global shift Flashcards
1
Q
what is the global shift?
A
the economic centre of gravity in the world
2
Q
journey through the global shift
A
- Middle Eastern power (Ottoman Empire)
- European Power (slave trade, the British Empire, colonisation)
- decrease in EU power (gone bankrupt after WW1+2)
- rise in US power
- China’s Open Door Policy in 1987 and India’s Open Door Policy in 2000 led to increased Asian power in MANUFACTURING
3
Q
what will the global shift be in the future?
A
- MINTs (Mexico, Indonesia, Nigeria and Turkey) will be on the rise
- economies like Japan and China will plateau (and either decline or boom again)
- remaining US and EU power
- increase of power for places with renewable energy resources
4
Q
why is it helpful to predict global shifts?
A
- to know where to send FDI
5
Q
why did the global shift to Asia occur?
A
- TNCs expressed interest in manufacturing in China
- TNCs expressed interest in outsourcing services like call centres in India
- Open Door Policies
- FDI flows into Asian countries
6
Q
social benefits?
A
- employment opportunities
- investment in infrastructure, education, training, health and public services
- reduction of poverty (rise in middle-class incomes in China and India)
- in China, working conditions have improved due to protests
7
Q
environmental benefits?
A
TNCs bring new equipment like rain water collection and storage (although only fixing an issue they caused)
8
Q
economic benefits?
A
- increased tax can be paid to the government to increase public spending
- TNCs bring in equipment and management techniques that independent firms use to make their own products like the Xanoi phone in China
- Chinese Banks have become some of the largest TNCs in the world
- huge economic growth from tech companies and Indian Call centres
9
Q
social costs?
A
- exploitation of migrant workers
- exploitation of sweatshop workers
- health problems from carcinogens
- low wages
- increased poverty and inequality
- decreased life expectancy
- trade union workers get sacked, threatened or killed
- TNCs will deny true allegations (corruption)
- farmers lose access to water from aquifers that TNCs pump from
- decreased consumer confidence, purchasing power and therefore demand for local goods (multiplier effect of local decrease in quality of life)
- protests are usually ended by armed guards as the government won’t listen (corruption) to workers as they lose out on the benefits from the TNC if they raise wages.
10
Q
environmental costs?
A
- eutrophication and bioaccumulation
- loss of biodiversity
- land degradation
- water and air pollution
- exploitation of resources
- wasting water
- deforestation
(poor environmental governance and laws attract TNCs to locate in LICs)
11
Q
economic costs?
A
governments and countries rely on TNCs for economic growth and stability so experience the same fluctuations as they do
12
Q
what happened in Leicester in 1980 due to global shift?
A
de-industrialisation
13
Q
what caused de-industrialisation in Leicester
A
- China’s Open Door Policy 1978
manufacturing businesses relocate to Asia for cheap labour
cheap foreign imports reduce demand for local products - Technological advancements
Typerwriters go out of business - Online shopping
Thomas Cook and textile shops out of business - Economic Liberalisation
(relaxed rules on who can own a business) small firms can’t compete with large companies - Economic crisis of 1970
14
Q
what are the social impacts of the de-industrialization in Leicester?
A
- unemployment
- cycle of poverty
people can’t access food, water, and sanitation which causes malnutrition and disease so people can’t go to work or school) - high crime rates
- deprivation
largely British Indians who migrated from high-paid manufacturing jobs
Spinney Hill and Latimer are in the top 5% of England’s most deprived areas) - leaves a generation of low qualifications (skilled workers have no jobs available)
6.9% of kids have parents who don’t work
20% live of state welfare benefits
23% have 1-4 GCSEs
16% have a degree
15
Q
what are the economic impacts of the de-industrialization in Leicester?
A
- low disposable income
decreased tax revenues, therefore government public spending decreases
decreased spending on the local economy, so secondary businesses shut down (negative multiplier effect) - derelict industrial buildings eliminate the potential for economic growth and tourism
