1. Global Systems and Global Governance

What is Globalisation?

Increasing interconnectedness of people around the world through the growth of the international flow of money, ideas and culture. Globalisation can be argued to primarily be an economic process of integration which has social and cultural aspects as well

Whos famous coloniser?

Cecil Rhodes - wanted "cheap labour that is available from the natives of the colonies"

Globalisation started to take form as we know it in the 1950s by...

- Post WW2: Solid trading blocs grew out of alliances formed - increasing the complexity of world trade

- 1960s: emergence of 1st gen NICs - Taiwan & Singapore

- 1980s: 2nd gen such as Malaysia & Mexico

- 2000s: emergence of 3rd gen NICs such as India

- Last 20 years: opening up large economies to the rest of the world such as India and China has fueled the desire for existing companies to exploit opportunities there

What is the Maggie and Ronnie influence?

- Free market economies - an idea promoted by their governments in the 80s, ie, no government intervention. A model copied round the world

- Possible for banks, insures and other investment companies, who previously could only operate with in their own countries, to operate anywhere they wanted to in order to achieve the best returns on their investments

What are the two dimensions of globalisation

The processes that allowed globalisation to take place. These processes allow the movement of things, both tangible and intangible to move around the world.

The flows of globalisation that occur, These are the things that move around the world that connect places together

8 Dimensions of Globalisation

Travel - Planes, Trains, Tourists, Workers, Freight

Pollution - Global warming, Exploitation, Oceans, Atmosphere, Global Waste Trade, Denmark takes UKs rubbish

Communication - Internet, phone, News

Migration - Culture, Labour, Ideas, Knowledge

Culture - Religion, Languages, Traditions, Food, Fashion, Music

Money - Exchange, Markets, Stocks

Trade - Labour, Food, Resources, Goods, Services, Foreign Direct Investment, TNCs,

Politics - Geopolitics, Wars, Ideologies, Neo-Colonialism, Partnerships / Alliances (eg. EU)

What are the things that Flow globally?

- Information (News eg trump)

- Capital (Trading)

- Technology (eg Apple)

- Products

- Labour

- Services (UK finances)

How does Marketing Services flow around the world?

Recognizable brand is usually developed and one marketing strategy will be used to advertise the product to customers all over the world

- Having one marketing campaign on a global scale generates economies of scales

What is Global Shift?

Filtering down of manufacturing industry from developed countries to lower wage economie

What is the pattern of production?

- In 1954. 95% of manufacturing was concentrated in the industrialised economies of western countries

- Products were also largely consumed in the country of origin

- Decentralisation has occurred, largely as a result of FDI by TNCs into developing countries that are able to take on manufacturing tasks at a competitive price

- Global Shift

- Consequence = deindustrialisation in richer countries

What is the pattern of distribution & consumption?

- Product consumption still lies predominantly in the richer countries of the developed world

- Products being manufacturing in NEE economies are largely exported and sold to countries in Europe, NA and Japan - eg Dyson (UK) moved production to Malaysia

Employment in manufacturing in the UK fell by around what from 1983 to 2013?

50%

Globalisation has created an international division of labour with two main groups:

- The highly skilled, highly paid, decision-making, research and managerial occupations which, on a global scale, are mostly concentrated in more developed countries

- The unskilled, poorly paid assembly occupations, which tend to be located in developing countries that have low labour costs

- This pattern is changing - development in NEEs means that their populations are becoming more affluent and are starting to demand similar products to those that they are extorting . - Forecasting suggest that consumption will drive trade patterns more than production location decisions and so the fastest growing trade route will be between India and China & as Asia

How does New Technologies, communications and information systems help Globalisation?

- Information can now be shared easily and cheaply with an audience of billions at the click of a button

- Mobile phones are one of the most important technologies for LDEs as they connect different people, markets and so trade, in ways that werepreviously not possible

How does Global financial systems help Globalisation?

- Banks and financial services operate across the world. They are linked together by vital transmission systems that allow lending and flows of money.

- Some argue that the 2007 credit squeeze (when banks no longer wished to lend money) and subsequent 2008 global banking crisis were triggered by the collapse of US house prices.

How does Transport Systems help Globalisation?

- The world has never been more accessible. A global

transport network allows the movement of people and goods across vast distances.

- Without the friction of time and space, there are both new opportunities as well as new threats (such

as the spread of disease).

How does Security help Globalisation?

- As national boundaries have become less of a barrier to more mobile and better informed populations, traditional security measures have reduced in relative significance.

- High profile leaks of sensitive information have brought the issue of cybersecurity to greater prominence due to our reliance on information systems in all walks of life. For example, in 2016 the leak of 11.5 million financial and legal records exposed wrongdoing on a global scale.

- In the UK, the average cost of the most severe online security breaches for big corporations now starts at nearly £1.5 million.

How does Government Support help Globalisation?

Support that a government will give to businesses to allow them to access global trade as effectively as they can

UKTI (UK Trade & Investments)

- Help you access foreign markets

- Help you sell online globally

- Help you win big projects abroad

- Help you win big projects abroad

- Help you export goods

What's an example of a company helped by UKTI?

Yorkshire Rocking horses

What was the total number of passengers carried on scheduled services in 2019?

4.5 billion in 2019

What is a Pakistan dryport?

Ports that process documentation and customs paperwork - to speed up the process rather than clogging up the overwork and often inadequate infrastructure at the sea port. This helps the exporters in Pakistan access trade partners around the world.

Bangladesh Export Processing Zones

Economic enclaves where goods can be imported, manufactured, and reshipped with reduced duties.

What is the Bangladesh Export Processing Zones Authority

- Responsible for creating, developing, and operating EPZs, which are economic zones that promote export-oriented businesses

- Create large city / industrial estates with different trading laws to grease the wheels of trade from Bangladesh

How does BEPZA promote export oriented businesses?

- Offers first 3 yrs of a business in their EPZs to be tax exempt

- Duty free import of construction materials, machines & office equipment

Average US electronics worker wage and hours?

$23 per hour

41 Hour work weeks

Average China electronics worker wage and hours?

$2 per hour

60 hour work weeks

What is Economies of Scale?

Large production plants capable of meeting demand

Where is Foxconn's largest factory worldwide?

Longhua Town, Shenzhen

- 300,000 workers

- 15 factories, worker dormitories and its own city utilities (shops, fire stations etc)

What are Global Value Chains

Different stages of production are located in different areas around the world (eg. jeans and parts of TNCs)

Why is Global Value Chains utilized

Countries specialise in a specific part and become better at it

What are Trade Agreements?

Rule that cover trade between 2 or more countries. They aim to make trading easier between those countries. They do this by reducing the restrictions on imports and exports between them

What are the different types of Trade Blocs?

- Free Trade Areas

- Customs Unions

- Common Markets

How do Free Trade Areas work?

- Abolish Tariffs

- No quotas on trade

- Maintain restrictions on good from outside group

- eg NAFTA/ EFTA

How do Customs Unions work?

- Members impose a tariff on goods from outside the group

- eg Mercosur

How do Common Markets work?

- Same as Customs Unions but allow the free movement of labour and capital

- eg EEC (European Economic Community) (Now EU)

What is OECD?

Organisation for Economic Co-operation and Development

An international organisation that works to improve economic and social well-being. The OECD is made up of national governments that collaborate to develop policies and standards.

Global Advantages for Trade Blocs

- Compete on a global scale with other trading entities

- To support particular sectors of a national economy (eg. Cap within the EU)

- Help member countries become more equal globally in terms of economy and standards of living

- Improve global peace and security and reduce conflict

- increase global trade and cooperation on trade issues

Regional Advantages for Trade Blocs

- Allow freedom of movement of trade across regions

- Spread democracy, human. rights and possible political and legal integration across regions

- For remote regions or declining industrial regions to receive support from the larger organisations (eg. the EU regional fund helps regions such as southern Italy and western Ireland

- Possibility of developing common currency to prevent currency fluctuations and simplify transactions

- Raise standards in education and healthcare in the region

- Allow people to seek work and move between countries more easily

- To share technological advances

Global Disadvantages for Trade Blocs

- Some loss of financial controls to a central authority such as a bank (European Central Bank that oversees monetary policy in the euro zone)

- Pressure to adopt central legislation (eg. Europe - Bodman ruling on soccer transfers or food packaging labels

- Some loss of sovereignty

- Certain economics sectors are damaged by having to share resources (for example, the UK sharing its traditional fishing groups with other EU nations such as France and Spain

What are the Evidence of success of trade blocs according to OECD

- In duty free deals between emerging economies the proportion has advanced from 28% to 92% which demonstrated that regional trade agreements can lower these barriers

- Deals between rich and emerging nations had lifted the number of goods that are traded duty free from 68% to 87% over the past 10 years

What was the Eu rewarded?

Global Peace Prize in 1994

What is OPEC?

Organisation of Petroleum Exporting Countries

- 12 Countries

- Controls 80% of the worlds oil reserves

- Controls 45% of Global Production

-

What are the three main dimensions of globalisation KOF Globalisation Index measures?

What countries have the lowest Globalisation index scores?

- Somalia

- DPRK

- Laos

- Myanmar

What is the natural outcome or side effect of increasing globalisation?

Increasing interdependence of the people and nations who live in it

What are the four main sub-groups of globalisation which are instrincically linked in todays world?

Economic

Political

Social

Environmental

(Globalisation)

What has to be set up in order to provide stability and consensus across nations

International Political Organisations

- They are fundamental in supporting the stricture of the worlds economic and financial order, allowing for a stable global economy

What are example of International Political Organisations that oversee the global political economy?

- The World Bank

- The International Monetary Fund

- World Trade Organsation

What do IMF do?

Oversee the g;

What do the World Trade Organisation do?

- Supervise and liberalise trade by reducing barriers

- Act as an arbitrator nothing out trade problems between member governments

- Negotiate to reach agreements that become legal ground rules for international commerce

- Provide stability by giving trading nations confidence that there will be no sudden policy changes

How is the UK Politically Interdependent?

UN

- Global development organisations

Allegiances

- Parties sharing similar philosophies link together

Trade Blocs

Agreements

- NATO, Paris 2015 (UNCCC)

How is the UK Environmentally Interdependent?

COP

- Atmosphere, oceans, pollution

How is the UK Socially Interdependent?

Migration

- Spread of Culture

What Positives does Polish Labour Movement Bring?

- Money sent back to Poland by emigrants (Remittance)

- More workers for agriculture

- Unemployment fell in Poland 20% 2004 > 7% 2008 (savings for unemployment benefits)

- Brain Gain In UK, increase in highly skilled workers

- Migrants often have strong work ethic

- Fills niche jobs often seen an undesirable in host nations

- Spread Culture

What Negatives does Polish Labour Movement Bring?

- UK loss of £3 Billion - No longer circulating in host economy

- Brain Drain - loss of highly skilled workers to more developed host economy. (1000 filipino nurses ' "head hunted" to work in London Hospitals) 2019

- Discrimination / conflict / clash of cultures

- Perception that 'migrants steal jobs'

- Perception 'competition' for jobs increases unemployment in host nation

- Pressure on - NHS, education, housing, UK most expensive in developed world

What is Outsourcing?

- A cost saving strategy used by companies who arrange for goods and services to be produced or provided by other companies, usually at a location where costs are lower. (AKA sub-contracting)

Eg. Foxconn

How much of all electronics in the World does Foxconn produce?

40%

£32M invested in research and development (Dyson)

GAPGAPGAPGAPGAPGAPGAPGAPGAPGAPGAPGAPGAPGAP*

What has Chinas economic growth

Who are the Group of 77 and China'?

77 poorest countries grouped together to represent their global interests better. Chinas an ally helping reducing poverty

Who are the G20 and us China a member?

20 largest economies set up in 1999.

Are China a member of the G7?

No

What has Chinas economic growth rate b been over the last 20 years?

10% per year since early 1980s. Currently around 5%

When did China take over America as Africas largest trading partner?

2009

Are China or the USA the worlds largest trader?

Yes - $23T of goods traded in 2017

- EU is second with $19.9T

- US third at $19.3T

What are Nigeria's minerals?

Oil, natural gas, coal, lead, tin, limestone, iron, niobium & zinc

How much of world oil production does Nigeria account for?

Accounts for 2.9% of the world oil production

Why does China want to trade with Africa?

Wants to grow biofuels

- 2m hectares in Zambia

- 2.8 hectares in Congo

Oil exploration & Iron mining

- $4.04B investment in Mauritania

- £5.6B in oil trade received by Sudan

Farming

- 800,000 hectares of farm land obtained between 06-09, 1 million Chinese farm laborers in Africa

What does Africa get in return for Chinas trades?

- Capital investments

- Improved infrastructure (32 hospital units in DRC since 2010

- £3B oil and road network projects in Ghana

What is Debt-trap diplomacy?

Securing political allegiances by getting them beholden to you through debt

What is the Myth of the Chinese Debt Trap in Africa?

- Chinas role in Africa is varied: one clear objective is to extract a range of primary resources including metals to support industrial expansion in China, for example, investment in old coper mines in Zambia and Botswana.

- However, there is evidence that China's investment in Africa is helping some of the poorer countries to develop infrastructure, as well as healthcare and education

- There are fears of Neo-colonialism between Africa and China, however it is clear to what extent this is founded

What is the Belt and Road Initiative?

It's an economic belt of roads, pipelines, and railroads spreading over 70 different countries increasing trade.

Is China losing its export prowess?

2016 vs 2022

Travel goods, Furniture, clothing etc all down

How can Globalisation cause conflict?

- Shortages of goods (eg water) eg. Syria water shortages - almost went to war with Iraq in 1975

Why might some people in poorer nations feel this in regards to the processes of globalisation?

- Richer nations in the driving seat

- Unequal spread of wealth

- Exploitation of poorer nations

Communist Slow Jams, Darkskin Manson,

Black Ben Carson, The 2nd Amendment

Veteran, All My Heroes Are Cornballs,

EP! EP2!

LP! (ONLINE) - LP! (OFFLINE)

Scaring The Hoes - Scaring The Hoes (DLC)

I Lay Down My Life For You - I Lay Down My Life For You (Director's Cut)

How has trade has been used as a weapon in conflict?

1979 - Islamic revolution in Iran. US immediately try to halt the development of nuclear weapons by imposing embargo

2006 - Islam claims its for nuclear energy

2006 - 2015 - Sanctions imposed

No trade with bank, insurance,

What did that mean for Iran?

- Estimated $60 B loss from their energy sector alone

- Huge increases in the cost of living for Iranian citizens

- 80% devaluation of the Iranian Rial (Currency)

- Shortages of drugs for the treatment of 30 illnesses including cancer

What are Import Quotas?

A physical limit on the number of goods that can be imported into a country

What are Import Licenses?

License issued by national government authorizing the importance of goods

What are Subsides?

Grants or monetary allowances usually awarded to domestic producers to help reduce costs and make them more competitive against imported goods

What are Voluntary export restraints?

A diplomatic strategy offered by the exporting country to appearance the importing country and deter it from imposing trade barriers

What are Embargos?

Partial or complete prohibition of commerce and trade with a particular country - usually political rather than for commercial reasons

What is a barrier to trade?

Self-imposed government restraint on the flow of international goods or services

G7 account for what percent of world trade?

50%

USA, Germany and Japan account for what?

25%

Each year how much does world trade account? goods & services

Goods = $35T

Services = $7T

Each year how much does inter regional European trade account? goods & services

Goods = $7T

Services = $5T

What region has the fastest growth in world trade?

Asia Pacific

Where is becoming the most important market for sub-saharan exports and why?

Europe

(Closer than China)

What sector is the largest contributor to trade?

Machinery and export sector (includes consumer electricals)

What is the Goal of Fair Trade?

- Fair wages

- Better working conditions

- Sustainable farming

What are the Positives of Fairtrade?

- Equal Pay

- Priority on Price

- Fixed Fairtrade premium

- Strong standards

- Democratic and inclusive

- Local experts - Local support

- Label: People gravitate more toward the fairtrade product

What are the Negatives of Fairtrade?

- May be misinterpreted and not understood

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