Unit 4 - Global networks and Flows

Question 1

Growth of World Trade

Answer 1

value of world trade in materials. manufactured goods and services roughly doubled between 2005 - 2015 - Asia, Europe and North America continue to account for the bulk of trade although the share in merchandise from NIC’s increased

Merchandise trade by region - merchandise trade between emerging countries increased from just over 40% to over 50% of global trade between 2005 to 2015 (China and USA)

In 2015- China remained the world’s leading exporter and the USA the world’s leading importer - chinas exports valued at over $2 trillion

Question 2

Services

Answer 2

Developing countries’ share in commercial services continued to rise, accounting for nearly one third of global exports - increase mainly due to China, India, Hong Kong and South Korea

Question 3

International aid

Answer 3

many types of aid, including emergency/ relief aid, development aid and short and long term aid.

Top-down development :
large in scale
carried out by governments
done by people from outside area
imposed upon the area or people by outside organisations
often well funded and responsive to disasters
Does not involve local people in decision making process
Emergency relief can be considered top-down

Bottom-up development:
small in scale
labour intensive
involves local communities and areas
run by locals for locals
limited funding available
involves local people in the decision making process
common projects = building earthen dams creating cottage industries

Question 4

Development aid

Answer 4

main donors of developmental aid are HIC’s - in contrast main recipients are NIC’s and LIC’s Highest levels of aid would appear to go to much of sub-saharan Africa, Eastern Europe and Russia and South East Asia - largest donors = USA and Japan although as a percentage of their GNP each donates less than 0.25%

Question 5

Loans

Answer 5

loan = transfer of money that require payment over a set period of time - main pattern is from richer to poorer countries

Question 6

Debt Relief

Answer 6

Sub-Saharan Africa = includes most of the countries classified as heavily indebted poor countries - in 1962 sub saharan Africa owned $3 billion and in 2017 it was about $230 billion - as a result of dept relief Tanzania introduced free schooling, built more schools and employed more teachers - critics = it does not help the poor that it does not help countries that do not get into dept and encourages overspending

Question 7

Structural adjustment programmes

Answer 7

Structural adjustment programmes are loans from the IMF requiring the borrowing country to cut its government expenditure, reduce state intervention and promote liberalisation and international trade. four main requirements :
- greater use of country’s resources
- social and economic reforms to increase economic efficiency
- diversification of the economy and increased trade earn foreign exchange
- reduction in the active role of the state in the economy

Question 8

Remittances

Answer 8

many of the world’s migrants travel from poorer to richer countries but people from rich countries also migrate to oil rich countries. Largest regional migrations are from South East Asia to the middle east - lured by employment in the oil economy and boo in construction industry - Mexico to the USA = very big flow

Region that receives the most remittances is south Asia (India, Pakistan, Bangladesh) - value of remittances said to be higher than the amount of international aid which they receive. Indonesia, Malaysia and Vietnam receive a considerable amount of money through remittances.

Most of Africa and the Caribbean receive a relatively small amount of remittances - patten is different for the usual- rich poor divide in a number of ways - eg low value remittances recieved in eastern europe and in arc of countries through turkey makes this pattern unusual

Some countries very dependant on remittances - greatest advantage of remittances is that they go directly to the migrants family and household. However, many money transfer companies charge a substantial amount to transfer money back to migrants home and in some cases their wages can be withheld

Question 9

Trafficked people

Answer 9

crime on a global scale. between 2012 and 2014 there were over 63,251 victims of trafficking from data provided by 106 countries - can be domestic or international women 51%, men 21% and children 28% - most trafficking occurs in same geographical sub-region - frequently victims come from poorer countries and exploited to richer countries - middle eat highest amounts

Question 10

Counterfeit Goods

Answer 10

believed to generate more than 250$ billion each year and are responsible for labour exploitation, environmental damage and health implications for consumers.

Corruption and bribery are linked to trade in counterfeit goods especially when they are transported internationally. Trade in counterfeit goods reduces tax revenues for governments - raises extra costs with the need for more surveillance

Question 11

Fraudulent medicines

Answer 11

trade in fraudulent medicines from East asia and the pacific to south east asia and africa worth $5 billion each year

Question 12

Counterfeit food and drink

Answer 12

up to 10% of the food bought in the Uk is fraudulent

Question 13

flows of drugs

Answer 13

drug trafficking : major global trade involving the cultivation, manufacture, distribution and sale of substances - worth more than $300 billion

Question 14

foreign direct investment

Answer 14

investment by a company into the structures equipment or organisations of a foreign country. It does not include investment in shares of companies of other countries
FDI = fell after the financial crisis of 2008-2009 but by 2015 had improved - much of the growth was due to investment in HIC’s
Asia remained the main focus for FDI in NIC/LIC whereas FDI into Africs, latin america and the carribean slowed. Expection = cuba - re-establishes diplomatic ties with the USA and FDI there is expected to increase

Outward FDI flows from HIC’s increased by a third in 2015 - this was still 40% short of the peak in 2007 - Europe became worlds largest investment region - investment in agriculture declined while that in manufacturing increased

Question 15

Positive and negative impacts of the global shift in HIC

Answer 15

HIC positive : cheaper imports, growth in LIC’s may lead to a demand for exports from HIC’s, greater worker mobility to areas with relative scarcities of labour, greater industrial efficiency

Negative : rising unemployment, especially of unskilled workers, larger gaps develop between skilled and unskilled workers, Job losses are invariably concentrated in certain areas and certain industries , branch plants are particularly vulnerable

Question 16

Positive and negative impacts of the global shift in LIC and NIC

Answer 16

Positive : higher export- generated income, the effects can spread to local areas with many new highly paid jobs, negative trade balances can be reduced, employment growth in relatively labour- intensive manufacturing spread wealth

Negative: jobs tend to be concentration in the core region of urban areas leading to in migration, TNC’s may be exploitative and establish sweatshops, Over-dependence on a narrow economic base can result, Food supplies may be reduced as people give up agriculture

Question 17

Transnational companies

Answer 17

transnational company is an organisation that operates in a number of countries - generally TNC headquarters are in the hIC cities, with research development and decision-making concentrated in growth areas of HIC’s and assembly and production located in LIC’s and NIC’s and depressed parts of the HIC’s

Question 18

Case Study: The TATA group

Answer 18

Tata group = compromises over 100 companies, covering sectors such as cars and consulting, software and steel, tea and coffee, transport and power. Tata Steel is India’s largest steelmaker and Tata consultancies services is Asias largest software company

Tata was founded in 1868 creating India’s first Indian-owned steel plant, and it is now one of the stars of Indias globalisation - operates in over 80 countries and employs 600,000 people - over half of it’s revenue comes from outside India

Tata created many of India’s greatest institutions (Tata Memorial Hospital) - defined by it’s culture = loyalty, dignity and social responsibility - company introduced at eight hour working day and it introduced paid leave in 1920. Funds worthy causes, from clean water projects and literacy programmes (105$ annually)

Question 19

Apple INC

Answer 19

apple inc is one of the richest cooperations in the world, valued at around 250$ billion in 2015 - However the apple supply chain has received much criticism on account of human rights and ethical issues in China. For the manufacture of it’s IPhone apple has some 785 suppliers 349 of them in China - in its supplier code of conduct states that “suppliers are required to provide safe working conditions, treat workers with respect and dignity, act fairly and ethically and use environmentally responsible pratices where they make products or perform services for Apple”

Foxconn - largest electronic manufacturing services company emplys approximately 1.6 million people in China - Apple’s principle supplier - since 2006 have been allegations of poor working conditions with workers working 15 hours a day earn just $50/ month. Resulted in many suicides due to increased wage requests.