The influence of Superpowers Flashcards
What are IGOs? (what are the main IGOs)
Intergovernmental organisations whose members are nations which cooperate on issues like economic policies, human rights and military operations. The 4 main IGOs studied are the IMF, World Bank, WTO and WEF.
What is the IMF?
The International Monetary Fund was set up in 1944. it aimed to provide loans to prevent them falling to communism. In return for accepting loans, recipients have to agree to run free market economies. This can be detrimental to the developing countries receiving the loans as often imported goods may have a lower cost and higher quality meaning local farmers, producers etc may not be able to compete and lose business. Voting power is proportional to the country’s level of investment (the USA holds 16.5% of the vote) this means wealthier countries are more influential in deciding how funds are spent. This could mean funds are diverted from use to improve housing, healthcare and education to instead develop trad to benefit the wealthier nations.
What is the World Bank?
The World Bank was established in 1944 wth the aims of financing economic development. It started by giving post-war reconstruction loans to Europe. It has a proportional voting system where the greater the level of investment the more votes your country has. The World Bank was accused of financing environmentally damaging projects in the 1970s and 80s in the pursuit of economic gain. However recently has helped contribute to meeting the MDGs and SDGs through funding educational programmes (particularly for the poorest in society and for girls) and have spent 435 million between 2002 and 2015 funding such projects All presidents of the WTO have been American citizens.
What is The World Trade Organisation?
The World Trade Organisation was established in 1995 aiming to increase free trade by removing barriers such as tariffs quotas and subsidies. Despite it operating on a one-country one-vote system, votes have never been held ad poorer countries are excluded from decision-making. Whilst free trade may benefit already developed nations as they get access to cheaper imported goods and materials, developing nations may suffer. For example, local farmers may not be able to compete with the higher quality and lower cost imported produce. it also means countries pay less for the raw materials they import.
What is the WEF?
The World Economic Forum is a Swiss not-for-profit organisation founded in 1971. it aims to encourage public-private cooperation. It costs $19,000 to attend the annual meetings in Davos meaning smaller businesses and less wealthy countries are under-represented.
Bolivian Independence from the World Bank and IMF
The IMF and World Bank have recieved of resistance in the form of protests against privatization policies, austerity measures, cuts to public services, wage reductions and weakening of labour rights.
In the 1970s, Bolvia became increasingly dependent on the IMF and World Bank loans to modernize their mining and agricultural export industries. This led to more than $3bn in foreign debt incurred by Bolivia between 1971 and 1981. To repay loans, the IMF forced the Bolivian government to divert much-needed government funds from social welfare programmes. This disproportionately affected the low income workers.
In 2000, the World Bank encouraged the Bolivian government to sell the public Cochabamba water system to the Bechtel Corporation. Granting the company control over the city’s water company for 40 years and an average annual profit of 16%. As a result, water bills increased 43%. this led to public protests.
Under President Evo Morales (from 2005 to 2019), the Bolivian Governemnt has established economic autonomy from the IMF and World Bank, this has led to debt to the World Bank falling from 37% in 2005 to 9$ in 2014.
The importance of TNCs.
in 2018, the World’s 500 largest companies generated $32.7 trillion in revenue, $2.2 trillion in profits and employed 65 million people. 400 of the 500 largest TNCs originate from just 7 countries. In 2013, it was estimated that TNCs accounted for 80% of global trade. In the past the USA dominated the most valuable TNCs, however, there is an increasing number of Chinese TNCs in the top 10 largest (notably State Gride, Sinopec and China National Petroleum) which are state-owned.
Cultural impact of TNCs.
12 of the top 16 brands are from the US (despite China having many of the largest TNCs, they do not have brands as they are not publically traded).b The global presence of such TNCs results in the spread of Western culture 9Westernisasation) leading to a global culture characterised by:
Mass consuemrism
Capitalism
Democracy
English as a dominant language (or second language in many nations)
TNCs will often adapt their product to fit customers in different countries. (e.g Cadbury’s makes it chocolate sweeter in China to suit local taste) this is called glocalisation and allows TNCs, and by extent the nation they originate from to extend their global influence. Countries use media to reingroce cultural messages, especially the US. In 2015 only 3 of the top 20 grossing movies were not made by one of the top 6 global media TNCs.
How are patents an important aspect of power?
TNCs invest vast amounts into research and development of new products. Such developments are protected by intellectual property laws.
New innovation, technologies and systems are patented
Artistic works such as music, books and artwork are protected by copyright laws
Designs such as logos are protected by trademarks.
Any company or person who wishes to use a protected asset must pay a royalty fee. over 85% of all royalty fees go to the USA, EU and Japan.
Wealth generated by royalty fees i re-invested into research and development meaning more IPs are created so more royalty fees are paid. This increases the wealth of countries were TNCs operate through taxes leading to higher education levels and more public investment.
In 2012 China applied for 652,000 patents whilst the US applied for 542,000
