Globalisation has promoted this by reducing prices (increasing purchasing power) and increasing choice of products. It’s unsustainable environmentally and ethically (economically and socially), due to resource use and pollution. They also eat more meat (10kg of veg required for 1 kg meat), and buy more water-intensive luxury goods. They use more water (washing machines, toilets), and more energy. Our current usage of fossil fuels is unsustainable and peak oil production may be near. (Although this has been extended due to fracking)
Consumer society environmentally unsustainable due to resource use and pollution - yet it is expected to grow by 2 billion people by 2050.
An ecological footprint is measure of the area of biologically productive land & water required to produce goods consumed & to assimilate waste generated (using current technology.)
The average citizen in USA has ecological footprint 8 ha per person, a Sub-Saharan African subsistence farmer uses 0.4 ha.
Ethical and environmental concerns
Globalisation has led to a number of widely held ethical and environmental concerns:
fears that consumer goods have been made using exploited labour
concerns that imported food products like tea, coffee, bananas and cocoa do not provide their farmers with a decent income due to low prices
concerns that consumer goods use excessive resources during their production, packaging, transport and use
worries that our consumer culture is contributing to global warming as ecological footprints rise
Jeans in Bangladesh
These concerns can be illustrated by jeans from Bangladesh:
growing the cotton to make the denim fabric uses 13,000 litres of water
fertilisers and pesticides leak into rivers and groundwater
dyes and chemicals from fabric treatment waste from factories poison rivers
Bangladesh’s 3.5 million textile workers earn about £25 per month
Many textile workers work 14-hour days in appalling conditions
Jeans need to be transported by ship from Bangladesh, which burns fuel-oil and releases greenhouse gases
most cheap jeans last for 12-18 months before being discarded for the latest fashion
Fair trade
Fair Trade
Fair trade - rather than free trade - pays farmers of cocoa, cotton, tea, and coffee in developing countries a guaranteed price for their produce plus a ‘fair trade premium’ payment. This attempts to reduce the inequalities of global trade.
The aim is to make income sustainable for farming families, and use some of the additional money to support community facilities like wells, schools and cities.
The downsides of fair trade are that the extra income is small, and fair trade products are more expensive for consumers.
Ethical consumption schemes
Ethical consumption schemes
Founded in 1993 in Germany the NGO FSC (Forest Stewardship Council) uses its FSC logo on wood products that are sourced from sustainable forests thus helping consumers ensure that products are not contributing to environmental degradation.
Its criteria include that forestry must respect the land right of indigenous people and that forestry workers are well treated and paid.
FSC has become well known globally, but has been criticised for being too brand focussed.
Recycling
Recycling has a role in managing resource consumption and ecological footprints, but its use varies by product and place (local authorities in the UK or local NGOs such as Keep Britain Tidy). (F: environmental consequences of different patterns of resource consumption)
Recycling materials from waste products reduces the extraction of new materials and decreases consumption and the amount of waste sent to landfill.
Local councils in the UK play a key role in reducing waste and ecological footprints through recycling and councils’ waste collection service.
Recycling of household waste increased from 17% to 44% between 2003 and 2013 but this was still some way behind the 65% achieved in Germany.
Recycling does reduce waste, but different councils have different schemes with different results and reducing packaging may be a better way forward. Rate of recycling varies by product as not all materials are easily recyclable - these and valuable materials are recycled most (e.g. metals, paper, glass). Those that are difficult or dangerous to extract will not be (razor blades, medicines, cling film, crockery).
Keep Britain Tidy is an NGO set up in 1954. In 1969 they introduced the ‘tidyman’ logo on bins and packaging to encourage people to dispose of litter appropriately. Their campaigns encourage households to recycle and firms to reduce packaging or the proportion that can be recycled.
