Globalisation Flashcards
What are the two main factors that accelerated globalisation?
Transport and communication.
What are the transport factors accelerating globalisation?
Containerisation
Jet Air Craft
Railways
Steam-ships
What are the communication factors affecting globalisation?
Mobile phones Fibre optics Social networking Internet Electronic banking
What is privatisation?
Moving businesses out of government ownership into private ownership.
What is the advantage of privatisation?
Creates a competition led market, which encourages more FDI.
What is deregulation?
Getting rid of certain rules/ tarrifs.
Who privatised lots of companies in Britain?
Margaret Thatcher in the 1980s. Privatised BT in 1984 and British gas in 1986.
What is a trade bloc?
International agreement where barriers to trade are reduced or eliminated among the participating states.
What are the advantages of trade blocs?
Serve a larger market
Protection from foreign competition
National firms can merge to form transnational companies
What are the disadvantages of trade blocs?
Interdependence
Loss of sovereignty
Compromise and concession
How do national governments attract FDI?
Change in policy (Open-door policy in China 1991)
Privatisation (Margaret Thatcher UK 1980s)
Improvement of infrastructure (China has 234 civil airports since 2018)
How does privatisation attract foreign direct investment?
Creates a competition-led market which brings great opportunity to bring in profit. Therefore companies are attracted to that area.
What are the special economic zones in China?
Shenzhen, Shantou, Zhuhai
When did China join the WTO?
December 2001
Why are special economic zones significant?
They create a high proportion of jobs in an area, which brings in a lot of money to the national economy.
What questions the significance of SEZ’s?
They only help certain areas, and may only profit certain cities and not the people living in urban areas.
What is a switched on and switches on area?
Switched on zones are areas that are very globally connected with other places, and host a lot of tourism and trade.
Switched off places are areas that are very shut off from the rest of the world, and do not have a large amount of global connections.
What are some examples of switched on places?
- Paris
- New York
- London
- Tokyo
What are some examples of switched off places?
- DRC
- North Korea
- Ethiopia
- The Sehel
What are some reasons for places being switched off?
Location barriers, political barriers, economic barriers
What are some political barriers?
Government corruption
Mismanagement of natural resources
Government policies
Ethical reasons, such as gender equality
When was the KOF Globalisations Index founded?
2002
What does the KOF Index measure?
Measure extent to which countries are socially, politically, economically linked to others
Countries with more links are more globalised
Ireland was most globalised in 2015
What are the advantages and disadvantages of KOFI?
Advantage: include political factors
Disadvantage: data from all countries is not available
What is the AT Kearney Index?
Measures at city level. Uses business activity, human capital, information exchange, and cultural experience to rank cities in terms of the quantity and quality of their connections.
Evidence from AT Kearney Index.
In 2014, New York and London were unchanged in top spots
Emerging economies such Jakarta and Manila were increasing global connections at a first rate in same year.
What is out-sourcing?
When companies use foreign labour to manufacture their products due to cheaper labour costs and reduced regulations.
When did the global shift begin?
Began in the 1950s when companies began outsourcing their products to Asia, specifically India and China.
What two counties have had a significant impact through globalisation?
China and India
What is cumulative causation and who proposed the theory?
Gunner Myrdrel propose that one event can cause many different factors to change. It can either be positive or negative feedback. For example a new factory opening would bring new jobs, lower unemployment, improve economy and thus infrastructure and education.
Why did globalisation in India grow?
- India is a preferred destination for Foreign Direct Investment because low labour costs, highly skilled workforce, high proportion of population speak English
- Change in policy, India changed its policy to allow foreign direct investment
- Improvements in technology, many people in India get jobs involving IT with foreign companies, without improvements in technology these firms probably wouldn’t invest there.
What is an example of a TNC in India?
Coca Cola has invested $1billion USD in India. They have created many jobs for people in factories, call centres, management, etc. They have improved infrastructure of India and invested $10million USD into community projects such as sustainably energy schemes, and installing pumps to allow people to access fresh, clean water.
Benefits of globalisation in India (and in general)
- Poverty reduction, people living below poverty line fell from 45% in 1994 to 21.9% in 2012
- Education and training
- Infrastructure investment
- Waged work
Disadvantages of globalisation in India (and in general)
- Competition, people tend to choose foreign products over local Indian goods
- Air and water pollution, in China 4000 people die of air pollution every year and 70% of China’s rivers and lakes are polluted.
- Unplanned settlements, Dharavi slum has 16milliokn residents
- Environmental resource pressure, 100 cities suffer with extreme water shortages and 360million students worldwide don’t have access to safe drinking water
Impacts of globalisation on developed counties
- Reduced cost of manufacturing
- Development of tertiary industries
- Deindustrialisation