Power, Places, and Networks Flashcards
What is globalization?
Systems whose processes and impacts occur at a global scale
Economic: growth of TNCs
Physical: western culture, art, media, sports
Social: growth of western democracies
What are globalization indices?
KOF index of globalization
Index value overall for each country + sub-categories
Economic dimension: long-distance flow of goods, capital, services, information
Social dimension: spread of ideas, info, images, people
Political dimension: diffusion of govt policies
EY globalization index
60 largest countries by GDP according to their globalization
Looks at openness to trade, capital flow, exchange of tech and ideas, cultural integration
New globalization index
Finance, trade and politics, social factors
Uses distance that goods travel, counts refugees
Small HICs at top, rich large in middle, very large HICs and LICs at bottom
Some say it’s slowing down: protectionism since 2008, Trump, Brexit, trade barriers
What is a global superpower?
Able to influence policy worldwide, different regions simultaneously
Cultural, economic, military, geographical influence
Soft power - change individuals, communities, countries without force or coercion
Distribution of American media when visiting
Which countries were / are superpowers?
Post WW2: USA, Britain, Russia
Britain lost colonies
1942 - 1991: USA & USSR Cold War (communism vs democracy), wanted more influence
Similar in size / power → USSR broke up
After 1991: just USA, but maybe declining
EU, BRICs, OPEC states also hold superpower-y qualities
US’s insane military budget and influence allow it to pressure other nations (~800 billion)
Describe case study: China – a rising superpower
Since 1978, standard of living generally improving
China’s economic growth impacts global trade
GDP growing 8% per year
Demand for raw materials impacts world oil, metal, machinery markets
Still has characteristics of developing country bc a lot of manufacturing and agriculture
What is the G7 & G8?
G7: USA, France, Germany, Italy, UK, Japan, Canada
Advisory capacity meeting annually to discuss global issues, initially about oil
Added Russia (G8), but too much disagreement → reps smaller group
Limited actual follow-through
What is the G20?
Governments and bank governors from 20 major economies
Discuss global economics, but branch to energy depletion, ageing population, etc
173 countries not represented
What is the organization for economic cooperation and development (OECD)?
35 countries that analyze, discuss, and find policies for problems
Also works with other global institutions (UN, IMF, G20)
Aim to help countries:
Restore confidence in markets
Re-establish healthy public finances
Foster and support green growth
All ages can have skills to work productively
What is OPEC?
Organization of petroleum exporting countries (1960)
Counter oil price cuts by USA and Europe companies
Concerns about pumping capacity, but revenues allow generation of wealth anyway
Western countries must be in good relationship with Middle Eastern countries
What is the World Bank?
1944 – aid and assistance to developing countries, fight parents
Until 1967: reconstruction of post-war Europe
1968 - 1980: developing worId, more loans
1980 - 1989: lending to third world debt
1989 on: sustainable development goals in MICs
Critics:
Free-market reform harms economies
Assumes LICs cannot modernize without advice from abroad
Represents many countries but run by rich few
What is the International Monetary Fund (IMF)?
International organization overseeing global financial system
Members use funding pool to pay imbalances, usually must launch a SAP (structural adjustment program)
186 members now
Critics:
Unconcerned with democracy, human rights
SAP condition to sell national assets to western corporations
Delay in responding to problems
Controlled by major western nations
What is the New Development Bank?
Developed by BRICS (Brazil, Russia, India, China, South Africa) to support public or private projects through loans + financing tools
Mainly focusing on sustainable development
Not enough money to meet structural development of emerging economies
Describe growth trends in global trade
Doubled 2005 to 2015; slowdown in 2015
Merchandise trade increasing in emerging economics, highest in N America, Europe, Asia
Smaller amount of service trade is emerging economies
In 2015 China was lead exporter, USA und importer
Developing countries’ share in commercial services rose (esp travel and tourism)
What are top-down and bottom-up development?
Top-down: large scale, by govt / intl orgs, done by people from outside, imposed, often well-funded and quick to respond, doesn’t involve locals
Emergency relief
Bottom-up: small scale, labor intensive, for locals by locals, limited funding
Earthen dams, cottage industries
Most aid orgs say bottom-up is most effective
What is development aid?
Main donors are HICs, main recipients are in sub-Saharan Africa, Eastern Europe, Russia, SE Asia
Largest donor by $: USA + Japan
Largest relative donor (% of GNI): Norway, Denmark, Sweden
What are loans?
Transfer of money or skills that require repayment over a set time
Main pattern is transfer from rich to poor countries
In 1970 OECD target for donors to spend .7% of GNI on overseas development assistance (ODA), only 5 by 2012
ODA is largest intl resource flow for 40+ countries
What is debt relief?
Most heavily indebted countries in sub-Saharan Africa
Many developing countries borrowed in 70s/80s bc Western lenders but:
Low growth in industrialized economies
High interest rates 1975 - 1985
Oil price rises
Falling commodity prices
Heavily indebted poor countries (HIPC) initiative by IMF and World Bank
Relieve unsustainable debt, promote reform for growth, human dev, poverty reduction
2 steps: service relief (repay interest over period) after IMF program + dev of national poverty strategy, stock relief (cancel specific debts) of 90%+ of debt after IMF and world bank approval
What are structural adjustment plans (SAPs)?
Loans requiring cut to govt expenditure, reduce state intervention in economy, promote liberalization and intl trade; promote long-term economic growth
Requirements:
Greater use of resource base
Increase economy’s efficiency
Generate foreign income via economy diversification + trade
Reduce active state role
Stabilization measures: short-term to limit harm (wage freeze)
Adjustment measures: long-term to boost competitiveness (tax reduction)
What are remittances?
Money given without commercial use
Most given to South Asia
Africa and Caribbean name relatively small amount → not typical rich/poor divide
Some countrys’ incomes / GDPs reliant on remittances
Benefit as they go directly to migrants’ households
What are some forms of illegal flows?
Trafficked people: 70% international but usually within region, often victims from poor countries exploited in rich ones, mainly women + girls
Counterfeit goods: >$250 bil each year, labour exploitation, env damage, linked to corruption/ drugs/laundering, trade reduces tax revenues bc raises policing costs
Fraudulent medicines: 1% in HICs and 30% in LICs fraudulent
Counterfeit food and drink: passing food off as something else, mislabeling (wild vs. farmed), contamination
Flow of drugs: >$300 bil worldwide, associated with violence and murder
What is forgein direct investment?
Investment by a company into structures, equipment, orgs of foreign countries
Fell after 2008, improved by 2015 → mainly to HICs but some others in Asia
Positives to global shift:
HICs: cheaper imports, industrial efficiency
NICs+ LICs: higher income from exports, employment growth
Negatives to global shift:
HICs: rising unemployment, gaps between skilled and unskilled workers
NICs+ LICs: reduced food supplies, over dependence on narrow economic base
What are transnational companies (TNCs)?
Organization operating in large number of countries
HQs in HICs, assembly in LICs and NICs
Up to 1/3 of all trade is internal transfers of TNCs
TNCs typically unsustainable bc worker exploitation
Describe case study: the Tata Group
Over 100 companies (cars, consulting, software, power, hotels, coffee, etc)
80+ countries and 600K employees, 60% of revenue outside India
Economic liberalization allowed them to globalize → bought many foreign companies
Created institutions for science, research, Tata memorial hospital
Culture: loyalty, dignity, corporate social responsibility → funds worthy projects
Focusing on product not philanthropy?
Describe case study: Apple Inc. and its supply chain
One of the richest corporations
Criticism of human rights, env, ethical issues in China, though it requires safe working conditions
Main supplier Foxconn has poor conditions → 13 successful sulfides in 2010
Apple is “reactive” but Chinese labor laws don’t protect workers
