Human - Global systems and governance Flashcards
Define Globalisation.
The increasing connections between places and people across the planet.
Connections are established through trade, politics and cultural changes.
Helped by technology and transport…
What are the 5 FACTORS in globalisation?
1) New Technologies, communications and information systems
2) Global financial institutions
3) Transport systems
4) Security
5) Trade agreements
How is technology a factor in globalisation?
Communications have improved so that ideas can be transferred
How are global financial institutions a factor in globalisation?
- Flow of economic commodities
- Labour flows to areas experiencing economic growth
How are transport systems a factor in globalisation?
- Multiple modes of transport connect many parts of the world
- Labour (people) and goods can be moved over great distances
What is time-space compression?
The ‘compression’ of distances because travel times have decreased
Who theorised tine-space compression?
David Harvey
How is security a factor in globalisation?
- Borders are more fluid
- Cyber security, costing the UK £1.5 million / year
How are trade agreements a factor in globalisation?
- Allows for economic growth with competative advantages
- WTO has facilitated this since est 1994
How many pages are there in the WTO agreement?
26000!
What proportion of world trade does the WTO oversee?
97%
What are the 3 dimensions of globalistion?
1) Economic
2) Cultural/Social
3) Political
What is an additional (4th) dimension of globalisation which has emerged more recently?
Environmental
What are ‘dimensions of globalisation’ also called?
Forms of globalistaion
In what ways is there an economic dimension of globalisation?
- More free trade
- More TNCs
- Fast+cheap transport
In what ways is there a cultural dimension of globalisation?
- Migration (facilitated by transport)
- Impacts of media
In what ways is there a Political dimension of globalisation?
- Western democracies exerting more power in developing countries
- Fall of USSR, more free market economies
How can globalisation be measured?
With the KOF system
When was the KOF system established? How often is it used?
2002
Measured every year
How does the KOF system measure globalisation?
Monitors and quantifies globalisation, focusing on economic, social and political factors
Define dimensions of globalisation.
Changes occurring (distance, depth and velocity)
What is Disneyfication?
The cultural elements of Disney (or other media) can be witnessed worldwide
State 2 ‘bad’ outcomes of globalisation.
1) Outsourcing of industries to Asian countries
2) Some languages have dies out and cultures are abandoned by younger generatioons
State 2 ‘good’ outcomes of globalisation.
1) UN peacekeeping missions and ratification of states
2) Glocalisation is combating globalisation
What is the global standard?
The ability of info to be distributed worldwide with technology. Information can be distributed in real-time
What exemplifies the global standard?
The cost of telephone calls between London and NY falling by 99% since 1930
By how much have international exports increased by in the last 60 years?
A 30-fold increase
How much has Foreign Direct Investment (FDI) increased since 1970?
$13 Billion 1970
$1.8 trillion today
How many multinational corporations are there?
Over 70,000 - 10X the number 30 years ago
What does ‘McWorld’ mean?
The effect of western culture becoming increasingly dominant, destroying cultural diversity
What is counter-globalisation?
The backlash against globalisation (in a variety of countries). People try to return to local and regional traditions
What countries have not benefited from globalisation?
Sub-Saharan African countries becoming undercut by foreign goods
What countries have benefited from globalisation?
Developed countries with manufacturing competition from NICs
What 3 things have made it possible for companies to sell worldwide?
1) New technologies
2) Decreasing transportation costs
3) Liberalisation of international trade
Why has politics been affected by globalisation?
International issues are not affected by borders, such as climate change, finance and terrorism.
Requires collective support
Name the 5 flows.
1) Flows of products
2) Flows of Capital
3) Flows of services
4) Flows of information
5) Flows of labour
What is the “core-periphery model”? Who developed it?
The idea that there was a flow of capital between “core” western countries and a “periphery”, LEDCs
Developed by Willerstein
Why is the “core-periphery model” outdated?
BRIC and MINT countries and other NEEs means that there is a continuum of development
What are the BRIC(S) countries?
Brazil, Russia, India, China (and recently South Africa)
What are the MINT countries?
Mexico, Indonesia, Nigeria, Turkey
When were the MINT countries established?
Est. 1990
What links the flows of labour and capital?
Remittances
Also trading blocs
Why does labour flow less easily than finance?
Physical restrictions are in place on movement (immigration restrictions)
Where is the majority of movement of labour taking place (think scale and time)?
Majority is WITHIN countries
What are remittances?
Payments sent home by economic migrants from a ‘host nation’ to a ‘source nation’
How important are remittances for some countries?
Very…
40% of GDP in Tajikistan and Somalia comes from remittances
How can remittances can benefit host countries?
50% of workers in Qatar are migrants - reinforcing host nation economies
Were remittances affected by the 2008 recession?
Not really, certainly less so than FDI. This is a major benefit
What are the 3 benefits of remittances?
1) Supports host nation economies
2) Supports source nation economies
3) Boosts regional economies
How can remittances cause divides within countries or regions?
‘Brian Drains’ such as the North-South divide in the UK
How can an over-reliance of remittances negatively-impact source countries?
Family members of those working abroad stop working
Why do remittances sometimes not work (-VE)?
Banks in host nations may block the flow of capital back to source countries.
This has occurred with terrorism in Somalia
What are economies of scale?
- A cost-saving strategy adopted by TNCs and large companies.
- The cost is spread out by having larger factories with larger outputs
What is marketing?
The process of promoting, advertising and selling products or services
What is global marketing?
What occurs when a company becomes a global marketer - viewing the world as one single market
How does global marketing occur? (4 points)
- A brand is chosen
- Some products sold in the same way worldwide
- Creates economies of scale
- The product is adapted to suit regional market places
Give an example of a company which does global marketing. In what ways does it do this?
Coca Cola
Same product is sold but in different sizes depending on regulations in place
What is glocalisation?
When goods are produced for local markets by adapting products or branding used
What is an example of glocalisation?
Walmart in China - stores in Shenzhen sell more vegetables and chicken feet, unlike in the USA
How many Walmart stores are there worldwide?
11,000
What percentage of products sold in Walmart China come from China?
85% from >14,000 Chinese suppliers
Where does labour flow between?
From S. Asia, Africa and Latin America to N. America and the EU
Also oil-rich Gulf states too due to construction industry booming there
Where is the majority of labour moving?
Within countries or regions (small scale)
Are migrants poor?
No. Often have some education and financial means
Between 2005 and 2010, how many workers moved from South Asia to West Asia?
5 million
The majority of immigration is from LEDCs to MEDCs. Why, therefore do some people migrate from HEDCs to LEDCs? (3 points)
- Sometimes there are job opportunities in NEEs
- Jobs may suit an individual’s profession
- More opportunities in trade and finance
How is the flow of products facilitated?
Trade costs are reduced
What 3 methods can be used to reduce trade costs in order to increase the flow of products/
1) Improve data flows to reduce transaction costs
2) Reduce transport + time costs, CONTAINERISATION
3) Lower tariffs (WTO)
What is the flow of services?
Economic activities which are traded without the production of material goods.
Includes financial and insurance services
How are flows of services subdivided?
- High-level services to business in HICs
- Low-level services to consumers such as Banking and tourism
What does the flow of services depend on?
Depends on:
- Communication
- Information transfers (flows of info…)
- Existing ties, such as call centres in India
Why are service-sector companies ‘footloose’?
They can locate anywhere - not confined by resources or factories
What is the flow of information?
The spread of data and communications transfers
What has the flow of information enabled in the last 50 years?
- The transfer of cultural ideas and language
- Improvements to Research and Development (R&D) for service-sector companies
In 2002 where did the majority of GDP flow between?
USA and EU (a bit to East Asia)
Just 1% of GDP
What has happened to the flow of GDP since 2002? (3 points)
- Proportion of global GDP being transferred has decreased
- Absolute value of GDP flows between US and EU has increased
- More flows established, more interconnectedness
How much ‘wider’ are data bandwidths now compared to 2005?
Much higher. In 2005 500-1000 gigabits/s now >20,000 between US and EU
Name 3 inequalities in the global export of goods and services.
1) Majority performed by HICs >60%
2) 30x more trade by HICs than Sub-Saharan African countries
3) HICs have 47% more regional purchasing power than Africa
What is Capital?
Money
What are ‘core areas’?
Economically important areas, attracting investment, capital and people (HEDCs)
What are ‘periphery areas’?
Poorer areas experiencing exploitation, economic leakage and out migration (LEDCs)
What is aid?
Money provided to countries or regions for support or help. Can be given directly (money) or indirectly (infrastructure)
What is FDI?
Foreign Direct Investment made by overseas governments, businesses or individuals (agents of change in globalisation… CP!)
What is repatriation of profits?
Capital sent back to HQs from host countries by TNCs .
AKA ECONOMIC LEAKAGE
How many containers are there in the world?
17 million
How much pollution from ships takes place in the northern hemisphere?
85%
What percentage of climate change has been attributed to shipping?
4%
What method of transporting goods was used prior to containers?
Goods were loaded off lorries/trains onto ships piece-by-piece
Why has containerisation been so efficient?
- Consistent: All containers are the same size
- Flexibility with boats, lorries and trains all compatible
- Goods are secured, less chance of theft/sabotage
How much faster is the transportation of goods with containers?
1.75 times faster
What 4 factors affect the locations of container ports?
1) Access to road and rail infrastructure
2) Other infrastructure such as cranes and warehouses
3) Deep, wide harbours
4) Proximity to industries the goods are exported to
What percentage of container traffic originates in China?
26%
What percentage of containers are made China?
97%
In what ways are containers connected to globalisation?
Containers are both a cause and (increasingly) an effect of globalisation
(The ‘effect’ is due to production more in China)
Who invented containers?
US truck driver Malcom McLean
When were containers first used?
1956
What are the 2 standard sizes of container?
20ft and 40ft
Name a port that has been redesigned to allow for containers to be used.
Liverpool
How many containers does Felixstowe handle each year?
2 million
What are containers measured in?
TEU: Twenty-foot equivalent unit
Why is Felixstowe the UK’s main container port?
- Close to London with good road + rail links
- Deep harbor
In what form does the majority of the UK’s trade with the EU take?
ro-ro ferries to Dover, Harwich and Portsmouth (46% trade)
What are the dimensions of the largest container ships?
ULTRA LARGE CONTAINER VESSELS:
- 400m long
- Capacity for 15,000 TEUs
What is a major obstacle to container trade on Ultra Large Container Vessels (ULCVs)?
The Panama canal
What is the maximum-sized ship used on the Panama canal?
5,000 TEU
Why is the container ‘bottleneck’ of the Panama particularly concerning?
The large lakes along the canal are drying up more frequently due to climate change and water exploitation
What is being done to widen the Panama canal?
Some sections are being widened in a $5 billion project which will allow Ultra Large Container Vessels (ULCVs) to use it
What fuel do large ships use? Why is this bad?
‘Bunker fuel’ is used, very viscous and produces 2000x more Sulphur than car diesel
What is London Gateway (CONTAINERISATION)?
A new port facility on the northern bank of the Thames on the site of an old oil refinery
Who funded the London Gateway port?
Dubai Ports World, a UAE company
How many deep-water berths will the London Gateway provide for large container vessels?
6 deep-water berths, a capacity of 3.5 million TEUs
Why is the London Gateway container port appropriately positioned?
- It has access to north, south east and west routes via 8-lane motorway
- 30% of port traffic will go by rail to destinations
What is the new container port being built at Liverpool called?
Liverpool2
How many trips a year do containers make?
200 million
What percentage of container ship pollution is within 400km of land?
70%
What is the busiest container port in the world? How many TEUs did it handle in 2012?
Shanghai
Handled 34,500,000 TEUs (Twenty-foot equivalent units) in 2012
What is the difference between ‘ro-ro’ and ‘lo-lo’ shipping?
‘ro-ro’ = Roll on and off (lorries at Dover)
‘lo-lo’ = Loaded on and off by cranes (Felixstowe)
What is the international division of labour?
How labour has become divided internationally due to globalisation into SKILLED and UNSKILLED workers
What are NICs?
Newly Industrialised countries, such as Tiger economies, BRIC and MINT countries
What are the tiger economies?
Hong Kong
Singapore
South Korea
Taiwan
Where was the majority of manufacturing in the 1950s?
In Western Europe, USA and Japan (95%)
What is the global shift (changes in patterns of manufacturing)?
The movement of manufacturing sectors to NICs in Asia by TNCs because of low labour and land costs
What is a major disadvantage of the ‘global shift’?
- Deindustrialisation in MEDCs
- Structural unemployment
- 50% of manufacturing jobs in the UK have been lost since 1983
Why did deindustrialisation occur in MEDCs?
The GLOBAL SHIFT caused Asian-produced products to be much cheaper than domestic products, undercutting them
What 4 factors affect the locations of industries?
1) Skilled + educated workforces
2) Land, resources and infrastructure
3) Government incentives (Tax breaks)
4) Access to large markets (trade agreements)
What region used to be the main ‘consumers’?
Wealthy citizens in the developed world
How has consumption changed?
More NICs are also consuming
What will happen to consumption in the future?
More consumption in Asia, so more products flowing within the region
What is international trade?
The exchange of capital, goods and services across intl borders
Name 3 advantages of intl trade.
1) Increased employment due to multiplier effect in NICs
2) Comparative advantages
3) Purchasing power due to more competition (race to the bottom)
What is purchasing power?
The increased ability to afford commodities, occurring due to competition to lower prices
Name 3 disadvantages of intl trade.
1) Loss of skilled labour
2) Product dumping
3) Exploitative labour
What is product dumping?
When a product is sold in a foreign market at a very low price
Give an example of a location which has benefited from intl trade.
Songxia, China
AKA Umbrella city
What percentage of umbrellas are made in China?
70%
How do umbrella manufacturers in Songxia increase profits?
- Cheap labour costs
- Government support
- Specialisation to ensure a competitive advantage
- Production lines on economies of scale
- Access to markets (East coast of China)
How many people are employed in Songxia?
40,000
What has Songxia done to create a sense of place?
Held umbrella festival yearly since 2003
What is free trade?
Frictionless trade enabled by removing restrictions
Give an example of tariffs to protect domestic industries.
Britain’s use of Tariffs in the 19th century to help protect textile industry from Indian competition
How was the Indian textile industry destroyed?
Tariffs on Indian goods were 25x higher than on British goods
How much is the US peanut industry worth?
> $4 billion
Give an example of a commodity that has suffered as a result of liberalisation of trade.
Peanuts in senegal
What are ‘trade deterrents’?
The idea that trade between countries can help prevent wars starting
What statistic exemplifies inequalities of world trade?
The poorest 49 countries only account for 0.6% of intl trade
By how much has the value of global exports increased by since 1948?
310x
What is a trading bloc?
- Associations between different governments that promote and manage trade.
- Trade barriers between the countries are removed.
- A common barrier created for external countries
What country could be seen as an anomaly of international trade?
Why?
India.
Like China, India has a very large workforce, yet it does not export so much goods
TRUE or FALSE?
All trade blocs are based within geographical regions?
FALSE
Whilst they are generally geographically regional, some are not
OPEC is based on oil industry
How much money does NAFTA generate?
$20.8 trillion per year
Name 3 advantages of NAFTA.
1) Trade between the 3 countries has quadrupled
2) US and Mexico oil prices have decreased, so less reliance on Middle East oil
3) 5 million US jobs
What does NAFTA stand for?
North American Free Trade Agreement
Name 4 disadvantages of NAFTA.
1) 750,000 US jobs lost
2) Mexican farmers are out of business
3) Mexican workers have resorted to the Maquiladora program
4) 65% of US businesses threatened to move to Mexico
What are 6 key policies of the EU?
1) A single market
2) A monetary union
3) Agriculture
4) Infrastructure
5) Regional Development
6) The environment
Name 4 arguments against the EU
1) Share of resources (fishing)
2) Migration tensions
3) Fears of lost sovereignty
4) Pressure to adopt central legislation
What are the 2 types of free trade agreement?
1) Internal agreements (more internal free trade)
2) Restriction on trade outside the bloc
What are the global advantages of Trade Agreements? (2 points)
1) Reduce conflict
2) Increased cooperation on trade
What are the regional advantages of Trade Agreements?
1) Increase regional importance in terms of governance
2) People seeking work can move between countries (but does cause brain drain!)
3) Supports specialist sectors of state economies (eg agriculture in the EU)
4) More R+D
Name 2 trading blocs other than the EU and NAFTA.
1) Arab league
2) Caribbean community
FLOW OF LABOUR
How many Polish workers have moved to the UK since 2001?
600,000 since 2001
When did BAE close in Portsmouth?
2013
How many jobs were lost when BAE closed in Portsmouth?
1800 jobs
What does HDI stand for?
Human Development Index
What are RICs?
Recently Industrialised Countries
Countries that have undergone industrialisation more recently than NICs (Newly-…)
Example: Mexico
What country is ranked last for HDI globally?
Niger
What are Centrally Planned Economies?
An economic system which believes that external markets are unsuitable so a central authority makes decisions
Eg North Korea
When did the Tiger Economies grow? Why?
In the 1960s due to Japanese TNCs relocating workforces there
How does Hong Kong rank in terms of FDI?
3rd highest recipient of FDI worldwide
By how much did GDP grow in Hong Kong 1960-1997?
180X !!
What unique aspect of Hong Kong allowed for manufacturing growth?
The British colonial manufacturing system was very efficient
Where is Apple HQ?
Cupertino, Silicon Valley, CA
Give 4 key facts about Apple.
1) Second largest IT company in the world
2) Most economically-successful brand in the world
3) 3rd Largest phone manufacturer
4) Largest music retailer worldwide
How much is Apple worth?
$150 billion (highlights inequalities of globalisation)
In how many countries does apple have stores?
24 countries, but sold in every country
What percentage of Apple’s products are manufactured in China?
95%
Where in China does Apple produce its products?
Shenzhen and Zengzhou, latter called ‘phone city’
What company does Apple outsource to produce its products in China?
Foxconn
What is Apple’s intl division of labour?
- Products assembled in china by low-paid, unskilled workforces
- Bluetooth chips are designed in Cambridge UK by highly-paid, skilled workforces
When was Apple founded?
1976
How has apple successfully become a familiar household brand?
- The logo has continually changed over time
- The brand of ‘i-…’ and ‘Macs’ has become familiar
What catchphrase has Apple used to sell products?
“Think Different”
What company has apple entered competition with recently?
S. Korean Samsung
Why has Apple been criticised?
- Lack of innovation
- Environmental impact
In what ways does Apple have a poor environmental impact?
Small scale with pollution in Chinese factories
Large scale with (until recently) non-recyclable plastic components (PVCs)
How much of Apple’s energy does it claim is from Renewable sources? Why is this figure incorrect?
- 75% is claimed to be from renewable sources
- Incorrect because it does not account for outsourced companies emissions etc…
Name 3 pollutants Foxconn releases during production
1) NOx
2) Particulates
3) VOCs
What steps has Apple made to become more environmentally sustainable?
- PVCs banned in products
- 70% recyclable
How have Apple products benefitted LEDCs?
Nations such as Kenya have leap-frogged onto the world stage with mobile phones etc
What has recently reduced Apple’s profits?
The US-China trade war
Will Apple continue to thrive in the future?
Possibly not. Workforces in NICs and China could demand higher wages, so it may have to mechanise or relocate centres of production
How did western countries grow manufacturing sectors?
Fordism allowed for SYNCHRONISATION, PRECISION + SPECIALISATION with assembly lines
Give an example of a place in the UK which underwent deindustrialisation.
The London Docks (link CUE + CP)
How many jobs in London have been lost in the last 30 years?
600,000 (includes Stratford and London Docks)
What proportion of jobs in London are now in the Manufacturing sector?
6%
Why did the London Docks thrive in the 1940s-60s?
Close proximity to trading opportunities
The Thames Gateway container port hopes to recreate this opportunity
Why did manufacturing decline in London? (4 reasons)
- Manufactures became less competitive following the global shift
- Less trade with the British Empire
- Oil crisis made manufacturing the capital less cost-effective in the 1970s
- Poor management by agents of change with a top-down approach
Why was the loss of manufacturing in London and other parts of the UK such an issue?
The loss of a key ENDOGENOUS FACTOR caused:
1) Spiral of decline
2) More crime
3) Dereliction
How much of the world’s steel did the UK produce in 1870s?
40%
How much of the world’s steel does the UK produce now?
0.7%
How many times was the UK steel industry nationalised between 1949 and 1990?
Twice
What has globalisation caused in India?
- More economic segregation of minority groups
- More rural -> urban migration
What is the ‘Washington Consensus’ model of globalistion?
- The idea that the US controls world trade.
- When a loan is given conditions are made
- Freedom in LEDCs like India is reduced
- ‘unjust’ trade
What are global systems?
Systems which have emerged to ensure environmental, political, economic, financial and cultural facilitation with the independence that exists in the contemporary world (from globalisation)
Name 5 global institutions.
1) World Bank
2) IMF
3) UN
4) TNCs
5) WTO
What is the IMF (International Monetary Fund)?
An organisation of 188 countries who work to promote financial cooperation between countries to reduce poverty. Promotes trade + high employment
STABILITY
What is the UN (United Nations)?
- A global institution promoting the development of poorer nations through the IMF and World Bank.
- Known as the “Guardian of International Peace”
- Has many groups focusing on politics, economics and the environment, the latter including the ICZM
What is the WTO (World Trade Organisation)?
An international organisation which deals in the rules of trade between countries. Desires more free trade
How many countries are members of the TWO?
What % of these are developing countries?
160 members
70% LEDCs
What is the World Bank?
An important source of financial and technical assistance to developing countries, aiming to reduce poverty
SUPPORT
What is a criticism of the IMF?
Imposes cuts on education and welfare in countries receiving support
What is a criticism of the World Bank?
Conditions are attached to loans, preventing countries from fulfilling success
What is a criticism of all global institutions?
Global institutions often have HQs in MEDCs, so there are uneven interests
What have the World Bank and IMF done to be less top-down?
Both organisations adapted in the 1990s to be more bottom-up, consulting insiders
What was the WTO previously called?
The “General Agreement on Tariffs and Trade” (GATT)
How has the WTO been successful?
- Holds ‘rounds’ such as the Uruguay and Doha rounds
- Liberalisation of trade has allowed goods to be traded more rapidly at a cheaper price
What is an issue with the WTO?
- The rounds can be difficult to agree on.
- Doha round ended with talks in Geneva because the US and EU did not want to give too much capability to China and other NICs
- LEDCs cannot imppose tariff to protect less wealthy farmers, such as peanut farmers in Senegal
What statistic sums up global inequality?
The richest 62 people are as wealthy as 1/2 the world’s population!
What is outsourcing?
A cost-saving strategy adopted by TNCs whereby companies are sub-contraced to produce in NICs (in a ‘host country’)
What two types of inequality need to be considered with globalisation?
Inequality;
Between countries and within countries
What does geopolitics concern?
Political tensions over geographical space and time
Recently made a comeback with Middle East and Ukrainian conflicts, also China’s hosilites
Why is China expanding into the South China Sea?
30% of world trade passes through the region, so China will be able to counter-act the USA’s presence in the region
China is in an arms race with the US for dominance in the region
When did China establish military bases in the S. China Sea?
in 2014
How many island has China constructed in the SCS?
7 islands, some with military bases
Why is China’s behavior in the SCS worrying?
- Undermines international law
- Intimidates neighbors
- Increased potential for conflict
How many nations border the S. China Sea?
14
What 3 general methods have been proposed to stop China’s expansion into the South China sea?
1) Legal
2) Diplomatic
3) Military
Why is diplomacy ineffective with China?
China only works with one country at a time, so conflicts such as the S. China Sea are hard to resolve because so many countries are involved
What project is China currently creating with other Asian countries?
A ‘new silk road’ or the BELT + ROAD INITIATIVE
What is the Yamal Megaproject?
A gasline running from the Yamal peninsula in Siberia to Europe
When was the Yamal Megaproject established?
1996
How much oil is the Yamal Megaproject set to transfer?
Could be up to 50 trillion cubic metres
Who benefits from the Yamal Megaproject?
The companies extracting oil (eg Gazprom), Russia and Countries in EU receiving the oil
Who are Nenets?
- Indigenous reindeer herders who have lived in Northern Russia for >1000 years
- Will be highly disrupted by the Yamal Megaproject
How has the Yamal Megaproject affected the native Nenets?
- Reindeer have become isolated with roads and industry
- 30 fisheries on the River Ob have been destroyed due to pollution
How many pipelines will the Yamal megaproject make?
2500
How much tundra has the Yamal Megaproject destroyed?
64,000km2 in 10 years
What is China’s occupation of the S. China Sea an example of?
Inequality and tensions between countries (directly)
What is the Yamal Megaproject an example of?
Inequality within countries with the Nenets loosing out
Will the Yamal Megaproject continue to create inequality within Russia in the future?
YES
More oil extracted will only contribute to GhG emissions, which will not only cause more permafrost to release CH4 and CO2 (+Ve feedback), but the Nenets will suffer more as their livelihood disappears
Highlights the inequlaities of unequal energy consumption because the Arctic is warming 7x faster than elsewhere
How much more does the richest 20% in the UK earn compared to the poorest 20%?
12 times more!
What is the Lorenz curve?
A graphical method of measuring inequality within and between countries
Why is the Lorenz curve useful for measuring inequality between countries?
The use of a graph allows for easy comparison
On the Lorenz curve, what represents perfect equality?
A diagonal line which is directly proportional
I Bangladesh more or less equal than the UK according to the Lorenz curve?
More equal
What is the Gini Coefficient
A ratio/index used to measure dispersion of a nations wealth
What does a score of 1 mean on the Gini Coefficient? What about 0?
1 = Complete inequality - all the income owned by one person 0 = Perfect equality
Name one country that has become more equal between 1980 and 2010
Brazil, had a Gini CoEf of 0.55 in 1980 but by 2010 it was 0.525
An anomaly - majority of countries have become more unequal
Why do nations trade?
Countries can make money by exploiting their ‘competitive advantage’
Name 5 forms of trade barrier
1) Voluntary export restraints
2) Import Licences
3) Import Quotas
4) Embargos
5) Tariffs
What are Import Licences?
Issued by national governments to allow specific goods to be imported by specific countries
What are import quotas?
Physical limits on the quantity of goods imported
What are trade subsidies?
Grants offered to domestic producers to lower the prices of products so that they are more competitive
What country uses lots of trade subsidies?
China, state offers grants to make manufactures more competitive
What are voluntary export restrains?
Diplomatic strategies used by exporting countries to importing countries to deter imposing trade barriers
Eg. Sort of with Saudi Arabia and arms provided by UK
What are embargos?
Partial or complete prohibition of commerce + trade. Used for Political, not trade purposes
USA and N Korea or Iran
What proportion of Tariffs are still in place now compared to the 1940s?
10%
What caused the number of trade agreements made through the WTO to drop?
The 2008 financial crisis - more uncertainty
What proportion of world trade goes through the G7 countries?
50%
What is fair trade?
A social movement whereby producers in LEDCs achive better working and trading conditions in order to promote sustainability
What sort of commodities does fair trade focus on?
Agricultural products and valuable minerals
What is Ethical investment?
A decision made by investors to pressure groups into conforming to social morals + environmental standards
Increasingly occurring with oil companies
How has NAFTA caused more inequality in Mexico (within a country)?
- There is more spacial inequality
- Prior to NAFTA in 1994 the economy of Mexico was evenly distributed
- Now the north rivals S. Korea’s economy whilst the south resembles poorer Honduras
- 70% of pop and 18% GDP is in the north
Why is more manufacturing taking place in the north of Mexico?
NAFTA has allowed for liberalisation of trade between the countries, so the north is within closer proximity to US consumers
What has the industrialisation of northern Mexico caused?
- A backlash - wealthier people are moving south
- BMW has located to Puebla in southern mexico to increase access to PAcific and Atlantic markets
Give an example of deindustrialization and structural unemployment caused by the global shift
The British Steel industry
How many people did Tata make unemployed in the UK?
8000 jobs, 1000 in 2019
By what % has manufacturing sector declined 1970-today?
20%, causing structural unemployment
Why can ex-steelworkers not find other forms of employment?
Some do not have the skills for service sector jobs
How could structural unemployment of the UK steel industry since the 1980s been averted?
More intervention by the domestic government to provide alternative jobs
What are the headline statistics on inequality within Port Talbot?
- 2.5% have ‘very bad health’
- 31% have no qualifications
- 22% on benefits
When was NAFTA est?
1994
What sort of factory in Mexico has a particularly bad environmental impact? (NAFTA)
Maquiladora factories on the US-Mexico border
What are Maquiladora factories?
Export-oriented factories which return profits to the USA. Very few environmental regulations in place
How many Maquiladoras are there on the US-Mexico border?
2700
How many infants went to hospital in northern Mexico between 1997-2001 for breathing difficulties? Why?
36,000
Due to more road haulage to the USA - inequality created by NAFTA
What is visible and invisible trade?
Visible = Goods which can be counted and weighed Invisible = Services exchanged, such as tourism
What are the 4 types of trade agreement, in order of most barriers between members to least barriers barriers between members?
1) Preferential Trade Area
2) Free Trade area
3) Customs union
4) Common market
What is a common market?
Almost full economic integration whereby ALL economic resources are traded with ALL tariffs removed
What is a customs union?
No tariffs between members, but a common external tariff in in place against external trade.
Trade is negotiated as a single bloc
What is a free trade area (FTA)?
> 2 countries agree to reduce/elminate barriers on ALL PHYSICAL goods
What is preferential trade area (PTA)?
Countries within a region agree to reduce/eliminate tariffs on SELECTED goods
What is an economic union?
- Free internal trade
- Movement of labour
- Common policies on:
Agriculture
Industry
Regional Development (EU)
What are the G7 countries?
USA Germany Japan UK Canada Italy France A group of countries with significant economic and financial manipulation capabilities
By how much has the trade in services increased by 2020?
$6 trillion
How much inter-regional trade will the EU circulate by 2020?
$7 trillion, $2 trillion more than in Asia
What countries are likely to become major trading nations?
Countries in Sub-Saharan Africa by 2020
What is FDI?
- Foreign Development Investment
- An important source of funding for development in ALL countries
- For LEDCs it allows a ‘jumpstart in economic growth’ by injecting capital
How much FDI flows in the world each year?
$1 trillion
How does FDI contribute to inequalities in globalisation?
Countries with large economies undergoing growth receive FDI, not the LeastEDCs
What attracts FDI?
- Forcast economic growth
- Natural resources (Mongolia)
- Size of pop
- Financial business services (Hong Kong)
- Accessible consumer markets
Which country receives the most FDI? How much?
USA, $250 billion /year average
What is TPP?
Trans-Pacific Partnership
A proposed trade agreement between the USA and Pacific nations including Australia and Vietnam (not China)
In what ways will TPP be beneficial?
- Exports will increase by >$300 billion/year by 2025
- Less wildlife trafficking
- More environmental regulations in place
How many tariffs will TPP remove?
18,000
In what ways will TPP be bad?
- Only benefits workers on good wages (protects patents + copyrights
- Possible disregard for the environment in Asian countries involved
- Profit-orientated
What is TTIP?
Trans-atlantic Trade and Investment partnership between EU and US to create free trade between the blocs
What does TTIP aim to do?
Reduce barriers on big businesses, food safety law and environmental legistation
‘Harmonise’ standards
How much will the EU and UK recive in TTIP is formalised?
EU = +$100 billion UK = +$10 billion
Why is TTIP difficult to negociate?
- EU wants to protect goods like UK Pork Pies or Italian Palma Ham
- Some standards cannot be ‘harmonised’, such as animal testing stances
- NHS may be sold
How could TTIP only benefit a minority in the UK?
Only 20% UK companies trade outside the UK, so only these will benefit - increasing regional inequality
How have TTIP talks been going?
Badly…
Failed in August 2016, the 14th round of negotiations
Brexit has slowed the process
What was Chinese ‘steel dumping’ in the EU?
In 2015 Chinese steel became too competitive, so sold at a lower price than it takes to produce
Why was China able to steel dump?
Chinese steel is state owned, so the government could subsidise it to sell abroad
How did Chinese steel dumping affect the UK?
- Tata closed factories in 2016
- UK government supported Tata in finding a buyer
- Direct conflict avoided with China so other projects, such as Hinkley point C could go ahead
What has the EU done to ensure that Chinese Steel dumping doesn’t occur again?
‘Anti-dumping’ regulations set up in 2015
What are ‘Terms of trade’?
The cost of importing goods into a country compared to the price at which they can sell goods they can export
How do terms of trade benefit HICs?
- HICs manufacture products and use primary products from LEDCs
- Price of manufactured goods has increased, however primary resources fluctuated
- HICs make more profit, LICs loose out - inequality
Why is China exploiting Africa?
Needs raw materials and primary resources to manufacture goods
What is an example of inappropriate Chinese influence? What happened there?
Collum Coal Mine, Zambia
- 11 people shot chinese mine managers in 2011 in protests
- The mine was closed in 2013 by the Zambian government because of poor ‘safety, health + environment records’
How do Polish immigrants benefit the UK?
Average age is 28, so have a lot of spending power
Why did the US pull out of TPP?
Fears over:
- Free trade may cause competition with the US
- TNCs undermine the US
- Fears over sovereignty
Why was Obama for TPP?
- Counteract the rise of China
- Help reduce tensions in S. China sea
Why are some people skeptical of TTIP?
A feature of the agreement is an ISDS which would allow TNCs to sue EU governments and taxpayers. This would limit company regualtion
When was phase 1 of the China-US trade deal signed?
15th January 2020
Who used to provide FDI and aid to African countries?
The west
Why is Chinese investment in Africa so popular?
China offers a ‘no strings attached’ development so African countries do not need to abide by human rights as a condition of investment
How much trade did China make with Africa in 2014?
$200 million, 2x the USA
Name 4 benefits of China’s involvement in Africa.
1) Social infrastructure improved
2) $5billion railways built
3) Infrastructure improvements to facilitate economic growth, particularly in manufacturing and service sectors
4) Help during 2014/15 Ebola crisis in Guinea
Why might the benefits of China’s role in Africa be short lived?
If China’s economy collapses, Africa’s economy collapses
What are 4 negatives to China’s role in Africa?
1) ‘No-strings aid’ investment in corrupt groups. China has not stopped Darfur conflict
2) Only employs Chinese citizens for some projects
3) Cheap Chinese goods are now being sold in Africa, undercutting domestic products
4) Possible use of aid to manipulate UN voting patterns
When was the category LDCs developed by the UN? Why?
1971 in order to provide LDCs with more support
What does a Special Differential Treatment (SDT) enable LDCs to do?
- Access to developed countries markets
- More of a right to restrict imports
- Additional freedom to subsidise exports
- Flexibilty regarding WTO rules
All ensures maximum profits from trade by LDCs
What are the 4 negatives of Special Differential Treatments (STDs)?
1) Not all LDCs are members of the WTO and as such cannot be granted SDTs
2) Some LDCs are unaware of STDs or don’t put it to good use
3) Not measures in SDTs prevent issues in LDCs
4) Could result in cheap imports flooding MEDC markets
What is a bilateral agreement?
An agreement on trade negotiated between 2 countries or groups of countries
What is a multilateral agreement?
An agreement on trade negotiated between >2 countries or groups of countries at the same time
What do SDTs enable? (3 points)
1) Tackles the structural handicaps of LDCs
2) Engaging world trade on a more advantageous level
3) Promoting income growth and development
Why do TNCs choose to invest/outsource in China instead of Africa?
African countries are too socially and economically ‘risky’ due to historical civil wars
What are G20 countries?
An intl forum of governments and bank governors from 19 countries and the EU
When was the G20 founded?
1999
What are the G77?
A UN body of 135 members created to promote economic interests
Started with 77 founding members but has since expanded to 135 in 2019, including China as a non-member
What is Mercosur?
- A trade bloc est. 1991
- Includes Bazil, Argentina, Uruguay, Paraguay and Venezuela
- Similar operation to the EU - a customs union
- EU and US are main markets
Name 3 internal issues of Mercosur
1) Brazil’s car industry became competitive in 1999, causing Argentina to impose tariffs (against the agreement)
2) Uruguay has complained about Brazil + Argentina trade talks
3) Venezuela’s membership has yet to be formalised by Paraguay
What is Pacific Alliance?
- A trading bloc formed in 2011
- Consists of Chile, Peru, Colombia and Mexico
- US and EU are economic targets
- Rapidly grown
What could happen to Mercosur and Pacific alliance in the future?
May merge
Why is Brazil in a ‘sticky situation’?
- Trapped in a dysfunctional Mercosur trade bloc
- EU talks have been ongoing for 18 years
Has the WTO lived up to its promise to put developing countries needs at the centre of intl trade negotiations?
NO
Developing countries have been sidelined
What 2 things does Fairtrade do?
1) Sets social and environmental standards
2) Certifies products and ingredients (checks standards)
Also improves the quality of some products
What are ‘alternative trading organisations’?
Groups that focus on the application of fair trade, such as Oxfam
