3 - globalisation Flashcards
THE SHRINKING WORLD- define the term ‘globalisation’
- known as the increasing interdependence between countries through flows of capital, trade, goods and services as well as culture and ideas
why is the rate of globalisation increasing?
- LEDCs are becoming more involved in global markets and forums
- MEDCs are becoming increasingly interdependent on one another
explain the economic causes for accelerating globalisation?
- volume and influence of TNCs has increased, many have incomes higher than GDPs of many countries
- online purchasing between countries is becoming increasingly common
- stocks are traded from across countries and countries invest in each other (FDI). some financial businesses (pension funds & investment banks) trade large amounts of currencies in order to make profit
explain the political causes for accelerating globalisation
- trade blocs (eg NAFTA, EU) have become more influential and have reduced tariffs, other protectionist measures
- IGOs (eg IMF, WTO and the World Bank) work to harmonise economies, whilst promoting democratic ideology
- political views and ideology are expressed in worldwide media outlets (eg BBC, Fox, CNN)
explain how migration is a cause of accelerating globalisation
- international migration has led to extensive family networks living across the globe, leading to the spread of culture and finance (through remittances)
- international tourism has increased : more people can travel abroad for holidays due to lower transport costs
explain how culture is a cause of accelerating globalisation
- americanisation and westernisation of other (often developing) parts of the world
explain how flow of commodities is a cause of accelerating globalisation
- goods can easily be imported, increasing countries interdependence on one another (some UK bottled water is imported from Fiji, which is 10,000 miles away)
- the volume of manufactured goods has increased rapidly due to low cost countries such as Bangladesh and Vietnam
explain how technology is a cause for accelerating globalisation
- the internet has rapidly allowed the spread of information and knowledge
- social networking sites have become very popular (Facebook had 1.5 million users in 2015). networks can allow the spread of culture, ideology and opportunities for migration and tourism
- enormous server farms exist currently (eg Microsoft’s data centre in Washington) which store substantial amounts of data
list the different types of globalisation
- economic
- political
- cultural
- social
describe the features of economic globalisation
- TNCs trade products internationally, use international outsourcing and offshoring to lower costs
- industries moved to developing countries to save money on labour, bringing economic growth there
- trade blocs create economic integration between states, promotes development
- sources of income from international companies
- global transactions of money eg buying something that is shipped from China
describe the features of political globalisation
- governments form connections to trade, such as trade deals and trade blocs
- western democracies especially have had a global influence on political ideas, such as development of market economies in former communist states
- deregulation (removing state regulations) policies allow markets to grow with an international reach
- international organisations exist to harmonise national economies and political relations eg the UN
describe the features of cultural globalisation
- exposure to media sources such as television and social media allow a recognition and understanding of other cultures
- the ability to travel internationally lets people experience cultures
- individuals have a greater awareness and understanding of world events due to education and news sources
- westernisation : the domination of western cultural traits in non-western areas eg well known western brands like Starbucks seen in Asia
describe the features of social globalisation
- international immigration is creating multicultural societies where people share, adopt cultures (eg cultural food shops)
- social networking has revolutionised human connections, as tech platforms enable interactions with people living in different countries and access to international information
- global NGOs and charities are involved in the global improvement of education and health, such as the World Health Organisation and Amnesty International
what has globalisation led to?
- the lengthening of connections : people can now travel further afield and goods are brought in further away
- the deepening of connections where connections are penetrating more in depth into most aspects of life
- faster speed of connections : people can now talk in real time from different parts of the world, you can travel much faster than previously between different countries etc.
describe economic interdependence
- countries are dependent on the flows of labour, products and services entering the country in order for the economy to grow
- labour provides a workforce ; products and services mean countries can develop and make more money
describe social interdependence
- countries rely on each other for leisure activities eg TV programmes produced in other countries
- migration has caused social interdependence as there are now diasporas (groups of migrants of the same origin living in another country) all over the world that are dependent on the place they live in
describe political interdependence
- international political issues require countries working together in order to solve them. issues raised must have a unanimous decision from nations
- countries rely on other countries to intervene if there is political unrest.
- EXAMPLE : many countries intervened when there was Serbian State sponsored ethnic cleansing of Kosovo Albanians, eventually leading to Kosovo’s independence
describe environmental interdependence
- all nations are affected by other nations’ greenhouse gas emissions, nuclear waste emissions etc. meaning all countries rely on each other to protect the environment
- EXAMPLE : the nuclear fallout from the Chernobyl disaster in Ukraine reached the UK and France
INCREASING GLOBALISATION THROUGHOUT HISTORY ; 19th and 20th centuries - name the important innovations in transport
- steam power
- jet aircraft
- containerisation
how has steam power contributed to globalisation?
- in the 1800s, Britain was leading the world in the use of steam technology
- this allowed the British to move their goods and armies very quickly into key areas, such as Asia and Africa
how has jet aircraft contributed to globalisation?
- newer and more efficient aircraft have allowed goods to be transported quickly between countries
- increasing competition between affordable airlines (eg EasyJet, RyanAir, Jet2) has led to more people being able to travel abroad
how has containerisation led to globalisation?
- there are more than 200 million container movements every year and this is extremely important to the global economy.
- all sorts of goods are transported across the world, lower costs of transport is beneficial for both businesses and consumers
describe the technological advancements which have contributed to globalisation
TELEGRAPH - the first telegraph cables were laid across the Atlantic in 1860s
- this allowed for almost instantaneous communication and revolutionised how businesses operated
21ST CENTURY - how are telephones advancing?
- mobile phone use is very common across the world, with smartphones becoming even more popular
- this has allowed for better global communication
how are broadband and fibre optics advancing?
- since the 1990s, larger amounts of data can be transferred very quickly via cables laid out along the ocean floor
- introduction of fibre optic cabling for domestic abuse has accelerated telephone, internet and television speeds for the home
how is GPS advancing?
- satellites have allowed companies and people to track goods across the world
- GPS has become an essential feature of modern cars, and has led to the success of google maps
how is the internet advancing?
- internet is now extremely important
- approximately 40% of the world’s population have access to it
- social media is extremely influential, and due to their large numbers of users, has led to the rapid spread of news, knowledge and opinions
DIMENSIONS OF GLOBALISATION - what is a flow?
- when countries share things with one another
- this is a flow because things are flowing (moving) from one country to another
- flows can be physical like people or products, but can also be ideas and concepts such as money (capital), services or information
list the different flows of globalisation
- capital
- labour
- products
- services
- information
- these are the dimensions of globalisation, the reason why it exists
describe capital flows
- movement of money for the purpose of investment, trade or business production
describe labour flows
- movement of people who move to work in another country
describe product flows
- flows of physical goods from one country to another
describe service flows
- services are ‘footloose’ industries, meaning they can locate anywhere without constraints from resources or other obstacles
- services flow as they can be produced in a different country to where they are received (eg international call centres)
describe information flows
- any type of information can flow from one place to another via the internet, SMS, phone calls etc.
- EXAMPLE : international news
GOVERNANCE & DECISION MAKING INFLUENCES GLOBALISATION - what is a switched off area?
- switched off areas are usually excluded from global flows of trade, capital, labour and information
- these countries are generally left behind whilst other countries prosper and benefit from globalisation
explain the reasons why a country may be switched off from globalisation (environmental)
- landlocked countries cannot be independent in trade (they must rely on its neighbours to travel through before participating in trade)
- poor fertility of land, mountainous or arid conditions, limited land space can all reduce a country’s ability to produce a commodity for trade
- some countries are vulnerable to climate change, and so the natural environment could change to unfavourable conditions (sea levels rise, desertification etc.)
explain the reasons why a country may be switched off from globalisation (political)
- the political agenda and governance of a country may limit flows of people or culture (anti-migration policies, censorship etc.)
- terrorism or active conflict within a region can be hugely detrimental to their global connectivity
- corruption within the government means money is lost rather than invested
explain the reasons why a country may be switched off from globalisation (economic)
- LEDCs, with little finance extra, cannot afford to invest in ports, infrastructure, incentives for TNCs nor education to improve the skills of its labour force
- countries with unstable markets or weak currencies will deter investment and businesses
why are global flows seen as a threat in some countries?
- importing raw materials and commodities could hurt domestic suppliers and industries
- migrants from abroad could create tensions as they may not be wanted
- foreign information could be seen as a threat (China’s Great Firewall)
INTER-GOVERNMENTAL ORGANISATIONS (IGOs) - what are these?
- organisations that aim to enable switched off countries to become more globalised
- HOWEVER, these can be controversial in their own ways
IMF - International Monetary Fund
what is the IMF and their role?
- organisation based in Washington that loans money to poorer developing nations
- one of key conditions for recipient nations is that the country opens up its markets and industries from government control, which in turn leads to privatisation
-TNCS now have the opportunity to enter those markets more easily, this would generate financial activity and tax, but mainly for their host country (tends to be an MEDC)
why can the IMF be seen as more of a hindrance than help?
- LEDCs fall into debt with their industries privatised, which in turn could lead to profits leaving their country and potential environmental or workforce exploitation
- countries which struggle to pay their debt will have to cut back on funding in key areas such as education and healthcare, which further damages the country’s economy and welfare
The World Bank
what is the World Bank and their role?
- similar to IMF, loans money to developing nations with aim to improve development, and so enabling globalisation
why is the World Bank seen as controversial?
- like the IMF, the World Bank is also seen as controversial
- many critics say both organisations don’t benefit developing countries
- instead, they promote LEDCs to increase their debts, limit the government’s sovereignty
The WTO - World Trade Organisation
who are the WTO and what is their role?
- the WTO is headquartered in Geneva, Switzerland
- they aim to liberalise trade by removing tariffs, subsidies and quotas
why has the WTO been criticised?
- it has failed to prevent the EU and USA from implementing protectionist measures like subsidies
- so has been unsuccessful from creating equal opportunities for all countries to trade
ATTITUDES & ACTION OF NATIONAL GOVERNMENTS - what is meant by free market liberalisation?
- governance model strongly associated with the policies implemented by Ronald Reagan (US) and Thatcher (UK)
- belief that government interventions in markets would hinder economic growth, development in the long term
- as a result of market liberalisation, the banking and finance sectors were deregulated in the UK which led to London becoming one of the world’s major financial centres
what is meant by privatisation?
- until 1980s, important assets in the UK, such as railways and utilities, were owned & run by the government
- Thatcher privatised these state-owned industries ; private companies bought and ran these services, which has continued to the present day
- allowed the government at the time to raise a lot of money
- HOWEVER, some critics believe that privatisation compromises the quality of services (such is the case for Northern Rail, despite raising prices for consumers there are increasing strikes which are negatively affecting commuters)
what is meant by encouraging business start-ups?
- around the world, incentives (grants, tax breaks, infrastructure constructed) are provided by governments in order to attract businesses
- after Sunday trading began in the UK, many foreign businesses (eg Disney) were attracted to establish shops here to profit from this lucrative opportunity
what is foreign direct investment?
FDI - several kinds which all involve TNCs increasing economic or industrial activity within a country