Globalisation Flashcards
What is globalisation?
The increasing of global interconnectedness, established through trade, investment and migration.
How has tech shrinked the world?
Increased transport times:
* 1800s, UK to Hong Kong took up to 100 days. UK to Hong Kong today takes 3-4 weeks by boat.
Cheap travel:
* Easyjet flights - low cost flights for around £50.
* 2000 - 5,600,000 Passengers
* 2019 - 96,100,000 Passengers
Quicker transference of information and money:
* “Fibre Optic Link Around the Globe” 28,000km of fibre optic connecting UK to USA to China and India.
What benefits does the EU bring?
- Free trade - EU Customs Union member states have zero or non-tarriff barriers to trade. 70% of EU imports are not tariffed.
- Free movement of people - 800,000 polish migrants to UK since 2004. Schengen area - abolished passports among members.
- FDI - WTO and EU joint talks in 2021 about how to promote FDI. 196 billion EURO FDI net, 2009 EU handles all FDI across member states.
- Care packages and loans - Romania will receive €31.5 billion as a result of the EU’s cohesion policy
- Generating economic growth. Romania’s GDP has grown 78% since joining the EU’s single market in 2007
How have SEZs promoted economic growth in China?
- 1978 open door policy - SEZs allowed TNCs to invest and set up their industries. By 1990s, 50% of China’s economy was from SEZs.
- China’s extreme poverty went from 88% in 1971 to 0.7% in 2018 as SEZs were instated.
- Car membership increased from 1/100 in 2000 to 1/5 in 2020.
What have IGOs done to promote globalisation?
- IGOs promote free trade and therefore increased trade - EU Customs Union.
- IGOs promote migration - Schengen area.
- IGOs promote globalisation as a way for countries to maintain economic stability - Jamaica - testing out Foreign Exchange Auction Systems. IMF states on their website that globalisation has great potential in reducing poverty.
What are some policies that have promoted globalisation?
- Liberalisation of the market - Sunday trading was allowed in 1994, restrictions such as price control were lifted. Monopolies were broken up allowing foreign companies to set up in the UK such as Santander.
- Privatisation of the market - Early 1980s recession led to privatisation of the market, along with railways and energy companies - post-industrial railway boom, LNER, GWER, CrossCountry and Virgin Trains and EUROSTAR.
- Neo-colonialism - West and Central African Francs are connected to the Euro, previously the French Franc. Fixed exchange rate. Interdependency on France for development.
How have TNCs promoted globalisation?
- Offshoring - TNCs such as Nike offshore to different countries to set up their own manufacturing. Nike has 600 factories across 46 different countries.
- Global outsourcing - Microsoft signed outsourcing deal with Indian IT company infosys in 2010. Deal with IT help and desk services.
- Daughter companies in foreign countries - Tesco and Tesco Lotus. Before 2020 acquisition, Tesco Lotus served 20 million customers with a variety of products. All shares were owned by Tesco. Interconnectivity is promoted as foreign companies begin to source people’s domestic products.
What are the pros and cons of IGOs promoting globalisation?
Pros:
* Intertwined economies = larger economies. Romanian GDP per capita has increased by 78% since joining the EU.
* Increased migration can increase employment and fill employment gaps - 20% of the permanent workforce in agriculture were EU nationals in the UK.
Cons:
* IGOs such as IMF can cripple countries in the pursuit of their globalisation. Real-time wages were forced to drop by 20% because of IMF’s austerity policies as a part of their loan scheme to Jamaica.
What are the pros and cons of TNCs promoting globalisation?
Pros:
* Higher employment levels - 30 million people are employed due to SEZs in China.
* Reduction in poverty in China. China’s extreme poverty went from 88% in 1971 to 0.7% in 2018 as SEZs were instated.
Cons:
* Exploitation of labour - Nike Indonesian workers earn as little as $102 dollars per month, some earning less than the Indonesian minimum wage.
* Cultural erosion - Americanisation and glocalisation - Glocalisation merges cultural items with TNC’s cultural ideals. Americanisation can degrade national identity and pride.
Why are some countries switched off to globalisation and name some examples?
- Political regime - North Korea.
- Geological location - Afghanistan has zero ports due to being landlocked. No sea-faring trade.
- Poor infrastructure due to poor economy - DRC has 6 international airports despite being the second largest country in Africa. USA has 118.
What are the pros and cons for the global shift in western countries?
Pros:
* Reduction of production costs - $28 dollars to produce and ship a $100 dollar shoe for Nike.
* Growing economy in Asia means more FDI directed towards their main consumers, western nations.
Cons:
* Spiral of decline - outcompeted General Motors by Japanese car manufacturing. 1950 manufacturing jobs in Detroit to only 20,000 in recent years.
What are the reasons for cultural erosion?
Americanisation - Disney Land Tokyo pushed western concepts of beauty etc. Promotion of english.
Glocalisation - McCurry Pan in india.
Advantages and disadvantages of globalisation on the environment.
Pros:
* IGOs promote environmental agreements. Arguably would not need to be done if globalisation did not exist however. Paris Climate accord.
Cons:
* Globalisation leads to an increase in carbon emissions. World’s largest manufacturing giant China emits the largest amount of Carbon - 27% of worlds greenhouse gases in 2019.
* Deforestation due to cash crops. Indonesia has lost 10 million acres of forests for logging, urbanisation and commercial farming.
How has globalisation created winners and losers?
- Multi-speed world. World GDP per capita is $12,234 in 2021 whereas the USA GDP per capita is $70,248 in 2021.
What does the Lorenz curve display?
The gini-coeffictient. The difference between a perfect distribution of wealth and the actual distribution of wealth.
