Globalisation Flashcards
Define globalisation
A multi strand process where by there is increasing interconnectedness incorporating social, economic, cultural, political and environmental aspects
Name an example of economic globalisation
TnCs operating in multiple countries increased cross border exchanges
Name an example of social globalisation
Migration causes loss of culture - cultural erosions
Name an example of political globalisation
Colonialism
Name an example of cultural globalisation
Foods from different countries are available
Name an example of environment globalisation
Transportation of goods increased global warming
Name the connections
Lengthening - countries that are far apart are connecting
Deepening - more connections are being made
Faster - speed increase of connections
What is economic liberalisation
The progressive freedom of money control in a country
What is the world bank
An international financial institution that provides loans to countries of the world for capital projects
Name the 5 flows
Commodities, capital, information , tourists and migrants
What is the relationship between transport and trade
Transport increases trade, but transport needs to be updated and this creates a feedback loop
Name some points about steam power
Leading power in 1800s
Moved goods and armies quickly
Trade routes in Asia and Africa
Name some points about railways
1800s expanded globally
HS2 halving train times
By 1904, 9000km trans Siberian railway
Name some points about telegraph
First cables in 1860s
Placed 3 week boat journeys
Instantaneous communication
What are the three factors in HDI
GDP, life expectancy and education ( % literacy rate and years of schooling)
What are the values for HDI
- 550 or lower for developing
- 550-0.799 for emerging
- 800 or above for developed
When were the Bretton Woods Organisations founded
After WW2 to avoid the return of the Great Depression
What was free trade replaced with
Protectionism
Why did they set up
Because western economically weak countries felt threatened by territorial advances made by communist countries
What are the organisations there to encourage
Free world trade and globalisation
Explain the free trade loop
Governments take away barriers that make trade more costly eg tariffs
As costs are reduced, TnCs see profit and want to invest in nations
They bring new ideas, products etc
They generate wealth
This increases development and in turn increases standard of living and demand for foreign products
Nations become more interdependent
Name some points about jet aircraft
Available to the mass market in the 1960s
Budget airlines made air travel available to everyone in developed world
Explain time space compression
Heightened activity/ connectivity changes our perception of time, distance and potential barriers
What is the shrinking world
As travel times fall, places feel closer
Name some key points about World Trade Organisation
Believes in free trade (trade liberalisation)
Makes countries and producers become poorer and monopoly rises
Yet imports are cheaper
Name some key points about the International Monetary Fund
Lends money for development purposes
Forces countries to privatise government assists in order to increase size of private sector (in order to pay back loans) (structural adjustment programme) which stops money going to education
Name some key points about the World Bank
Formed to finance economic development Money from wealthy to poorer countries Agreements on conditions made Focuses on natural disasters Structural adjustment programme
What is the global financial crisis
Governments in developing and emerging countries became mistrustful of financial advice from the Bretton Woods Organisations
What does BRICS stand for
Brazil, Russia, India, China and South Africa
What did BRICS set up
The new development bank as an alternative
Name the three reasons why policies of the WTO disadvantage developing nations such as Ghana
Commodity traders
Over seas tariffs and unequal power
Why is commodity traders bad for Ghana
- Trader but cocoa in advance for TnCs which is called futures market and this guarantees price, supply and delivery
- other producers put pressure on Ghana as traders have alternative sources to negotiate with
Why are overseas tariffs bad for Ghana
There are higher tariffs on processed beans so they have to sell raw cocoa, which isn’t turning a low value product into a high value product
Why is unequal power bad for Ghana
Pre-WTO Ghanaians were subsidised to encourage food production but the WTO imposed a no subsiding condition and this means some farmers gave up
What do trade blocs and national governments do to promote globalisation
Free trade and foreign direct investment
What does foreign direct investment involve
Offshoring, foreign mergers, foreign acquisitions and transfer pricing
What is offshoring
Building production facilities in offshore low wage economies
Give an example of offshoring
Fender with Mexican plant in 1987
What is foreign mergers
Two firms in different countries merge
Give an example of foreign mergers
Royal Dutch and Shell
What is foreign acquisitions
When a tnc takes over another company in a different country to get that nations benefits
Give an example of foreign acquisition
Kraft over Cadbury
What is transfer pricing
Some TNCs have sometimes channelled profits through a subsidiary in a low tax country
Name an example of transfer pricing
Amazon through Ireland
What is a trade bloc
A group of nations that form to reduce/eliminate barriers to trade
What do governments recognise about secondary and tertiary products
That there is more money to be made, as if trade in these increase then so will the tax base and therefore skill level and high wage employment
How do trade blocs gain members
They attract FDI form other nations that want to invest to avail tariffs and access the large market
What do primary products not provide
Stability
What do you get with being in the EU
Currency- eligible for EU structural funds
Agriculture - produces benefit from farm subsidies
Peace- European Parliament holds peace
Freedom of movement - granted to all citizens of member states and the Shenzhen agreement means national borders are removed
What are the ASEANs aims
Eliminate tariffs and encourage free trade
Aim to develop into a single market (the Asian economic countries)
Where is ASEANs financial centre
Singapore
Where is ASEANs call centre
Philippines
Where is ASEANs manufacturing
Indonesia
How many countries and people are in ASEAN
10 countries and 600 million people
What is a special economic zone
An industrial area, often near a coastline where favourable conditions are created to attract foreign TNCs
What do SEZ’s add towards
Economic development goals
Explain SEZ’s in Indonesia
In 1960, president Sauharto built a new legal and economic framework which attracted companies such as Gap and Levi’s