Globalisation

Question 1

What is the background of TNCs?

Answer 1

Major player in the global economy.
Rapid growth since 1970s.
1975 - 7,000 TNCs.
Today - 60,000 TNCs.

Question 2

What are the 3 main forms of globalisation?

Answer 2

1. Economic - under GATT and WTO, world trade has rapidly grown.
   Major force in increasing economic independence.
   Several generations of NICs have emerged.
2. Cultural - Western culture is very influential - spread through media.
3. Political - nation states influence has decreased.
   Trade blocs have increased.
   Strong influence of Western democracies in developing countries.

Question 3

What geographical forms can globalisation be viewed in? 4

Answer 3

1. Urban - hierarchy of global cities act as centres for the global economy.
2. Demographic - growth of international migration and multi-cultural societies.
3. Linguistic - emergence of English as the working language.
4. Environmental - impact of one country’s activity has a clear impact on others e.g. global warming.

Question 4

What was globalisation like in the 1900s? 3

Answer 4

1. Transport/communication rapidly increased.
2. World trade increase - increased interdependence level between rich/poor nations.
3. Capital flows increased - European countries began operations in other countries.

Question 5

What has globalisation been like since the 1940s? 5

Answer 5

1. Fragmented production processes.
2. Complex international trade.
3. Increased NICs e.g. Singapore.
4. Integration of Soviet Union into capitalism.
5. Large economies opening up to the outside world e.g. China.

Question 6

What is the market like regarding globalisation?

Answer 6

Emergence of free market ideas - 1980s.
Marget Thatcher and Ronald Reagan.
Deregulation of world financial markets - financial companies able to scour the world looking for the best returns on capital.

Question 7

What are labour markets?

Answer 7

Not as free as financial markets.
People move less easily round the world than money.
Immigration, affinity to a birth country.
20th century - millions of economic migrants.
Growth of EU - poorer eastern European member nations e.g. Poland, to the richer west - UK.

Question 8

What did the General Agreement on Tariffs and Trade do?

Answer 8

Wanted to lower barriers to international trade - aimed for free trade.
Average trade tariffs have shrunk 1/10 since GATT.
Difficult to reach agreements.

Question 9

What have countries done since the 1950s regarding trade?

Answer 9

Joined together to form trade blocs.
Done to stimulate trade between themselves and to obtain economic benefits from cooperation.
E.g. free trade areas, customs unions, common markets and economic unions e.g. EU.

Question 10

What does the International Monetary Fund do? (IMF)

Answer 10

Oversees the global financial system.
Offers financial/technical assistance to members.
Renegotiates debt terms on behalf of nations in financial difficulties.
Usually imposes conditions on its financial assistance e.g. severe cuts in welfare and education.

Question 11

What does the World Bank do?

Answer 11

Internal investment projects.
Usually in developing countries.
Aims to reduce poverty.
Loans are set at the current market rate.
IDA - provides interest-free loans (with long repayment periods) to those countries with low capita incomes.
Promotes sustainable development.
Most funding going to small-scale projects.
Critics argue that loan conditions haven’t always had the effect of reducing poverty/dependency.