Flashcards in EQ1 Deck (81)
why are large parts of Africa bypassed by globilisation?
little govt support
whats a SEZ?
a special economic zone :
refers to designated areas in countries with special economic regulations that differ to other areas in the same country.
What policies were used by the U.K. to globalise?
1) free market liberalisation
3) encouraging business startups
what's free market liberalisation ?
and 1 example
Based on two simple beliefs: 1- govt intervention in marked impedes growth
2- trickle down.
e.g: deregulation of City Of London in 1986 made London global hub for financial services.
what does the world bank do ? (+examples)
lends money on a global scale:
1950s- was used to finance development of ex colonies
1970s+1980s- invested in projects that weren't sustainable environmentally
2014- 470$ million to Philippines for poverty reduction.
What are the two goals set by the world bank to achieve by 2030?
1) end extreme poverty by decreasing percentage of people living on less than $1.90 a day to to no more than 3 percent.
2) Promote shared prosperity by fostering the income growth of the bottom 40% for every country.
what are 3 examples of innovations in transport and trade in the 1800s?
1) steam ships
2) railways- by 1904 the trans siberian railway connected mosco with china and japan
3) telegraph- 1st telegraph cables across atlantic in 1860s replaced 3 week boat journey with instant connection.
how does free trade increase globilisation?
govts remove trade barriers→costs are reduced→TNCs will see a profit and want to invest in countries→TNCs bring new ideas products cultures and generate wealth in country→QOL + development increases→demand for new products increases→economy has more TNCs and countries become more interconnected.
what are the impacts of NAFTA on Canada?
•visible trade with usa increased by 80 percent during 1st 5 years.
•visible trade with mexico doubled to reach $9 billion in 1998.
•more than 1 million jobs created since 1994
•Canadian manufacturing jobs lost to Mexicans leading to higher unemployment
what are the impacts of NAFTA on mexico?
•mexican companies are forced to adopt higher foreign standards + business practices.
•keeps mexico politically modern as it's influenced by USA+ Canadian govts.
•mexico has 0 or reduced tariffs with 60% of the world
•mexico is dependent on the usa for 88% of its exports
•many jobs created by TNCs are poorly paid
• many jobs created by TNCs require employees to live in squallor because of the lax govt rules and regulations.
• same jobs- no health and safety
name two examples of developments in transport and trade in the 21st century.
what is globilisation?
the widening and deepening of global connections. interdependence, and flows.
which terms describe the heightened connectivity that changes our conception of time and distance?
shrinking world effect
how could global flows be viewed as threats?
1)information can provide citizens with knowledge that their government finds threatening.
2)imports of raw materials +commodities can threaten a nation's own industries.
3) migrants can bring cultural diversity; not everyone welcomes this- racial tension
4) mass pollution to the environment.
what is a maquiladora?
manufacturing or export assembly plants in northern mexico, producing parts and products for the USA.
how do maquiladoras benefit corporations?
mexican labour is cheap and courtesy of the nafta trading bloc. they are duty fee and tariff free; taxes and custom fees are almost nonexistent.
how many maquiladoras are there in northern mexico?
over 1 million Mexicans work in over 3000 maquiladoras.
what are the impacts of NAFTA on the USA?
•free trade with mexico will mean US firms can set up factories there and benefit from lower labour costs, meaning more profit.
•environmental laws aren't as strict there meaning companies don't have to spend as much money on clean up.
•profits are made in mexico which return to US shareholders.
•US manufacturing jobs lost to mexicans leading to higher unemployment.
•mexican trucks allowed full access to US roads but are not limited by driving hours, leading to more accidents,
•costs are lower. leading to higher profits.
what is offshoring? and one example
when TNCs build their own new production facilities in "offshore" low wage economies. eg Fender (guitars) opened mexican plant in Ensenada in 1987.
what is foreign merging? and one example
when two firms in different countries join forces to create a single entity. eg Royal Dutch Shell has HQs in both the UK and the Netherlands.
what are examples of transfer pricing taking place?
companies like Starbucks and Amazon
low tax countries like Ireland
what is transfer pricing?
when some TNCs channel profits through a subsidiary company in a low tax country.
what is a subsidiary company?
A subsidiary company is a company owned and controlled by another company.
what is now attempting to limit transfer pricing?
The Organisation for Economic Cooperation and Development (OECD)
what is an example of foreign acquisitions?
In 2010 Cadbury (UK) was subjected to a hostile takeover by US food giant Kraft.
what is foreign acquisitions?
when a TNC launches a takeover of a company in another country.
what are thee different types of FDI?
2) foreign mergers
3) foreign acquisitions
4) transfer pricing
what is privatisation?
foreign investors gain stake in privatised national services and infrastructure. state owned services eg railways, NHS, sold to private investors to reduce gov't spending.
how is globilisation controlled in china?
• google and facebook have little/no access to china's market.
• only 34 foreign films in cinemas a year.
• strict controls of foreign TNCs in come sectors, eg chinese government rejected Coke 's planned $2.4 billion acquisition of the Chinese company Huiyuan Juice in 2008.