Global systems and global governance Flashcards
(11 cards)
globalisation
globalisation:
- globalisation - where the world has become more economically, politically and socially interconnected
- economic - exchange of goods/services across borders// global supply chains (where companies locate different parts of the production process in different countries)
- political - countries working together - international agreements e.g. paris climate agreement
- social - exchange of cultures and ideas e.g. via social media
flows of globalisation:
flows of capital:
- FDI has almost quadrupled in the last 20 years
- apple is a clear example of FDI in china - apple invests heavily in china’s factories and workers - helps china’s economy grow, but much of the profit still goes back to the USA
flows of labour:
- international migration increased by over 40% between 2000 and 2015
- highly skilled and unskilled workers migrate from one country to another, bringing aspects of their culture with them
flows of products:
- due to the global shift, production has moved to NEEs e.g. china, where production is cheaper
- china is the largest manufacturing country - made 28% of all goods globally in 2018
flows of services:
- high level services such as finance usually occur in HICs e.g. london and new york
- low level services such as customer services e.g. call centres for BT moved to india - serve the needs of people in HICs
flows of information:
- the development of email, the internet and social media has allowed people living in different countries to communicate and work together
global marketing:
- global marketing involves treating the world as one single market and using one marketing strategy to advertise a product to customers all over the world
- global marketing allows firms to exploit economies of scale - it is cheaper to have one marketing campaign for the whole world, rather than having a different campaign for every country
- example: coca-cola uses the same branding everywhere (same logo, same colors) and same slogan - “taste the feeling”
- glocalisation - products adapted to suit location e.g. mcdonald’s - india don’t have beef in their menu as it’s sacred
patterns of production and consumption
production:
past:
- in the past, most manufacturing was concentrated in industrialised countries such as USA, UK and Germany
present:
- through deindustrialisation and the global shift - manufacturing has moved to NEEs such as china - cheaper labour costs
consumption:
past:
- HICs - goods were made in the same place as they were consumed
present:
- goods mainly consumed by HICs but growing is in NEEs - e.g. due growing middle class in china
- as NEEs continue to develop, it is likely that patterns of production and consumption will shift again - their populations get wealthier - in the future, more goods will be consumed in NEEs rather than just in HICs// as wages in NEEs rise, it may become cheaper to move production to even less developed countries e.g. parts of africa
factors affecting globalisation
systems:
- systems include ways of working - e.g. just in time production - parts arrive exactly when needed - requires fast communication via ICT
financial systems:
- financial systems facilitate quicker and easier flows of money, goods and services between countries
- financial deregulation (1980s) has reduced barriers to capital flows - has allowed money to flow freely across borders - this means investors can invest in different countries more easily
trade agreements:
- trading bloc - a group of countries that join together and agree to increase trade between themselves
transport and communication systems:
- rise of technology - allow people to communicate with each other around the world quickly
- technological developments such as fibre optics and satellites have enabled large volumes of data to be transmitted long distances at high speeds - makes it easier for people to communicate instantly
- contributes to the shrinking world effect - the world seems smaller as its becoming more connected
- containerisation - large shipping containers to transport goods
- air transport - goods can be transported around the world very quickly// cheaper flights - increased tourists and migrants
management and information systems:
- global supply chains - where companies locate different parts of the production process in different countries
- large companies benefit from economies of scale
- outsourcing - hiring another company to help e.g. hiring another company to do advertising
- offshoring- moving work to another country to maximise profits
security:
- some countries work together to stay safe by making political and military alliances e.g. NATO was set up after world war II to keep peace in europe during the cold war
- however, globalisation can also increase threats to security - more opportunities for crimes such as fraud
interdependence
interdependence
- economic - countries rely on each other for economic growth
- political - countries are dependent on each other to solve issues that cannot be addressed by just one country
- social - greater connections between people living in different countries creates social interdependence
- environmental - every country in the world is dependent on the rest of the world to look after the environment
- interdependence can create inequalities between and within countries - tends to bring more benefits to developed countries and richer people - this is because flows of people, money, ideas and technology are unequal
unequal flows of people:
benefits:
- immigrants can create economic growth, as they do jobs that a country’s citizens can’t do (e.g. skilled jobs like engineering) or don’t want to do (e.g. dangerous jobs)
- many migrants send money back to their families - this is called a remittance - remittance payments can significantly increase the amount of capital flowing into less developed countries - creates economic growth in the home country
issues:
inequalities:
- less developed countries suffer from ‘brain drain’ - skilled people leave and take their knowledge with them
- (gini coefficient)
conflict:
- low-skilled migrants are often happier to work for less money than low-skilled locals - as a result, companies may depress wages for the local population - can cause conflict between the local and migrant populations
injustice:
- migrant workers are sometimes made to work in dangerous conditions for little money e.g. in qatar, 1400 people died when building facilities for the 2022 FIFA world cup
unequal flows of money:
- flows of money can include remittances, foreign aid (money given to a less developed country to increase development or help in a crisis), foreign direct investment and income from trade
benefits:
- FDI - companies invest in other countries to benefit from cheap raw materials and low labour costs
- FDI can improve quality of life as it provides an income, usually an income that is higher than other employment in low income countries
- foreign aid can be used to improve living standards or to rebuild local infrastructure after a disaster
issues:
inequalities/conflicts:
- aid can create dependency
- FDI can force out local businesses, because foreign companies can make products more efficiently
- (gini coefficient)
injustice:
- companies may pressure governments of less developed countries to pass laws that make it cheaper to invest there e.g. by cutting environmental regulation or weakening laws on working conditions
- low wages and poor working conditions in developing countries e.g. apple
unequal power relations
unequal power relations:
- developed countries have a lot of power, whereas less developed countries have limited power
power relations and climate change example:
- many of the biggest contributors to climate change are the richest countries - these countries can be reluctant to agree to proposals to limit climate change - think it’ll harm their economy
- in contrast, some of the countries that are most affected by climate change are also the poorest - find it difficult to influence other countries to reduce greenhouse gas emissions because they lack power
global institutions can reinforce unequal power relations:
world bank and IMF:
- world bank - gives out loans to support economic development
- IMF - gives out loans to support economic development and advises governments on how they could improve their economic situation (however, less developed countries are expected to pay back the loans)
- the IMF and the world bank are both based in the USA and are led by the USA and other developed countries - less developed countries (who are most likely to require a loan) therefore have less influence over the decisions of the organisations
- the IMF and world bank’s loans are conditional - the less developed country has to make changes (e.g. cutting regulation to make investment easier) in order to receive the loan
world trade in a food commodity
facts:
- staple food for 400 million people
- of all fruits, more bananas are produced than any other fruit
spatial distribution:
largest exporter:
- latin america and caribbean - bananas make up 20% of equadors exports
consumption:
- EU and USA
social:
- TNCs such as Chiquita and Dole dominate 45% of the banana market and seek to minimise costs to maximise profits, which often results in the exploitation of labour in LICs
- working conditions are often poor - many workers earn as little as $3.50 a day and work over 14 hours, often exposed to hazardous pesticides
- consumers in HICs benefit from cheap banana prices - benefits come at the expense of the exploitation of workers
- evaluation: schemes like fairtrade help improve wages and conditions - however, on a global scale, fair trade only covers 2% of bananas
economic:
- bananas make up 20% of equadors exports - provides millions of jobs - while banana trade supports LIC economies, the profits remain concentrated in HICs and TNCs
- in the UK, for every £1 spent on bananas, only 5-10p goes to the farmer - supermarkets and TNCs take the majority
- the largest slice of profits - 42% is taken by the retailer e.g. supermarkets like tescos
environmental:
- bananas are susceptible to disease - treated with chemicals - e.g. large TNCs such as chiquita apply around 30kg of chemicals per hectare per year - soil degradation
- deforestation occurs to clear land to plant bananas
- banana plantations use monoculture farming practices (only grow one type of plant) that damage local ecosystems
- evaluation - some producers are beginning to implement more sustainable practices, though their adoption is slow
fair trade:
- in the uk, 1/4 of all bananas sold are classified as fair trade - supports local farmers and producers by paying them a decent living wage
- on a global scale, fair trade only covers 2% of bananas
antarctica
global commons:
- the global commons are areas that aren’t owned by any one country or organisation - they belong to everybody
4 global commons:
- antarctica
- high seas - areas of the sea that do not belong to any country
- atmosphere
- outer space - the moon and the rest of the solar system
pressures that global commons face:
1. countries and organisations may feel they can exploit the global commons without dealing with the consequences - costs of exploiting the global commons are shared by everybody - known as ‘the tragedy of the commons’
2. increasing demand for resources (e.g. minerals and oil) - extracted from the global commons
3. new technology has made it easier to get to areas like the high seas, antarctica or outer space that were relatively inaccessible before - this makes them more vulnerable to exploitation
geography:
- 98% of antarctica is covered by ice
- surrounded by southern ocean
- average temperature is -49 °C
- cold desert - only 16cm of rain per year
antarctic convergence zone:
- at the antarctic convergence zone, there’s an upwelling of nutrient-rich cold water - krill and plankton flock along the convergence - disruption can impact the ecosystem - knock-on effects on other animals in the food chain
4 main threats to antarctica:
climate change:
- over the last 30 years, temperatures have increased by 3 degrees
- antarctica impacted from global warming at a rate 5x higher than the average rate
- warming has caused large sheets of ice around weddell sea and ross sea to melt - adélie penguins have declined as the ice has melted
- the krill population has declined by around 80% as sea ice has melted - krill are the main food source for penguins, whales and seals, so the decline in the number of krill is leading to declines in the populations of these animals as well
- climate change also causes ocean acidification - affects marine organisms
- positive feedback loop - e.g. less ice = less albedo = more warming
- climate change is a global issue - antarctica is being impacted by emissions produced elsewhere
fishing and whaling:
- overfishing can lead to extinction e.g. the patagonian toothfish - extinction is a long term threat
- can be better management overtime
- more localised threat
minerals:
- large deposits of minerals in antarctica e.g. coal, iron ore
- in the southern ocean - lots of oil
- mining is currently banned - madrid protocol 1991 - however, some countries want the ban to be revisited e.g. UK/japan/USA in 2048
- while currently not an active threat, it may pose a threat in the future
- more localised threat
tourism and research:
- 1990: 5000 visitors per year// 2016: 44,000 visitors per year
- tourism has been made easier via technology
- trampling damages fragile vegetation
- litter and waste disposal damages habitats and can harm wildlife
- antarctica is important for scientific and environmental research - requires lots of facilities, including bases for the researchers to live
- tourism is manageable through regulation - can be restricted in the future
- more localised threat
governance in antarctica:
laws:
1959 - the antarctic treaty:
- has now been signed by 58 countries
rules laid out in the treaty include:
- antarctica should only be used for peaceful reasons - no army bases or weapons are allowed on antarctica
- countries should cooperate on scientific research in antarctica by sharing results
- antarctica should remain in the global commons - individual countries cannot make a claim to it
1991 - the protocol on environmental protection to the antarctic treaty:
- banned all mining in antarctica (madrid protocol)
global institutions:
international whaling commission (IWC):
- the IWC is responsible for regulating whaling and ensuring that the whale population is at a sustainable level
- in 1982 the IWC introduced a whaling moratorium that banned all commercial whaling around the world - however, the whaling moratorium is poorly enforced - in 2018, japanese whalers killed over 300 antarctic whales for ‘scientific research’ despite the rules
united nations environment programme (UNEP):
- UNEP governs the world’s environment and is responsible for reporting activity in antarctica to the UN
- the CCAMLR aims to stop illegal fishing
- however, only small parts of the southern ocean is protected and some fishing companies move just outside protected zones to avoid restrictions
NGOs:
- NGOs play an important role in protecting Antarctica - e.g. ASOC
- As they don’t act on behalf of a particular country, they will speak up against exploitation by individual countries
- ASOC checks whether countries are sticking to the rules - e.g. 1991 Environment Protocol, IWC and CCAMLR
- ASOC also monitors the effects that climate change is having on Antarctica e.g. by checking melting ice and sea levels around Antarctica
- IGOs and NGOs are mutually reinforcing - without one, the other would be less effective
- evaluation of NGOs - NGOs do not have the power to enforce rules or create laws
impact of governance on the lives of people:
- Monitoring of melting ice in Antarctica has informed efforts to combat climate change - affects people’s daily lives - e.g. using renewable energy sources, and using cars less
- Global governance may slow down short-term economic growth in some countries e.g. limits on how many whales and fish can be caught limits the amount that countries can sell
pros and cons of globalisation
benefits of globalisation:
- integration - globalisation allows countries to solve global issues that are too great for a single country to deal with// greater integration of people creates a better understanding between people of different backgrounds and cultures
- economic growth - global trade increases economic growth// countries can also gain products and services that they would be unable to produce themselves - improves people’s standard of living
- globalisation - TNCs - positives of apple
- antarctica - positives e.g. enabled international corporation to protect the global commons
costs of globalisation:
- globalisation - TNCs - negatives of apple
- antarctica - negatives e.g. tourism has increased due to better transport
- cultural erosion – clone towns - dilution of culture - e.g. totnes costa
- environmental - e.g. global trade increases the amount of greenhouse gas emissions
TNCs
- TNCs - companies that operate in 2 or more countries
spatial patterns:
- HQ usually located in HICs - highly educated and skilled workers
- manufacturing usually takes place in NEEs/LICs - low labour costs
- this means that TNCs create linkages between countries
growth of TNCs:
- global supply chain creates economies of scale – average costs fall as output increases e.g. apple is able to bulk buy
- mergers – when one company merges with another
- acquisitions – when one company buys out another e.g. facebook and instagram 2012
- outsourcing (hiring another company to help)or offshoring(moving work to another country) to maximise profits
- global marketing – this boosts sales by creating a globally recognised brand e.g. coca cola which sells soft drinks in over 200 countries
- vertical integration - when a company merges/takes over its supply chain - either forward or backward
- horizontal integration - when a company merges/takes over another company at the same stage of production
TNC case study (apple):
spatial distribution:
- headquarters: USA, california
- manufacturing: concentrated within NEEs e.g. foxconn factories located in china, shenzhen - labour is cheaper
- markets: apple sells products all over the world
impact on china:
social:
- job creation - 4.8 million jobs created in china via apple - multiplier effect - higher employment - higher incomes - higher standards of living ✅
- poor working conditions - long working hours - work up to 12 hours per day// workers are paid an average of $1.70 per hour ❌ (despite wages being low, they are higher than the rural farming jobs)
- 14 suicides since 2010 due to poor mental health and overwork ❌
economic:
- job creation - 4.8 million jobs created in china via apple - multiplier effect - higher employment - more spending - increased tax revenue etc ✅
- repatriation of profits - profits return to the country of origin - china gets less than 5% ❌
environmental:
- manufacturing of apple products result in significant CO2 emissions - 15 million tonnes of CO2 per year ❌
- some manufacturing processes use harmful chemicals, which can pollute local environments if not handled properly - NEEs such as china are less able to handle these problems ❌
impact on HICs:
social:
- size of TNC benefits consumers - size means firms can benefit from economies of scale - lower average costs - lower prices for consumers ✅
- apples european HQ is based in cork, ireland - employs 6000 workers - high skilled labour ✅
economic:
- size of TNC benefits consumers - size means firms can benefit from economies of scale - lower average costs - lower prices for consumers ✅
- TNCs themselves benefit from cheaper labour abroad etc ✅
environmental:
- their irish operations run on 100% renewable energy ✅
- mainly impacts host country e.g. china ❌
trade
trading relationships:
- most trade takes place between developed countries
- trade is increasing in NEEs
- LICs mainly trade with HICs or NEEs
- LICs export primary commodities whereas HICs and NEEs export manufactured products
trade blocs:
- trading bloc - a group of countries that join together and agree to increase trade between themselves
WTO:
- WTO - international organisation that regulates world trade
functions/roles of WTO:
- promote free trade
- resolve trade disputes
- if agreements have been signed, WTO ensure that trade is happening as it has been agreed
access to markets:
- access to markets - refers to how easy it is for countries to trade with one another
- determined by wealth - wealthy countries can afford to pay higher tariffs - greater access to markets
- being a member of a trade bloc - trade blocs largely made up of HICs - impose common external tariffs on countries outside of the bloc - LICs may struggle to access the market
SDT agreements:
- WTO creates SDT agreements - gives LICs better market access as they are able to bypass tariffs - e.g. EU’s EBA agreement which allows LICs to export some of their products to the EU without paying tariffs
- however, some argue that SDT agreements have a negative impact on developed countries by allowing cheap imports into the country
differential access to markets:
economic impact:
- limited access to markets reduces the ability of a country to achieve economic growth
social impact:
- limited access to markets results in lower incomes and poorer standards of living for citizens
- countries with limited access to markets have less tax to invest in education and healthcare, which reduces future development
patterns of international trade and investment:
international trade:
- the volume of global trade has increased by 8x between 1980 and 2008
- increase in fair trade
- HICs still remain the biggest global traders but NEEs are slowly catching up e.g. china is now the largest exporter in the world
- LICs are becoming bigger traders but growth is slow
investment:
- FDI - investing money in another country in order to generate profits
- the volume of FDI rose dramatically from around $400 billion to $1500 billion in 20 years
- increased investment in NEEs e.g. china and india etc
- moreover, NEEs are now investing in LICs e.g. china investing in africa
- ethical investment has grown - has tripled in 10 years in the US
global governance
