Globalisation Flashcards
what is globalisation
process by which world is becoming increasingly globally interconnected as a result of increased trade, communication and cultural exchange
what are the 4 strands of globalisation
economic
political
social
cultural
what causes social globalisation
- international migration created extensive family networks
- global improvements in education and health7
- social interconnectivity through phones and internet
what causes cultural globalisation
- westernisation and Americanisation
- glocalisation- old culture and new culture merge
- media circulates ideas and information
what causes political globalisation
- growth of trading blocs- TNCs merging and making acquisitions in neighbouring countries
- global concerns such as free trade and global response to natural disasters
- WTO, IMF, WB
what causes economic globalisation
-growth of TNCs accelerates cross border exchanges of goods and services
- information and communications technology supports more international economy
- online purchasing - amazon etc
what does widening, deepening and quickening links mean
widening = new links growing over countries a greater distance apart
deepening= more peoples lives increasingly connected with far away places
quickening- shrinking world, can immediately access people across the world and fly wherever
what is the world’s largest cargo ship
Maersk McKinley Moller
contained 18,000 containers
Danish, ran by Pilipino crew, built in south Korea and shipping Chinese goods to Europe
name some key transport innovations
- steam power in 1800s, UK
- Railways from 1800 expanded globally
- Jet Aircraft developed 960s-1990s, low cost easyJet
- container shipping backbone of global trade, avg boat carries 10000 containers
how many container movements are there per year
200 million
how does transport increase trade
- trade in larger amts more frequently made possible
- competition creates improvement
- allows tncs to set up and prosper
- global shift- production shift to cheaper countries
- cheaper production and mass consumption allows economies of scale
how many visitors flew via easy jet into malaga in 2008
how much has it increased per year
2.1 million
16% increase each year
why do so many people fly to malaga
UK tourism hub
many retirees influenced by warm climate and relaxed lifestyle pull factors
how much weight can each container carry
25000kg
why are containers so popular for retailers ad manufacturers
- standardised size in 196s
- acts as mobile storeroom cutting warehouse costs
- reduced cost of storage as can deliver stock at perfect time
what happened at 1945 Bretton woods agreement
- system of rules, procedures and policies devised
- regulation of currencies
- global organisation established to encourage a globalised world
- 44 countries signed
4 examples of International governmental organisations
World bank
IMF
UN
WTO
what are IGOs
organisations of 2 or more nations working together on issues of shared interest
what is a broker
connects two interest groups and assists with transactions between them
what is ratification
the official way to confirm something, usually by vote
what is the UN
international organisation working to maintain peace and security, protect human rights, uphold international law
what are the UN’s main bodies
- general assembly (all un states)
- security council (responsible for international peace and security)
- international court of justice (universal court)
- UN secretariat (administrative department of the UN)
how many member states does the UN have
193 in 2024
what is the world bank
provides loans and grants to governments of LICS and MICs too pay for big infrastructure projects
how many members does world bank have
189
what is the IMF 3 critical missions
- furthering international monetary cooperation
- encouraging expansion of trade ad economic growth
- discouraging policies that harm prosperity
how many members in IMF
190
example of IMF
Jamaica 1980s
enforced strict cuts in exchange for loans
1990- 97% completed primary
2015- 73% completed primary
huge interest payments, has repaid more than original loan but still owes $8bn
world bank example
2014 DRC
loan for mega-dam project
produces hep
but will displace 35000 from homes
UN example
Sudan 2005-2011
trying to maintain peace between 2 factions fighting for oil
country split in 2
WTO example
China persuaded to lift export restrictions on rare earth metals 2014
west indies grow bananas on small family farms
more expensive to produce than on US TNC farms
tariff placed on US goods but they complained about ack of free trade so it was removed
west indies out competed
what are the 2 main measures of globalisation
the KOF index
the AT kearney index
KOF index measures
measures globalisation trough links
- economic
- social
- political
kearney index measures
-political
- economic
- personal
- technological
links
pro con of KOF index
pros:
- compares countries overtime
- available for 158 countries
- calculated on 24 variables
cons
- quantitative
- doesn’t include cities so large areas skewed (USA)
pro con of Kearney index
pros
- covers 98% of worlds gdp
- covers 86% of the popn
- weighted measures
cons
- only 64 countries involved
- more qualitative data
example of politically switched off place
North Korea
hereditary autocracy ruled by Kim Jong-Un
one party system
minimised trade
no emigration
no internet or social media
economic example of switched off country
Sahel region
poor infrastructure and low literacy levels so unattractive to FDI
low income so lacks retail market for FDI
rural subsidence farming - food to eat not sell
physical example of switched off country
Sahel
all 4 countries landlocked w poor quality roads
rely on freedom of passage from neighbouring coastal countries
Himalayan Mountains isolate Nepal, Bhutan and Chinese Tibet
Example of glocalisation
Mc veggie instead of Big Mac in Indian Mac Donald’s to accommodate vegetarian culture
What is acquisition
TNC aggressively buying out other companies
Eg US Kraft to Cadbury, Walmar to asda
What is vertical integration
When TNCs buy every stage of the process
Eg exon Mobil platforms, tankers, refineries and petroleum stations
What is horizontal integration
When companies try to buy all the competition making or doing the same thing
Eg Kraft bought Cadbury
What are the three Ms required to set up global expansion of a TNC
Motive - prospect of global market and increased profit
Means - financial means to move across the globe, borrow, invest and sell
Mobility- set up complex supply chains and global production networks, reduce trade barriers between nations
Jaguar Land Rover
Owned by Indian TNC Tara (bought up most of UK steel inductry)
Invested in international manufacturing sites - china and India
Established joint partnership with Chinese Chery automobile
Continuing to outsource production plants
Technological advances in 21st century
Telephone - global comms
Broadband - large amounts of data quickly transferred across cables on sea floor
Fibre optics - increased internet speeds
GPS - satellites allow tracking across the world, google maps
Internet - 40% with access
What are the flows of globalisation
Capital
Labour
Products
Services
Information
What is free market liberalisation
Associated with thatcher USA and Reagan USA policies
Belief that government interventions in the market would hinder economic growth and development long term
Banking and finance deregulated
What is privatisation
Thatcher
Private owned companies bought and ran state owned industries
Eg railways and utilities
Allows gov to make a lot of money in the short term
Can decrease quality of service as being ran to make a profit
How are business startups encouraged in the uk
Incentives such as grants, tax breaks, infrastructure
Sunday trading attracted Disney
What are the types of FDI
Offshoring - production facilities set up in developing countries with large cheap workforces (Bangladesh)
Foreign mergers - TNCs join to form one large company
Foreign acquisition - TNC acquires another country from abroad (hostile)
Transfer pricing - TNCs channel profits through subsidiaries in tax havens
How can governments hinder globalisation
Censorship - limits flow of information through internet, limits knowledge of foreign ideas eg democracy which could undermine a dictatorship government
Limiting migration- border control etc
Trade protectionism - subsidies, tariffs and quotas to help country protect domestic industries
E.g. Chinese steel flooding market in 2016 (dumping) meaning Tara steel had to close due to losses
What are free trade blocs
Where governments sign agreements to reduce restrictions of flow of capital and goods
e.g. EU freedom of trade and movement
Pros of trade blocs
- Gives Businesses a larger potential market
- many more businesses benefit from being part of supply chain as volume and demand increases
- reliable trade of materials and services
- less economic risk and better pathways for essentials
Cons of trade blocs
- other countries feel excluded and find it difficult to join in trade
- foreign industry directly damaged when outcompeted or have lack of opportunity
- blocs don’t guarantee fare treatment within - eg USA and Mexico
What is a tariff
A tax for importing and exporting goods
What is a quota
Limited/ fixed number of goods
What is GNI
Gross national income
Measures value of goods and services of a country, taking overseas earnings into account
What is ppp
Purchasing power parity
Expenditure of a countries population
Takes into account cost of living
What is GDP
Gross domestic product
Measures value of goods and services
Doesn’t include informal earnings
Exchange rates vary as measured in USD
What is economic sector balance measure
Considers all 4 economic sectors
Primary secondary tertiary quaternary
As a country develops they move away from primary and eventually secondary
What is HDI
Human development index
Measure of social development considering LE, wealth and Education
What outsourcing
TNCs outsource tasks to other companies to save time and money
What is offshoring
TNCs have manufacturing in LICs with lower labour costs and environmental laws
What is glocalisation
The adaptation of good and services by a TNC to meet local needs and taste
-
What are elite international migrants
Very skilled or very wealth people with the ability to move to global hubs
Russian oligarchs
Russian oligarchs case study notes
Pay investors visas
Purchase property in Mayfair, Kensington, belgrave - causes UK house price to escalate
Invest in pounds as Russian rouble is too unstable
What are economic international migrants
Dubai, London and New York attract workers
Workers who earn very little and are very skilled in a particular profession (often construction)
Can fill skill gaps and advance development
Can escalate urban popn growth and rise in illegal migrants
Benefits for host country or migrants
- fill skill gaps
- working migrants contribute through tax and buying goods and services (multiplier effect )
- increase cultural and demographic diversity
- young migrants balance ageing population
- businesses have larger pool of potential employees and customers
Benefits for source country of migrants
- migrants send remittance which can aid development and reduce poverty
- migrants become skilled and come back to set up businesses encouraging local economy
- reduced service spending as population declines
Costs for host countries of migrants
- rise of far right organisations, hate crimes and racial tension when lack of understanding between population
- strains on services
- house price inflation due to higher demand
Costs for source country of migrants
- brain drain due to skilled workers leaving
- migrants tend to be young so leave isolated ageing population
- decline in services due to low customer numb3s leading to negative multiplier effect
- agricultural land not taken care of - potential dereliction
What is culture
Language - national language, dialect and accent
Tradition- behaviour and manners
Religion
Food- national dishes and diet that reflect local spices, crops and animals
How is culture influenced
Media
Migration
TNCs
social media
What is the change in meat consumption in china between 1990s and 2015
Meat consumption per capita increased from 5kg to 50kg
10x
Impacts of changing Asian diets
- Obesity increased - especially in growing middle class population
- Rise in cattle farming lead to increased methane emissions - negative impact on environment
Deforestation to make room for cattle and soy to feed livestock
Example of positive cultural change
2012 Paralympics
Removing some stigma from disabled individuals in china
Previously only 25% employed
China came 1st in 2012 paralympics
What is a cultural erosion
When communities are suddenly exposed to a new culture
Can experience sudden change or reduction to their own culture
Young people particularly susceptible
Can lead to conflict
Examples of countries who resist cultural change
France
China
Iran
How do france resist cultural change
Restriction of foreign language media
40% of all broadcast must be French
How do china resist cultural change
Great firewall of china
Prevents information unfavourable to the government or foreign media outlets
Can’t access BBC, Facebook or search politically sensitive information
How did Iran resist cultural erosion
Barbie dolls banned in early 2000s
Confiscated from all stores
Not sen as appropriate for Islamic state
What is the inequality gap
The gap in wealth between the richest and poorest in a nation
Trends in income across the world
Average income risen in all continents
Poorest parts of Africa seen very little and very slow growth
Increased wealth of Europe and USA has resulted in widening gap between richest and poorest
Absolute poverty fallen but still high
Trend in Asian income
Risen significantly since 1970s due to japan and South Korea modernisation
2010 Asian income stood at US$7000
Trend in African income
Growth in Sub Saharan countries remained stagnant
Huge disparities
Northern countries eg Algeria and Tunisia grown from oil wealth
What is the Gini coefficient
Measures inequality of wealth shared across a population
Scores between 0 to 100
0 = perfect equality
10. = perfect inequality - one person has all income
How has globalisation caused growing conflict and degradation?
Rise of far right parties in Europe
Worsening environmental degradation
Political conflict over waterways
Case study notes: rise of far right parties
Far right parties more popular with more support
Accelerated by expansion of EU in 2004 to address 8 Eastern European countries - increased migration
Germany accepted most migrants of any EU country but growing concern and tension led to rise of Pegida
National front received 25% of vote in election suggesting less acceptance of migration
What is causing Environmental and political conflict on Mekong river
Flows from china through Myanmar, Laos, Cambodia and Thailand
Dams comstructed causing tension between countries
Increased pressure for national governments
Conflict between states over fossil fuels, rivers, naval bases, land for living or farming
How have some indigenous communities strengthened their cultural identity
Tourists attracted to experience culture or witness traditional lifestyle
Indigenous and nomadic populations grouped together to support and maintain traditional lifestyles
Continue to prosper despite TNCs threatening to drill for oil in natural territory
Eg Canadian First Nations , Siberia and Alaska
What is localism
The reduction of globally sourced goods
Instead purchasing locally sourced, sustainable products to protect environment and vulnerable individuals
Advantages of localism
- local suppliers can generate more revenue
- jobs for locals
- deliveries much quicker and cost less
- fewer carbon emissions due to reduced food miles
Disadvantages of localism
- foreign suppliers lose out and jobs lost abroad
- overall higher cost due to higher wages and manufacturing costs
- low income families may not have money to be able to afford local produce
What do transition towns promote
- reducing consumption through reusing and recycling
- reducing waste, pollution and environmental damage
- meeting local needs through local production
Example of transition town
Totnes Devon worlds first transition town
Has own currency (totnes pound) to encourage spending in local stores
Benefits own economy rather than chains and TNCs
What is fair trade
Aims to secure better pay for producers and growers
Includes coffee, cocoa and bananas
Provides consumer confidence that suppliers being paid fair price
As s, increasingly difficult to ensure profits deposited fairly
What is financial leakage
The movement of earnings of a TNC back to its source country
What is ‘just in time’
Method of stock control
Involves countries keeping very little stock and relying on deliveries made exactly when they are needed
What is free market liberalisation
Government model
Encourages privatisation and reduced government intervention/ restriction in business
What is sovereign wealth fund
SWFs
Government owned investment funds and banks
Associated with china and oil wealthy countries
Used for FDI in free market economies
What is a subsidy
Grant given by the government to increase profitability of guarantee the survival of key industries
Eg farming in the UK
What is a subsidy
Grant given by the government to increase profitability
When did china transition from a planned economy to a mixed economy with increasingly open market environment?
1976- When Mao died and Xiaoping took power
What are SEZs
Special economic zones
Large areas of land set aside by governments in locations well placed for international trade (ports)
Companies can import and export without incurring domestic tax
Encourages TNCS
What year did chinas open door policy come in
1978
What did chinas open door policy involve
4 SEZs set up near Hong Kong, Taiwan and Macau
Aiming to attract capital and business from external Chinese communities
Went from little exports to overtaking USA in 2013 in biggest trader of goods
What are the benefits of global shift for Asia
- investment in infrastructure
- waged work and reduction in poverty
- education and training
Costs of global shift in Asia
- unplanned settlements
- loss of productive land
- environmental and resource pressure
Examples of improved education and training across Asia as result of global shift
-high school achievement in Singapore and Hong Kong highest in the world
- china awarded 30000 phds in 2012
Examples of poverty reduction as a result of global shift
- 1bn moved out of poverty globally since 1990- half are from china alone
- Asia predicted to be home to 3Bn middle class in 2030
- millions moved from rural farming to waged labour in urban areas
Examples of environment and resource pressure as result of global shift
- forest sacrificed for rapid urbanisation
- deforestation in Mozambique to export hardwood to China
- more and more raw materials used to fuel expansion
Examples of benefits and costs to infrastructure and built environment as a result of global shift
- motorways and high speed rail and airports constructed all over Asia
- rapid urbanisation fuelled growth of slums in many Asian cities Eg Dharavai in Mumbai is largest in world
- boom in high rise development changed face of cities, displacing older neighbourhoods and communities
Examples of winners in globalisation
- Economies with low labour costs and infrastructure to export
- new middle class
- workers gaining jobs
- educated and skilled workers can earn higher wages
- multinationals benefit from tax avoidance and outsourcing
- workers who can migrate to higher income economies
Losers in globalisation
- manufacturing sector in high cost countries
- post industrial regions with decline in employment
- unemployment in former manual workers
- poorest 5% with stagnant incomes
- environment - costs of trade and growth
- land locked countries unable to develop exporting industries
- economic and social pressures from migration
What is diaspora
The dispersion of a group of people from their original homeland
What is post accession migration
The flow of economic migrants after a country has joined the EU
What is centripetal migration
The flow of people towards the centre of urban areas
What is the Lorenz curve
They measure inequality in graphical form and allow Gini coefficient to be calculated
Shows how far away reality is from perfect equality.
How does the UK control migration
5 tier point system designed to check the economic migrants possess resources that the UK economy needs
Tier 1 must either possess exceptional talent or be prepared to invest more than £2mil in the UK
What % of Japanese respondents were opposed to a more open immigration policy?
65% - despite imminent labour shortage due to aging population
How many internal migrants resided in cities across the world in 2013
750 million
1/3 Chinese rural-urban migrants
Wh
