Globalisation EQ1 Flashcards
(104 cards)
1
Q
What is globalisation?
A
Growing interdependence of worlds economies, cultural + populations
2
Q
What is economic globasication?
A
- Growth of TNC
- Information + communication technology
- Online purchasing
3
Q
What is social globalisation?
A
- International immigration (created extensive family networks)
- Global improvements in education + health
- Social interconnectivity
4
Q
What is political globalisation?
A
- Growth of trading blocs (allow TNC to merge + make acquisitions)
- Global concerns (free trade, credit crunch)
- The world bank
5
Q
What is cultural globalisation?
A
- Successful Western cultural traits come to dominate in some territories
- Glocalisation + hybridisation
- Circulation of ideas and information
6
Q
What does COMICAT stand for?
A
COmmodities
Migrants
Information
CApital
Tourist
7
Q
What is a TNC?
A
Transnational corporation
- Business operations spread across world
8
Q
What are the flows of the movement of capital?
A
- Flows are routed daily through world stock markets
- Buy + sell in different currencies to make profit
9
Q
What are the flows of the movement of commodities?
A
- Valuable raw materials traded between nations
- Flows of manufactured goods multiplied in recent years (due to China’s lower waged economy)
In 2018, GDP was $80Bil (1/3 generated by trade flows in agriculture + industrial commodities)
10
Q
What are the flows of movement of information?
A
- Internet bought real time communication
- Facebook gained 1.5bil users in 2015
- On demand TV increased data usage
11
Q
What are the flows of movement of tourists?
A
- Budget airlines bought ‘pleasure periphery’ of distant places in easy reach
- Moneyed tourists of HIC
- China= world biggest spender on international travel (120mil trips in 2014)
12
Q
What are the flows of movement of migrants?
A
- Face obstacles due to border controls + immigration laws
- ‘Pick and mix’ attitude (embrace trace flows, attempt to resist migrant flows unless special need)
- Combined number of economic migrants + refugees reached almost 1/4bil in 2013)
13
Q
What is GDP
A
Gross domestic product
- Measure of financial value of goods + services produced within a territory
- Divided by population size (produce per capita for comparison)
14
Q
What are remittances?
A
Money migrants send home to families
15
Q
What is interdependency?
A
2 places become over reliant on financial + political connections with one another
16
Q
How is trade and transport connected?
A
Transport (communication + transport tech improving, helping trade to grow)
-> Technological progress brings change to way companies operate
Trade (economies seeking to increase profit, research into transport tech to help build new global market)
-> Economic drive tech changes when companies foster innovation
17
Q
What is spatial division of labour? (transport allow TNC to establish)
A
Moving low skilled work abroad to places where labour costs are low
18
Q
Why was steam power important in the innovation of transport?
A
- Britain became leading power in 1800s
- Steam ships moved goods quickly along trade route in Asia + Africa
19
Q
Why was railways important in the innovation of transport?
A
- 1904= 9000km Trans Siberian Railway connected Moscow with China/ Japan
- Enabled reliable + predictable movements of goods over large distances
- Still a priority today for governments
20
Q
Why was jet aircrafts important in the innovation of transport?
A
- 1960s boeing 747 made international travel more commonplace
- Transport in air more rapid + large scale
21
Q
Why was container shipping important in the innovation of transport?
A
- 200mil containers moved each year
- Transported efficiently using intermodal containers
-Loading, stacking + unloading made safe, reliable + efficient
22
Q
What are intermodal containers?
A
Large capacity storage units which can be transported long distances
23
Q
Before containerisation, how were boats usually loaded? Why was this a problem?
A
- Loaded by hand (dangerous-> someone killed every few weeks, cost £335 tonnes to move)
- Vested interest (put cargo in different sized boxes)
- Malcom McLean-> idea of shipping containers + trans pacific trading began
- Ships move 95% manufactured items + 20,000 boxes
- One container= 10,000 ipads at $0.05 each
24
Q
What are the advantages of shipping containers?
A
- More efficient
- Lower costs for consumers
- No longer manually moving containers
- Helps islands interconnect with world
- Developing economies join existing supply chains rather than building own
25
What is time-space compression?
Heightened connectivity changes our conception of time, distance + potential barriers to migration of people, good, money + info
26
What is the shrinking world effect?
Distant places start to feel closer + take less time to reach
27
An example of a company which ICT has help grow
EASYJET
- Founded in 1995 (started with small venture flights within UK)-> most of Europe's major cities now interconnected by EASYJET flights
- 1996-> flight to Barcelona and continued to grow
- Now 300 routes within EU (and extending to Egypt, Morocco)
- 2014= 200 aeroplanes carrying 65mil people per year with £4bil revenue
28
Why was the telephone + telegraph an important element in the growth of ICT?
- 1st telegraph cable (1860s) replaced 3 week boat journey
- Telephone remains core tech for communication
29
Why was broadband + fibre optics an important element in the growth of ICT?
- Large amounts of data moved quickly through cyberspace (1980s/90s)
- Now enormous flows of data conveyed across ocean floor by fibre optic cables (own by gov or TNC)
- 1mil+ km of flexible undersea cables carry worlds internet info
30
Why was GIS + GPS an important element in the growth of ICT?
- 1970s= launch of first GPS satellite
- 24 GPS 10,000km above Earth
- Continuously broadcast position + time data to users throughout world
31
Why was the internet, social networks + skype an important element in the growth of ICT?
- Computer network ARPANET (1960s) linked important research computers in handful of different locations
32
How is tech used for economic globalisation?
- ICT allows managers of distant offices + plants to keep in touch
- Help TNC to expand
33
How is tech used for social globalisation?
- Maintain long distance social relationships through ICT (supports migration)
- Skype provides cheap + powerful way for migrants to maintain link with family
34
How is tech used for cultural globalisation?
- Cultural traits are adopted, imitated + hybridised faster
35
How is tech used for political globalisation?
- Social networks raise awareness about political issues + fight for change on global scale
36
What benefits did M-Pesa mobile service have on Kenya?
- 1/3 of GDP sent through M-Pesa
Use mobiles to make payments
- Check market price before selling produce
- Women able to secure microloans by using M-Pesa to show they have good credit record
37
What is the problem with ICT in globalisation?
1. Cultural elements diluted
2. Inequality increase as wealth grows
3. Flow of info spread less desirable ideologies
4. Fuelled organised crime
5. Legal loopholes exploited
6. Environmental destruction
38
How has online banking helped with globalisation?
- Increased ease, use + speed of capital
- Migrants send remittances back home
39
What ways can global flows be viewed as threats?
1. Imports of raw materials/ commodities threaten nations own industry
2. Migrants bring cultural change + religious diversity (some don't like this)
3. Info provide citizens with knowledge gov finds unsettling
40
What is FDI?
Foreign direct investment
- Financial injection make by TNC into nations economy (COMICAT)
41
What is Bretton Woods and when was it established?
- After WW2 ('United Nations Monetary and Financial Conference)
- 44 nations met in Bretton Woods, New Hampshire
- Guiding principle that restabilised worlds economy
- Establish trusting economic relationships
42
What issues were explored before assessing the likelihood of Bretton Woods players maintaining their influence?
1. Global financial crisis (2008-09)-> resulted in gov in developing countries becoming more sceptical of finance advice
2. Geopolitical changes-> developing countries can instead approach China Development Bank
3. WTO unsuccessful in getting 159 member countries to reach global agreement
43
What is the BRICS group?
Four large, fast growing economies
Brazil, Russia, India, China, South Africa
44
What is IMF and what is its role in globalisation?
e.g. Bailout of Greek gov 2011
International Monetary Fund
- Channels loans from rich nations to countries applying for help
- Agree to run free market economies that are open to outside investment in return (TNC enter easily)
45
What are the benefits of IMF?
1. Provide loans to member nations in need of bailout
2. Fills deficit gaps
3. Technical support + assistance
46
What are the drawbacks of IMF?
1. Rules + regulations can be controversial
2. Harsh interest rates
3. Creates moral hazards (accused of unsustainable budgets)
47
What is the World Bank and what is its role in globalisation?
e.g. $470mil loan granted to Philippines (poverty programme)
- Lends money on a global scale
- Direct grands to developing countries
48
What are the benefits of the World Bank?
1. Distributed $65bil loans + grants (2014)
2. Distributes development aid
3. Funds gov projects
49
What are the drawbacks of the World Bank?
1. Strict conditions on grants + loans
2. Uncompetitive economy
3. Puts failure burden on poor
50
What is WTO and what is its role in globalisation?
e.g. Plans to link 2 of the worlds largest economies
World Trade Organisation
- Advocates trade liberalisation + asks countries to abandon protectionist attitudes
51
What are the benefits of WTO?
1. Simplifies businesses
2. Lowers prices for consumers
3. Lessens lifestyle cost
52
What are the drawbacks of WTO?
1. Failed to stop worlds richest countries from subsidising own food production
2. Economic challenges for certain industries
3. Challenges in addressing non tariff barriers
53
What is offshoring?
TNC build their own new production facilities in low wage economies
54
What are foreign mergers?
2 firms in different countries join to create single entity
55
What are foreign acquisitions?
TNC launches takeover of a company in another country
56
What is transfer pricing?
TNC has channelled profits though subsidiary company in low tax country
57
What does MOAT stand for?
Mergers (2 companies join together)
Offshoring (elements of business carried out in foreign location)
Acquisitions (company takes over another company)
Transfer pricing (locating HQ in countries with favourable fiscal policy)
58
What is free market liberalisation?
1. Gov intervention in markets impedes economic development
2. Overall wealth increase = trickle down takes place from richest to poorest
- Restrictions lifted on way companies + banks operate
59
What is trickle down?
Positive impacts on peripheral regions caused by creation of wealth in core regions
60
What is privatisation?
- Gov led the way in allowing foreign investors to gain stake in privatised national services + infrastructure
- French company Keolis owns large stake in S England railway network
61
What is SWFs?
Sovereign wealth funds
- Gov owned investment funds + banks (associated with China + countries with large revenues from oil)
62
What is encouraging business start ups?
1. Low business taxes (allows local + foreign owned business to make more profit)
- Sunday trading made UK more attractive to foreign retailers
63
What is incentivisation?
- Make location more attractive to investors
- Attract FDI
- Done by relaxing regulations, providing grants, reducing tax
64
What are trading blocs?
Voluntary international organisations exist for trading purposes, bringing greater economic strength + security
65
Why are trading blocs important?
- Trade freely with neighbours/ distant allies
- Agreements drawn by allowing state boundaries to be crossed freely by flows of goods/ money
- Encouraged by removing internal tariffs
66
What are the benefits of trading blocs?
1. Market growth
2.
67
What are tariffs?
Taxes paid when importing/ exporting goods/ services between countries
68
What are the benefits of removing tariffs for businesses?
1. Markets for firms grow (EU= Tesco had 75mil extra consumers)
2. Firms with comparative advantage in production of particular product should prosper
3. Increases demand causing economy of scale
69
What is economy of scale?
Increasing output leads to lower running average costs
70
Agreements of trading blocs
1. Preference areas (tariffs set to favour particular relationships)
2. Free trade areas
3. Customs union (intra area trade is free)
4. Common markets
5. Economic union (policies align to support smooth trade flow)
6. Political union
71
What is the MINTs group?
Classify countries who follow similar trends
Mexico, Indonesia, Nigeria, Turkey
72
What strategies are used to attract FDI?
1. Liberalism around trade
2. Reduce protectionist measures
3. Incentivisation
4. Create SEZ
73
What are SEZs?
Special Economic Zones
- Industrial area where favourable conditions are created to attract foreign TNCs
74
How did Indonesia (MINT) attract FDI?
- 1960s-> left communist rules and opened up market
- Created attractive economic + legal package (offshoring)
- World bank gave loans to develop infrastructure
X- Became low tax haven for sweatshop manufacturing
75
How did India (BRIC) attract FDI?
- 1991-> protectionist measures reduced + increased FDI
- Until 2013-> foreign retailers had to form partnership with Indian business to form presence
- Results in 90% India's shops locally owned
76
Why was the EU good?
- Simple trading bloc
- Has its own currency (€)
- Some share political legislation
- Members eligible for EU structural funds
- Helps cities gain global reputation
- Grants all citizens freedom of movement
77
What was the evolution of the EU in the UK?
-1973-> UK joined the EU
- Led to increasingly greater integration
- 1993-> evolved into single European market
- 2020-> UK left EU after the referendum
78
Why is the ASEAN (Associated of South East Asian Nations) good?
- 10 member states + 600mil people
- Established in 1967
- Eliminate tariffs for free trade
- Helped Indonesia manufacturing industries thrive
- Now planning to operate on same lines as EU
79
What happened to China when it used a detached approach (switched off)?
- Millions died from famine
- Most lived in poverty
- Strict control over FDI
- Strict quota of only 34 foreign films streamed
- No free flow of social media
80
What happened to China when it adapted to an open door approach?
- TNCs quick to establish branch plants
- FDI from TNC= $1.25tril between 2015-25
- Export more rare earth minerals
- Foreign TNC allowed to invest in some sectors of domestic market
81
Why do China have the potential to develop global hubs?
1. Gov backing
2. Politically stable
3. Emerging market
4. Good infrastructure
5. Positive image
6. Stable currency
7. Cheap skilled labour
8. Tax incentives
9. Cheap freight
10. Low risk + high return
82
What are 2 ways of measuring globalisation?
A.T. Kearney world cities index
KOF index
83
What is the A.T. Kearney world cities index and how does it measure globalisation?
- Analyse cities business activity, cultural experience + political engagement
Assess 29 metrics across 5 dimensions:
- Business activity 30%
- Human capital 30%
- Info exchange 15%
- Cultural experience 15%
- Political engagement 10%
84
What are the Kearney index ranking in 2017?
1. New York
2. London
3. Paris
4. Tokyo
5. Hong Kong
85
What are the positives + negatives of the Kearney index?
+ Has all factors
x Rely on questionable data
86
What is the KOF index and how does it measure globalisation?
- Score from 0-100
- Creating network of connections among actors at multi-continental distances
- Meditated through variety of flows
Indicators: (globalisation)
1. Economic= cross border trade, FDI, tariff free trade 36%
2. Social= spread of ideas, info, people 38%
3. Political= diffusion of gov policies 26%
87
What are the positives and negatives of the KOF index?
+ Collects huge range of data
x Validity of data limited
88
What is a TNC?
Transnational Corporation
- Large, profit making company that operated in more than 1 country
89
What are TNC designed to do?
Maximise profit by selling at high price + manufacturing in locations of low cost + low wage
90
Why do only some places benefit from FDI from TNCs?
- Not all places are suitable for production of goods
- Not all places have enough market potential to attract large retailers
91
What is offshoring?
TNC move part of own production process to other countries (reduce labour cost)
92
What is outsourcing?
TNCs contract another company to produce goods they need (rather than doing it themselves)
93
What is a global production network?
Chain of connected suppliers of parts + materials that contribute to manufacturing/ assembly of consumer goods
94
What are the risks of outsourcing?
1. Natural hazards (2011 tsunami)
2. Horsemeat entering UK supermarket supply chains (2013)
3. Collapse of Rana Plaza textile factory killed 1100 people (making clothes)
95
What is glocalisation?
TNCs changing the design of products to meet local tastes/ laws (maximise profit)
e.g. McDonald's makes different food items on menu (the Greek mac)
96
What is economic liberalisation?
Way of running country's economy using more socialist principles (not western capitalist methods)
97
What is fair trade?
Partnership between producers + companies which ensure better pay + working conditions
98
What is free trade?
Freedom for private businesses to trade + earn profit
99
What is a free market economy?
Economic + political system dominated by private ownership of business aiming to make profit
100
What is neoliberalism?
Belief in free flow of people, capital, finance, resources
101
What is privatisation?
Assets owned in public sector transferred to private sector
102
What is protectionism?
Restricting/ banning foreign companies from investing in their country
103
What is a quota?
Fixed level indicating maximum amount of imported goods which a state allows in
104
What is a subsidy?
Grants given by gov to increase profitability of key industry
