Globalisation Flashcards
Asian ‘tiger’ economies
The first NICs of South Korea, Taiwan, Hong Kong, Singapore
BRIC
Acronym used to identify a group of 4 countries – Brazil, Russia, India and China – whose economies have advanced rapidly since the 1990s
Capital flows
The movement of money for the purpose of investment, trade or to produce goods/provide services. Usually regarded as investment into a production operation.
Commodity
A raw material or primary agricultural product that can be bought and sold, such as copper or coffee. Oil is the single most important traded commodity.
Conglomerates
: A collection of different companies or organisation which may be involved in different business activities but all report to one parent company – most TNCs are conglomerates
Containerisation
A system of standardised transport that uses large standard-size steel containers to transport goods. The containers can be transferred between ships, trains and lorries, enabling cheaper, efficient transport of goods
Deindustrialisation
The reduction of industrial activity or capacity in a region or economy.
Diaspora
A large group of people with similar heritage or homeland who have moved and settled in places all over the world.
(noun so a / the diaspora)
Economies of scale
The cost advantage that results from the large size, output or scale of an operation as savings are made by spreading the costs or by rationalising operations
Enterprise
A very particular form of human capital describing those who take the risk of establishing businesses and organising the production of goods or provision of services
Foreign direct investment (FDI)
An investment made in business interests in one country by a company or individual in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company.
Global shift
The filtering down of manufacturing industry from developed countries to lower wage economies.
Global village
A ‘flat world’ where free rein is given to economic and information flows
Globalisation
A process by which national economies, societies and cultures have become increasingly integrated through the global network of trade, communication, transport and immigration
Interdependence
Mutual dependence at a global level; countries depend on each other for products, goods and services
International trade
The exchange of capital, goods and services across international borders. Inbound trade is defined as imports and outbound trade as exports
Labour
Factor of production defined as the aggregate of all human physical and mental effort used to create goods or provide services
Leakages (economic)
Refers to a loss of income from an economic system. It most usually refers to the profits sent back to their base country by TNCs; this is also known as profit repatriation .
Maquiladora
A manufacturing operation (plant or factory) located in free trade zones in Mexico. They import materials for assembly and then export the final product without any trade barriers.
Migration
Movement (of people) from one place to another (NB does not have to be international to count as migration)
MINT
Acronym referring to the more recently emerging economies of Mexico, Indonesia, Nigeria and Turkey
Nation state
This term joins the political entity of a “state” to the cultural entity of a “nation”. We tend to refer to nation states as countries, nations or states!
Newly Industrialised Countries (NICs): Countries that have undergone rapid and successful development since the beginning of the 1960s
Countries that have undergone rapid and successful development since the beginning of the 1960s
Non-governmental organisations (NGO)
A not-for-profit, voluntary organisation that operates independently of any government, typically one whose purpose is to address a social or political issue. They can be organised on a local (e.g. North London Hospice), national (e.g. Age UK) or international (e.g. Greenpeace) level
North American Free Trade Agreement (NAFTA)
Signed by the USA, Canada and Mexico in 1994, creating one of the world’s largest free trade zones
Official Development Assistance (ODA)
A term coined by the OECD to measure aid, first used in 1969. It is widely used as an indicator of international aid flow.
Organisation of Petroleum Exporting Countries (OPEC)
An economic alliance of countries with a surplus of oil that they are able to export to developed countries which need it more. Responsible for about 50% of crude oil exports. 12 member countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela
Protectionism
A deliberate policy by government to impose restrictions on trade in goods and services with other countries – usually done with the intention of protecting home0based industries from foreign competition
Remittances
Transfers of money made by foreign workers to family in their home country. They are the second most important source of income in developing countries, more so than international aid
Tariffs
A tax or duty placed on imported goods with the intention of making them more expensive to consumers so that they do not sell at a lower price than home-based goods – a strategy of protectionism
Transnational Corporations (TNCs)
A company that has the power to coordinate and control economic operations in more than one country. The company does not have to own the operations outside its home country (NB franchises). Also known as Transnational Companies or Multinational Corporations (MNCs)
World economy
Where prices, supply and demand of products are affected by global events
World Trade Organisation (WTO)
A group of (in 2016) 164 nations agreeing to trade with each other without the use of tariffs or duties. It deals with the rules of global trade, with the aim of easing trade and getting rid of anything hindering it.
Bilateral agreement
An agreement on trade (or aid) that is negotiated between two countries or two groups of countries
Bottom up
When local people are consulted and supported in making decisions to undertake projects or developments that meet one or more of their specific needs
Common markets
A group formed by countries in geographical proximity in which trade barriers for goods and services are eliminated. This may eventually apply to removing any labour market restrictions, such as in the EU.
Customs unions
A trade bloc which allows free trade with no barriers between its member states but imposes a common external tariff to trading countries outside the bloc e.g. the EU
Geopolitics
the study of international relations, as influenced by geographical factors – it involves understanding the relationships between a country or group of countries, and the rest of the world. Each nation has a sphere of influence that it exerts over other nations in terms of trade, economic aid and military intervention
Intergovernmental Panel on Climate Change (IPCC)
The leading international body for the assessment of climate change. Established by UNEP and the World Meteorological Organization (WMO) in 1988, with the aim to provide a clear scientific view on the current state of knowledge in climate change and its potential environmental and socio-economic impacts
International Monetary Fund (IMF):
An organisation which funds development in poorer countries, using bank deposits from wealthier countries. Helps to facilitate the global financial system.
Multilateral agreement
An agreement negotiated between more than two countries or groups of countries at the same time
Outsourcing
A cost-saving strategy used by companies who arrange for goods or services to be produced or provided by other companies, usually at a location where costs are lower
Top down
When the decision to undertake projects or developments is made by a central authority such as government with little or no consultation with the local people whom it will affect
World Bank
An organisation set up after World War II to promote investment globally. It provides loans for countries who agree to conditions. Helps to facilitate the global financial system
Agglomeration
When companies in similar industries locate near to each other because of the benefits gained by sharing ideas and resources – called “agglomeration economies”
Embargoes
These involve the partial or complete prohibition of commerce and trade with a particular country. They are usually put into practice for political rather than commercial reasons e.g. the EU has an arms embargo against the export of weaponry, and many countries have sanctions imposed, with strict trade controls in place e.g. Armenia, DRC, Iran, Lebanon, Sudan, Zimbabwe, etc.
Fair trade
A social movement whose goal is to help producers in developing countries achieve better trading conditions and to promote sustainability. It focuses mainly on agricultural-based products e.g. coffee, tea, cocoa, sugar, wine, flowers, bananas, chocolate
Free market ideology
A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. The WTO’s aim is free trade.
G20 group
An international forum for the governments and central banks of 20 major economies. It includes the G7 countries and the EU as a single member. Established in 1999 t aims to give a voice to the major developing economies (including BRIC countries) who felt that the WTO were not fully serving their interests
G7 countries
The Group of 7 is a group consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The European Union is also represented within the G7. They are the 7 major advanced economies as reported by the IMF. They represent more than 64% of the net global wealth ($263 trillion). A very high net national wealth and a very high Human Development Index are the main requirements to be a member of this group.
Glocalisation
A term used to describe products or services that are distributed globally but which are fashioned to appeal to the consumers in a local market e.g. in India, McDonalds sells the Maharaja Mac, made with chicken patty instead of beef, to accommodate cultural and religious (Hindi) beliefs around the sacred nature of cows.
Group of 77 and China
A forum/coalition of developing nations established in 1964 when China was seen as a less developed economy. It aims to promote its members’ collective economic interests and create an enhanced joint negotiating capacity in the United Nations.
Horizontal integration
A strategy where companies diversify their operations by expansion, merger or takeover to give a broader capability at the same stage of production. This can either be complementary of competitive to its existing business e.g. Kraft Foods takeover of Cadbury in 2010 gave them a more diverse base in the grocery and confectionary market
Import licence
A licence issued by a national government authorising the importation of goods from a specific source
Import quota
These set a physical limit on the quantity of goods that can be imported into a country
Least Developed Countries (LDCs)
Low-income countries that face severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets. There are currently 47 countries on the UN’s list of LDCs, which is reviewed every 3 years. LDCs have exclusive access to certain international support measures in particular in the areas of development assistance and trade.
Mercosur
Formed in 1991 and comprises of Brazil, Argentina, Paraguay and Venezuela (Bolivia and Ecuador have applied to join) – it is a traditional customs union and operates very similarly to the EU, allowing the free movement of labour between member states. It tends to view the EU and North America as its main markets
Multiplier effect
A situation where an initial injection of investment or capital into an economy (at any scale) in turn creates additional income by, for example, increasing employment, wages, spending and tax revenue
Pacific Alliance
Formed in 2011 and comprises of Chile, Peru, Colombia and Mexico (Costa Rica, Panama and Guatemala have applied to join). It is different to Mercosur as it is more open to making bilateral agreements with other nations. It tends to view Asia Pacific and the USA as its main markets
Regional trade agreements (RTAs)
Within the WTO, these are reciprocal trade agreements between two or more partners. They include free trade agreements and customs unions
Special and differential treatment
The WTO Agreements which contain provisions that give developing countries special rights
Subsidies
These are grants or allowances usually awarded to domestic producers to reduce their costs and make them more competitive against imported goods e.g. in 2010 the EU spent €39 billion on agricultural subsidies, which form over 40% of its budget. The largest subsidy is the Single Farm Payment, which subsidises farmers on a per-hectare basis
The Organisation for Economic Co-operation and Development (OECD)
An intergovernmental economic organisation with 35 member countries, founded in 1960, to stimulate economic progress and world trade.
Trade restrictions
Other import restrictions may be based on technical or regulatory obstacles such as the quality standards of goods being imported, or how they are produced. E.g. the EU attempts to put restrictions on the import of goods knowingly produced using child labour
Transatlantic Trade and Investment Partnership (TTIP):
A proposed trade agreement between the EU and the USA, which is said to boost the EU economy by €120 billion and could create millions of new jobs. Critics are concerned about food safety laws, environmental regulations and the sovereign powers of individual nations
Trans-Pacific Partnership (TPP)
The largest ever trade agreement in history, signed in 2016, concluding 7 years of negotiations – it is a trade agreement between the USA and countries in Asia and South America including Chile, Peru Japan and Singapore, among others
UN Conference on Trade and Development (UNCTAD)
Together with other UN departments and agencies, they measure progress by the Sustainable Development Goals, as set out in Agenda 2030. They work to ensure that globalisation benefits global society more fairly and effectively
Vertical integration
An arrangement in which the supply chain of a company is owned entirely by that company, from raw materials through to the finished product. This gives the TNC control over its supplies and stocks, and reduces costs because of economies of scale. E.g. BP in the oil and gas industry – it owns 40 oil and gas fields and associated production rights world-wide, has its own pipelines and shipping fleets, refineries and over 1,100 retail service stations
Voluntary export restraints
This is a diplomatic strategy offered by the exporting country to appease the importing country and deter it from imposing trade barriers
