14) Impacts of globalisation - nice lil summary

1. Some countries have developed rapidly + have emerged as major economic powers

... The flow of capital, outsourcing, FDI generated by TNCs = led to a change in global patterns of productions
=> contributing to the development of LICs

+
· Reducing inequality between countries
· Increased employment @ higher wages, created the multiplier effect in local economies, NEMC
· expansion + emerging markets
· Higher GDP => infrastructure development + better QofL
· Improves education + health, disrupts cycle of poverty

-
· Inequalities within countries, increasing disparity (Gini Index), rural-urban divide
· Deindustrialisation in HICs => increased unemployment, deprivation, and dereliction in inner cities
· Consumerism => greater environmental degradation


...MINT countries are growing rapidly, with 4% annual growth in Mexico, 5.8% annual growth in Nigeria, 5.9% in Indonesia, and 4% in Turkey
- In 2015, the top 10 fastest growing economies were all in Asia or Africa
- In China, disparity has increased by 34% in the last 20 years

2. TNCs have been able to grow in a number of different industrial and service sectors

mainly in HICs but TNCs from NEEs have also become global powers
... increased communications, the flow of capital + services due to development of the global financial market, and the flow of products due to transport innovation

+
. Job creation = the multiplier effect
. Greater access to the larger and wealthier markets of the EU and the US for TNCs from NEEs results in greater profit returning to NEEs through economic leakages

-
· TNCs can become more powerful than some governments = undemocratic
· Creation of "core" and "periphery" regions, both globally and within a country can lead to inequalities in wealth (e.g., urban core of Mumbai and the rural periphery in India)

e.g.,
The Lome convention is an example of the power of TNCs

3. TNCs outsource to LICs and NEEs

... The cheaper labour in LICs and NEEs attracts TNCs
lower environmental standards and the lack of trade unions

+
· Cheaper consumer goods, greater choice of products for consumers
· TNCs gain economies of scale, and this competition leads to greater innovation so that companies can effectively compete

-
· The repatriation of profits to HICs slows the economy in NEEs + maintains disparity between countries
· The "Race to the Bottom" for wages + environmental standards leads to the exploitation of workers, damage to the environment and lower income for workers

e.g.,
... 90% of the cost of bananas stay in the "northern hemisphere" with mainly HICs
... Banana production by TNCs is moving to West Africa (e.g., Chiquita, race to bottom)
...oil in Angola and cobalt in Zambia = "race to the bottom"

4. Risk of economic shock in one country quickly spreading to another

... world cities such as London and New York have financial markets which are interdependent
"When America sneezes, the whole world catches a cold"

+
· Risk sharing + forced cooperation as global nations, political integration

-
· A lack of trade globally impacts all countries + likely to lead to job losses and a decline in living standards
· Interdependence is likely to impact the poorest people and most vulnerable the worst, leading to increased disparity

e.g.,
...the 2008 Global Financial Crash known as the "credit crunch"

5. Greater sharing of ideas, lifestyles, and traditions

... flows of information via the internet and media have allowed information to flow with increased ease

+
· greater cultural understanding = increased acceptance + reduced conflicts
· Increases access to foreign cultures such as film, music, food, and clothing, all which enrich life

-
· Standardisation = cultural homogeny + the erosion of cultures
· extinction of individual cultures (cultural dilution) = less global cultural diversity, placelessness + westernisation
· rise of consumerism = prioritise "things" other human/environment needs
· Negative ideas such as terrorism can be spread

e.g.,
- "An idiot abroad" shows differences in traditions and cultures
- technological leapfrog in Uganda means that farmers can use mobile phones to keep up to date with prices for goods

6. The strategy of glocalisation has been employed by some TNCs

... TNCs use this to offset criticisms about standardisation of products and to fit in with the local culture (such as considering dietary requirements)

+
· appeal to a wider range of people, TNC increases profits = more local employment directly and multiplier effect
· Allows new products to be tried with less threats to culture or religious beliefs

-
· Cultural dilution can still occur due to changes in lifestyle that new products bring even with glocalisation

e.g.,
- McAloo burger in India, the McBuritto in Mexico, and the Ratatouille Burger in France
- McDonalds can change traditions of eating together as a family to grabbing a quick meal after work or school

7. IMF-enforced spending cuts

... loans have been given to "bail out" countries struggling or to provide support for LDCs

+
· Ensures the stability of the worlds economics systems so that countries don't go bankrupt
· can also help regional economies such as the EU
· provides support for countries as they are "not on their own"

-
· Austerity measures have led to hardship due to cuts in education and health spending
· Job losses have been caused by spending cuts
· There will be less spending on the environment and less consideration of environmental laws

e.g.,
- in Greece, austerity measures have had a major impact on the economy and people's lives
- SAPs have been imposed on LICs following IMF funding, such as in Uganda

8. Increased awareness of global news and events

... flows of information via the internet and media, along with technology has allowed technological leapfrog

+
· Increased awareness informs people of environmental issues such as climate change, encouraging people to change their lifestyles
· People are better informed about human and natural disasters encouraging donation to NGOs

-
· The spread of propaganda for terrorist purposes could increase

e.g.,
- Islamic State
- Israel-Gaza war and NGOs, money to charity and support for refugees
... arguably not effective as have no real power

9. Increased transportation of goods and people

... technology has allowed an increased flow of people in the form of travel, internet, media, and information, as well as the flow of goods due to containerisation and air travel

+
· Remittances
· flows of labour, higher income and migration to High service countries
· Increased local cultural diversity/multiculturalism leads to increased understanding and reduces conflict

-
· Brian drain
· Remittances mean that money is lost to the local economy
· Social issues could occur due to family members working abroad
· Product transportation leads to more waste from packing and environmental damage
· Increased GHG emission + the depletion of non-renewable sources
· Increased spread of diseases (COVID-19)
· An increased risk of invasive alien species impacting food chains
. conflict between cultural groups

e.g.,
- 40% of Somalians rely on remittances
- Chinese workers in Angola and many workers on the world cup venues in Qatar are foreign
- diseases such as HIV/AIDS, Ebola spreading in west Africa 2014
- foreign species in Antarctica

10. There has been a growth in regional trading blocs

... greater communication and travel have led to greater co-operation between countries in close proximity

+
· Some trading blocs have used SDTs to allow LICs access to markets
· HIC economies are protected by tariffs and quotas on agricultural imports, and the payment of subsidies

-
· Protectionism has led to injustices as it has excluded LICs from lucrative markets, and the WTO has been criticised as not always supporting SDTs
· Farmers in LICs can't make enough to support their families and improve their standards of living as the world price is so low

e.g.,
- EU, NAFTA, Mercosur, Pacific Alliance, ASEAN
- the Lome convention + banana wars