EQ1: What are the causes of globalisation and why has it accelerated in recent decades? Flashcards Preview

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Flashcards in EQ1: What are the causes of globalisation and why has it accelerated in recent decades? Deck (37)
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1
Q

What is globalisation?

A

Globalisation is defined by the Financial Times as ‘a process by which national and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transportation.

2
Q

What are the four ‘flows’ of globalisation?

A
  • Goods: the products and commodities we all buy in shops, many of which were grown or made in distant places.
  • Capital: flows of money between people, banks, businesses and governments.
  • Information: such as data transferred between businesses and people, often using the internet.
  • People: flows of migrants and tourists from one part of the world to another.
3
Q

What are the different forms of globalisation?

A
Economic globalisation
Cultural globalisation
Political globalisation
Demographic globalisation
Environmental globalisation
4
Q

Why has globalisation become a wider process?

A

Globalisation has become wider because even recently isolated places such as Sub-Saharan Africa are increasingly connected to the rest of the world through trade and tourism. It has become deeper because in the developed world our food, goods, media, music, friends and places we visit are increasingly global.

5
Q

Why have developments in transport technology been a key factor driving globalisation?

A

Transporting goods and people around the world has become cheaper over time.

The speed and ease of moving around the world have reduced the friction of distance between places as well as dramatically lowering the cost of trade.

6
Q

What types of transport can containers be used on?

A

Inter-modal

7
Q

How many shipping containers can the world’s fleet of 9500 container ships carry?

A

The world’s fleet of 9500 container ships can carry up to 18,000 twenty-foot shipping containers each.

8
Q

What have the late twentieth and early twenty-first centuries been dominated by?

A

The late twentieth and early twenty-first centuries have been dominated by developments of ICT and mobile technology.

9
Q

When was the first text message sent?

A

The first text message was sent in 1992.

10
Q

What percentage of the world’s population uses the internet?

A

Now close to 50% of the world’s population uses the internet.

11
Q

What technology carries internet data across oceans?

A

Land-based and subsea fibre optic cables

12
Q

Why is the internet and mobile communications revolution important to businesses?

A

Businesses can:

  • keep in touch with all parts of their production, supply and sales network locally and globally
  • transfer money and investments instantly
  • instantly analyse data on sales, employees and orders from anywhere within their business.
13
Q

How have many countries been able to protect their own industries and businesses?

A
  • Demanding payment of taxes and tariffs on imported goods, so making them more expensive than home-produced goods
  • Using quotas to limit the volume of imports, protecting home producers from foreign competition
  • Banning foreign firms from operating in services like banking, retail and insurance
  • Restricting, or banning, foreign companies from investing in their country.
14
Q

What is the difference between free trade and protectionism?

A

Protectionism reduces total trade volume, whereas free trade (no taxes, tariffs or quotas) increases it.

15
Q

What is the role of the World Trade Organisation (WTO) in free trade and FDI?

A

The international organisation that works to reduce trade barriers and create free trade. WTO was known as GATT (General Agreement on Tariffs and Trade) until 1995, A series of global agreements have gradually reduced trade barriers and increased free trade, although the latest round of talks began in Doha in 2001 and have not been agreed yet.

16
Q

What is the role of the International Monetary Fund (IMF) in free trade and FDI?

A

Since 1945 the IMF has worked to promote global economic and financial stability and encourage more open economies. Part of this involves encouraging developing countries to accept FDI and open up their economies to free trade.

17
Q

What has the IMF been criticised for?

A

The IMF has been criticised for promoting a ‘western’ model of economic development that works in the interests of developed countries and their TNCs.

18
Q

What is the role of the World Bank (WB) in free trade and FDI?

A

The World Bank’s role since 1944 has been to lend money to the developing world to fund economic development and reduce poverty.

19
Q

What has the World Bank (WB) been criticised for?

A

It has helped developing countries develop deeper ties to the global economy but has been criticised for having policies that put economic development before social development.

20
Q

Which global organisation has been mainly responsible for removing trade barriers between countries?

A

World Trade Organisation (WTO)

21
Q

Why do most governments actively seek global connections?

A

Most governments actively seek global connections in the belief that trade promotes economic development and wealth.

22
Q

How can governments promote globalisation?

A
  • Joining free trade blocs such as the European Union and Association of South East Asian Nations (ASEAN).
  • Opening up markets to competition.
  • Privatisation.
  • Grants and loans are often made to new businesses (called business start-ups) especially in areas that are seen to be globally important growth areas such as ICT development, pharmaceuticals or renewable energy.
23
Q

When did China first open the country up to foreign direct investment?

A

China led the way in this area when in 1978 it decided on an Open Door Policy towards FDI and in 1980 it created the Shenzhen Special Economic Zone.

24
Q

How many people, in how many countries, work in special economic zones?

A

About 50 million people in more than 100 countries work in such locations.

25
Q

Why are SEZs and similar models attractive for FDI?

A
  • They are tariff and quota-free, allowing manufactured goods to be exported at no cost.
  • Unions are usually banned, so workers cannot strike or complain.
  • Infrastructure such as port facilities, roads, power and water connections are provided by the government, providing a subsidy for investors and lowering their costs.
  • All profits made can be sent to the company HQ overseas.
  • Taxes are usually very low, and often there is a tax-free period of up to 10 years after a business invests.
  • Environmental regulations are usually limited.
26
Q

What does the KOF Index measure?

A

The KOF Index measures the degree of globalisation of countries on an annual basis. It measures three aspects of globalisation:

  • Economic globalisation
  • Social globalisation
  • Political globalisation
27
Q

How can economic globalisation be measured?

A

Economic globalisation measured by cross-border trade, investment and money flows.

28
Q

How can social globalisation be measured?

A

Social globalisation measured by international telephone calls, tourist flows, resident foreign population and access to foreign internet, TV, media and brands.

29
Q

How can political globalisation be measured?

A

Political globalisation measured by foreign embassies in a country, the number of international organisations the country is a member of and trade and other agreements with foreign countries.

30
Q

What type of population do many of the most globalised countries have?

A

Many of the most globalised countries have culturally mixed populations and have many of their residents living abroad, as well as foreigners living in their country.

31
Q

Why is the USA less globalised (ranked 34 in 2016)?

A

The USA is less globalised (ranked 34 in 2016) than might be expected but this reflects the large parts of the interior of the USA that are not well connected to the rest of the world.

32
Q

What does the AT Kearney Global Cities Index measure?

A

The AT Kearney Global Cities Index measures how economically successful cities are.

33
Q

What has much of China’s rapid economic growth been fuelled by?

A

Much of China’s rapid economic growth has been fuelled by western TNCs locating manufacturing plants in its SEZs, creating jobs and boosting exports, taking advantage of China’s economic liberalisation since 1978.

34
Q

How have TNCs contributed to globalisation?

A
  • Outsourcing
  • Offshoring
  • Developing new markets
  • Glocalisation
35
Q

What have TNCs been accused of?

A

TNCs have been accused of exploiting workers in the developing and emerging worlds by paying very low wages.

36
Q

What can outsourcing jobs to the developing world lead to?

A

Outsourcing jobs to the developing world can lead to job losses in developed countries.

37
Q

Why do some places remain ‘switched-off’ and have only weak connections to other places?

A
  • Political isolation
  • Physical isolation
  • Economic isolation
  • Environmental isolation