Studied by 0 peopleWhat are global systems?
Structures put in place to help the world work together
What is an example of a global system?
The World Trade system
What is Global Governance?
A movement of political integration across the world, aimed at negotiating responses to problems that affect more than one state or region
What is globalisation?
The movement of people, knowledge, ideas, goods and money across national borders, leading to interconnection.
What are the dimensions of globalisation?
Flows of capital, labour, products, services, information.
Factors that affect globalisation
Development of technologies, new systems and relationships, communications, trade agreements, migration.
What are periphery areas?
Poorer areas, that may receive exploitation, economic leakage, and out migration.
What are core areas?
Economically important areas that attract invesment
What is the International Monetary Fund?
an international corporation that aims to foster global cooperation, secure financial stability, facilitate trade, promote employment and sustainable economic growth, and reduce poverty.
What is foreign direct investent?
Investments into another country that aim to make lasting interest. The investor has significant influence on operations.
What is a remittance?
Money sent home to friends and family by migrants living in a different location.
Why does the World Bank give out money?
Disaster relief and development loans for periphery areas.
Why does the IMF give money to periphery areas?
Stabilising loans- low interest loans to stabilise economies and prevent economic collapses.
Why are remittances important?
They provide money to those in periphery areas who may not be able to afford necessities, creating a higher quality of life.
How much money did India have in remittances in 2022?
$111.2 billion
How do remittances create a more equitable society?
They help to reduce poverty, so allow for development in periphery areas- helps out economy, allowing for more infrastructure to be made to facilitate development.
What are the disadvantages of remittances?
Large taxes- up to 35%, increased interdependence- economic crisis spreads to periphery countries.
What scale do remittances work on?
Local- benefits individual households rather than contributing to broader systemic changes that are necessary for long term development.
What are the flows of labour?
Migration- economic migrants are those that move for work. 3.5% of the world are international migrants.
What percentage of HIC populations are international migrants?
14.1%, compared to 1.6% in LICs.
What are the major labour flows in Asia?
63 million moved from different parts of Asia in 2017- biggest labour flow in the world. Majority are between south and west Asia.
What are the main labour flows in Europe?
41 million moved to other areas within Europe in 2017. Germany holds the largest amount of European migrants- most moved from East Europe.
What are the main labour flows in Africa?
19 million people move within African countries. Movement is typically between neighbouring countries, as moving is costly and the majority of these countries are low income.
How many Asian migrants moved to North America in 2017?
17 million.
What is the brain drain?
Skilled workers in periphery areas move to core areas for better job prospects. Those left take positions that do not require training, which can lead to poverty, exploitation, overpopulation and illegal work.
What are the flows of products?
The movement of produced goods from area of production to area of consumption.
What was the value of world trade of food and manufactured commodities in 2015?
$25 trillion
When was the UN formed?
1945
How many member countries are in the UN?
193
What are the UN main objectives?
Maintain international peace security, develop friendly relationships between nations, co-operate in solving international progress, and peace, dignity and equality on a healthy planet.
How many members are in the WTO?
164
What do the WTO do?
Oversee global trade, ensuring it flows smoothly and is predictable.
How have the WTO improved trade?
Average tariffs have halved, trade volumes double, trade in services has grown faster than trade in good.
What are the WTO main aims?
Offer members tools to solve trade differences, help to promote transparency of trade policies, helps to build trading capacity.
When was the IMF formed?
July 1944, after the great depression
How many members are in the IMF?
190
What do the IMF do?
Oversee global financial systems, framework for international economic co-operation, discourage policies that harm prosperity.
When was the world bank formed?
December 27th 1944
How many member countries are in the WB?
189
What are the aims of the WB?
Create a pro-investment environment, improve omic stability by reducing poverty, work towards achieving sustainable growth. Predominantly for periphery areas.
What are some of the criticism of globalisation?
Overdependency, technology, transport issues, cultural homogenisation, contributes to climate change.
What is interdependance?
The state of being dependant on one another
What does overdependency lead to?
Inequality between countries, inequalities within countries, geopolitical conflict, inequality within labour.
What are the negative impacts of people moving freely?
Greater risk of disease/pandemics, countries find it difficult to retain their best talents (brain drain), loss of skilled workers leads to training gap, outsourcing causes unemployment in more developed countries.
What are the positive impacts of people moving freely?
Lack of workers leads to increased job opportunity, reduced inequality between workers, workers return to the origin country with new skills, addresses labour shortages e.g. recruiting nurses from far east.
Why would a company move overseas?
Outsourcing- cost saving strategies, cheaper wages, avoiding environmental and worker protection laws, lower start-up costs, access to primary materials.
What are the patterns of global trade?
Increased trade in Africa and developing Asia, increased international trade in North America, more international trade rather than national trade.
What are the barriers to trade?
Geography (e.g. being landlocked), politics, protectionism.
What is a tariff?
A tax on imports
What are trade agreements?
Contractual agreements between states, concerning their trade relationships. They exist when two or more countries agree on terms that help them trade with each other.
Why do some areas of Africa only have 1-5 trade agreements?
They are periphery areas, and world trade is dominated by core areas.
Why do the UK and Switzerland only have between 11-35 trade agreeements?
They are not part of the EU.
What are the criticisms of global trade?
-Ideas that if countries were interdependent, countries couldn’t go to war with each other- trading blocs made after ww1 to promote world peace.
-GAT replaced by WTO
What is protectionism?
The theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.
What is reshoring?
The practice of transferring a business operation that has moved overseas back to the country from which it was originally located.
What is a free market?
Emerged at the end of the 2oth century to try and remove existing trade barriers.
What are regional trade agreements?
Emerged due to increase in mobility of capital and production of good: trading blocs.
What are the dominant economic blocs?
North America, Europe, East Asia
What countries account for 25% of world trade?
USA, Germany, Japan
What country has the largest economic growth?
China
What is foreign direct investment?
Investment made by overseas governments, businesses, or individuals in foreign enterprises. An important source of funding for countries around the world.
What is NAFTA?
The North American free trade agreement is a trading bloc that came into agreement on January 1st, 1994, with the objective of eliminating tariffs and restrictions of free trade in Canada, The USA and Mexico.
What has hastened NAFTA?
-Economic challenge from Europe and Asia
-Completion of internal market of EU and European Economic Area
-Growing concern that nations left outside trade blocs would be disadvantaged.
What is the role of China in trade?
Around 80% of Africa is dominated by China in trade.
China invested $60 billion by end of 2018
Train lines, $100 million to peacekeeping aims, trained 100 journalists, large investment in infrastructure projects. Helping Africa’s economic growth.
Where does China outsource its labour intensive industries to?
Africa
By what % have China’s exports to Russia decreased by?
23.7%
What is the Trans Pacific Partnership? (TPP)
A free trade agreement between 12 countries.
What countries are in the TPP?
USA, Australia, Brunei, Chile, Japan, Vietnam, Malaysia, Mexico, New Zealand, Singapore, and Canada.
How much money did the TPP generate in a decade?
$295 billion
What % of global economy did the TPP comprise?
40%
Why was the TPP set up?
To combat/balance China’s economic growth
What are the critics of the TPP?
-Negotiations happened behind closed doors
-Deal favours corporations over others
Why did the TPP never fully develop?
The USA left- creating TPP-11. The TPP was never a complete success, as the USA had more economic power than the rest of the countries.
What is the Transatlantic Trade and Investment Partnership? (TTIP)
A free trade agreement between the EU and the US.
What are the criticisms of the TTIP?
-Secret negotiations
-USA agree with GM- could lead to UK/EU using GM too?
-Promises cheap gas- fracking- contaminates drinking water.
-Little worker protection laws in the US- EU laws are threatened
-Only 20% of big companies trade outside the UK- benefits large corporations only
-Could lead to privatisation of the NHS and schools.
What are the benefits of the TTIP?
-Could benefit the average UK household by £400 per year
-Grow Europe’s economy by €120 billion
-Prices could fall were unnecessary tariffs were cut
What is Fair Trade?
Trading partnerships based on dialogue, transparency, and respect, that seeks greater equity in international trade- sustainable development.
What is Fairtrade?
The logo is a brand of fairly traded products. Businesses apply and pay for the logo- items must meet a criteria.
What percentage of Fair Trade farmers are women?
19%
What percentage of Fair Trade workers are women?
40%
How many farmers and workers are in Fair Trade certified workplaces?
Over 1.7 million
What is the fairtrade criteria?
-opportunities for disadvantaged producers
-Transparency and accountability
-Fair Trade practices
-Fair payment
-No child labour, no forced labour
-Gender equality, freedom of association, no discrimination
-Good working conditions
-Capacity building
-Promote fair trade
-Respect for the environment
Where did Fairtrade stem from?
The work of NGOs
What is an example of how fairtrade create better working conditions?
Farmers are guaranteed a minimum price
What is free trade?
Trade free from tariffs and quota. Maximises economic output and fosters economic growth.
What are special differential treatments? (SDTs)
WTO agreements which contain provisions which give developing countries special rights. They allow other WTO members to treat them more favourably, and is a feature of multilateral, post-war trading.
Why were SDTs created?
Concerns that protectionist policies would exclude newly decolonised countries.
What forms can SDTs take?
-Tariff reductions or exemptions
-Relaxed rules of original requirements
Why are SDTs necessary?
-Historical injustices
-Unfair economic power
-The persistent development gap warrant
-’trade not aid’
-Special attention and assistance for certain countries.
What are some of the successes of SDTs?
-Improves economic wellbeing for those in LICs, generating thousands of jobs.
-Trade terms can help bridge the income gap, alleviate poverty, and promote economic growth
-Diversify economies- more products can be traded.
What are the problems with SDTs?
-Not all LICs are WTO members so can’t have SDTs- applications take 8-10 years.
-More international co-operation is needed to address the inequalities exacerbated by trade blocs.
-Richer countries believe that treatments result in cheap imports and exports.
What is a Trans National Corporation? (TNC)
Companies that operate in at least 2 countries, with headquarters in one. Not all in developed countries, some now in emerging.
Why are TNCs called a globally integrated enterprise?
They are prepared to locate different functions of the business elsewhere. Their goal is to integrate production and deliver value worldwide.
What are the characteristics of TNCs?
-Maximising global economies
-Sourcing raw materials at the lowest cost
-Controlling key supplies
-Control of processing
-Branding of products/services so they are easily recognisable.
-Outsourcing of production
Why are TNCs collectively the world’s most powerful economic force?
No intergovernmental organisation is charged with regulating their behaviour.
What is vertical integration?
Supply chain of whole company is owned
What is horizontal integration?
Company merges with another at the same stage of the supply chain.
What types of services do core areas typically provide?
Quaternary sector- research and development.
What types of services do periphery areas typically provide?
Primary/secondary sector- production.
What is glocalisation?
A product or service that has been developed to meet both local and global needs of intended customers.
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