Topic 3 - EQ1 - Globalisation Flashcards
(87 cards)
1
Q
What is globalisation?
A
Globalisation is used to describe a variety of ways in which places and people are now more connected with one another than they used to be. The International Monetary Fund (IMF) defines globalisation as: “the increasing integration economics around the world, particularly through the movement of goods and services and capital across borders. There are also broader cultural, politically and environmental dimensions of globalisation”
2
Q
What are the 4 main strands of globalisation?
A
Economic globalisation
Social globalisation
Political globalisation
Cultural globalisation
3
Q
What is economic globalisation?
A
The increasing integration economies around the world caused and characterised by:
- The growth of TNCs accelerating cross border exchanges of raw materials, goods, etc.
- The growth in IT supports the growth of complex spatial divisions of Labour and a more interconnected economy
- Online e-commerce e.g. Amazon
- TNCs
4
Q
What is social globalisation?
A
The increasing social interconnectivity around the globe creating a new social network which goes beyond borders caused and characterised by:
- International migration creating extensive family networks across borders
- Social inter connectivity has grown thanks to spread of universal connectivity
- Global rise in education and health can be seen over time, with rising world life expectancy and literacy levels, although the changes are by no means uniform or universal
- The spread of universal connections such as mobile phones, the internet and email
5
Q
What is political globalisation?
A
Political globalization refers to the growth of the worldwide political system, both in size and complexity, this system has increased the importance of IGOs and decreased the importance of the Nation State, political globalisation has been caused and characterised by:
- The growth of trading blocs (e.g. EU, NAFTA) allows TNCs to merge in neighbouring countries, while reduced trade restrictions and tariffs help markets grow
- Global concerns such as free trade and response to disasters/war
- The World Bank, IMF and WTO work to harmonise national economies internationally
6
Q
What is cultural globalisation?
A
Cultural globalisation refers to the rapid movement of ideas, attitudes, meanings, values and cultural products across national borders caused and characterised by:
- ‘Successful’ Western cultural traits come to dominate in some territories, e.g. the ‘Americanisation’ of tastes and fashion
- Complex outcomes as old local cultures merge and meld with globalising influences
- Circulation of ideas information has accelerated due to 24/7 reporting
7
Q
What has happened to the cost and speed of communications?
A
Speed ⬆️ Cost ⬇️. More countries are becoming increasingly interconnected and so the world is shrinking.
8
Q
What have been some financial impacts of globalisation?
A
- Global capitalism spread by IMF
- Cheap Labour in developing countries helps supply wealthier nations with goods
- Trillions of dollars exchanged globally by electronic means
9
Q
What have been some political impacts of globalisation?
A
- Some TNCs seek to influence how people think (and thus the political climate) across the globe (e.g. Rupert Murdoch’s news empire)
- International political organisations and groups have been able to expand and promote economic growth (e.g. EU has promoted economic growth across the EU, like in the peripheral area of Cornwall of the UK pre-Brexit)
- TNCs can intervene in the governance of national governments
10
Q
What have been some impacts on population of globalisation?
A
- Skilled workforce can move to where they’re most in demand with higher incomes and rewards
- Fast air transport allows international migration with truly global companies
- Movement enabled whilst retaining jobs as a result of globalisation
11
Q
What have been some of the impacts of globalisation on communication and information?
A
- Cheaper global phone networks and increased communication pathways allows rapid exchanges of information and news to reach around the globe instantly (e.g. Paris terror attack or 911)
- Allows instant communication between people on opposite areas of the globe (in result leading to increased globalisation)
12
Q
Who is globalisation drive by? Countries across the globe or a handful of drivers?
A
Drive by key players from a handful of powerful countries - USA, Japan, Europe
13
Q
What is a major factor that is allowing for an increase in globalisation? (Related to infrastructure)
A
Transport developments
14
Q
What are the benefits of container ships for shipping goods across the globe?
A
- Less fuel being used per contained as more containers are used on one ship (18000 container ships use 20% less fuel per container than one carrying 10,000 containers)
- Many more goods can be transported on larger ships
- Ships bring high value goods to Europe and take back low-value waste in return
15
Q
What are the problems of container ships for shipping goods across the globe?
A
- High cost as there are many containers
- Shifted balance of trade towards Asia and always from Europe
- Almost everything on ships made in China exploiting lower labour costs
- Plastics often taken to China to be incinerated
16
Q
What are the benefits of e-tailing (electronic online retailing)?
A
- Quick delivery times for customers, and quick delivery also saves companies like Amazon money as large items do not need to be stored in warehouses for long periods of time
- Offers manufacturing companies, sellers, writers and musicians access to a global market for their sales through its warehouses, encourages entrepreneurship and innovation
- Amazon now offers services to customers in 180 countries offering access to people across the globe
- Offers cheaper items than in shops
17
Q
What are the problems with e-tailing (electronic online retailing)?
A
- People in the 21st C buy and throw away more due to the ease of buying cheap goods (over 30% of what is purchased on the globe will be thrown away within a year, not including packaging)
- Goods often have a human rights cost (sweatshops) and environmental costs (unrecyclable packaging or rare metals)
- Creates throw away society
18
Q
What are the social impacts of e-tailing companies like Amazon?
A
- Increased globalisation and access to goods from around the world
- Offers a wide range of services in one place which makes it easier for consumers
- Ruins markets and economies of developing countries and destroys business owner jobs
- Human cost
19
Q
What are the economic impacts of e-tailing companies like Amazon?
A
- Reshaped economic landscape with more retailing done online
- Easier to register in tax havens
- Harder to trace owed payments
- Job loss
- Ruins economies of developing countries where people’s businesses rely on loyal local customers
20
Q
What are the environmental impacts of e-tailing companies like Amazon?
A
- Products often require lots of plastic or un-recyclable packaging
- Approximately 30% of what is purchased will be thrown away within a year
21
Q
How have 21st C developments in ICT and communication given new opportunities to businesses?
A
- Establishment of online marketplaces have given small businesses access to a global customer base
- Has challenged the old supermarket model and due to click and collect or grocery deliveries
- Made possible for online retailers to sell a variety of things replacing old specialist businesses that weren’t maybe as effective (e.g. Amazon made use of technological developments, Blockbuster didn’t and failed)
- It has directly led to the development of the idea of the digital economy with supporting infrastructure (worth 1.5 trillion USD in 2015)
22
Q
Explain how changes in technology have sped up (or contributed to) the process of globalisation (4 marks)
A
P1: Cultural globalisation has been sped up as cultural traits, such as language or music, are adopted/imitated and hybridised faster than ever before. (E.g. Korean Gangnam Style clocked up over 1.8 billion views in 2012)
P2: Political globalisation has been sped up quicker than ever by technology. (E.g. the terrorist group ISIS in the Middle East has used the internet, especially chat rooms and online games, to radicalise vulnerable people across the globe to join their terror group, pre-technology they wouldn’t have been able to recruit so efficiently.)
23
Q
What are the big 3 international political and economic organisations we study?
A
- The IMF (International Monetary Fund)
- The WTO (World Trade Organisation)
- The World Bank
24
Q
What is an example of joining international political and economic organisations having devastating consequences?
A
In 1995 Pakistan joined the WTO, to comply with WTO trade rules this meant that Pakistan had to open up its fishing grounds for foreign competition. Until then, it had enforced a 200 mile exclusion zone around its coast to protect Pakistani fishing communities. After 1995 TNCs (many from India) and their deep sea trawlers took and still take most of the catch. Pakistan’s own fishing communities are left in poverty.
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Who created the big 3 international political and economic organisations we study? When? Why?
The USA. Post-WW2. To combat the spread and influence of communism through economic development and it was also to maintain international financial stability after the war.
26
What does the IMF aim to do? How do they do this?
The IMF aim to maintain international financial stability and stabilise currencies, in order to maintain economic growth and develop the global economy.
To do this the IMF lends money and in return for loans it tries to force countries to privatise gov’t assets in order to increase the size of the private sector and generate profit and wealth.
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How does what the IMF does enable globalisation?
By encouraging gov’ts to privatise and sell of gov’t assets, the opportunity for FDI is opened up and it means that TNCs from other parts of the world can buy these assets brining in money and globalising the economy.
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What does the WTO aim to do? How do they do this?
Use trade to generate economic growth in the world’s poorest regions. The WTO believes in free and fair trade and ‘trade liberalisation’.
To do this they seek to encourage all trade between countries free of tariffs, quotas and restrictions (even having preferences on trading with some countries over others). By 2016 it had 162 members.
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How does what the WTO does enable globalisation?
Increasing trade between countries across the globe means that products are spread around the globe and this allows a spread of culture and capital around the globe, and it makes countries and cultures connected via trade relations.
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What does the World Bank aim to do? How do they do this?
World Bank was formed with the purpose of financing economic development.
To do this the World Bank uses bank deposits placed by the world’s wealthiest counties to provide loans for stimulating development in countries that agree to certain conditions concerning repayment and economic growth. It also focuses on natural disasters and humanitarian emergencies and provides generous loans to help countries rebuild in the wake of them.
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How does the World Bank enable globalisation?
It stimulates economic growth which allows countries to play a bigger role on the world stage and a bigger role in trade. More developed countries are more likely to forge connections to other countries.
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What are trading blocs?
Trade agreements between countries to help improve trade and trading conditions by reducing or removing trade barriers and protectionist policies and promoting free trade between members of the trade bloc. Trading blocs place tariffs on imports from non-member state protecting industry in the bloc. Increases globalisation as it makes countries more economically interconnected.
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What are some trade bloc examples?
EU, NAFTA, ASEAN, APEC
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Why have some been critical of trading blocs?
Some blocs subsidise their producers to protect them from the influence of the global market despite this being against WTO rules (e.g. EU subsidising farmers). Also, there is an argument that these blocs are elitist, exclusionary, clubs which allow development inside them but actively hinder and limit the development of countries outside the trading blocs.
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What are subsidies?
Grants given by governments to increase the profitability of and protect key industries.
36
What is FDI?
Investment made by an overseas company or organisation directly into a company, organisation or project which is based in another country.
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What is the open door policy?
China’s policy of welcoming international business and FDI after years of economic and political isolation.
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What is an SEZ?
A Special Economic Zone, they are set up by national governments to offer financial or tax incentives in a region to attract FDI, these incentives for this specific some differ from those incentives normally offered by a country.
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What is an EPZ?
China’s equivalent of an SEZ
40
What are the 2 case studies of national government s promoting globalisation?
UK and China
41
How did the UK government promote globalisation?
In the 1980s the Conservative gov’t led by Thatcher was the first to embrace globalisation strategies fully. Some industries were left to close if their profitability depended on gov’t subsidies, and the government also refused to artificially support industries facing competition from cheaper overseas products (e.g. the coal-mining industry, which was decimated by cheap foreign coal imports during the 80s and 90s). The conservative gov’t developed two strategies for growth:
1) It gave tax breaks (i.e. subsidies) to companies investing in areas such as the London Docklands. Almost all companies establishing themselves in London’s Canary Wharf development since the late 1990s have been given life-long tax breaks which in turn encouraged lots of overseas financial institutions to relocate to London.
2) It also gave grants and subsidies to encourage foreign companies to locate new manufacturing plants in the UK. Nissan’s Washington, Tyne and Wear, factory and Toyota’s factory in Burnaston, Derbyshire, were each subsidised in order to attract investment from their Japanese parent companies - known as FDI. By 2015, the UK was the 4th largest recipient of FDI.
42
How did the Chinese government promote globalisation?
After decades of economic and political isolation, the Chinese gov’t declared an ‘open door’ (welcoming) policy to international business in 1978 because it needed Western technology to develop its economy. As a result companies from Europe and the USA quickly relocated into one of southern China’s four ‘special economic zones’ (later know as EPZs). These zones offered tax incentives and huge pools of cheap labour. Since then, China’s economy has grown rapidly and it became a member of the World Trade Organisation in 2001. By 2005, around 50% of Chinese exports came from foreign companies with connections in these zones. China’s rapid economic growth has altered the flow of FDI. China is still the world’s largest recipient of FDI, however, traditional flows of FDI have changed. Now countries such as China and the other BRICS countries are now major players in both the inflow and outflow of FDI (to sub-Sahara Africa, the US, EU, South America). Investment flows from the BRICS to other countries increased twenty-fold between 2000 and 2012.
43
What are some criticisms of the UK gov’t’s approach?
Industries that were major employers in the country (e.g. coal mining industry), particularly in the north were shut as they couldn’t survive without subsidies resulting in devastating de-industrialisation and resultant high levels of unemployment.
44
What are some criticisms of the Chinese gov’t’s approach?
It doesn’t promote Chinese business and it goes against the communist principles of the country and the CPP?
45
Why do countries make deals with other countries (outside of trading blocs)?
Sometimes countries require products that are not available within their own country or even trading bloc, or it is significantly cheaper outside their trading bloc therefore trade deals with other countries gives them access to these products. E.g. USA has free-trade agreements with SA and the UAE, both have resources not found in abundance in the US or cheaper there, oil in UAE and metals in South Africa.
46
Why is China creating such strong links with Africa?
Africa can be considered the world’s least developed continent. China investing in developing countries in Africa will help these countries develop, and the infrastructure and manufacturing capabilities will improve and the countries will develop and then, in the future, trade with China (due to the FDI it has got from China) and because China will be so instrumental in their development, China will gain more influence in Africa. Developing African infrastructure, will also allow China more access to African natural resources and manufacturing for its own benefit.
47
What is OPEC?
The Organisation of Petroleum Exporting Countries. It is an organisation made up of 13 major oil exporting countries (e.g. UAE, Saudi Arabia, Venezuela...)
48
Why is OPEC so powerful?
They make up 40+% of oil production today and have 70+% of the world’s proven oil reserves which will meant it will continue to be powerful. Oil is extremely valuable and the world’s current dependence on oil makes OPEC extremely powerful.
49
Why will OPEC become less powerful in the future?
As more nations begin to try and reduce their carbon footprint in the face of climate change, the power of OPEC will inevitably decline despite the large reserves it has.
50
How has China’s position in terms of FDI changed?
Pre-open door policy it received no FDI and didn’t invest elsewhere, in the modern age China is now a major player in terms of both inflow and outflow of FDI and has invested money in different areas of the world, it has particularly strong influence in Africa (even to the extent where it could be considered Neo-colonialism). Historically the USA and the West have been at the top of the world order.
51
How has Ghana benefitted from global connections?
Commodity traders buy cocoa in advance for TNCs like Cadbury, on what is known as the futures market. This guarantees the supply, price and delivery date of the products months ahead which is good for these Ghanaian traders.
52
How has Ghana lost out from its global connections?
Before joining WTO, Ghana subsidised farmers to encourage food production, but, the WTO imposed a joining condition that they couldn’t be subsidised. As a result, Ghanaian farmers can’t compete with imported, subsidised, American or EU foods.
EU sets tariffs for processed cocoa - but none for raw cocoa beans. Ghana could gain extra income and employment by processing its cocoa beans into powder, although tariffs would then be applied, forcing Ghana to export raw cocoa beans instead.
53
How has Vietnam gained from its global connections?
In 2014-15, the EU and ASEAN negotiated new trade deals. One of the largest took place in August 2015 with Vietnam. Removed all import duties and quotas on items traded between the EU and Vietnam. Before the deal, the value of EU trade was already 30 billion USD (therefore this deal was only going to make a good opportunity better). Vietnam benefits off EU machinery, aircraft, vehicles and pharmaceuticals, the EU is a market for Vietnamese telephones, electronic goods, footwear, clothing, coffee, rice, seafood and furniture.
54
How has Vietnam lost out from its global connections?
Competition from countries like China means Vietnam must keep its labour costs very low, meaning the people there get paid very little for that they do (reflected in the little tax that they pay and subsequent low tax revenue for the gov’t).
55
How has Guatemala gained from its global connections?
In the 1980s, 75% of Guatemala’s cotton crop was exported. The income generated was used to buy pesticides, machines and equipment for future crops. Although cotton production ended in 2005. TNCs now import raw cotton into Guatemala and use its workforce to produce cheap t-shirts for export.
56
How has Guatemala lost out from its global connections?
If Guatemala had processed its raw cotton into finished clothes, and then exported these instead, its export earnings would have been greater. More significantly, only 1% of the land devoted to cotton production would have been needed to generate the same income - leaving Guatemalans able to grow other crops and one mew markers. Instead WTO policies made this difficult and Guatemala became tied to exporting raw cotton.
57
What’s the difference between colonialism and globalisation?
Colonialism is where a country invades or occupies another and forces its laws, customs and language on another, whilst also often exploiting this country for its resources or labour. Globalisation is the modern, more natural, form of colonialism in which customs and culture are shared around the globe due to greater communication, globalised also allows countries to use each other’s resources more (not forceful though).
58
What’s the difference between trade liberalisation and subsidies?
Trade liberalisation is the removal of restrictions surrounding trade, to promote further production, whereas, subsidies is the gov’t actually funding production to increase output and trade.
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What’s the difference between tariffs and quotas?
Tariffs are taxes on imported goods, whereas, quotas are limits on how much of a good can be imported.
60
What’s the difference between Special Economic Zones and trading blocs?
SEZ, in a country, are zones with tax breaks promoting FDI. Whereas, trading blocs are international trade alliance promoting free trade (and FDI) between member states. Trading blocs often trade with other areas of the globe as a bloc (as opposed to individual nations).
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What’s the difference between FDI and normal investment?
FDI is investing in business, or setting up business, or building/investing in infrastructure in a country that is not your own. Investment is an umbrella term encompassing many things, but it does not have to be cross border.
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What happens to flows, technologies, movements and media as a country becomes more globalised?
Flows: A higher volume of international trade, more migration of people, more FDI, more remittances
Technologies: increased interest usage, flows of information and ideas, telecommunications
Movements: increased international air traffic (more movement)
Media: The spread of global advertising, publishing, music, TV and film (cultures being spread)
63
What 3 interactions does the KOF index measure?
Economic, social and political interactions
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What economic, social and political interactions do the KOF index measure?
Economic: Cross border transactions and volume of FDI
Social: Cross border contacts (calls, letters, tourists...), presence of McDonalds and IKEA as measures of ‘global affinity’
Political: number of foreign embassies in the country, membership of different organisations (e.g. WTO), and its participation in UN peacekeeping activities
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How do they work out the average rank of the KOF index?
Each set of different indicators in each group is scaled, because some indicators are more significant than others. The three sets of indicators are then aggregated into one value for each of economic, social and political interactions, which are then ranked.
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What are the advantages and the disadvantages of the KOF index?
Advantages: uses a wide range of globalisation data that is available, allows for easy comparison between countries, uses a weighing system that takes into account missing data and rebalances discrepancies
Disadvantages: internet skews data, smaller countries are misrepresented and over represented at the top (e.g. Belgium), discounts informal economies and undocumented migrants, does globalisation equate to ‘better’
67
What are the two main indexes used to measure globalisation?
KOF index and Kearney index
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What are the 4 main indicators used in the Kearney index?
Political engagement
Technological connectivity
Personal contact
Economic integration
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What are the advantages and disadvantages of the Kearney Index?
Advantages: Allows for comparison between countries, allows for comparison over time
Disadvantages: doesn’t measure cultural trends, only 64 are included in the index, who decides the weightings?
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What country ranks top of the KOF index vs Kearney?
KOF: Ireland
Kearney: Singapore
71
What are global production networks (GPNs)?
Interconnected functions, operations and transactions through which a specific product or service is produced, distributed and consumed
72
What is outsourcing?
When work is contracted out to another company (its known as off-shoring when that company is overseas)
73
What is offshoring?
When a company does work overseas, either itself or using another country
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What are new markets?
Where GDP is earned more through expertise and creativity in services such as finance, media, law, technology and management, than from the manufacture of goods. Also know as the ‘knowledge economy’.
75
What are the three Ms that explain the process of TNC contribution to the spread of globalisation?
- Motive (economies of scale, developing new markets, diversifying product range, horizontal and vertical integration with other companies) through Outsourcing and Offshoring
- Means global digital movement of money has made it possible, trade and FDI, Chinese Russian and Indian TNCs are investing around the world
- Mobility (faster and cheaper transport, ICT and instant internet communication, JIT manufacturing provides cheaper production and more linkages around world, Global Production Networks – to make a produce requires many countries to be linked together)
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TNCs are _____ of globalisation?
Architects. They join the world up economically with investment across the globe and branches in different countries all motivated by the prospect of increased profit.
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What are switched on countries?
Countries that are increasingly connected to the rest of the world (e.g. Western Europe, USA, Canada, UAE...). Switched on countries argue that it improves economic development, which in turn leads to a higher standard of living for their citizens.
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What are switched off countries?
Countries that are not well connected to the rest of the world (due to resistance to globalisation or due to factors out of their control meaning they cannot be well connected), e.g. Ethiopia, North Korea... Switched off countries that resist globalisation actively belief that it leads to corrupt practices, an erosion of culture and heritage, and also that some countries and people are left behind creating a two speed world.
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What is the difference in flows, movements and media between switched on and switched off countries?
Flows: Volume of international trade, migration FDI (On⬆️ Off⬇️)
Movements: International air traffic, international train travel (On⬆️ Off⬇️)
Media: Global music, global TV, global film, global advertising (On⬆️ Off⬇️)
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How are the UK and NL switched on?
They have two of the world’s busiest airports, Schipol and Heathrow, also NL has Europe’s busiest port which is Rotterdam
81
What are 3 examples of places switched off because of their physical geography in 3 different ways?
- Philippines (especially rural Philippines) = vulnerable to climate change and natural hazards
- Himalayas = mountains cause physical isolation
- Niger = physical isolation and lack of coast (landlocked) deters FDI and TNCs
82
Why are large parts of Africa bypassed by globalisation?
Africa is still considered to be underdeveloped and not up to date with the rest of the world. Many parts of Africa struggle to ‘switch on’ for a variety of physical, political, economic and environmental reasons. For example, mobile connections in sub-Saharan Africa are growing rapidly (much cheaper than landlines), but the costs of 3G and 4G connections make internet usage more expensive than just sending a mobile text.
83
What has caused North Korea to be switched off?
Physical: Closed and heavily patrolled land borders, only accessible by air for heavily controlled and censored tours
Political: Extremely authoritarian, communist, government has cut the country off from the rest of the world politically, violated multiple human rights laws leading to the international community politically isolating it and imposing a number of sanctions. The government also has strict censorship laws, no North Koreans can access western media. The doors are not open to FDI or TNCs.
Economic: Terrible economy and economic management
84
What has caused Tanzania to be switched off?
Political: no important role on world stage, especially as a former (non-settler) colony
Economic: Until 2001, Tanzania had serious debt problems. Then the global Heavily Indebted Poor Countries (HIPC) initiative led to the cancellation of many of its debts, but before then it was struggling and this limited globalisation.
Economic/physical: Tanzania has very fertile soils, and 80% of its working population is employed in agriculture, however, between 2006 and 2016, the global market price of one of its main crops - raw cotton - fluctuated from just 0.40 USD per lbs to 2.00 USD. When prices are high, Tanzanian farmers feel incentives to grow cotton. However, due to global overproduction, cotton prices frequently fall. When this happens the country is less able to pay for imported manufactured goods. There is no guarantee of income and GDP fluctuates, so Tanzania is struggling to switch on. Historically it was an important trading centre and had busy ports in the colonial era, but unfortunately it has failed to switch on.
85
What evidence is there that Tanzania and Zambia are beginning to switch on?
- Zambia’s recently developed Chinese funded Benguela rail link, now carries copper for export to the Angolan coast. Copper remains Zambia’s biggest export, although its value had fallen in recent years as fibre optic cables increasingly replace it in telecommunications
- Tanzania also has growing investment links with India, China (via TanZam railway), Japan and UAE, in order to export its farm produce and mineral resources
- Expanding copper town, like Kitwe, have started a process of helping localities in Africa to switch on - and Zambia’s development indicators have improved as a result
86
What has caused Zambia to be switched off?
Physical: Zambia is a landlocked country with no ports so it relies on good political relations with its neighbours to access ports on the Angolan or Tanzanian coasts by rail. This inhibits global trade and limits its industry (raw and part processed copper).
87
Does everywhere need to be switched on?
Some communities/societies are sustainable and quite happy with their traditional way of life, and in fact trying to make switched off communities switch on can damage these communities greatly. The western mould does not fit everywhere and many places are better off without the added stresses and harm that come from being switched on. Not everywhere needs to be switched on. Pacific islands are a great example, the introduction of fast food has led to skyrocketing obesity rates, Amazon tribes are a great example of people more than happy living their own subsistence lives.
