M20 Flashcards
What is the meaning of economic globalization?
Huge transaction volume of goods and services across countries, greater labour mobility across countries, rapid flow of capital, information and technology
What are the factors leading to economic globalization?
Political changes, technological changes, economic changes.
What are the political changes?
Government policy like removing trade bars, attractive immigration policies to attract foreign workers, international cooperation like joining international organizations.
What are the technological changes?
Advancement in Telecommunication like monitoring production plants all over the world and investing in global market. Advancement in Transportation like large carriers can reduce time and cost.
What are the economic changes?
Development of IFCs like more ways to raise funds, more markets to invest, more job opportunities. Development of Multinationals like global production mode which bring skills, money and technology and so on. Labour supply like boosting the high value added industry and workers will want to work overseas since they want a higher income.
What are the positive social and economic impacts to the LDC government?
Import of foreign capital, management culture and technology can accelerate the pace of industrialization and modernization leads to economic transformation and development.
What is the positive social and economic impact to the people in LDCS?
There are more job opportunities which means higher living standard.
What is the positive social and economic impact to the people in MDCs?
More trading and investment opportunities leads to accumulation of wealth.
What is the positive social and economic impact to the local customers?
Lower prices of goods.
What is the positive social and economic impact to the multinationals?
Lower cost of land price, labour price and transport cost.
What is the positive cultural aspect to the local customers?
More choices.
What are the negative social impacts to the people in LDCs?
Economic benefits cannot be enjoyed by the LDCS as most of the benefits flow back to the MDCs which widens the income gap between countries.
What are the negative social impact to the low skilled workers in MDCs?
Economic restructuring leads to unemployed leads to widening domestic income gap.
What are the negative social impacts to the workers in LDCs?
Lack of awareness to protect labour rights leads to labour exploitation.
What are the negative social impacts to the local small companies?
Mulitnationals can enjoy a lower cost, local stores have a lower competitiveness leads to close down.
What are the negative social impacts to local customers?
Market monopoly leads to fewer choices in long run.
What is the negative economic aspects to all stakeholders?
Economic interdependence
Which are the IGOs related to economic globalization?
World Trade Organization, World Bank, International Monetary Fund and Organization for Economic Co-operation and Development.
What is the use of World Trade Organization?
Deals with the rules of trade between nations at a global or near-global level, promotes free trade all around the world.
What is the use of World Bank?
Offers financial and technical assistance to LDCs around the world with the goal to reduce global poverty.
What is the use of International Monetary Fund?
Oversees the global financial system by following the macroeconomic policies of its member countries and offer loans with varying levels of conditionality mainly to poor countries.
What is the use of Organisation for Economic Co-operation and Development?
It helps to work to build better policies for better lives and shapes policies that foster prosperity, equality, opportunity and well-being for all.
What is the effectiveness of IGOs in economic globalization?
More developed countries have a large voting share which LDCs may not be able to voice out. LDCs need to open up their market after joining World Trade Organization.
