Flashcards in Globalisation Deck (20):
The growing economic interdependence of countries worldwide through increasing cross border transactions freer trade
What is the WTO?
GATT became 123 countries agreeing to major reductions in tariffs and agricultural subsidies
What are the 5 factors which accelerated globalisation?
TNCS:FDI builds links between places which make consumers and the producers
Lower transport costs: steamships, containerisation, planes and railways
Computer and Internet technology: Manufacturing in diverse locations can be co-ordinated using computer software
International organisations: Trade relies on trust and cooperation and the global economy has rules and referees(WTO)
New markets: Companies invest in new markets order to make profits.
How has containerisation contributed to the shrinking world?
A normal ship can carry up to 25,000kg, they have reduced the international transport costs from 30% to 1%.
What is market liberalisation?
Removing government control and opening up markets to private companies
What is a trade bloc?
An intergovernmental agreement where Barrie's to trade(tariffs and non tariffs) are reduced or eliminated.
What are the advantages of trade blocs?
-bigger markets but no extra taxes
-national firms can merge to form transitional companies
-protection from foreign competitors and political stability
What are the disadvantages of trade bloc membership?
Loss of sovereignty
Compromise and concession
What are SEZs and why do they encourages FDI?
They are special economic zones and they attract FDI because
-they are tariff and quota free
-Unions are usually banned
-infrastructure(like port facilities, roads, power and water connections) are provided by the government
-Profits can be sent to the company HQ overseas
Taxes are usually very low and there is few environmental regulations
How have TNCs contributed to globalisation?
Developing new markets
What are the reasons that some places remain switched off from globalisation?
Political isolation(North Korea)
Physical isolation(Africa and the Himalayan countries)
Economic isolation(sub Saharan Africa particularly the Sahel are dominated by subsistence farming economy, they have little capacity to crate connections and are poor)
Desert, polar and tropical climates all limit the development of transport and trade connections
What is the global shift
The outsourcing of industry and offshoring of industry through FDI to Asia since 1980
What are the benefits of the global shift?
Major investment in roads, ports airports and power infrastructure
A shift from informal insecure employment to waged employment with a set income and some security
TNCS invest in training and skills development some of which are transferable
Major reductions in regional poverty due to emolument(almost 600 million Chinese were lifted out of poverty between 1992 and 2015)
Public services such as education and health have increased due to formal employment paying taxes
What are the costs of the global shift?
Urban sprawl and loss of productive farmland due to industries and cities expanding
New developments tend to be unplanned and sometimes poorly built, lacking key public services
Pressure on natural resources(water supply)
Low wages, long working hours and no union representation=exploitation
Rapid loss of tradition like local foods and dress( due to fast pace of urban and industrial change)
What are the environmental effects on China of the global shift?
Severe air pollution
50% of its rivers and lakes are polluted, 40% of its groundwater
Over 20% desertification
Loss of species
What are the social challenges of megacity growth?
Housing in short supply
Poverty is rife, wages are low and jobs are in sort supply
Lack of taxes means government struggles to supply basic services
Lack of water sanitation means disease and illness is common
What are the environmental challenges with megacity growth?
Sprawling slums at city edge cause deforestation and loss of farmland increases flood risk
Air pollution is high due to wood fires and industry
Rivers and lakes are polluted with sewage and industrial waste, making health problems worse
Critical resources(water) are in short supply due high demand
What are the arguments against globalisation?
Dramatic increase in resource consumption and exploitation of the natural environment(deforestation etc)
Exploited workers particularly in emerging countries
Passed political and economic power into the hands of TNCS and uncaring governments
Created increased inequality
Caused cultural erosion due to western culture taking over
Who are the winners of globalisation?
The billionaires who own TNC's
Developed countries maintaining their wealth
Rising middle class of factory and call centre workers whose incomes have risen from gaining offshore and out outsource jobs
Workers for TNCs in developed countries