S 1.4 -2.1 Flashcards
Overseas Aid
All global regions are covered - not just about poorest countries.
• As much about influence as much as development.
• Much aid goes to countries where the USA seeks to ‘keep a lid’ on troubled areas (Peru, Iraq, Haiti, Ethiopia).
• Some aid is political, it buys friendship and influence (Pakistan, War on Terror)
McDonald’s
• A global TNC making money from all corners of the earth, except the very poorest regions.
• A map of other USA companies would look similar (Subway, Starbucks etc.)
• Helps spread US culture and lifestyle as much as a money making enterprise.
• Global trade is an important way to maintain economic power
US military
• A more traditional, direct influence – especially in hotspots such as the Middle East, horn of Africa and northern Andes.
• Is reassuring in some locations and threatening in others (Is the USA the world’s policeman?)
• Might be about directly protecting oil supplies and key trade routes (Suez, Hormuz, Panama, Malacca and Gate of Tears
G7
USA, UK, Canada, France, Germany, Italy, Japan (+EU).
• Russia expelled in 2014.
• Half of global net wealth and 10% of the world’s population.
• Annual meeting of heads of gov. since 1973 – to deal with energy/oil crisis.
• Focus on macroeconomic policy, later expanded to global security & human rights.
• Global initiatives – HIV/Aids, economic development in developing world, climate change
G20
19 countries and the EU –including G7 and China, India, Indonesia, Brazil, Argentina and Russia.
• 80% of GWP (global world product), 75% of trade, 2/3rds of global population.
• Founded in 1999.
• Focus on international and economic co-operation – each summit has a theme
BRICS
• Early 90s - a nickname (Goldman Sachs) for countries predicted to dominate world trade.
• Brazil, Russia, India, China and South Africa (2010).
• Half of GWP, 42% of global population.
• 2009 – formal IGO, with annual meetings.
• Co-ordinate multi-lateral policies.
• New Development Bank (alternative to WB).
• Contingent Reserve Arrangement (CRA)
Andre Gunder Frank
Frank’s Dependency Theory (1971).
• Marxist Theory, opposed to modernisation theory.
• Countries ‘locked in’ since the late 16th Century by colonialism.
• Peripheral countries unable to develop because of balance of global system of trade.
• Core countries rely upon, but exploit peripheral regions.
• IGOs – IMF, World Bank – reinforce systems of control over world.
Immanuel Wallerstein
• Critiqued global capitalism.
• There is no ‘third world’ – just ‘one world connected by a complex network of economic exchange relationships (i.e. world economic, or world system)’.
• There’s a Core, Semi-periphery & Periphery.
• Economic exchange is unequal.
• Global economics goes in cycles.
• Each cycle sees the development of a new field e.g. IT in the late 1990s.
• Gov. spending (or FDI) stimulates new growth during a recession.
Core
Most economically diversified, wealthy, and powerful both economically and militarily..
• Strong central governments.
• State institutions that help manage economic affairs internally and externally.
• Have a sufficiently large tax base, such that state institutions can provide the infrastructure for a strong economy
• Highly industrialised
• Specialise in the information, finance, and service industries.
• Forefront of new technologies and new industries.
• Have significant means of influence over non-core states.
• Are relatively independent of outside control
Semi periphery
Developing peripheral or declining core states.
• May have characteristics of both.
• Export more to peripheral states.
• Import more from core states.
• BRICS often considered semi peripheral, although China may be moving towards the core.
• Countries most likely to move up or down between cycles.
• Likely to be the location of change and tension, e.g. China vs the USA as China moves towards the core
Periphery
• Least economically diversified –export of commodities.
• Weak governments, institutions + tax base.
• Targets for FDI from TNCs exploiting cheap labour.
• Populations with high percentages of poor and uneducated people.
• Tend to have very high social inequality because of small upper classes that own most of the land and have profitable ties to multinational corporations.
• Influenced by core states, often forced to follow economic policies that help core states and harm the long-term economic prospects of peripheral states
China and Africa
China has been building its presence in Africa since 2000; trade has grown 400%.
• There are many billion-pound deals
• Over raw materials, and other goods that China needs.
• Africa is being transformed with funding and construction of infrastructure -roads, bridges, railways, shopping malls, casinos, golf courses, schools, hospitals.
• Knowledge, experience, wealth are being widely shared.
• China is now Africa’s largest trading partner (since 2021).
• But: China has flooded the market with cheap goods – and that destroys local industries – and China is also engaging with rogue regimes that support human rights abuses.
Angola
• Oil producing country in SW Africa.
• Civil war 1975-2002, now governed by MPLA (high levels of corruption).
• China’s 2Nd biggest trading partner in Africa (behind Nigeria).
• $465million of finance projects since 2000, including Luanda Railways and electricity distribution lines.
• China provided $1bn credit to rebuild infrastructure after civil war in 90s.
• Angola no longer needs Western (former colonial) support – French and Portuguese companies are shut out
Benefits of Chinese investment for Angola
• By 2021: $60bn worth of loans for Angola from Chinese banks – paid for reconstruction.
• 70% of Angolan government reconstruction projects have to be awarded to Chinese companies.
• China wants political equality and mutual trust- not just America ruling the world.
• 600 teachers and 15,000 doctors have been sent to Africa.
• China acquires the raw materials it needs:
• The prices are rising
• Africa countries are bartering; Angola forces China to buy 10,000 barrels of oil / day as part of China’s deal to invest
Costs of Chinese investment in Angola
• Local private companies can’t compete - they don’t have the resources to build a road / power station.
• New Chinese goods aren’t high quality, but they are cheaper that locally produced goods.
• There is local protest / riots e.g. Zambia; when an anti-Chinese opposition politician ‘lost’ an election.
• The value of clothing / textiles have fallen – 17% -creating job losses in Kenya, South Africa, Lesotho.
• China blocked a UN Security Council resolution to stop civil war in Darfur, Sudan.
• China is less worried about governance – willing to support regimes that abuse human rights (MPLA corruption)
Implications of Chinese investment in Angola
• Everything is about unconditional trade – ignoring human rights abuse, or dictators staying in power.
• Poverty is ignored; whilst Western companies expect change, China just provides money.
• There is more money for African countries in continuing to extract raw materials, rather than develop.
• What you really want is good governance, human rights, economic growth – but in reality, people don’t even have food to eat / clothes to wear
