Y1) TERM 3- GLOBAL SYSTEMS AND GLOBAL GOVERNANCE (PART 1) (A) Flashcards
(114 cards)
1
Q
What is globalisation?
A
The process by which national economies, societies and cultures (the worlds systems) have become increasingly integrated through the global network of trade, communication, transportation and migration
2
Q
Globalisation facts
A
- globalisation is neither good or bad
- allows countries to sell goods to different countries and allows HICs to that have big companies to set up warehouses in LICs and pay the workers less money for labour
- allows active trading between companies
- contributes to global warming and climate change
- brings countries together (interdependence)
- makes the world a smaller place- a global community, the global village, the flat world, glocalised
- some say that we live in a world of ‘borderless’ markets and that globalisation is to blame for growing inequality in the world
3
Q
What are the factors that enable globalisation?
A
- development of (new) technology, systems and relationships
- development of financial systems
- development of transport and communications
- development of security
- development of trade agreements
- development of management and information systems
4
Q
What does HIC stand for?
A
High Income Country
5
Q
What does LIC mean?
A
Low Income Country
6
Q
What does NEE mean?
A
Newly Emerging Economy
7
Q
What does NIC mean?
A
Newly Industrialised Country
8
Q
What does MIC mean?
A
Medium or Middle income countries
9
Q
What does CLIPS mean?
A
- C- capital
- L- labour
- I- information/ideas
- P- products
- S- services
10
Q
What are the 6 flows and factors of globalisation?
A
- systems, technology and information
- financial systems
- trade agreements
- transport and communication systems
- management and information systems
- security
11
Q
Systems, technology and information (flows and factors of globalisation)
A
New systems, tech, relationships are the alignment of the worlds rules on trade, ‘way of working’ and the evolution of tech such as the internet.
- Capital- enables capital to flow without physical money, facilities via online/internet banking
- Labour- can flow as technology allows people to work on a ‘footloose’ basis
- Information- allows info to flow via email, cloud services, social media etc and beyond international and political boundaries
- Products- enables the flow of products by efficiency gain in transportation, GPS system improve monitoring and security of products. JIT systems maximise efficiency and containerisation improves efficiency
- Services- high level services (banking) and low level (customer services) are connected via the internet via satellite, fibre optics etc which allows offshoring and outsourcing
12
Q
Financial systems (flows and factors of globalisation)
A
Predominantly affect the flow of money around the world, using the stock market and a range of banking mechanisms
- Capital- investment banking, stock market, market investment, financial deregulation and currency exchanges enables capital to flow globally
- Labour- enables labour to flow as salaries and financial packages overseas/elsewhere become attractive (leading to inadvertent brain drain/ brain gain/ migration)
- Information- these systems depend on flow of info via email, cloud services, social media etc. Beyond international / political boundaries
- Products- facilitate the flow of products by efficient marketing, ‘behind the scenes tech’ reducing the delay between payment / shipping etc
- Services- these systems rely on and require the internet and fibre optics
13
Q
Trade agreements (flows and factors of globalisation)
A
Governs the flows of products between countries.
-Capital- this flow can move freely between countries because of these agreements
- Labour- if more places have trade agreements, more products are needed so more people get employed and labour in some countries is also cheaper
- Information- countries with better trade agreements may have a better connection or a better relationship and knowledge about threats
- Products- these can be made easier and cheaper and transport can be cheaper as things are made and transported in bulk
- Services- these also require fibre optics and the internet to connect countries together virtually but also transport is needed
14
Q
Transport and communication systems (flows and factors of globalisation)
A
These allow countries to trade more freely between each other
-Capital- allows trade to become cheaper and can be bought easier and quicker from all over the globe
-Labour- more people needed to transport goods around and people can now work on a more footloose basis as communication systems can work from home
-Information- it’s easier to communicate and give information between countries
-Products- products can be bought easier online and can be traded further
-Services- the internet, transport (boats, planes, lorries etc) and fibre optics are all needed
15
Q
Management and information systems (flows and factors of globalisation)
A
New ways of working have made companies more efficient
-Capital- this allows companies to benefit from economies of scale
-Labour- cheap labour to make the biggest profit
-Information- communication between companies and warehouses manages cheap labour, high prices, most amount of profit
-Products- products are made cheaply but sold expensively (high profit margin)
- Services- warehouses are needed and so is transport as well as internet and fibre optics
16
Q
Security (flows and factors of globalisation)
A
New trading relationships between countries, by forming trade agreements countries become more interdependent (if countries need to use one another to buy/sell products, it would not be in their interest to be at war with one another). This means that trade makes war less likely
-Capital- with countries working together they can both improve their security using each others technology and to rely on each other, encouraging the flow of money. Cyber security makes financial/information transactions safe from things like fraud and theft
-Labour- two countries sell and buy products from each other to make money. This makes wars less likely as countries rely on each other (interdependence). Border security protects flows of people and products (people feel safe to move)
-Information- countries working together and providing each other with information can help reduce common threats and deter them
-Products- trade of products makes war less likely as countries become more interdependent on each other through trading agreements
-Services- by working together countries can deter common threats and are more able to improve security
17
Q
What does economies of scale mean?
A
This is when the cost of a product is reduced because of the increased size of production facilities
18
Q
What does interdependence mean?
A
This is when 2 or more things depend on each other (this can relate to human and physical geography through things like 2 countries relying on each other through trade or 2 animals relying on each other)
19
Q
What is cyber security?
A
This is technologies, processes and practices that are designed to protect networks, devices, programs and data from attacks, danger or unauthorised access (viruses, malware, phishing etc)
20
Q
Cyber security and globalisation. What is the link?
A
Globalisation means the world is more interconnected, communicate globally to each other. This makes cyber attacks more likely and dangerous. Cyber attacks wreck havoc- affecting market capitalisation (money used in trade), endangering executive leadership (rigged voting) to causing major losses in sales and diminished profits, identity theft, fake news etc. Has the potential to destabilise major enterprises in a matter of hours.
This also enables countries to work together safely, without any ‘betrayal’ of secrets, promoting competition and innovation and improves security to deter common threats. This will also mean its less likely for countries to be at war with each other. Interpol facilities cross-border police co-operation and supports all organisations, authorities and services whose mission is to prevent / combat international crime.
21
Q
What is the World Trade Organisation (WTO)?
A
This is a global organisation which deals with the rules of trade between nations.
22
Q
What do the WTO do?
A
They regulate trade and their main goal is to create a level playing field by setting and enforcing rules so that countries can trade with another smoothly. Rules can be created or altered through a majority vote (mostly unanimous decision). If disputes arise, the WTO tries to resolve them through negotiation. If necessary WTO can impose sanctions on countries that break the rules.
23
Q
Why has the WTO been criticised for?
A
They were criticised for being unfair and ignoring the needs of developing countries e.g. free trade benefits developed countries more than developing ones. They have also failed to reduce tariffs on agriculture. Free trade has also ignored environmental considerations e.g. free trade has enabled imports to be made from countries with least environmental protection. It structure enables richer countries to win what they desire and arguably benefit the most. Trade rounds have been notoriously slow and difficult to reach an agreement.
24
Q
What was the General Agreement on Tariffs and Trade (GATT)?
A
This was established in 1948 and is the idea that if countries were dependant on each other, then they would not go to war with each other. This created the start of globalisation.
25
What was the Uruguay round?
This was made in the 1980's in the GATT framework and lasted 8 years. They were motivated by the idea of global efficiency to try and continue boosting the economy and it was the 8th round of multinational trade negotiations.
26
What happened in 1995?
The GATT was scrapped and the WTO was bought into place. The ideas of non-tariff barriers created a global sense of efficiency.
27
2 case studies when the WTO have got involved with conflicts
-American's wanted to export GMO beef to Europe. However, the Europeans said they don't want it and it's local rule and national sovereignty. The WTO backed the US and said that the European rules don't support global efficiency (national law VS global law = conflict)
-In the US, if you wanted to sell tuna and say it was dolphin free, you had to use dolphin free methods. Mexican's said it discriminates against Mexican fishermen as they fish in dolphin heavy waters and don't use methods that exclude dolphins. This may because they cannot afford the technology to do so. The WTO agreed that it was discrimination against Mexican fishermen.
28
What are 'economic ideologies'?
These are also known as moral positions and are how economies should be structured, as compared to economic theories. This could also be described as a set of views forming the basis of an ideology on how the economy should run.
29
Why can the WTO be seen as biased?
Because it is primarily based in America and funded by American's, therefore it is biased to American's 'way of thinking'.
30
What does SEEP mean?
S-social
E-economic
E-environmental
P-political
31
What are some examples of SEEP?
Socio- In 2015, there were 244 million migrants globally. People connect/link places
Econ- Oil is produced in one place and consumed everywhere- there is a reliance on suppliers and consumers (Supply and demand)
Enviro- Chernobyl- lots of the pollution is 'transboundary' making it everyone's responsibility
Polit- Syrian migration crisis needed to be resolved by countries working together
32
What are some examples of SEEP in relation to globalisation?
Socio- Countries rely on each other to connect families and people. People go to universities all over the world so universities in different countries are connected
Econ- Countries rely on others for money, through importing and exporting good and/or services
Enviro- Climate change is because of all countries not just 1 so all countries need to work together to try and resolve the issue
Polit- Countries need to rely on each other to reduce the likelihood of war or conflict between countries. This means countries try to agree on issues
33
What is time space compression?
This is a used to describe decreasing space between people, places and ideas. This makes distances appear shorter because of things like new technology. A journey that once used to take X amount of weeks now only takes X amount of hours. The internet also means that people don't need to travel as much and communication is quicker as well as being able to share ideas.
34
What does interconnected mean?
This is pretty much the same as interdependence with countries relying on each other. This can create inequalities between people because this can bring more wealth, power and benefits to those in HICs rather than LICs.
35
What does migration mean?
The movement of people
36
What does emigration mean?
People leaving a country
37
What does immigration mean?
People moving into a country
38
What does push factor mean?
A negative factor encouraging a person to leave a country
39
Examples of push factors
War, political conflict, lack of employment, lack of facilities and services, lack of safety and high crime
40
What does pull factor mean?
A positive factor attracting a person towards a new location
41
Examples of pull factors
Good facilities and services, better employment and pay, security and low crime rates
42
What does diaspora mean?
A large group of people with similar heritage/homeland who have moved and settled in a new place
43
What is an asylum seeker?
A person who has fled for their life and is currently awaiting 'leaving of stay'
44
What is a refugee?
A person who has fled for their life and has received 'leaving of stay'
45
What is a home country?
The country of somethings or someone's origin
46
What is a host country?
The country of something or someone's destination
47
What does brain gain mean?
This is when a host country receives people who are skilled or qualified and hard working meaning their work force benefits
48
What does brain drain mean?
This is when the home country loses the people who are qualified or highly skilled and hard working meaning their work force lacks
49
Poland to Peterborough case study (unequal flows of people)
Facts
- Poland is located in Central Europe
- Peterborough is in Cambridgeshire in the UK
- Peterborough is 'swamped' by Poles or other immigrants
- if the Poles move away there will be massive gaps in the labour market and due to the fact that Poles are hardworking for not so much money, Brit's may not be as willing to take up the job roles left behind
- there is language issues between Poles and Brit's
- housing is getting overcrowded
- Poles move here because there is better pay (£300 per week compared to per month)
- this is also low skilled labour so pretty much anyone can do it
- 15,000 more people since 2004 in Peterborough
- there is little to no British left in Peterborough
- 1 in 10 Peterborough residents are foreign
- jobs include: picking, packing, building or factory work
- its one of the fastest growing local economies
- the Poles are seen as excellent workers
- there is school issues because they are full or the children coming into the school are not English speaking
- police have to have multi-language speaking officers
- this does mean now though that it is easier for women to find jobs back in Poland because all the men have moved to the UK or west
- women are now doing 'men's' jobs in Poland
50
Poland to Peterborough case study (unequal flows of people)
Home country benefits
- increased opportunities for females(manufacturing/fire fighting etc)
51
Poland to Peterborough case study (unequal flows of people)
Host country benefits
- improved diversity of population
- growth in local economy
- benefits from outstanding work ethic
- brain gain
52
Poland to Peterborough case study (unequal flows of people)
Home country costs
- lack of male workers
- brain drain
- gender imbalance
- debt
53
Poland to Peterborough case study (unequal flows of people)
Host country costs
- increased pressure on services like schools and doctors (language issues in particular)
- police lack skills/language
- increase in brothels, misdemeanours
- some houses become over crowded ]
- xenophobia/racism/lack of integration
- some qualifications not recognised meaning over qualified people become bitter
54
Qatar case study (unequal flows of people)
Facts
-located in the Middle East and borders United Arab Emirates (southeast) and Saudi Arabia (southwest)
- overcrowding of housing
- men are dying in the job (16 year old goes into cardiac arrest)
- people get sick a lot due to poor hygiene standards and facilities available
- there is no support for workers
- the employees feel 'trapped' in the contracts and feel 'trapped' by the employers
- the salaries provided are much less than what was advertised when people applied for the jobs with some people not getting paid for months
- some call this 'modern slave labour'
- its also become illegal if they run away from employment and they take away the workers passports meaning they cannot return home
- no food or water is provided making workers malnourished
-people go to this work because the workers families have debts and they are trying to earn money to send home to work off the debts so they work abroad
- there is a lot of exploitation and deceit
55
Qatar case study (unequal flows of people)
Statistics
- 1.8 million total migrant workers estimated to be involved in World Cup 2022 projects, directly or indirectly
- overall the population of Qatar is 2.67 million, increase of 64% sine 2010 when the country was awarded the 2022 World Cup, mainly an influx of migrant workers
- 60% of Qatar's population lives in labour camps, the overwhelming majority are single men from south Asia
- 1,800 migrant workers died in the 3 years to 2014, according to a report commissioned by the Quatrain government
- 7000 migrant workers who will die on World Cup-related projects by the time the 2022 tournament starts, according to the International Trade Union Confederation
- £101,406 is Qatar's average per capita income, according to the World Bank and International Monetary Fund, making it the richest country in the world
- the average monthly salary for a Nepalese working about 70 hours a week is £262
56
Some examples of flows of people around the world
- Latin American's flowing into Europe, specifically Spain
- South-east Asians flow to west Asia
- Latin American's also go to North America
- There are lots of flows to North America and Europe
57
What is a TNC?
A transnational corporation
58
What are the 5 ways that money flows?
- Foreign Direct Investment (FDI)
- Aid
- Remittances
- Repartition of profits
- Income from trade
59
What is Foreign Direct Investment (FDI)?
Investment usually from a TNC (or a government) in one country into the assets (businesses, land, stock & shares) of another country
60
What is aid?
Financial support from one or more countries into another country (aid can also take the form of food, relief provisions etc)
61
What are remittances?
Transfers of money made by foreign employees to family in their home country
62
What is repatriation of profits?
TNCs investing in a country will remove profits from the host country back to the home country (AKA economic leakage)
63
Money from China to Africa (unequal flows of money)
Facts
- China has been investing heavily in African natural resources and they have been developing mines, oil wells and running related construction countries
- the volume of FDI has risen dramatically and the pattern of investment has changed
- China is an NEE
- most of Africa's countries are LICs
64
Money from China to Africa (unequal flows of money)
Statistics
- The top 10 recipients of this investment is Ghana, Nigeria, Cameroon, Sudan, Ethiopia, Zimbabwe, South Africa, Angola, Equatorial Guinea and Mauritania
- Ghana receives $11.4 billion US dollars and China has a 15.6% shares in it
- Nigeria receives $8.4 billion US dollars
- Cameroon receives $3.0 billion US dollars
- Sudan receives $5.4 billion US dollars
- Ethiopia receives $5.4 billion US dollars
- Zimbabwe receives $3.8 billion US dollars
- South Africa receives $2.3 billion US dollars
- Angola receives $4.2 billion US dollars
- Equatorial Guinea receives $3.8 billion US dollars
- Mauritania receives $4.6 billion US dollars
65
Money from China to Africa (unequal flows of money)
Billion-dollar projects set up
- Ghana- 2010 concessionary loan- $5.49 billion
- Nigeria- 2006 infrastructure in exchange for preferential oil right bidding- $5.38 billion
- Mauritania- 2006 oil exploration, sewage systems, iron mine and road- $4.04 billion
- Ghana- 2009 loan for oil and road projects- $3.0 billion
- Equatorial Guinea - 2006 oil-backed loan- $2.69 billion
- Ethiopia- 2009 loan for dam construction- $2.25 billion
- South Africa- 2011 financial operations agreement- $2.25 billion
- Angola- 2004 national rehabilitation project- $1.51 billion
- Madagascar- 2008 hydroelectric construction- $1.42 billion
- Sudan- 2007 railway construction- $1.38 billion
- Angola- 2009 agriculture development- $1.20 billion
- Zimbabwe- 2004 powerplant construction- $1.01 billion
66
Money from China to Africa (unequal flows of money)
China gains
- cheaper labour force
- access to cheaper raw materials (rare earth materials)
- more countries become dependent on China (becoming political allies- friends)
- an extension of their political influence
- a spread of Chinese influence
- military bases
- increased knowledge of host nations (intelligence/markets/etc)
67
Money from China to Africa (unequal flows of money)
Africa gains
- increased local employment
- investment into infrastructure
- improvements in interconnectedness (internet, roads, rail)
- access to machinery from China
- military/political protection (allies)
- access to global markets
68
Remittances to Somalia
There is heavy demand for wiring funds to Somalia, which derives more of it's income from international money transfers than any other source. For examples:
- Remittances=$1.8 billion
- International aid=$800 million
- Exports= $500 million
- Foreign direct investment=$100 million
US banks are worried because they think the funds they transmit could land in the wrong hands because of conditions in the African country. This includes:
- an informal economy with little government oversight
- no anti-money laundering laws
- no due diligence SARs (suspicious activity reports) for money transmitters
- terrorist group Al-Shabaab get donations from domestic and foreign sympathisers
69
What can be a negative of aid?
Countries can become reliant on it and it can create dependency which may cause home governments to resist investing in their own country, creating an over-reliance on aid
70
What can be a negative of FDI?
This can force out local businesses, as HICs technology and purchasing power is greater than an LICs, such as Somalia (thus out-competing the LIC)
71
UK foreign aid money 'diverted to extremists' in Syria
Why did this happen?
The Free Syrian Police (FSP) was set up in 2012 following the uprising in Syria, to bring law and order to parts of the country that were controlled by the opposition
Britain was one of the six donor countries paying for the project (FSP) which provides community policing to the rebel-held areas of Aleppo, Idlib and Daraa provinces (UK pays £40 million per year)
It is intended to be an unarmed civilian police force and not co-operate with extremist groups, but Panorama has found examples where that was jot the case. Some of Panorama's allegations against the project includes:
- Police being paid in cash and then being forced to hand over funds to an extremist group controlling the area
- Police officers being handpicked by an extremist group (corruption)
- Police co-operating with courts that carry out summary executions- including a case where 2 women were stoned to death (corruption)
72
What are the 3 things that unequal flows of money lead to?
Inequality
Conflict
Injustice
73
What does SDT mean?
Special and differential treatment which means it helps lower developed countries trade to become developed (tariffs lowered etc)
74
What is the IMF?
IMF stands for International Monetary Fund. This is funded mainly by HICs especially USA and they loan money to LICs
75
What does the World Bank do?
This is also funded mainly by HICs and especially USA and loan money to NEEs/NICs/MICs and LICs
76
What does trade liberalisation mean?
This is an idea whereby trade is 'free' for all, due to the removal of tariffs and quotas
77
What does free trade mean?
A system flowing free movement of products due to the removal of tariffs and quotas.
If everyone is selling, oversupply could drive prices down, so the poor could stay poor (out-competed)
78
What is neo-liberalisation?
This is a political approach that favours free-market capitalism, deregulation and reduction in government spending
79
What is deregulation?
The removal of regulations or restrictions, especially in a a particular industry
80
What is capitalism?
An idea whereby a country's trade and industry are controlled by private owners for profit, rather than by the state (similar to neoliberalism)
81
What is privitisation?
Businesses being sold by the government into private hands
An example of this could be an LIC selling their companies (like their water supply) to a HICs companies (like Coca Cola) (LICs now buy bottled water from Coca Cola)
82
What does public spending mean?
Money spent by the state (NHS, police, military etc)
83
What does Structural Adjustment Programmes (SAPs) mean?
Conditions imposed by IMF and World Bank upon LICs
1- Free trade
2- Decreased public spending
3- Privatisation
84
What is a quota?
A limit on the amount of goods that can enter/leave a country
85
Positives of capitalism/trade liberalisation (unequal flows of power)
- Provides jobs for people
- In LICs, jobs will open up (which can improve quality of life)
- LICs can pay off debt
- More development within countries
- HICs gain wealth and therefore power
- Liberalisation of trade can be good for importers (HICs)
86
Negatives of capitalism/trade liberalisation, inequality and conflict (unequal flows of power)
- HICs benefit more financially, making economic differences (inequality) even greater
- Wealth is concentrated in HICs
- Cuts in public spending negatively affects services
- LICs have little/no power
- LICs can end up in debt
- Privatisation can lead to unequal pay within a business (top executives 'creaming off' the majority of the pay, manual workers receive lower pay)
- Free trade has been forced onto LICs (in order to secure loans)- partially removes LICs power to control prices
- Increased competition due to free trade can result in economic job loss in LICs
87
What is protectionism?
Refers to government actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition
88
China's Belt and Road plan
- this could happen because of China's rivalry with USA
- trying to get countries to be independent with China
- provides an alternative market for China's vast state-owned companies beyond the borders of China
- stimulates economies in central provinces that are behind richer coastal areas. They can use the belt and road to support and encourage businesses in these central regions
- aimed to develop and expand China's interdependent market and grow its economic and political power
89
What is the primary sector and what are some examples of them?
This is the sector related to raw materials. For example, agriculture, mining, forestry and fishing
90
What is the secondary sector and what are some examples of them?
This is the sector related to manufacturing. For example, factory work
91
What is the tertiary sector and what are some examples of them?
This is the sector related to the services. For example, police, fire and paramedics, education, retail, leisure and recreation
92
What is the quaternary sector and what are some examples of them?
This is the sector relating to research and development. For example, technology jobs, science etc
93
What does SEZ mean?
Special Economic Zone
94
What are the 4 types of trading agreements?
SEZs, trade blocs, cartels and SDTs
95
Trading/trade blocs
- Usually groups of countries in specific regions that manage and promote trade activities e.g. EU, NAFTA (now called USMCA- United States, Mexico, Canada agreements), ASEAN
- Promote trade by 'trade liberalisation' (the freeing of trade from 'protectionist' measures) and trade creation between members of a trade bloc, since they are treated favourably in comparison to non-members
- Issues of trade blocs include protectionist strategies, such as unreasonable tariffs on imports (the WTO should manage this)
- The WTO permits the existence of trading blocs, provided that they result in lower protection against outside countries that existed before the creation of the trading bloc
96
Trading/trade cartels
- A cartel is an organisation created from a formal agreement between a group of producers of a good or services to regulate supply in an effort to regulate or manipulate prices
- Collection of otherwise independent businesses or countries that act together as if were a single producer and thus are able to fix prices for the goods they produce ad the service they render without competition
- Can have a negative effect for customers because their exitance results in higher prices and restricted supply
- Examples: OPEC (oil, producing and exporting countries) created to compete with 'The Seven Sisters'
97
SEZs
- An area in a country that is subject to unique economic regulations that differ from other areas in the same country
- SEZ regulations encourage FDI, boosting the host nations economy
- Conducting business in a SEZ typically implies that the company will receive tax incentives and the opportunity to pay low tariffs
- SEZs improve manufacturing efficiency (economies of scale) and promote competition (so consumers should end up paying less)
- Examples: Shenzhen, SEZ, China
98
SDT agreements (HICs VS LICs)
- Greater wealth, greater access to markets, greater 'power' over loans and tariff charges, often members of trade blocs (and their associated favourable trading conditions)
- Special and differential treatment agreements (SDTs) formed by WTO- these allow LICs to bypass HICs tariffs, empowering market access
- Examples: the EUs 'everything but arms agreement' which allowed LICs to export certain goods to the EU without tariffs
+ LICs gain profit, are able to diversify their industry
+ LICs may form trade blocs, increasing their ability to compete globally
- HICs may lose out as their prices are undercut by cheaper goods for LICs
- New industries (typically in LICs) are difficult to establish and less likely to develop/evolve, high tariffs make imported goods uncompetitive and mire likely to undercut, low value primary products (which fluctuate in price all the time) reduce income, security and overall Gross National Income (GNI). Meanwhile, HICs continue to trade easily, increasing their wealth
- Lower income- poorer education/poorer access to healthcare- lower quality of life, increased likelihood of undertaking employment in 'sweatshop' conditions
99
Positives of capital
- Remittances, aid (foreign), income from trade, FDI increase the development of LICs
- FDI allows HICs to take advantage of cheap labour and raw materials whilst LICs benefit from investment in their infrastructure and greater expertise (trickle down effect)
100
Negatives of capital
- Unequal flow cause inequality
- LICs can become over reliant on aid
101
Positives of labour (people)
- increased cultural diversity
- remittances allow money to flow back to the home nation
- migrate for better jobs (brain gain)
102
Negatives of labour (people)
- culture clashes
- gender inequality/imbalance
- brain drain
103
Positives of technology/information
- improved security
- advances in technology
- increased interconnectedness
104
Negatives of technology/information
- unequal flows
- HICs can afford best technology
- can cause conflict
- increased access to information that others don't have access to
105
Positives of ideas
- neo-liberal ideas increase free trade lead to development
- increased competition
106
Negatives of ideas
- wealthy wealthier, poor poorer
- TNCs etc say free trade is the best way to develop countries
107
Positives of trade (products)
- causes interdependence
- prevents conflict
108
Negatives of trade (products)
- LICs exploited by HICs
- cheap labour
- LICs become dependant on HICs
109
Positives of marketing
- high level of market access
- goods more widely available
- allows choice
110
Negatives of marketing
- developed countries have better access to markets
- LICs disadvantage as trade blocs mean higher tariffs
111
Ground nut- Senegal case study
- World Bank invested in farming technology and through loans and advice helped improve production
- as prices fell due to a global over supply caused by globalised production (cash cropping) Senegal was close to bankruptcy
-the IMF demanded for certain conditions in exchange for financial help. These were privatisation of their industry, rather than them being owned by the Senegalese government and farmers (which should increase profits, rather than having to pay the government to be involved) and although this improved the production of different varieties, the situation actually got worse (prices continued to fall) and Senegal had to borrow more money from the IMF and the World Bank
- Senegal was forced to use money that would have otherwise be used for 'development' projects and social welfare to make loan repayments (dept, poverty, etc)
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Cashew nut- Mozambique case study
- to try and maximise profits it imposed an export tax on the raw crop, meaning that farmers were either encouraged to sell to the Mozambique processing factories (and that the government were receiving some payments), it also meant that some of the crop would stay in the country
- the World Bank, IMF and WTO reacted to this and Mozambique were told that they were not allowed to impose any export tariffs or taxes as it broke international trade rules: they forced the industries into private hands
- this meant that without exporting taxes it was much easier for the crops to be sold to anyone (big companies, economies of scale). This meant that the raw materials were all sold. The Mozambique processing plant could not compete- they were outbid by higher bidders- then the market flooded and prices fell
- some economic and social impacts of this are that the industry shut down and a lack of skilled manufacturing jobs were available anywhere else: in processing- 9000 jobs. The nut was also a source of protein for the population = poor health/poverty they now couldn't buy it except via an export. Their economy collapsed and they had to borrow more money
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Brazil nut- Bolivia case study
- the traditional method of growing these nuts were that they had to be grown with in the rainforest as a specific fly is needed to pollinate the plant. Local expertise is needed. Nuts harvested by hand, not damaging surrounding ecosystem. Helped to promote ecosystem services and keep rainforest standing rather than felled
- during industrialisation the Brazil nut was staring to be produced elsewhere using plantation methods- this produced a nut that was poorer quality than the Bolivian origin but did contain lower amounts of poison- Aflatoxin
- the EU reduced the potential for the Bolivian nut to be sold by changing the limit on safe levels of aflatoxin allowed to imported in food
- this lead to a significant decrease in the Brazil nut sales and trade
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Peanuts- America case study
- this nut is called the 'luckiest' nut in the world
- this is because its is protected by import tariffs on other nuts and farmers subsidised so that nut prices are unfairly low, price set low as farmers don't need to make a profit
- there are 50,000 farms in USA and the average American eats 6 pounds of peanuts a year so there is always a market
-$4 billion was added to the US economy through the peanut trade
