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21 Cards in this Set
- Front
- Back
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Globalisation |
The process by which people, their cultures, money, goods and information can be transferred between countries with FEW or NO barriers! World is becoming more interconnected Connections between places are lengthening |
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Core vs Periphery |
Core is the the central region of trade and is where the largest benefits are felt Periphery is the outer countries that are less involved in trade and are less developed Comparisons - Core owns more than periphery and has more power. Poor supply the rich to become rich, offering natural resources. Rich still take from the poor even if they do not need them |
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Factors affecting Globalisation |
"Shrinking world" conveys a sense that technology has changed our perception of distance between places - Internet - Speed of information travelling - TNCs - Companies spread across the world operating by selling and manufacturing goods, creating global brands e.g. Coca Cola - Transport - Speed and efficiency (Jumbo Jets, Containerisation) - International Organisations - e.g. WTO and World Bank helping connect areas |
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Case Study - FLAG |
The FLAG (Fibre-optic Link Around the Globe) project is a $1.5billion 28,000km underwater cable snaking its way along the sea floor from Britain to Japan. Offers uninterrupted data traffic between Europe and Asia that was previously routed through the USA Links 75% of the Worlds population |
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Groupings of Nations (GoN) |
Groupings include OECD (Organisation for Economic Co-operation and Development) which includes the G8 (top 7 economies and Russia) plus Sweden Spain Australia and South Korea. NICs and OPEC nations are in middle income touching high income, Indonesia touches both, Saudi Arabia UAE and South Korea High income. Ex Soviet states further down with Uzbekistan and Tajikistan in Low income. Low income LDCs are war stricken, Angola is LDC that is part of OPEC. Political groupings e.g. Trade Blocs (EU) and Trade Organisations (WTO) |
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GoN - High, Medium, Low income |
Definitions used by the World Bank to describe the economic status of countries based on their GNI per Capita. Low = <$745 e.g. Sudan Middle = $746 - $9205 e.g. China High = >$9206 e.g. Spain |
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GoN - LDCs |
48 poorest nations based on level of development Weaknesses include low human development and weak governance Institutional capacity weaknesses and chronic lack of resources e.g. Sudan and Ethiopia |
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GoN - NICs |
Middle income countries that have experienced rapid industrialisation since the 1970s in South America and Asia. Large increases in secondary sector (manufacturing) and then trade Recently joined by RICs that have grown since late 1980s. E.g. China and India |
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GoN - Ex-Soviet states |
The break up of the Soviet Union in 1989 created 15 ex-soviet states, which score poor GDP and HDI figures and are described as middle or low income e.g Russia (middle) and Kazakhstan (Low) |
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GoN - OPEC |
12 major oil exporters. Earn huge money through petrodollars whilst surrounding countries are LDCs. Wealth is often unevenly distributed in the populations and the countries will have their own High, Middle, and Low income areas e.g Nigeria, Iran |
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GoN - OECD |
Group of 30 richest and most powerful countries. Top 8 are the G8. Meet to discuss and provide solutions to economic, social and environmental issues. e.g. Sweden, UK |
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GoN - Trade Bloc |
Groups of countries that make agreements to reduce barriers to trade (e.g removing tariffs and taxes on imported goods) Aim to make trade easier and increase size of markets e.g EU |
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Benefits of trade barrier reduction |
- Markets grow (when 10 countries joined the EU in 2004, TESCO gained access to 75 million extra customers. - Comparative advantage benefits countries as their cheap goods can be sold anywhere - Enlarged market increases demand, raising volume of production and lowering manufacturing costs |
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TNCs |
Top 20 TNCs are all from High Income Countries Petroleum is dominating the market Europe have the majority of top TNCs Most TNCs have high numbers of overseas assets sales and employments So very reliable on other countries for their own success |
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TNCs Environmental Impacts |
Costs - Environmental Degradation - TNCs can be a cause of environmental degradation which has the greatest impact on the poor. LEDCs often have laxer environmental laws which make them attractive to TNCs Benefits - Raising Environmental awareness - some companies become active in relation to environmental issues, upholding their corporate image, whilst responding to environmental concerns |
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TNCs Social Impacts |
Costs - Erosion of culture - TNCs erode areas' culture and tradition. E.g. Starbucks in China's forbidden city. - Growing global wealth divide - Wealth Gap between the richest and the poorest countries. Less than 1% of FDI reaches LEDCs Benefits - Raising living standards - TNCs are active in raising wages and living standards in countries such as China. |
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TNCs Economic Costs |
- Cost to the host country - It often costs the host country huge sums of money to attract the TNC. Having negative impacts on the rest of the economy - Threat to local firms - Due to economies of scale local firms can't compete financially and may go out of business |
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TNCs Economic Benefits |
- Multiplier effect - When a TNC sets up in an area this rapidly attracts other businesses as there is great business potential as workers relocate to live nearby - Transfer of Technology - Can be responsible for providing training and raising literary rates for their workforce. Helps development e.g. South Korea |
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Case Study - Tesco |
Tesco is a TNC with stores in 13 countries Using low cost locations it sells jeans for £3 Only pays 50p wages in China and India 60% of Tesco's profits come from Asia 1250 Overseas stores Employs 450,000 people Shipping goods worldwide emits a lot of greenhouse gases Pledged to cut packaging on own brands |
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