Global Systems: Product Flows

Question 1

What are refined and manufactured products?

Answer 1

• Traditionally, high value goods move from high income countries to countries with the same income or lower: they are produced in places where infrastructure is present
• 1950s —> 95% of manufacturing was found in Europe, North America and Japan: it was largely consumed in these countries too
• Overtime, decentralisation and deindustrialisation in richer countries - UK manufacturing employment down 50% 1983-2013 (Offshoring)
• 2015 —> trade of refined / manufactured goods is worth £25 trillion

Dyson:
- Moved to Malaysia in 2002 causing hundreds of job losses in the UK
- Production still lies predominantly in richer countries
- Production moved to Malaysia but biggest sales in UK
- This shows the pattern is changing —> NEEs are becoming more involved

Question 2

Opportunities for LICs in the raw materials industry

Answer 2

• GM possibilities: climate adapted products
• Products will always be in demand
• Opportunities to form political relationships and alliances due to commodities being available: can be a bridge to reducing the development gap
• Development of fair trade etc. means conditions/prices are fairer
• Certain resources e.g oil command significant price and bring political advantages
• Alliances could encourage investment
• Can bring resource security domestically

Question 3

Threats for LICs in the raw materials industry

Answer 3

• Risk of competition as technology and innovation increases, enabling more areas to produce the same thing
• Vulnerable economy - Climate change —> depletion and degredation
• Challenging and risky to diversify
• There is a risk of oversaturation of the market. Supply vs demand. TNCs could intervene and use the land for cash crops (social inequality)
• Limited ability to influence the market prices —> ceiling on development which is dictated by countries which need the raw materials for products
• Raw material producers are sometimes viewed as less important or less developed: e.g mineral producers, which puts them at a disadvantage in terms of political and trade agreements