Topic 3: Globalisation Flashcards
Revision (94 cards)
What is Globalisation?
The process by which countries become more interconnected through free flow of goods, people, culture etc
How is globalisation achieved?
By reducing tariffs, removing tax and encouraging migration and movement of TNCs with other incentives
Why do TNCs relocate to Asia?
TNCs exploit Asia lower labour costs
What is the race to the bottom?
Competition between companies to produce and sell goods at even lower costs - this often exploits the environment or human rights.
What are economies of scale?
Reduce operating costs and encourage bulk buying.
Throw away society statistic
30% of goods are thrown away in the first year of purchasing (doesn’t include packaging)
One example of interdependence between countries
Russia - Ukraine war caused the price of fuel for many countries to skyrocket as Russia provides alot of fuel
What is a ‘shrinking world’?
The idea that through better communication (e.g. mobile phones) and transport (e.g. planes), the time taken to trade between countries is dramatically reduced - now e-commerce.
What is one financial impact of globalisation?
Large TNCs have bigger incomes than the GDPs of some countries
What is one political impact of globalisation?
Politicians often seek support of influential TNCs like The Times and Sky TV
What is one impact on population due to globalisation?
Elite migrants move to countries with bigger knowledge economies - causes brain drain
What is one impact on transport due to globalisation?
Lower transport costs allow increasing long-distance tourism.
One example of how WTO rules have not benefitted a country
Clue: hat
Bolivia - opened salt mines up to Chinese TNC (B doesn’t possess tech or money to harvest lithium under salt)
Local Valero’s are angry at loss of traditional ways of life and damage to environment.
Why were the 3 banking/trade organisations built?
After ww2, to stimulate economic growth in SE Asia and rebuild Europe.
What is IMF?
Aim/ Job
Pro
Con
Aim - maintain international financial stability by lending money and encouraging GOVs to privatise
Pro - increase private sector and generate more wealth
Con - forced poorer countries to sell off assets so wealthier TNCs
What is Austerity?
A set of economic policies implemented to reduce government debt by cutting spending or/and raising taxes
What is WTO?
Aim/ Job
Pro
Con
Aim - free trade with no barriers (trade liberalisation)
Pro - has 162 member states
Con - Wealthy countries often have more power in decisions made
What is The World Bank?
Aim/ Job
Pro
Con
Aim - uses bank deposits placed by wealthier countries to provide loans for developing countries
Pro - first loan was to France for post-war construction
Con - GOVs can become in debt and have to sell of assets to pay back
One example of WTO rules not benefitting a country
Clue: ban
2020 Indonesia banned raw nickel exports to force people to process it into goods - adds value and employment (‘export valorisation’)
EU disputed ban to WTO who ruled that the ban went against free trade rules (EU then placed tariffs on imported Indonesian rolled steel)
Who was first prime minster to fully embrace globalisation?
Name one thing that proves this
Margaret Thatcher
Forced unprofitable industries to close (like mining) to allow for cheaper overseas imports.
What is FDI?
It’s when a company or person from one country invests directly into a business or project in another country
Give on statistic about UK FDI
By 2015, UK was 4th largest recipient of FDI
What happened after 1979?
Privatisation - reduced influence of state, shares were sold to private shareholders
What are 3 cons of privatisation?
- leakage of UK profits to overseas investors
2.more easily affected by world events e.g. Russia and Ukraine war challenged UK national energy security
- Disregard for environment - water company allowed over 1 million hours’ worth of raw sewage into Uk river