lecture 1 & 2

Question 1

hisotory of globalisation

when was the first wave of globalisation

Answer 1

1870 - ended with ww1

Question 2

history of globalisation

what was in the first wave of globalisation

Answer 2

• Development of steam power, iron making and textile manufacture - reduction in transportation costs and trade barriers - productivity, specialisation - lower unit costs of production and the development of world trade
  • World bank; trade nearly doubled and foreign investment into developing countries tripled - africa, asia and latin american
  • Migration across the world;
  • 60 million from europe to the new world - USA, canada, austrialia and new zealand
  • Within asia ; from china and india to sri lanka and south east asia
    = total migrant nearly 10% of the worlds population

Question 3

history of globalisation

what was global stagnation

Answer 3

Protectionism as dominant economic policy - USA, germany, UK,, franc, italy, japan
Raising tariffs - restricting imports - decreasing world trade
Deepening depression - raising unemployment, decreasing social stability

Globalisation is not an irreversible process; economic integration (trade) took several steps backwards in this period

Question 3

history of globalisation

when was
(global stagnation)

Answer 3

1914 - 1945

Question 4

history of globalisation

whe was the second wave of globalisation

Answer 4

1950 - 80

Question 5

history of globalisation

what happened in the second wave of globalisation

Answer 5

• Integration among the industrial countires - incl geramny and japan
  
  • Multilateral trade liberalisation negotations - the general agreement on trade and tariffs eg WTO
  • Economic growth
  • Social stability and trend towards greater income equality aided by social welfare policies and programmes eg NHS IN UK
  • Most developing economies still isloated, concentrated on exporting primary commodities and pursing inward oriented polcies
  • The gap between the rich developed and the poor developiung econoies widened

Question 6

history of globalisation

when was the third wave of globalisation

Answer 6

since the 1980s

Question 7

history of globalisation

what happened in the third wave

Answer 7

• Technological advances in computing, telecommunications and transportation and internationalisation of corporations in search for new customers, cheaper resources and skilled labour
  
  • The golden ear for developing coutires:
  • Share in global exports of manufactured goods; from less than 25% in 1980 to 80% in 1998
  • Economic growth per capita eg china, india, brazil, malalysia and indonesia - exceeding developed economies since 1990
    Narrowing the gap between the developed and the developing economies

Question 8

defining globalisation

rough defintion

Answer 8

the declie in costs or barriers to doing business or otherwise interacting with other nations - integration of markets for goods, ideas, capital and labour

Question 9

defining globalisation

what are 4 areas of globalisation

Answer 9

• economic - global presence of business intergration of financial insitutions, emergence of international competition
• political - distribution of politico-eco power, loss of national sov, presence of global institutions
• cultural - more frequent exchange of culture through cheap travel, tv, networks, communications, increase trade of culutral goods
• tech - global commuication tech, global transportation tech, speed ad frequency of tech changes

Question 10

opp and threats of globalisation

what are the 4 opportunities of globalisation

Answer 10

• market access
• financial intergration
• reductio in commuication and transportation costs
• global sourcing, purchasing, production

Question 11

opps of globalisation

what is market access

Answer 11

• trade liberalisation by GATT (2/3 tariffs reduced) WTO (tariffs 40 to 5% plus non tariff barriers) , ETA
• many countries joining world trade after political changes
• new opps for consumers, businesses, govt
• increasing competition, productiivty and quality of goods - reduced prices

Question 12

opps of globalis

financial integration

Answer 12

free movement of capital to support exchanges
- portfolio capital - short term loans eg between banks in diff countires
- foreign direct investment FDIs - long term holding to est influence on local firms eg east eu, east asia

Question 13

opps of globalisation

reduction in communication and transportation costs

Answer 13

• increasing integration ands interdependence of countries, influencing businessa and daily lives

Question 14

opp of globalisation

global sourcing, purchasing and production

Answer 14

• caused by increasing complexity in product design, production and logistics
• outsourcing production to target national market or regional block

Question 15

example of global sourcing

Answer 15

• the boeing dreamliner; japan, italy, south korea, france, sweden, india, USA, UK
• ikea - sourcing products from the low cost local suppliers
• toyota can be designed in japan, components sourced in se asia then shipped to Kolinin the crezch republic for assembly before shipping to the us for sale

Question 16

threats of globalisation

Answer 16

• macroeconomic volatility
• globalisation of competition
• the growing anti-globalisation sentiments

Question 17

threats of globalisation

macroeconomic volatility

Answer 17

• volatility of short term capital; flows large fluctuations in foreign exchange and interest rates; difficulties to manage long term borrowing, fincial risks and market expansion
• erratic speculations - sudden shifts of investor sentiments and of capital app 95% of international capitial flows are speculative
• increased vulnerability of national economies to global macroeconomic volatility
• eg financial crisses with catastrophic economic repercussions eg 1973 OPEC crisis, 2008-10 crisis)

Question 18

threats of globalisation

globalisation of competition

Answer 18

• dominance of global brands in some industries eg retail
• intensification of competition in others
• response; leverage core competence in responding to consumer needs ;
• speed of repsonse is crucial in knowledge -based competition
• each part of supply chain needs to add value

Question 19

threats of globalisation

growing anit globalisation sentiments

Answer 19

• anti globalisation demonstration at international meeting
• globalisation seeen as mis used to justify and legitimise free market capitalism that benefits rich MNCs and TNCs example lobbying of car manufacturers or pharmaceutical companies

Question 20

globalisation has been blamed for intensifying

Answer 20

• global poverty and economic disparities
• environmental problems

Question 21

globalisation blamed for intensifying

global poverty and economic disparities

Answer 21

• systematic exploitation of cheap labour
• protectionism of rich countires eg non tariffs barriers

Question 22

glob blamed for intensifying

environmental problems

Answer 22

• climate change, resource depletion, food and energy insecurity

Question 23

global environmental problems examples

Answer 23

• environmental pollution and climate change acceleration (dirty production)
• inducing overconsumption and creating waste management problems (disposed products and packaging)
• resource depletion and loss of biodiversity

Question 24

other global environemntal problems

Answer 24

• climate change;
• most discussed but least quantitatively understood global issue
• economic perspective; related costs make 2% of GDP in developed and 9% in developing countries (reliance on natural resources)
• additonally damages from potential large scale catastophes, loss of biodiversity, impact on human health

climate change and food security
- hunger and malnutrition remain widespread and persistent in developing countries, esp sub saharan africa
- progressive loss of cultivable lands, degradation of coastal areas and shortage of fresh water - affecting livelihood and increase possibilties for conflicts over scarce reosurces