y12 eoy revis Flashcards
define globalisation
increasing integration or economies, people, and places around the world through the movement of goods, services and capital across borders
define economic globalisation
Financial integration and trade, movement of value
E.g.
-trade blocs
-remittance payments
define social globalisation
increasing integrations of human interactions within cultural communities encompassing family, work and education
define political globalisation
refers to the amount of political cooperation that exists between different countries
- WTO
- UN
- IMF
- World Bank
define cultural globalisation
the increasing integration of cultures, also known as development of a global culture
- development of consumerism and increasing Westernisation
- often causes conflict and opposition
what is glocalisation
adaptation of companies relating to the environment in order to be successful in a region e.g. McDonalds doesn’t sell beef burgers in India
What is the role of the IMF
International Monetary Fund:
-Channels loans from rich countries to those who apply for it
-In return the countries must agree to running a free market economy, allowing TNC’s to easily invest
-USA exerts great influence over IMF
Can be controversial as occasionally countries are forced to cut back on public services in order to satisfy the deals
what is the role of World Bank
WB:
- Distributes loans with strict conditions on its loans and grants
- Gives direct loans to mainly developing countries to aid development however in return makes the nation privatise many of its sectors
- Distributed $65 billion in loans in 2014
What is the role of the WTO
World Trade Organisation:
- advocates liberalisation of trade, especially for manufactured goods
- advocates for abandoning protectionist attitudes in favour of untaxed trade (china persuaded to lift restrictions on rare earth minerals)
- It has failed to stop richest countries (E.g. UK, USA) from subsidising their own food producers, this has been harmful to farmers in developing countries who want to trade on a level playing field
what are the 4 types of FDI
Offshoring
Foreign mergers
Foreign acquisitions
Transfer Pricing
Define Offshoring
moving/developing a new production facilities offshore, often low wage economies, e.g. Fender making guitars in Mexico
Define Foreign mergers
two firms in different countries join to create a single entity, e.g. Royal Dutch Shell has headquaters in both UK and Netherlands
Define Foreign acquisitions
When a TNC launches a takeover of another company in another country e.g. in 2010 Cadbury was subject to a hostile takeover by US food giant Kraft. UK has few restirictions on foreign takeovers. In contrast the comittee on foreign investment in the USA closely scrutinises inbound foreign take overs
Define Transfer pricing
Some TNC’s e.g. starbucks or amazon, have channelled profits through a subsidary company in a low tax country such as Ireland. this limits the amount of tax the comapny must pay. OECD is now trying to limit this practice
What are trade blocs ?
voluntary international organisation made to bring economic strength an security to nations, they are mainly focused around trae
Name the advantages of trade blocs
- Free trade (tariff free)
- Ease of investment + more trade
- Economic strength and stable trade
- If one nation aquires a commodity, the rest of the trade bloc can trade it without tariffs
Name what is EU and what are its: Aims/Rules, Political Agreements/Laws and changes over time
- What: European organsisation and trade bloc
- Aims/Rules:Boost economy, maintain peace and free -movement of people, improve agriculture
- Political Agreements/Laws: Human rights, free trade, free movement, environment
- Changes over time: increased membership, eurozone (common currency)
Name what is NAFTA and what are its: Aims/Rules, Political Agreements/Laws and changes over time
What: North American Free Trade Agreement (USA, Mexico, Canada)
Aims/Rules: removed all tariffs (2008), free trade
Political Agreements/Laws: Mutual security, economic growth, good relationships and regulate the environment
changes over time: increase in trade by 10% each year, manufacturing jobs lost, want to expand Free Trade Area (FTA)
Name what is ASEAN and what are its: Aims/Rules, Political Agreements/Laws and changes over time
What: Association of Southeast Asian Nations (singapore, malaysia, thailand, vietnam etc)
Aims/Rules: long term security, resolve conflict, ecoomic prosperity, niclear weapon free (2004)
Political Agreements/Laws: Security, nuclear weapon free
changes over time: volatile agreement
define free market liberalisation
removing restriction on markets to aid economic growth e.g. Margaret Thatchers de-regulation of London stock exchange which meant anyone could trade stocks without going through the London Stock Exchange, led to banking prosperity in London and development of Canary Wharf
define privatisation
The transfer of buisness, industry or service from public to private ownership and control e.g. privatisation of British steel, petroleum, Rolls Royce, Airways, water nad electricity
What are special economic zones ?
An are where the buisness and trade laws differ from the rest of the country e.g
Why did China start its open door policy
It was initiated by US, it called for portection of equal privileges for all countries trading with China
What are the costs and benefits of China’s open door policy
Benefits: -Lots of FDI -Economic growth -Exposure to new technologies and the share of knowledhe Costs: -Lack of regulation -Increased inequality -Pollution -Abuse of lack of workers rights
How is China now open door
- FDI predicted total of $1.25 trillioin between 2015-25
- Agreed to export “rare earth” minerals in line with WTO
- Foreing TNC’s are now allowed to invest in some sectors of China’s domestic markets, including rail freight and chemical industries
How is China still closed door ?
- Google and Facebook have little or no access to China’s market (censored companies like Yoku provide social media)
- China’s government sets a strict quota on only 34 foreign films per year
- Strict controls on foreign TNCs in some sectors, China’s government blocked Coca Cola’s aquisition of Huiyan juice in 2008
What are the top 3 countries of KOF ?
1) Ireland 2) Netherlands 3) Belguim
What are the top 3 countries of AT Kearny
1) Singapore 2) Switzerland 3) USA
How does KOF (konjunkturforschungsstelle)
measure globilisation ?
- Economic: cross border transaction + FDI
- Social: cross-border contacts (phone, tourists and immigrants), also affinity with presence of McDonalds or IKEA
- Political: number of foreign embassies, memberships to international organisation, oarticipation in UN peacekeeping activities
How does AT Kearny measure globilisation ?
- Economic integration: volumes of international + FDI
- Personal contact: through telephone calls, travel + remitance payments
- Political engagement: participation in international treaties and organisations and peacekeeping operations
- Technological conectivity: number of internet users, hosts and servers
Why are TNCs considered “architects of globalisation”
- TNCs make up the vast majority of FDI
- When TNC invests they bring over elements of their culture
- Create jobs and economic links between nations, this often leads to political implications e.g. Huawei and trump administration
- Often increase wealth and create opportunities but this doesnt mean employees are treated well
defiine outsourcing
where a TNC makes contact with a buisness to do some work instead of fulfuling it itself
define offshoring
where a TNC moves and operates in another country for cheap labour advantage
Define and give examples of glocalisation
adaptation of buisnesses to the culture and social aspects of a given environment e.g.
- Beef is replaced with other meats in burgers in McDonalds in India
- Driving seats are different in the UK
- sexualised music videos are censored in middle east
give reasons for areas being switched off from globalisation
Env:
-distance from market, wilderness, low agricultural potential, lack or poor quality of physical resources
Political:
-corruption or terrorist groups, weak governmental commitment, civil or trival conflict, exculasion form trade vlocs or disadvantafed by trade rules
Economic:
-High level of debt, low education levels and poor workforece skills, poor transport and telecommunication infastrucure, dependence on particular industries
Why is Cairngorms, Scotland isolated
- Physical landscape is rugged and hilly, dificult to develop infastructure
- Far from markets/ cities and ports
- Nearest city and airport is 62km
- Nearest rode is 22km away
Why is North Korea isolated
- Depletion of physical resources and floods destroyed crops
- Authorotarian autocracy ,ordinary citizens do not have access to social media, sanctions due to human rights abuse
- Centralised and isolated economy, $10-12 billion debt
- “Soil is basically dead”, Kim reigime overexploited resources
What is the global shift
movement of manufacturing industries from developed to emergin economies in areas such as south East, East and South Asia
-Began in 1970’s/80’s
what accelerated the global shift ?
- Change of policy to open doors allowing for inwards investment
- Cheaper manufacturing alternatives became in demand
- FDI began to flow into emerging ASEAN economies
What has resulted in India from global shift
- One of the largest recipients of FDI
- 50% of global outsourcing in india
- English became buisness language
- Developed technical universities
- Bangalore is now largest outsourcing country
How has the global shift in China affected infastructure
- Largest highway and high speed rail network
- Railway system connects all provnces
- 82 airports built since 2000
How has the global shift in China affected poverty
- 300 million in middle class
- increase in consumerism, 2013 Chinese bought more laptops and tv’s than Americans
- 680 million less in porverty since 1981
- extreme poverty moved from 81% to 10%
- 20% of China still in extreme poverty, mostly rural areas
How has the global shift in China affected incomes
- 10% rise per year since 2005
- Despite urban inequalities, still higher in countryside
- law includes 40+ hour weeks with paid holiday
- Large urban rural divide
How has the global shift in China affected education and training
- education is still free and compulsory between 6-15
- literacy increase from 20% to 94%
- 5x more uni graduates in 2017 than in 2000
How has the global shift in China affected farmland
- 3 million hectares of arable land polluted
- 12 million tons of grain polluted
- fertilisers and pesticides polluted
How has the global shift in China affected upland settlements
- increased demand for urban housing
- land prices rocketed making many unaffordable
- informal housing
- -exoanded housing in vilages which are used to rent out
- -farmland is privately developed for housing (illegal under communism)
How has the global shift in China affected pollution and health
- Air pollution caused by increased energy
- 70% of rivers are polluted
- 100 cities suffer from extreme water shortages
- air pollution kills 1.6 million per year
How has the global shift in China affected land degradation
- 22% of world population but 6.4% of land
- rapid industralisation causing degradation in 40% of farmland
How has the global shift in China affected biodiversity
- 2015, terrestrial vertebrates have decreased by 50% since 1970
- all due to degredation of natural environments
How has the global shift in China affected resources
- despite abundance of coal, it is not enough to satisfy ever increasing energy demand
- consequently china is importing additional resources in Africa and latin America, amazon rainforest etc
