Globalisation EQ1

Question 1

What is globalisation?

Answer 1

The growing interdependence and interconnectivity of countries due to increase flows of goods, people, money, commodities, culture and information

Question 2

What does economic globalisation involve?

Answer 2

Growth of TNCs
Information and communications technology supports growth of labour firms –> more international economy
Online purchasing

Question 3

What does social globalisation entail?

Answer 3

International immigration
Global improvements in education and health
Social interconnectivity due to mobile phones and the internet

Question 4

What does political globalisation involve?

Answer 4

The WTO, IMF and the World Bank work to harmonise national economies 
Trade blocs (EU, Nafta)
Global concerns such as free trade and global response to natural disasters

Question 5

What does cultural globalisation involve?

Answer 5

Glocalisation
Americanisation/Mcdonaldisation
Circulation of ideas and information has accelerated

Question 6

Define “Shrinking World”

Answer 6

Distant places are starting to feel closer due to them taking much less time to reach because of technological developments

Question 7

What is the “Time-Space Compression”

Answer 7

Any phenomenon that alters the qualities of and relationship between space and time

Question 8

How have transport improvements helped to accelerate globalisation?
(with dates)

Answer 8

Jet air craft - Boeing 747 1960s
Steam powered ships and trains - 1800s
Railways - 1850s
Container ships - 1950s

Question 9

How have information and communication improvements helped accelerate the process of globalisation?

Answer 9

Telegraph and telephone - 1860s
Internet, broadband and fibre optics - 1980s and 90s
GIS and GPS - First GPS satellite launched 1970s
Social networks and Skype- Facebook 2004 1.8 bn users
Mobile phones - 1990s
Smart phone - 2005

Question 10

What are other factors (apart from communication and transport improvements) that accelerate globalisation?

Answer 10

Trade Blocs
TNCs- FDI and global shift
IGOs - (The Washington Consensus) WTO, World Bank and IMF
Global markets and free trade
Specialisation
Global media

Question 11

How has containerisation accelerated globalisation?

Including stats

Answer 11

Container ships developed in 1950s, allowing economies of scale to take hold and thus decreasing the costs of goods.
2015 - New cargo ship Globe arrived in Suffolk from China containing 19,000 containers.
In contrast, in 1990 the average cargo ship held just 4,000 containers
Every year, the UK sends 1.7 million tonnes of waste to China for recycling, mostly via shipping container

Question 12

What are the casual factors (drivers) of globalisation?

Answer 12

Communication
Technology
Transport
Global businesses (TNCs)
Removal of trade barriers

Question 13

What are the shifts and flows of globalisation?

Answer 13

Global shift of industry to the developing world
Increase in connectivity
Increased flows (money, people, goods)
Shrinking of space-time
Glocalisation

Question 14

What are the outcomes/effects of globalisation?

Answer 14

Increased consumer choice
Gain in job opportunity in some areas and losses in others
Poverty reduction
Exploitation/ sweatshops
Brain Drains (but also gains)
Global brands (+ local adaptations)\

Question 15

What is free trade?

Answer 15

When there are no barriers to trade and commodities move freely between countries. Removal of tariffs, quotas and subsidies.

Question 16

What are trade blocs?

Answer 16

Group of countries form an agreement where the movement of goods within the group is free. Tariffs and quotas are in place for countries outside of the block.
EXAMPLES: EU, ASEAN, NAFTA

Question 17

What is privatisation?

Answer 17

The transfer of ownership of a property or business from a government to a privately owned entity.

Question 18

What are SEZs?

Answer 18

Special economic zones in which the business and trade laws are different form the rest of the country. This aims to increase trade, increase investment, create jobs.

Question 19

What is FDI?

Answer 19

Foreign Direct Investment. When a nationally owned business or TNC invests in business interests in another country. I.e Nissan Japan investing in Sunderland UK

Question 20

What is trade liberalisation?

Answer 20

Government policies that promote economic growth by opening up trade to international markets, extending the use of markets and lessening restrictions and regulations on business that limit international trade.

Question 21

What does encouraging business start-ups involve?

Answer 21

They are entrepreneurial ventures which are typically newly emerged, fast-growing business which aims to meet a marketplace need by developing or offering an innovative product, process or service.

Question 22

What are three barriers to trade?

Answer 22

Tariffs = a tax placed on goods that are imported from other countries
Quotas = limit placed on the number of goods that are imported from other countries
Embargo = a ban placed on certain goods imported from other countries
Subsidies = a sum of money granted by the government to help an industry or business keep the price of goods low

Question 23

How do trade blocs support trade?

Answer 23

They remove tariffs between member states.
Create barriers for non-member states on imports which in turn increases the price of imports and helps to protect their own industry.
This has led to the rapid economic growth. I.e in NICs
Some blocs subsidise their produces e.g EU subsidise their farmers

Question 24

What are the benefits of trade blocs?

Answer 24

• Removal on internal tariffs –> allows acces to largers markets to buy and sell goods and services. E.G 2004 (eu expansion) Tesco gained access to 75m new customers in Eastern Europe
• Merging of national firms to form TNCs which can compete globally
• Protection from foreign competitors E.G EU blocked £50m of Chinese clothes entering the UK in 2007 as Chinese quota had been filled
• Increased political stability through cooperation. E.G 2012 EU received Nobel Peace Prize for six decades of the advancement of peace and reconciliation
• FDI from member states but also non member states who want to invest to avoid tariffs, E.G Nissan Car plant in Sunderland gives the Japanese’s car manufacturer tariff free access to the EU
• Aid: In the EU, members are eligible for EU Structural Funds to help develop their economy
• Competition and specialisation leads to higher quality and cheaper good for consumers, increasing living standards

Question 25

What are the costs of trade blocs?

Answer 25

• Loss of sovereignty as more integrated trade blocs like the EU will handle human rights, crime and justice, migration and environmental issues etc. Reduces power of member states independently
• Interdependence: trade blocs encourage specialisation so disruption to production can have consequences for member nations. E.G cold winter temp in Southern Spain in 2017 reduced supply of broccoli and courgettes
• Over specialisation: if demand for a good declines in a nation that has been encouraged to specialise it, their economy is vulnerable to loss of trade revenue
• Loss of national business and jobs: removal of tariffs results in less competitive domestic firms losing market share to business from within the bloc, resulting in the closure of some industries
• Limited trade outside of bloc –> consumers have to pay higher prices for this

Question 26

What prompted the acceleration of trade in the 20th century?

Answer 26

After WWII Western allies viewed trade as crucial for growth and international relations

Question 27

What was Bretton Woods?

Answer 27

In 1946 at Bretton Woods in the USA two international organisations were created; the IMF and the World Bank. These promoted free trade and provided confidence in global trading. These two IGOs conform to the Washington Consensus

Question 28

When was the GATT created and what did it become?

Answer 28

The General Agreement on Tariffs and Trade was created in 1947, whereby member nations agree to reduce barriers to trade. In 1995 the GATT was replaced by the WTO

Question 29

What is The Washington Consensus?

Answer 29

A set of 10 economic policy recommendations e.g Lower tax rates, trade liberalisation, privatisation of state enterprises

Question 30

What is the IMF and its role in globalisation?

Answer 30

The International Monetary Fund (based in Washington DC) channels loans from rich nations to countries that apply for help. In return this country must agree to run a free market economy, open to outside investment. The USA exerts lots of influence over IMF even though it has always had a European president
Evaluation:
IMF rules and regulations can be controversial, especially the strict financial conditions imposed on borrowing nations, they may be required to cut back on healthcare, education etc

Question 31

What is the World Bank and its role in globalisation?

Answer 31

The World Bank lends money on a global scale and is headquartered in Washington, Dc.
E.G In 2014 US$470 million loan was granted to the Philippines for a poverty-reduction programme.
The World Bank also gives direct grants to developing countries (in 2014 help was given to DRC to fund mega-dam project)
Evaluation:
The World Bank distributed US $65 Billion in loans and grants in 2014. However, like the IMF, the World Bank
imposes strict conditions on its loans and grants.

Question 32

What is the WTO and its role in globalisation?

Answer 32

Took over GATT in 1995. Based in Switzerland and advocates trade liberalisation, and asks countries to abandon protectionist attitudes in favour of untaxed trade. E.G
China was persuaded to lift export restrictions on “rare earth” minerals in 2014)
Evaluation:
The WTO has failed to stop world’s riches countries (e.g US and UK) from subsidising their own food producers. This = protectionism and is harmful to farmers in developing countries who want to trade on level playing field.