Development and Globalisation Flashcards

1
Q

Name some common developmental indicators?

A
GDP/Capita
IMR
Doctor access
Literacy rate
Birth Rate
Death Rate
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2
Q

What is HDI?

A

Human Development Index - a compound measurement of development (better than single indicators)

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3
Q

Economics issues in LDCs?

A
  • low incomes (Ethiopia GNI/capita is $380
  • poor trade links/presence (10% of population in LDCs, 0.4% of trade)
  • debt: money must go towards high interest repayments
  • trade in low-profit goods, mostly primary resources e.g. minerals
  • trade deficits
  • economic instability and lack of diversification
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4
Q

Social issues in LDCs?

A
  • limited health care (30,000 patients/doctor in Ethiopia)
  • high IMR (75/100,000 in Ethiopia)
  • high levels of malnutrition and disease
  • low education and literacy levels (30% in Ethiopia)
  • lack of access to clean water and sanitation
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5
Q

Demographic issues in LDCs?

A
  • low life expectancy (56 in Ethiopia)

- rapid natural population growth leading to food shortages

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6
Q

Political issues in LDCs?

A
  • not truly democratic
  • corruption
  • war and conflict
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7
Q

Cultural issues in LDCs?

A
  • conservative religion hampering development

- inequality between genders and ethnic groups

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8
Q

What are the benefits of National Groupings?

A

ECONOMIC BENEFIT:

  • reducing barriers to trade, thus increasing trade (NAFTA)
  • larger market for business
  • comparative advantages as countries can specialize to maximize productivity

PROMOTING DEVELOPMENT:
- tackle issues of global concern e.g. UN Millennium Development Goals which highlighted global issues

TO INCREASE SECURITY AND PEACE
- less likely to go to war with an economic partner and also agree on policies to increase regional and global security

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9
Q

Positive consequences of National Groupings?

A
  • increase development due to increased trade
  • increasing QoL
  • can support declining regions or industries e.g. EU rural development policy
  • freedom of movement
  • better global representation for smaller countries
  • reduced conflict and improved relations
  • global security e.g. NATO
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10
Q

Negative consequences of National Groupings?

A
  • loss of some self-determination
  • sharing resources, some will lose out
  • can reduce extra-group trade
  • richer states must support poorer ones
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11
Q

What is the EU? (National grouping CS)

A

Closely integrates economic and political union:

  • single market
  • many countries with a single currency
  • common laws and policies e.g. CAP
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12
Q

Positive Impacts of EU? (National grouping CS)

A
  • trade increased (not just displaced but created outright), 12-23% GDP from EU since 1970
  • Euro means price consistency and less uncertainty about XRs
  • support for industry e.g. CAP
  • increased security from external threats e.g. biometric passports, Schengen DB
  • freedom of movement
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13
Q

Negative Impacts of EU? (National grouping CS)

A
  • joining can be expensive e.g. environmental requirements must be invested in
  • sharing resources e.g. CFP means British fishing grounds are now open to other states
  • extra-EU tariffs stifle extra-EU trade and are protectionist
  • unskilled immigration fueling tension and driving down wages
  • loss of some self-determination
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14
Q

Economic and environmental sustainability…

A

are often in conflict

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15
Q

Timber Industry in Sarawak? (Economic/Environmental Sustainability CS

A
  • one of largest tropical hardwood exporters (19mil m^3 in 1990), becoming vital to the national economy
  • this has caused widespread deforestation (70% of forests gone) leading to habitat loss, soil erosion and flooding
  • rate of logging became so great that they were going to run out in under a decade
  • since 90’s, forest management plans in place with a 25 year cutting cycle
  • illegal logging still occurs
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16
Q

Commercial Agriculture in Sarawak?

(Economic/Environmental Sustainability CS)

A
  • rising since 1990’s -> mostly palm oil (6% of exports)
  • plantations require forest clearing
  • monoculture reduces biodiversity
  • use of chemicals and waste causes water and soil pollution
  • still rising due to demand causing continued harm
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17
Q

Other Industries in Sarawak? (Economic/Environmental Sustainability CS)

A
  • since 2000, increased investment in manufacturing/construction
  • these industries require power, usually coal generated
  • this contributes to GG emissions
  • not currently environmentally sustainable
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18
Q

What/Where is the Great Barrier Reef? (Sustainable tourism CS)

A
  • largest coral reef system on Earth
  • NE coast of Australia
  • tourism accounts for 87% of area’s economic output
  • generates over AU$5bn annually
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19
Q

Negative Impacts of tourism on GBR? (Sustainable tourism CS)

A
  • coral reefs are very sensitive to pollution through waste, litter and boats
  • coral can be damaged by boat anchors and careless divers
  • GBR has passed a point of no return and will never fully recover
  • tourists disturb wildlife e.g. seabird nests upsetting local equilibrium
  • culturally and economically important area to indigenous people - this can be obstructed by tourism
  • developments can damage coastal ecosystems which sustain the reef
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20
Q

GBRMPA steps to make tourism more sustainable?

A
  • established a zoning system of activities to protect the most sensitive areas
  • fishing permits are capped and there are strict regulations
  • operators pay AU$3.50 per visitor per day to GBRMPA
  • operators play a vital role in reporting damage and helping fund research to monitor decline
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21
Q

How does aid help development?

A

Allows investment in areas aimed at improving QoL e.g. healthcare

22
Q

Problems with providing aid?

A
  • corruption, a lot of aid money simply disappears
  • logistical issues delivering aid, particularly w/ poor infrastructure
  • bilateral aid can be tied to benefit the donor country
  • dependence on aid can develop
23
Q

How does trade help development?

A
  • increasing economic growth by creating employment and wealth
  • increasing the country’s capacity to reinvest in QoL
24
Q

Problems with trade?

A
  • less developed countries cannot compete in global market due to low-tech processes or against HIC subsidies e.g. US agriculture
  • conflict/disease/problems domestically means money cannot be invested in trade
  • can have negative social impacts e.g. depressing wages and poor working conditions
  • primary goods generate little profit and are unreliable
  • lack of diversification makes growth fragile i.e. if one good reduces in demand could stall economy
25
Q

Consensus regarding trade and aid?

A

Combination of the two is required

26
Q

What/Where is Sudan? (Trade vs Aid CS)

A
  • one of poorest countries in Africa
  • long periods of civil war and conflict
  • economy has been growing at 5% annually but this had not translated into and improvement in living standards
  • half the population live off less that $1 per day
27
Q

Aid in Sudan? (Trade vs Aid CS)

A
  • 2007, over $2bn in aid (5% of GNI)
  • 70% of this was humanitarian
  • comes from different sources
  • a lot of short-term food aid but this does nothing to address the cause
  • some is used to promote education e.g. USID funded construction of 150 schools
  • conflict and corruption makes delivery difficult
28
Q

Trade in Sudan? (Trade vs Aid CS)

A

GROWTH OF OIL IS DRIVING TRADE AND THE ECONOMY

  • 1999, Sudan began exporting oil and it is now their main export with a trade surplus
  • driven economic growth and improved their international standing and importance
  • most wealth generated remains concentrated at the top
  • little is being spent on development
  • 40% of GDP is still agricultural, which is very unreliable
  • barriers to trade and WTO rules lock Sudan out (HIC subsidies and average 20% tariffs)
29
Q

What is Globalisation?

A

The process of the world’s economies, political systems and cultures becoming more integrated and interconnected.

30
Q

What triggered Globalisation? (mainly in the 80’s)

A
  • telephone network improvements and satellites made global communication instantaneous
  • mobile communications becoming readily available
  • the internet has enabled the transmission of vast amounts of data very quickly over long distances
  • transport advances (reducing air-cargo costs, containerization, etc.)
31
Q

Four factors promoting Globalisation?

A

Flows of:

  • capital
  • production
  • services
  • people
32
Q

What are TNCs?

A
  • companies that operate in 2 or more countries
  • in 2010, accounted for 25% of global GDP
  • quickly spread capital, tech and culture
  • can exert huge political pressure (see Nigeria)
  • main driving force between globalisation
33
Q

General Structure of TNCs?

A
  • HQ’d in HICs for skilled labour
  • R&D in HICs for educated, skilled labour
  • often regional R&D centres (Samsung in Warsaw)
  • factories in RICs or NICs
  • factories in target markets to avoid tariffs
34
Q

Why have TNCs grown so rapidly in recent years?

A
  • now able to exploit low costs in NICs
  • take advantage of govt policies designed to encourage business
  • operate where labour and environmental laws are lax
  • access to growing markets
  • economies of scale, increasing profits
  • control supply chain to minimize costs
35
Q

Impacts of TNCs upon Country of Origin?

A

ECONOMIC:

  • profits repatriated from abroad
  • skilled employment
  • deindustrialization and wider decline

SOCIAL:

  • range of products increases
  • prices go down
  • unemployment leading to social decline

ENVIRONMENTAL:
- reduces local pollution

36
Q

Impacts of TNCs upon Host Countries?

A

ECONOMIC:

  • increased employment and wealth -> multiplier
  • TNCs may out-compete local businesses
  • little profit remains in the host country

SOCIAL:

  • investment may lead to a more skilled workforce
  • increase productivity
  • keep wages low and treat workers poorly
  • managerial positions are likely to be filled by employees from origin countries
  • urbanisation
  • decisions are made with little consideration for the host country - could just leave one day

ENVIRONMENTAL:

  • causes pollution
  • construction will destroy habitats
  • some investment in sustainability, maybe
37
Q

What is Wal-Mart?

A
  • largest retail TNC
  • owns numerous chains e.g. ASDA
  • still HQ’d in Arkansas
  • manufacturing shifted to NICs e.g. electronics in China
  • expanding in emerging markets e.g. Bharti Enterprises in India
  • exported the US’ idea of a supermarket globally, where everything is under one roof (not popular in India)
  • some glocalisation by buying locals chains
38
Q

Impacts of Wal-Mart in USA, the origin country? (TNC CS)

A

SOCIAL:

  • provides huge range of goods - gardens to tyres
  • most are open 24/7 for convenience
  • most jobs are poorly paid so the govt has to support employees, effectively subsidising Wal-Mart ($85mil in CA)
  • poor working conditions e.g. denying meal breaks lawsuit

ECONOMIC:

  • provides thousands of jobs
  • provides cheap goods
  • contributed to decline in manufacturing
  • out-price local businesses (for every 100 jobs created, 50 local ones lost)

ENVIRONMENTAL:

  • produces vast amounts of pollution
  • increases traffic increasing pollution
39
Q

Impacts of Wal-Mart on host countries? (TNC CS)

A

ECONOMIC:

  • jobs in construction, manufacturing and retail (209k jobs in Mexico)
  • use of local companies and farmers ($8bn annually in Canada)
  • local suppliers can use Wal-Mart to expand
  • pays very little to suppliers
  • local companies out-competed
  • most profits sent back to US

SOCIAL:

  • skilled jobs in LEDCs (policy to fill managerial roles with locals)
  • offers a reliable wage
  • poor working conditions e.g. 80hr working weeks in Bangladesh
  • donates hundreds of millions to give appearance of trying to improve conditions

ENVIRONMENTAL:

  • invests in eco-friendly e.g. in Puerto Rico 23 Wal-Marts have solar panels
  • uses huge amounts of land e.g. 29000m^2 shop in Hawaii
40
Q

What are the Asian Tigers?

A
  • first generation NICs in the 1960s

- HK, Singapore, SK, Taiwan

41
Q

Attraction of NICs?

A
  • cheap labour
  • abundance of cheap land and materials
  • reasonable infrastructure
  • business friendly environment
  • reduced tariffs
  • lax labour and environmental regulations
  • expanding domestic markets
42
Q

Why do NICs move?

A

Wages rise, companies move elsewhere, new NICs are created.

Cyclical.

43
Q

China as an NIC? (NIC CS)

A
  • since 70’s, China’s GNI/Capita has growth consistently at 10%
  • since 1978, the govt has allows and encourage privatisation, causing growth
  • tariffs and taxes cut to encourage trade - exports rose 20% annually in the 80s
  • encouraging the growth of private business
  • SEZs setup to draw in FDI, mostly through tax breaks
  • investment in education and infrastructure
  • joined WTO in 2001, further opening China

Companies moved en masse to China

44
Q

Negative Consequences of China’s growth? (NIC CS)

A
  • wider gap between rich and poor (coastal vs interior)
  • pollution, acid rain, air quality
  • poor working conditions, 130 injured in 2010 by toxic chemical in Suzhou Apple Factory
  • poor working culture, spates of suicides at many factories
45
Q

India as an NIC? (NIC CS)

A
  • annual 7% growth since 1997
  • mostly based of service industries
  • services account for 56% of GDP

Why?

  • good supply of skilled, educated labour (500k engineering graduates annually)
  • English is widely spoken
  • cheap labour
  • extensive communications infrastructure
46
Q

Local Companies driving growth in India? (NIC CS)

A
  • migrants returning to India in the 90s recognized the IT needs of HICs and setup businesses to satisfy them
  • low labour costs meant more competitive pricing
  • TNCs began to outsource to these companies to reduce costs
47
Q

TNC Relocation driving growth in India? (NIC CS)

A
  • skilled, English speaking workforce suited for back-office roles e.g. customer support
  • average salary in India is 1/10 of UK at £1200
  • KPMG employs people in 10 cities in India
48
Q

Negative Impacts of India’s Growth? (NIC CS)

A
  • TNC profits leave the country

- increasing wealth divide

49
Q

What has recent economic growth been mainly driven by?

A

Emerging Markets (China responsible for 20% of growth since 2000)

50
Q

New technologies role in growth?

A
  • new sectors
  • increasing productivity
  • R&D investment
  • automation to have drastic effects to come