Globalisation Flashcards
Define Globalisation
The increasing interconnectedness of the world economically, culturally and politically i.e. a process in which human activities are organised on a global not national scale.
What are the 3 types of globalisation?
- Economic
- Social/cultural
- Political
What is economic globalisation?
Goods and services produced in one part of the world are increasingly available in others
What are examples of economic globalisation?
- Cheaper in other countries
- Lots of chemicals: can dump easily in other countries
= Global market place
What do... - TNC - MNC - FDI ...stand for?
Transnational company
Multinational company
Foreign Direct Investment
What do more of TNC and MNC lead too?
More FDI
What is FDI?
Where one business directly invests in another business in another country
Why if FDI now easier?
As money (capital) flows almost instantaneously round the world
What problems arise from more FDI
Credit crunch = sudden reduction in the general availability of loans(or credit)
People couldn’t afford houses/cars -> bankrupt
What’s another word for money
Capital
What’s global shift?
Movement of industry from HIC’s to new cheaper locations (the NEEs)
What does
NEE
stand for?
Newly Emerging Economies
Name two causes of globalisation
- 1866 - Telegram cable across Atlantic: could talk instantly
- 1939-1945 - WW2: Lots of countries got involved: USA, Africa, India, Japan etc - v. global then EU formed
What is containerisation?
A system of intermodal freight transport using standard containers
- can be loaded onto ships, railways, planes and lorries
What’s TEU?
Twenty foot equivalent unit
Advantages of containerisation?
- Can be locked
- Steel: can’t break
- Safe
- Improvements in port handing efficiency=lower costs= increased trade flow
What’s mass air transport?
Jet aircraft have replaced passenger ships for inter continental travel
what’s flag carriers
countries that have own airline that only they use
What are low cost airlines?
an airline that generally has lower fares, but may charge for extras eg food priority seat allocation and baggage etc
- good as have increased air travel in LICs for tourism
What’s air freight?
carry goods over air
- increased by 15% since 1970
- 5% of all goods traded go by air
what is included in “recent globalisation”
- from 2000 onwards
- driven forwards by development in ICT and mobile phone tech.
eg internet, email, www, mobiles
why does ict help?
- makes the world feel ‘borderless’
- also allows companies to become ‘footloose’ = free to go abroad and sell products
- allows businesses to trade more cheaply eg conference call and no flights etc
what does:
- switched on country
- switched off country
- access to internet
- no access
what’s the impact of modern telecommunications on businesses?
- reduces need for face 2 face interactions eg email, video conference (cheaper)
- businesses can be footloose
- it enabling rapid movement of money and information around the globe (up to date with everything)
what’s the FLAG (fibre optic link around the globe)
- $1.5 billion project
- 28000km underwater cable
- snaking its way across the ocean floor from britain to japan
- offers uninterrupted data between europe and asia
what are advantages of fibre optic cables?
- voices and data traffic is faster, cheaper, more reliable and subject to less interference
what are disadvantages of fibre optic cables?
- submarine pipelines are vulnerable to both physical and human attack
what’s time space compression
ict has changed our conception of time distance and barriers to goods, people and money
aka “the shrinking world”
what’s a special economic zone?
(sez) a geography region that has economic and other laws that are more free market oriented than a countries typical national laws
what do SEZ do (china)
mainly export related manufacturing areas where the taxes are reduced as an incentive for companies to offshore or out shore manufacturing
China:
How did they change in policy?
- run by communist party since 1949 revolution
- began to adopt neo-liberal economics (free market) in 1978.
- TNCs play major role in economics
- joined WTO 2001 (door opened even further)
Define: off shore
business go to china and buy land and build factory
Define: outsource
business will employ a Chinese companies to make products in china on its behalf
Political globalisation:
What does G8 stand for?
-Group of eight
Who is in g8?
leaders from; Canada, france, Germany, Italy, japan, Russia, uk and us
what do G8 do?
leaders take it in turn to be president
is G8 a good idea?
this IGO only contains 8 countries out of 195 making international decisions
What’s the WTO?
- founded in 1995
- world trade organisation for ‘liberalising trade’
- considerable power
Whose the WTO used by?
- EU, US and individual TNC’s
what do the WTO do?
- For governments to negotiate trade agreements
- and settle trade disputes
What are the positives of WTO?
- have liberalised trade, so easier to trade between nations = globalisation of companies
- battled to reduce tax on goods and services, benefited countries wishing to both import ad export
- points above have helped some countries to grow economically as trade barriers lifted= countries with little clout could sell goods around the world
What are the negatives of WTO?
- too powerful, when coupled with IMF & WB - can force entire countries to change laws for the benefit of its member countries eg Indonesia
- wto is run by the rich for the rich - gives no significant weight to problems of developing countries eg rich countries haven’t fully opened to products from poor
- no interest in conditions in sweat shops for eg- only aims are to assist trade between nations
- lowered GDP
- lacks democratic accountability - its hearing on trade disputes are closed to public and media
What is trade blocs
agreement between a group of countries that either reduce of eliminate the barriers to trade - making it easier for a select number of countries to trade amongst themselves
give 4 examples of trade blocks
eu -Europe union
nafta - north American free trade area
asean - association of southeast Asian nations
caricom - Caribbean community (15 member nations)
positives of trade blocks
- lower prices of commodities due t minimal tariffs on importation and exportation between the member countries
- stimulate trade between member countries
- free trade agreements: positive impact on economic growth and help countries focus on what they do best
- opening doors for other countries to compete fairly (w/o tariffs or trade policies)
negatives of trade blocks
- congressional budget office said; the pursuit of free trade could ‘divert the world from multilateral negotiations and lead to the developments of rival trading blocks’
- exploitation of developing countries by industrialised countries
- environmental concerns as the production of goods overseas is not consistently regulated from country 2 country
- political concerns that may influence negotiations between trading partners
what’s political globalisation
the increasing number and power of associations which influence or govern the world as a whole eg UN, EU, NATO, WTO, G8
what’s colonialism
the extension of a nations sovereignty over territory beyond its borders
indigenous populations are directly ruled or displaced
have more resources and labour
what’s imperialism (today)
eg usa
strong influence over many countries
it doesn’t directly rule them but influences them economically
what’s the IMF
- based in US
- channels loads from hics to lics who apply for help
- then they must run free market economies in return
- resulting in TNCs being able to enter these countries more easily
- there is rules eg have to cut back on heath care, education , sanitation etc
What’s the world bank
- lends money on a global scale
- headquartered in Washington, DC (us)
- gives direct grants to developing countries
- help given to Philippeanes in 2014 and to Democratic Republic
- total: US$65 billion in loans and grants in 2014
- like IMF, the WB imposes strict conditions on its L&G
- all WB presidents have been American
Whats the WTO
World Trade Organisation
- took over from General Agreement on Trade and Tariffs in 1995
- Based in Switzerland
- advocates trade liberalisation - especially for manufactured goods and asks countries to abandon protections in favour of untaxed trade
- failed to stop richest countries e.g. US and UK from subsiding their own food products
- harmful to farmers in developing countries, who want to trade on a level playing field