Globalisation- Enquiry Q2 Flashcards
Types of globalisation
x5
Economic Cultural Political Demographic Environmental
What is economic globalisation?
Growth of TNCs, which had a global presence and global brand image. Also, the spread of investment and rapid growth of world trade interdependence
What is cultural globalisation?
People leading increasingly similar lives with regards to food, clothes, music, religion, values and lifestyles. The emergence of a global culture which is predominantly of western origin
What is political globalisation?
The dominance of western democracies in political and economic decision making.
The spread of the view that democratic, consumerist societies are the most successful
What is demographic globalisation?
Occurs when migration and tourism increase which leads to a population becoming more mixed/ fluid
What is environmental globalisation?
A new concept, the realisation that the global threat requires global solutions
What is free trade liberalisation?
Ending the monopoly provision of some services like telephones, broadband, gas and electricity so you can choose a supplier of goods based on quality and price
What are special economic zones and why do they attract FDI?
They are:
Free trade/ export processing zones
Eg:
China FDI open door policy 1978
Reasons for FDI: No tariffs or quotas Unions are usually banned Tax free period for 10 yrs post investment Limited environmental regulation Infrastructure subsidised be government
Costs of SEZs
Lack of workers unions means the voice of workers is all but silenced Poor working conditions Low pay High environmental impact (2010 Apple workers scandal)
Benefits of SEZs
The West benefits from high quality, low cost goods
Profits can return to the companies country of origin
Encourages trade and provides local employment
Investment can lead to a better quality of life for locals
Aspects involved in the KOF Index
KOF measures degree of globalisation annually based on:
1)Economic Globalisation: cross border trade, investment + money flows
2) Social Globalisation: international calls, tourism, resident foreign population + access to foreign media
3) Political Globalisation: foreign embassies in a country, number of international organisations, involvement in trade blocs and international agreements
The role of TNC’s in Globalisation
TNC's have global reach Wal-Mart has a higher turnover than the GDP of Poland Often manufacture in SEZs Develops new markets Glocalisation Erosion of local culture Worker exploitation
What is out-sourcing ?
Usually administrative work and data processing which is handed off by a TNC to a third party company
What is off-shoring ?
Putting parts of a TNC in cheaper foreign locations, opening factories and coordination centres in countries other than that of their origin
Positive impacts of TNCs
Improved literacy rate Increased employment and spending power More tax Glocalisation Developing new markets Improved political stability Transfer of technology Increased environmental awareness
Negative impacts of TNCs
Decline of local custom Damage to environment Job loss due to outsourcing TNCs out compete local suppliers Worker exploitation Decline of agriculture causing food shortages Worker health degradation TNC tax evasion/ avoidance means government losing money and can't provide for local needs
Why is Africa in so much debt?
5 Steps
1)
Price of oil increased in the 1970’s
2)
Middle East made a lot of money which they invested in western banks. This money was then loaned to Africa in order to built power plants and dams
3)
In 80’s, global interest rates doubled, loan repayment increased and Africa couldn’t afford to repay
4)
To prevent collapse of WB, repayment date was pushed back
5)
Africa had to make cuts in health and education to repay which created a vicious cycle of poverty
What is the heavily indebted poor countries initiative?
Set up to reduce debt of poorer countries
Only eligible if your debts cannot be reduced via traditional methods
Critics suggest that the parameters are too strict
14 African countries will have their debts completely written off
Social impacts of global shift in China (Manufacturing)
300 million middle class citizens of China
Longest Highway network in the world
45% expected to be urban middle class by 2022
Poverty reduced by 74% since 1980’s
Growing rural/ urban divide
Increase in unplanned settlements
Environmental impacts of global shift in China (Manufacturing)
70% of lake and river water is now polluted, some isn’t even clean enough to irrigate farmland
100 cities suffer extreme water shortages
40% of farmland suffering from severe degradation
China’s terrestrial vertebrates have declined bu 50% since 1970
Social impacts of global shift in India (Services)
Overall rich-poor divide expanding rapidly
More people living in absolute poverty than all of Africa
Global recognition for “Process Innovation” leading to better paid, more specialist jobs
Upto 350 million middle class
2.5 million technical professionals
Stable democratic environment
Environmental impacts of global shift in India (Services)
“GDP has a direct, proportional relationship with the extent of CO2 emissions in India”- WB
Higher average income leading to higher consumption of fossil fuels
Consumerism leading to more unnecessary waste
Slum Housing
Definition of deindustrialisation
The mass closure of industries in regions traditionally associated with secondary industrial production, also features high levels of unemployment. Partly due to a global shift in production from developed to developing nations
Impacts of deindustrialisation
Spiral of decline High unemployment Crime Depopulation Dereliction
