4.1.3 - FACTORS CONTRIBUTING to INCREASED GLOBALISATION

Question 1

What is GLOBALISATION?

Answer 1

the PROCESS by which the World is Becoming INCREASINGLY INTERCONNECTED as a RESULT of Massively INCREASED TRADE & CULTURAL EXCHANGE

Question 2

What are 8 FACTORS CONTRIBUTING to INCREASED GLOBALISATION

Answer 2

(A) - TRADE LIBERALISATION
(B) - POLITICAL CHANGE
(C) - REDUCED COST of TRANSPORT and COMMUNICATION
(D) - INCREASED SIGNIFICANCE of GLOBAL TNC’S
(E) INCREASED INVESTMENT FLOWS (FDI)
(F) MIGRATION (within & between economies)
(G) GROWTH of the GLOBAL LABOUR FORCE
(H) STRUCTURAL CHANGE

Question 3

What is TRADE LIBERALISATION?

Answer 3

the PROCESS by which INTERNATIONAL TRADE is MADE EASIER Through REDUCTION of TARIFFS and BARRIERS

• 1947 GATT Created - RAISED LIVING STANDARDS worldwide as it ALLOWED DEVELOPING Nations to EXPORT Their GOODS To MORE INDUSTRULAISED ONES, Without Having to Pay HUGE TARIFFS

Question 4

What are the BENEFITS of GATT ( General Agreement on Tariffs & Trade )?

Answer 4

• meant NEW JOBS for UNSKILLED WORKERS
• Labour Intensive Production Manufactures in Developing Nations, ENJOYED COMPARATIVE ADVANTAGE because of LOW LABOUR COSTS

Question 5

What are 2 BENEFITS of TRADE LIBERALISATION?

Answer 5

• CONSUMERS BENEFIT as liberalised trade can HELP to LOWER PRICES and BROADEN the RANGE of QUALITY GOODS & Services AVAILABLE - as they’re now allowed to buy imported goods
• COMPANIES BENEFIT as liberalised trade DIVERSIFIES RISKS and CHANNELS RESOURCES to where RETURNS on Investment are HIGHEST

Question 6

What are 4 DRAWBACKS of TRADE LIBERALISATION?

Answer 6

• COMPETITON can INTENSIFY between businesses, between NATIONS and PROFIT MARGINS can END UP being SQUEEZED
• EMPLOYMENT that has been CREATED by Lower Trade Barriers, MAY Only be TEMPORARY
• INCREASE TRADE can mean POLLUTION or OVER-CULTIVATION of Land to KEEP UP with NEW DEMAND
• DEVELOPING Nations become ECONOMICALLY DEPENDENT on INDUSTRIALISED Ones

Question 7

Explain the Increasing Globalisation FACTOR - POLITICAL FACTOR

Answer 7

• POLITICS now Happens on a GLOBAL SCALE - Regular MEETINGS - power devolved to Govs in Trading Blocs and Organisations e.g. WTO
• LED to LESS PROTECTIONIST POLICIES and MORE TRADE between nations
• G7 Countries - Major Advanced Economies

Question 8

Explain the Increasing Globalisation FACTOR - REDUCED COST of TRANSPORT and COMMUNICATION

Answer 8

TRANSPORT :
- COST of Transporting Goods LONG DISTANCES has been REDUCED by CARGO CONTAINERS
- Can GAIN a Business EOS as they can SHIP HUGE QUANTITIES at ONCES
- CHEAPER AIRFLIGHTS for Business People for MEETINGS
COMMUNICATION :
- COMMUNICATION & TRADE via INTERNET = Exploitation in Globalisation
- MESSAGES SENT INSTANTLY and Directly - Email, Zoom
- FAR FLUNG Countries are NO LONGER ISOLATED from the Global Marketplace

Question 9

Explain the Increasing Globalisation FACTOR - INCREASED SIGNIFICANCE of TNCs

Answer 9

• has been caused by LARGE COMPANIES SETTING UP or BUYING EXISTING BUSINESSES in Other Countries
• called MNCs , from Developed Countries ( G7)
• e.g. Starbucks, Coca cola

Question 10

Explain the Increasing Globalisation FACTOR - INCREASED FDI

Answer 10

• BUSINESSES OUTSIDE of Important Market TRADE BLOCS will INVEST in a BUSINESS or SET UP PRODUCTION Inside It to GET ROUND TARIFFS , e.g. Nissan in UK
• led to globalisation –> MORE COMPANIES in MORE COUNTRIES
• can Give a COUNTRY INCOME GENERATION, JOBS, GDP GROWTH

Question 11

Explain the Increasing Globalisation FACTOR - MIGRATION

Answer 11

• many countries maintain extensive legal barriers to prevent foreigners seeking work or residency from entering their national borders
• but in the EU there is FREE MOVEMENT of PEOPLE BETWEEN NATIONS to WORK
• Immigration provides a Source of LOW INCOME, able-bodied workers

Question 12

Explain the Increasing Globalisation FACTOR - GROWTH of the GLOBAL LABOUR FORCE

Answer 12

• Global Labour Force is ONE that is FREE to SEEK BETTER JOBS in OTHER COUNTRIES
• can CAUSE RESENTMENT from HOST NATIONS, where CITIZENS FEEL that Their JOBS are being TAKEN By IMMIGRANTS

Question 13

Explain the Increasing Globalisation FACTOR - STRUCTURAL CHANGE

Answer 13

• an ECOMONIC CHNAGE that occurs when an Industry change the way it operates
• as country develops it moves away from Primary Sector Business and Employment TO MANUFACTURE as it becomes INDUSTRALISED …