Globalisation EQ1 Flashcards
Globalisation definition
It is used to describe a variety of ways in which places and people are now more connected with one another than they used to be.
It is the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders.
Economic globalisation
- the growth of TNCs, accelerates cross-border exchanges
- information and communications technology supports the growth of firms and a more international economy
- increased online purchases
Social globalisation
- International immigration creates extensive family networks that cross national borders.
- global improvements in education and health see rising life expectancy and literacy rates
- social interconnecninity rises thanks to spread of universal connections e.g internet
Cultural globalisation
- ‘successful’ Western traits can begin to dominate other territories e.g Americanisation.
- the circulation is ideas and information has accelerated due to 24-hour reports
Political globalisation
- the growth of trading blocs e.g EU allow TNCs to merge and make acquisitions in neighbouring countries, while reduced trade restrictions and tariffs help markets to grow
- growth of global organisations e.g World Bank work internationally to harmonise national economies
The connections between places represent different kinds of network flow. These flows are movements of:
- Capital: At a global scale, major capital (money) flow are routed daily through the world’s stock markets. A range of businesses buy and sell money in different currency to make profit. In 2013, the volume of these foreign exchange transactions reached US$5 trillion per day.
- Commodities: Valuable raw materials such as fossil fuels and minerals have always been traded between nations.
- Information: The internet has brought communications between distant places, allowing goods and services to be bought as the click of a button. Social networks have boomed in size, with 1.5 billion users on Facebook by 2015.
- Tourists: Many of the world’s air passengers are holiday makers. There has been an increasing number of people of emerging countries travelling abroad too. China is now the world’s biggest spender on international travel, with 120 million outbound trips made in 2014.
- Migrants: Of all global flows, the permanent movement of people still faces the greatest number of obstacles due to border controls and immigration policies. Most governments have a mixed attitude towards global flows, with embracing trade flows but attempting to resist migrant flows. The combined number of economic migrants and refugees worldwide almost reached one quarter of a billion in 2013. One issue of migrants is the negative impact on the countries economy in which they are working on.
The combined effect of these global flows has been to make places interconnected. One result of this is the increased interdependency of places.
Interdependency
This is when two places become over-reliant on financial and/or political connections with one another
Important innovations in transport include:
- Steam power: Britain became the leading world power in the 1800s using steam technology.
- Railways: In the 1800s, railway networks expanded globally. By 1904, the 9000km Trans-Siberian Railway connected Moscow with China and Japan.
- Jet aircraft: Recent expansion of cheap flights sector, including easyJet, has brought it to the masses in richer nations
- Container shipping: Around 200 million individual container movements take place each year. Everything from chicken drumsticks to patio heaters can be transported efficiently across the planet using intermodal containers.
Time-space compression (or shrinking world effect)
This refers to the heightened connectivity changing our conception of time, distance and potential barriers to the migration of people, goods, money and information.
The work of international organisations
For many decades, 3 international organisations have acted as ‘brokers’ of globalisation through the promotion of free trade policies and FDI. These are the International Monetary Fund (IMF), World Bank, and World Trade Organisation (WTO)
IMF
The IMF channels loans from rich nations to countries that apply for help. In return, the recipient must agree to run free market economies that are open to outside investment. The IMF rules and regulations can be controversial, especially the strict financial conditions imposed on borrowing governments
World Bank
It lends money on a global scale. It also gives direct grants to developing countries. In 2014, it distributed a total of US$65 billion in loans and grants. The world bank also imposes strict conditions on it’s loans and grants.
WTO
It advocates trade liberalisation, especially for manufactured goods, and asks countries to abandon protectionist attitudes in favour of untaxed trade. However, they have failed to stop the world’s richest countries, such as UK and USA, from subsidising their own food producers, which is harmful to farmers in developing countries who want to trade on a level playing field.
Attitudes and actions of national governments
Free-market liberalisation: It involves removing price controls, breaking up monopolies (e.g. trade union monopolies of labour supply) and encouraging competition - including foreign competition, which increases efficiency further and promotes globalisation.
Privatisation: Successive UK governments have led the way in allowing foreign investors to gain a stake in privatised national services and infrastructure. Over time, ownership of many assets have been passed overseas e.g Keolis owns a large stake in southern England’s railway network.
Encouraging business start-ups: Methods range from low business taxes to changes in the law allowing both local and foreign-owned businesses to make more profit.
Trading blocs
Voluntary international organisations that exist for trading purposes, bringing greater economic strength and security to the nations that join
