Booklet 2 - Global Systems

Question 1

Negative Effects of the Flows of People

Answer 1

• Developing countries suffer Brain Drain
• Developing Countries become over dependent on remittances
• Loss of workers affects productivity, growth and development
• Families may be split up
• Greater movement of labour may contribute to the risk of disease pandemics

Question 2

Positive Effects of the Flows of People

Answer 2

• Reduced Unemployment
• Addresses skill and labour shortages
• Reduces some inequality as migrant workers earn higher wages in HDEs
• Remittances sent back to developing countries
• Reduces population pressure on resources

Question 3

Outsourcing Definition

Answer 3

The process of subcontracting part of a firm’s business to another company in order to save money.

Question 4

Offshoring Definition

Answer 4

Relocating some part of a firm’s activity to another country.

Question 5

Positive Effects of Flows of Ideas & Technology

Answer 5

• Brings more investment into low-wage economies which results in the multiplier effect
• Multiculturalism
• Dismantling state ownership in LDEs can lower prices
• Reducing government regulation can encourage enterprise
• Multiculturalism angles developing countries to integrate into the global economy and access markets
• Allows global markets to develop and thrive and may help some LDEs attract investment

Question 6

Negative Effects of Flows of Ideas & Technology

Answer 6

• Developments in ICT allows much more outsourcing + offshoring
• Less manufacturing and service jobs in high-wage economies
• Profits are retained, so greater inequality, as HDEs receive profits
• Deregulation can lead to more relaxed social and environmental laws in LDEs, causing social injustices and environmental degradation
• Free Trade may not always be beneficial to some LDEs, as they may be outcompeted by free trade