Flashcards in Globalisation Deck (110)
IMF Definition of globalisation?
The increasing integration of economies around the world particularly through the movement of goods, services and capital across borders. There are also broader cultural, political and environmental dimensions of globalisation
Global flows definition
the connections between places around the world
What are capital flows?
(money) routed daily in the world’s stock market. Businesses buy and sell money of different currencies to make profits. In 2013 the value of these foreign exchange transactions exceeded US$5 trillion per day.
What are commodity flows?
Valuable raw materials have always been traded. Flows of manufactured goods have now increased.
What are information flows?
the internet has brought real-time communication between distant places, allowing goods and services to be bought at the click of a button. Also, social media, on demand TV.
What are tourist flows?
Budget airlines have brought a ‘pleasure periphery’ of distant places within easy reach of tourists from high-incomed nations. Increasingly people from emerging economies travel abroad too.
What are migrant flows?
of all global flows the movement of people still faces the biggest challenge – number of obstacles!
What is the combined effect of increasing flows?
Places have become more interconnected
What is the impact of increased interconnection in places?
What is depth of globalisation?
the sense of being connected to other people and places in our daily lives
What is speed of globalisation?
how quickly are we able to connect with other people and places
What is length of globalisation (and how has it changed)
connections between people and places have now lengthened with products being sourced from further away than ever before
How has globalisation changed over time?
Globalised processes have been operating for millennia, but the extent and importance of these global connections are sufficiently significant to allow us to look at “Globalisation” as a new process.
What is time-space compression?
the increasing sense of connectivity that seems to be bringing people closer together even thought their distances are the same
Shrinking World definition
Thanks to technology, distant places start to feel within reach
Large-capacity storage units which can be transported long distances using multiple types of transport, such as shipping and rail, without the freight being taken out of the container
What key factors have influenced globalisation?
Improvements to travel
Expansion of TNCS
Expansion of Markets
How does expansion of TNCs accelerate globalisation?
Bring cultural & economic changes to places where products are made & consumed
Expansion into new territories to make / sell products
How does expansion of markets accelerate globalisation?
more and more people can afford to be significant consumers of goods and services – and are aware of possibilities
How does oil money accelerate globalisation?
High oil prices in 1970s created wealth in OPEC countries which then loaned money to LEDCs to kick start industrialisation
Positive consequences of social and economic grouping of nations?
International understanding brings a greater chance of peace
Removal of trade barriers increases trade and the economy
Remote regions with countries receive support from the larger grouping
People can work and move between countries more easily
Negative consequences of social and economic grouping of nations?
If decisions become centralised, sovereignty may be lost
There may be pressure to adopt central legislation
Some economic sectors may be negatively effected by having to share resources
Financial control may be lost if there is a central authority overseeing monetary policy
Examples of Economic grouping
World Bank (international)
Examples of trade groupings
Examples of Political groupings
Foreign Direct Investment (FDI) definition
A financial injection made by a TNC in to a nation’s economy either to build new facilities or merge with a firm already there
Taxes paid when importing or exporting goods and services between countries
A limited quantity of a particular product which under official controls can be produced, exported, or imported
Trade liberalisation definition
the removal or reduction of restrictions or barriers on the free exchange of goods between nations
When was the World Bank and IMF Formed?
What is the role of the World Bank and what does it do?
Its role was to be a bank to finance development
Loans money, and gives direct grants
What is the role of the International Monetary Fund and what does it do?
Its aim was to stabilise currencies
Wealthy countries contributed money to it which could then be loaned out to help countries in debt
When was the World Trade Organisation formed?
1995, succeeding the 1947 GATT
What is the role of the World Trade Organisation and what does it do?
It deals with the rules of global trade, aiming to ease trade and make it fairer
Who are players?
Individuals, groups and organisations involved in making decisions about globalisation processes
Free-Market Liberalisation/Neoliberalism definition?
Restrictions being lifted on the way companies and banks operated.
The transfer of ownership of property or businesses from a government to a privately owned entity
Ways of encouraging business start ups?
Low taxes, changes in laws etc.
What is a trade bloc?
Voluntary international organisations that exist for trading purposes, bringing greater economic strength and security to the nations that join.
What are the typical characteristics of a trade bloc?
A free trade agreement.
Voluntary agreement involving co-operation between sovereign states.
Area promoting free movement of goods and can also be free movement of people and capital.
Internal tariffs removed, common external tariffs.
What are the benefits of trade blocs?
Firms that have an advantage should prosper
Enlarged markets increase demand
Smaller national firms can merge to form TNCs
What are disadvantages of trade blocs?
Some companies/regions are excluded and left behind, for example Africa
How many people are in the EU?
What percentage of the world's wealth does the EU generate?
What is the population of the ASEAN group?
Is globalisation an automatic outcome of ‘shrinking world’ technologies?
Not everywhere has the population density or market potential to attract foreign investors.
Demographic and economic disparities can results in places being ICY ‘have nots’ as part of a digital global divide.
Political factors – barriers to flows e.g. some imports can threaten nation’s own industries
This is why organisation such as the TWO, World Bank and IMF are needed
What is the key reason for accelerating globalisation outside of Europe and NA?
Changing government attitudes (China, India and Indonesia have all embraced globalisation)
What is an SEZ?
An industrial area, often near a coastline, where favourable conditions are created to attract foreign TNCs. These conditions include low tax rates and exemption from tariffs and export duties.
What are the benefits of SEZs?
Increase economy and employment levels
What was China like before 1978?
a poor and politically isolated country, ‘switched off’ from the global economy
Millions had died from famine and most people in rural areas lied in poverty
What happen in 1978?
Deng Xiaoping came to power and began a series of radical ‘open door’ reforms to embrace globalisation whilst remaining under one-party rule
How was FDI encouraged in China, 1978?
by providing government subsidies, establishing special economic zones and developing transport infrastructure
What factors encourage FDI?
Size of economy and population
Physical location and features
How did China encourage FDI?
Providing government subsidies
Establishing special economic zones
Developing transport infrastructure
How many foreign films are allowed in China per year?
What does it mean if a country is switched off from globalisation?
They lack any strong flows of trade and investment with other places and economies
Why are some countries switched off?
Physical factors - land locked
Lack of technology
How many dimensions does the KOF index measure globalisation?
What are the dimensions the KOF index measures?
Social, economic and political globalisation
What is social globalisation?
the spread of ideas, information, and people. This includes telephone traffic, TV sets owned, tourism, migration and the number of McDonalds
What is economic globalisation?
measured through trade and FDI
What is political globalisation?
measured through the membership of international organisations (eg WTO), number of political embassies and political cooperation.
Advantages of the KOF index?
A wide range of globalisation data that is available
Allows for comparisons between countries
Uses a weighting system that takes into account missing data and rebalances discrepancies
Used since 1970
Disadvantages of the KOF index?
Bias - smaller countries are over-represented at the top (Belgium)
The internet skews data (libraries and online bookstores)
Informal economies are discounted
Illegal migrants not included
Are those at the top ‘better’ than those at the bottom? Does globalisation always bring benefits?
Who are the most globalised countries (according to the KOF index)
Ireland, Netherlands and Belgium
What does the AT Kearnery Index Measure based on?
FDI, Internet and Telephone Traffic is weighted double
Advantages of the AT Kearney index?
It covers 96% of worlds GDP
It covers 84% of worlds Population
Allows for comparison between countries
Allows for comparison over time
Disadvantages of the AT Kearney Index?
Only 64 Countries are included in the index
Weightings – who decides?
How do you measure cultural experience?
Why have TNCs grown?
due to cheap and efficient global communication networks which have allowed organisations to control the activities of dozens of affiliates via one head office
Out of the 100 largest economies in the world how many are cooperations?
What is the revenue of the top 500 US cooperations equal to?
60% of the country's GDP
Positive impacts of TNCs?
Raised living standards
Higher environmental standards
Negative impacts of TNCs
Growing global inequality
Global shift definition
The internal relocation of different types of industrial activity, especially manufacturing industries
The decline of regionally important manufacturing industries. The decline can be chartered either in terms of workforce numbers or output and production measures.
How has the UK's economy changed overtime?
Gradually transitioned from primary industries (farming) in 1800s to industry work in 1900s and onto service industries in the 20th century, and now to Quaternary industries
What is a megacity?
A mega city is a metropolitan area with a total population in excess of 10 million people
What is a world city/global city?
A city with major political and economic power E.g. New York
How has the amount of megacities changed?
1970 - just 3
2020 - over 30
What has caused megacity growth?
Natural increase (high birth, low death rates) 60%
Rural Urban migration (30
how land is being reclassification from rural to urban (10%)
area with most economic activity and development and therefore is the most prosperous
area of low or declining economic development
What are global hubs?
are switched-on places possessing qualities that make other places want to connect with them.
What makes a global hub develop?
Natural resources (coastline, oil, physical factors)
Human resources (skilled labour, large labour, language)
How is the UK interdependent?
Some sectors of the UK economy are highly dependent on Eastern European labour, as is Eastern Europe for the remittance (money)
Benefits of migration for host country
Migrants willing to do work others won't
Migrants spend money on rent and tax etc
Some are entrepreneurs
Costs of migration for host country
Local shortages of school places
New markets can develop for ethnic food
Loss of culture
Benefits of migration for source country
Remittances (accounted for 25% of Nepal's earnings in 2014)
Migrants may return with new skills
Some government spending is transferred
Costs of migration for source country
Economic loss of working demographic
Reduced economic growth
Closure of universities and services, lower QofL
What are the different types of cultural traits?
Democracy McDonalisation definition
the principles of the fast-food restaurant dominating more and more societies around the world: Efficiency, Calculability, Predictability, Control
How do TNCs influence a global culture?
Social media reach, wealth, employees, political power, interdependence
What is at the core of development?
Economic growth, technology and enterprise
What is the outercasing of globalisation?
Many different strands representing different aspects of growth
Who are are the winners and losers in the multi-speed world?
Developing countries lose more, but ultimately environmental degradation negatively effects everyone
How is wealth divide changing?
What does the Gini coefficienct measure?
inequality within countries – an index with values between 0 and 100. A value of 0 means everyone has the same income, where as 100 means high income inequality.
What does a Lorenz curve show?
how much inequality exists in a situation.
How is tensions increasing across Europe?
increasing support for right wing nationalist parties is a trend seen across much of Europe
How does the spread of globalisation increase tensions?
People are more exposed to other cultures, which can cause worry in populations
How can globalisation be reduced/controlled?
Censorship - China
Limiting Migration - Australia
Maintaining Cultural Identity
What are the proposed developments at Jumbo Valley?
23 ski lifts
1300 private residences
Shopping malls, clubs etc.
6000+ hectares of public space turned into year-round European style resort
How does globalisation cause water insecurity?
food production also depletes water supplies. Animals and crops are water intensive activities.
Problems – increasingly popular global commodities e.g. chocolate, wine, and coffee have a high water footprint. Also urbanisation is causing water use to increase.
How does globalisation cause energy insecurity?
a 50% increase in global energy use is expected by 2035.
Problem – unless significant development in alternative fuels and nuclear occurs, dirty fossil fuels will continue to provide majority of this. Scars local landscapes and threatens transition to clean energy economies.
How does globalisation cause climate insecurity?
global diffusion of manufactured items has increased the average carbon footprint. Temp rise of at least 2 degrees now seems inevitable.
What are the aims of localism?
Encourage ethical consumption
Buy locally (reduced food miles)
What are the aims of transition towns?
Basically taking localism a step further
What is a transition town?
a settlement where individuals and businesses have adopted ‘bottom-up’ initiatives with the aim of making their community more sustainable and less reliant on global trade.
Ecological footprint definition
A crude measurement of the area of land or water required to provide a person (or society) with the energy, food and resources needed to live, and also to absorb waste