Development and Globalisation Flashcards
(95 cards)
1
Q
Types of development
A
Economic Demographic Social Political Cultural (Dev: above, changes associated with development (continuum)).
2
Q
Economic dev
A
Inc in a country’s wealth (and dec in those in primary industry).
Greater access to natural resources + inc energy use per capita.
Environ exploited in increasingly sustainable way.
3
Q
Demographic Dev
A
Inc in life expectancy + dec in overall DR (+IMR) and falling BRs.
4
Q
Social Dev
A
Changes of factors affecting quality of life of pop.
Education, access to medical care, sanitation levels, better housing.
5
Q
Political Dev
A
Freedom means people have greater say in who forms Gov and therefore, the impact it has on their lives.
6
Q
Cultural Dev
A
Greater equality of women and better race relations in multi-cultural societies.
7
Q
Developed countries
A
Most highly developed countries with high living standards.
8
Q
Developing countries
A
Countries at lower stages of development.
9
Q
LDC’s
A
C’s with low living standards, low LE, high IMR, low education.
Sub-Saharan Africa
10
Q
NICs and RICs
A
C’s beginning to develop through industrialisation in last 40 yrs.
11
Q
Centrally Planned Economies
A
Communist c’s (few left).
North Korea
12
Q
Oil-Rich Countries
A
High GNP per head - wealth concentrated in few.
Without oil would fall into developing.
Saudi Arabia
13
Q
Development Continuum
A
Dev process with c’s at different stages of development and are developing in different ways.
14
Q
North-South Divide
A
Brandt Line
Separates rich N from poor S
15
Q
Development Gap
A
Difference in affluence of rich/poo c’s. Increased with time.
16
Q
Foreign Direct Investment
FDI
A
Investment by a TNC in c’s other than its parent.
Key to help developing c’s develop.
17
Q
Measures of Development
A
GDP (gross domestic product)
GNP (gross national product)
HDI (human development index)
Real GDP
18
Q
GDP (gross domestic product)
A
Total value of all finished goods and services produced by country in a year.
Usually per capita.
19
Q
GNP (gross national product)
A
total value of all finished goods and services produced by a country in a year
plus all net income earned by that country and its pop overseas.
- wealth varies between groups/regions
- doesn’t consider local cost of living and therefore, the purchasing power of people’s incomes.
20
Q
HDI (human development index)
A
measures:
- LE at birth
- real GDP per capita
- adult literacy and enrolment in edu at primary, secondary, tertiary levels
+ Composite measure
21
Q
Real GDP
A
per capita based on purchasing power of peoples incomes (PPP).
22
Q
LDC
A
Poorest, most economically weak of developing countries with formidable economic, institutional and human resource problems: often compounded by geographical handicaps and natural and man-made disaster.
23
Q
Categories of LDCs
A
- low income (>$800 GDP per capita)
- poor human resource base (poor nutrition, health, LE, enrolment in education)
- poor physical resource base (landlocked, drought, excessive rain, poor soils, natural disasters)
- economic vulnerability (poor level of economic diversification, energy consumption, export concentration levels and % of pop. displaced by natural disasters)
24
Q
Examples of LDCs
A
Malawi Burkina Faso Haiti Gambia Bangladesh
25
3 Characteristics of LDCs
1. Quality of life
2. Debt
3. Social Problems
26
Characteristics of LDCs
| Quality of Life
- poverty
- limited resources
- high pop growth rate
- dependent on external finance
27
Characteristics of LDCs
| Debt
1970s: borrowed from banks I developed world
causes:
- inc oil prices in 70s
- higher interest rates in 80s
- falling export prices
- problems of domestic economic management
No hope of repayment: socio-economic decline
28
Characteristics of LDCs
| Debt - Attempts to Help
1996: Monetary Fund and World Bank est. Heavily Indebted Poor Countries Programme
2005: G8 c's proposed to cancel debt of HIPC's in scheme: Multilateral Debt Relief Initiative
2007: 16 LDC's receiving debt relief under HIPC (all sub-Saharan Africa) and benefited from MDRI
29
Characteristics of LDCs
| Social Problems
2000: world leader adopted a UN Millenium Declaration targeting more HDI's
8 Millenium Goals --> 2015 Sustainable Dev Goals
30
21st Century: Investment and Development
1. Education: primary, girls
2. Health Care: improved LE, child mortality, reprod health, affordable rural primary HC, dev partnerships with NGOs
3. Agriculture Development: loans for farmers, inc fertiliser use 30%, produce 'dry season' varieties=inc food security
4. Micro-finance projects: now widespread
e. g. Grameen Bank (90% women: work from home), founders Nobel Peace Prize 2006, range of projects: clothing (export)
31
Case studies for LDCs
Malawi
Bangladesh
Burkina Faso
32
Globalisation
increasing the number of links between countries throughout the world and the greater interdependence that results from this.
33
Global marketing
marketing on a worldwide scale, taking advantage of global operational similarities, differences and opportunities to meet global objectives.
34
2 main groups in global economy
- TNCs
| - global groupings
35
6 forms of globalisation
- economic (trade, finance)
- cultural (media, art, sport)
- political (groupings)
- urban (cities importance)
- demographic (migration, population)
- linguistic (English, Chinese)
- environmental (pollution - all c's impact each other)
36
Globalisation start in 19th Century?
- transport + comm expanded
- world trade growth: inc interdependence bet rich and poor c's
- capital flows expanded as Eur c's start ops in other parts of world
37
Changes since 1950s
- more complex intern. trade
- emergence of NICs and new generation of NICs
- opening up of large economies (China, India)
- fragmentation of production process across national boundaries
38
20th Century events that shaped Globalisation
1. free market ideas (M. Thatcher)
2. deregulation of world financial markets so no longer within own national boundaries
- inc movement across intern. borders (people seeking employment)
39
Trade blocs purpose
c's joined together to stimulate trade between themselves and obtain economic benefits from co-operation
40
types of trade blocs
- free trade areas
- custom unions
- common markets
- economic unions (EU)
41
IMF
| International Monetary Fund
- oversees global financial system
- financial and tech. assistance to members
- renegotiates terms of debt on behalf of struggling c's= to prevent problem reoccurring conditions on assistance (including cuts in welfare + educ spending by Govs in developing c's = controversy)
42
World Bank
| International bank for reconstruction and development
- sorts internal investment projects (developing c's) to reduce poverty
- branch: Intern. Dev. Assoc. (IDA) provides: interest free loans with long repayment periods to low income c's
- 90s: promotes sust. dev. most funds to small scale projects
- critics: loans + conditions don't always reduce poverty + dependency
43
new International division of labour
1. High skilled + paid, managerial + research = concentrated in developed c's
2. Unskilled, low pay, assembly occupations = developing c's (low labour costs)
44
How manufacturing location changed
| The Global Shift part 1
1954: 95% in industrialised c's
- decentralisation = FDI by TNCs in developing c's take on manuf. at competitive price
The Global Shift: industrialised --> developing c's
- transfer of tech. = developing c's inc productivity without extra cost
(widens dev gap - workers in developing paid less for same job in developed c's)
45
How manufacturing location changed
| The Global Shift part 2
Start 21st Cent: >50% all manuf. in developing c's and >60% exports - manufactured goods
46
Service Industry Changes
Call centres from UK to India as employment in India is 10-20% of UK
47
Deindustrialisation in richer c's causes
global shift
outdated production methods
products at end of life cycle
poor management
48
Advantages of TNCs international strategies
- brand loyalty encouraged as people move to diff c's
- manuf. move to c's where it costs cheaper
- cost of resear.+dev. of products can spread across more sales, dec costs and inc profits
49
Coca-cola
single product
same formulas (sugar/no sugar)
same bottle design
diff bottle/can sizing to match c's standard
50
Evaluation of Globalisation
| Advantages
+ inc economic prosperity + opportunity (esp for developing nations)
+ enhances civil liberties
+ leads to more efficient allocation of resources
+ all c's benefit in the end
51
Evaluation of Globalisation
| Disadvantages
- opportunities in richer c's take talent away from poor
- impact on culture: dominant nations (USA) dominate other c's cultures = indigenous customs + values lost
- NICs take adv of low wages and employ low-cost workforce = sweatshops due to outsourcing of service work = health and social problems
- electronic sweatshops due to outsourcing of service work, (customer service, call centres and IT work to India) = longer hours + an intense work place = manifest itself in health and social problems
52
TNC
A company that operates in at least 2 countries.
HQ and R+D in origin
Centres of production overseas
As company more global = regional R+D
53
Types of TNCs
1. Resource extraction - mining, gas, oil e.g. Shell
2. Manufacturing - high tech, consumer goods, mass produced consumer goods e.g. Coca cola, Unilever
3. Service operations - banking, insurance, advertising, hotel chains, fast food outlets e.g. Barclays, McDonalds
54
Growth of TNCs
| TNCs take advantage of what to gain what?
To take adv of:
- cheaper labour costs
- gov policies (lower taxes, subsidies, grants)
- less stringent legislation on employment and pollution
To:
- cirsumvent trade barriers
- locate in markets where they want to sell
- grow to a size to achieve economies of scales, reducing costs, be more competitive
- gain geographical flexibility so can shift resources and production between locations at a global scale to maximise profit.
55
To serve global market, TNCs globalise production in following ways
- produce for market where plant is situated
- use one plant to produce for number of c's
- use integrated production where each plant performs part of process
- source parts where they assemble products close to market
56
Advantages of TNCs on origin
- high salary employment (HQs and R+D stay in home)
- outside decision making: plans affecting plants in dev c's made in home country for benefit of TNC and its profitability
- removal of capital to TNC's home country
- return of profits: successful TNcs return profits to home to be distributed among shareholders + profits taxed = inc gov revenue
57
Advantages of TNCs on host
- employment
- capital into local economy = inc disposable income = demand for housing, transport, local services
- multiplier effect: investment triggers more employment by process cumulative causation bringing greater wealth into economy
- transfer of tech = more skilled workforce, new methods adopted (just in time), component supply and quality management systems
58
Disadvantages of TNCs on host
- competition: arrival TNCs adverse effect on local companies = close = local hostility
- environmental concerns: many LEDCs less stringent pollution laws than home country = pollution levels inc from manufacturing
- labour exploitation = sweatshops
- urbanisation: workers rural to urban (affects rural as well as urban)
- loss of capital to home country
- jobs offered: low skilled. Managerial positions are often filled by people who have moved with the TNC = little prospects for locals to develop within their jobs and gain promotion
59
Disadvantages of TNCs on origin
- unemployment fot TNCs employees and those in component suppliers
- reverse multiplier effects: unemployment inc = disposable income dec = downward spiral
60
TNC Case studies
Apple
Dyson
Unilever
61
Reasons for Economic Growth in China
| 1
1978= pivotal year = change in gov attitude to move from centrally-planned to more market orientated economy (under the leadership of Deng Xiaoping). This opened China to TNCs wishing to use the country as export platform = major competitor to other Asian NICs such as South Korea.
62
Reasons for Economic Growth in China
| 2
Initially, FDI was encouraged in several small SEZs along coast, but country lacked the legal infrastructure and knowledge of intern. practices to make this prospect sufficiently attractive.
63
Reasons for Economic Growth in China
| 3
1980s steps taken to expand number of areas that could accept FDI with a minimum of red tape, accompanied by significant improvements in infrastructure.
14 coastal cities (incl. Shanghai and Shenzhen), and three coastal regions were designated ‘open areas’ for foreign investment, providing tax and other advantages.
64
Reasons for Economic Growth in China
| 4
China’s entry to the WTO in 2001 allowing better access to global markets. China has subsequently developed a huge current account surplus with which it can invest both within and elsewhere.
And cheap labour, stable political system, increasingly skilled and educated workforce etc.
65
Trading Blocs
Countries grouped together to improve trade balance.
66
Trade Groupings
1. Free trade areas (Europe Free Trade asso.)
2. Customs Unions (members have import tariffs on non-members)
3. Common markets (like CUs but greater freedom of movement of labour and capital)
4. Economic Union (members do all of above + have common policies e.g. CAP)
67
Trade Groupings Examples
World Trade Organisation
Group of 77
NATO
EU
68
Advantages of International/Global and social Groupings
- trade barriers removed = economies prosper = inc living standards
- greater overall democratic function
- greater chance of peace
- possibility of single currency (Euro)
- particular sectors of an economy supported (agriculture)
69
Disadvantages of International/Social and Global Groupings
- having to share resources may damage economic sector (UK share traditional fishing grounds)
- loss of some financial a central authority (banks e.g. Europe Central Bank)
- smaller regions in large c's demand a greater voice = separatist movements
- elites within a system can hold disproportionate amount of power through the voting system
70
Trade vs Aid
Economists argue:
1. industrialisation helps poorer c's:
- provide more manufactured goods to export
- inc trade = more revenue
- inc health + well being standards
2. depends on:
- adoption of Western style capitalism (political impacts, democratic fairer)
- economic growth 'trickling down' (provides extra money + resources = more goods = inc trade + economic growth
- promotion free trade (markets as open as possible)
71
Bilateral Aid
given directly by gov. of one country to another
72
Multilateral Aid
given by gov's to international organisations which use the money to assist in poorer c's (World Bank + UNESCO)
73
Non-Govermental Organisations
Distribute aid in various ways. Many are charities e.g. Oxfam - raise money for dev projects ensuring aid is directed at people who need it most.
74
Short term aid
Given in response to a sudden problem in a country (usually follows a disaster e.g. Indian Ocean tsunami, 2004)
75
Development Aid - trickle down
Responsible body (internally, externally) directs the operation 'from the top'. e.g. builds dams to provide irrigation water + HEP
76
Development Aid - bottom up projects
aka grass roots initiatives
Such projects funded by NGOs, working closely with local communities + using local ideas + knowledge to bring about change
77
Trade Arguments For
- WTO advocates free trade = more open markets allow flow of revenue in c's = inc wealth + stnds living
- evidence NICs: India, China
- economic partnership agreements work better (like urban regeneration schemes work better if partnerships)
78
Trade Arguments Against
- trade blocs, not free trade + LEDCs can't break into groups e.g. LEDC farmers not subsidised
- wealth doesn't always trickle down to all parts of society (poor) e.g. India + Chine have huge disparities of wealth
- econ dev depends on revenue trickling down
- TNCs have -ve impact: dictate prices, exploit labour, clos manuf plants 1st in recession
- some LDCs may never develop e.g. c's with debt, HIV/AIDs, war, drought = can't be competitive in world
79
Aid Arguments For
- dev aid helps with economic dev - tackle humanitarian issues + environmental improvements
- yes if 'bottoms up' sustainable aid e.g. Burkina Faso and water aid
80
Aid Arguments Against
- short term aid e.g. Ethiopia encourages aid dependency
- aid comes with strings attached - poverty reduction strategy papers can overcome this
- doesn't always reach those in need due to lack of access/infra or corruption
81
Sustainable Development
Dev that meets the needs of the present without compromising the ability of future generations to meet their own needs
82
Economic Sustainability
Examines ability of economies to maintain themselves when resources decline or become too expensive, and when pop's dependent on those resources are growing.
83
Sustainable Development:
| Human well being, the environment and the global economy
linked in this process:
- human potential is improved
- environ is used and managed to support people on a long term basis = implies social justice + lonf term environ sustainability
- global economy depends on natural resources of environ as source of resources + sink for emissions (these two factors are the capacity of natural systems/critical threshold controlling how far pop can inc + economy can expand)
84
1992 Rio Earth Summit Sustainability Principles
Environment:
- ppl at heart concern for sust dev
- environ protection is key part of dep process
Economic:
- right to dev must be fulfilled so as to meet equitably developmental and environmental needs of present + future generations
- all states cooperate in eliminating poverty to dec disparities in stnds of living
85
3 Pillars of Sustainability
Social
Environmental
Economic
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Challenges for Developed Countries
Finding ways to manage environ, stresses of industrialisation + consumption of natural resources (esp those non-renewable)
87
Challenges for Developing Countries
Face risk of depleting renewable resources e.g. water + forests
Challenge of funding investments in environ protection + regulating impacts of economic growth
88
Debt for Nature Swaps
Way of tackling debt + deforestation
- frees up resources in debtor c's for conservation activities
- debt swaps: involves purchasing + converting debt into local currency - use proceeds to finance local conservation projects
e. g. Brazil swapped $21m to protect Atlantic Rainforest, dry tropical forest + grassland ecosystems + dev of sust livelihoods
89
Sustainable Tourism
tourism that does not destroy what it sets out to explore
90
Relationship between tourism + environment
Pattern:
- environ attracts tourists
- mutually beneficial: tourism maintains quality scenery + historical heritage (esp when small parts vulnerable t damage)
- pressure on coasts, mtns, national parks, historic monuments + esp city centres
e. g. coral reefs die as water sports invaded
91
Green Globe
Environmental checklist made by World Travel + Tourism Council (WTTC)
- waste minimisation (reuse + recycle)
- transport
- waste water management
- energy efficiency
92
Sustainable Tourism Aims
- operates within capacity for regen + future productivity of natural resources
- contributions of locals + culture recognised
- acceptance locals have equitable share in econ benefits of tourism
- everything guided by wished of locals + communities
93
Ecotourism
form of sustainable tourism: conserve environ for future generations
- environ sound (natural environ protected)
- socially sound (involves local comm's)
- economically sound (needs of locals and their jobs)
- sustainable (no damage future gen's)
94
Egotourism
many operations are ordinary tourism dressed up as politically correct
95
Criticisms of ecotourism
- arrival foreign visitors + wealth cause resentment
- make areas dependent on tourism = unreliable esp if political unrest
e. g. unsustainable tourism - Spain
