Globalisation Flashcards
What is globalisation?
When processes,cultures,money,food,goods and information are becoming more linked and spread throughout the globe.
What are the 4 types of FDI?
Offshoring
Foreign mergers
Foreign acquisitions
Transfer pricing (channel profit through low tax country)
What is economic liberalisation, SEZ and the Bretton Woods institutions?
Economic liberalisation= lessening of government regulations and restrictions in an economy e.g. greater participation.
SEZ= special economic zone, an industrial area often near coast where favourable conditions attract investment from TNC’s
Bretton woods institutions= established after ww2 tried to re-establish world economy and avoid depressions e.g. WTO,IMF,WORLD BANK.
Switched off case studies: North Korea and Sahel region
North Korea - 70 years it has been autocracy, politcally isolated,ordinary citizens don’t have internet access,no undersea cables
Sahel region - poverty affects majority of people in some of Sahel’s countries e.g. Chad,Mali and Burkina Faso which are some of the least developed countries Due to development challenges e.g. struggle to attract FDI or mismanagement of resources.Rapid growth of neighbouring countries could change things e.g. Nigeria.
What are the indexes that measure globalisation?
KOF Index = annul index of globalisation, using diverse data such as participation in UN peace keeping missions and tv ownership.
AT Kearney index = A world city index that ranks cities of commerce e.g. business activity, political engagement, no. Of TNC, foreign embassies etc.
What are GPN’s?
Global production networks = result from outsourcing (popular), chain of connected suppliers that contribute to the manufacture or assembly of goods.
Glocalisation= adaption of a product to suit local tastes/preferences.
CASE STUDY: Ghana
CASE STUDY: Guatemala
GDP could increase of buy cocoa in advance
Alternative suppliers to tnc puts downward pressure on prices
Gain extra income and employment before export to EU
Due to EU tariffs this forces Ghana to export raw beans which drives up price for buyers.
Joined WTO allowed other source of food
GUATEMALA: Income generated from cotton crop exported used to buy equipment for future e.g. pesticide. Earnings greater if exported processed, but WTO policies make this difficult, TNC’s can now do this cheaper.
CASE STUDY: Microsoft (TNC)
Origin: Alberquque, USA
Host: Belgium, China Vietnam etc.
- Provides employment, 1.4 billion software donated, 158 million donated to local communities, bought Nokia for 7.2 billion, massive it growth in Belgium,low pollution
CASE STUDY: China (Global Shift)
China’s wealth accumulation lags far behind its speed of economic growth,GDP growth,widespread construction > demolition of old building means wealth is negated although employment is created, product quality neglected during high economic growth,widening income gap, WORLD BANK: 16 of the worlds 20 most polluted cities in China, e-waste becoming problem.
Shift production due to cheaper labour,open door policy allowed TNC’s to invest and move certain manufacturing processes to China,lower costs, labour work more hours.
2nd largest economy in terms of GDP and amount of TNC’s, China joined APEC which promotes free trade and economic growth, worlds largest exporter.
Benefits: multiplier effect,trickle down of wealth,new tech,new skills,economic growth,new goods and services,GDP INCREASES AT 10% ANNUALLY.
Costs: expense of environment and its resources,reduction in quality,uneven income distribution,exploitation of workers.
Reasons for global shift?
Urbanisation in developing cities e.g. China, shift moving east, glocalisation,cheaper labour and taxes,investment by TNC’s/outsourcing/offshoring and SEZ’s,less building regulations,technology improving,less pollution regulations in developing countries.
500 million computers became obsolete in USA between 1997-2007
Deindustrialisation example Leicester and Detroit
People lose jobs > unemployment (Detroit lost 80%), deprivation, services fail,crime up,dereliction.
Leicester: dereliction of textile buildings,housing became low cost,pop down,unemployment,deprivation,crime,industrial land contaminated from dumping of chemical waste.
Types of migrant
Elite low wage and Internal
Other measures of globalisation
Global gender inequalities index
HDI(literacy rate,GNI per capita,life expectancy)
Economic sector balance(used in annual GDP calculation, contribution of different economic sectors).
What is the lorenz curve and GINI co efficient?
Lorenz curve: graphical representation of distribution of equality
GINI co-efficient: A measure of inequality using scale 0-1, represents income/wealth distribution.
(Area A/Area A + Area B)
The closer the GINI co efficient is to 1 the higher the degree of inequality, 0= absolute equality
In an ideal world 10% of pop would own 10% of wealth.
Where is the trans-boundary conflict?
The Mekong river e.g. Laos,Vietnam etc.
