Global systems and global governance

Capital flows

The movement of money for the purpose of investment, trade, or to produce G/S. Usually regarded as investment into production operation

Globalisation

A process by which national economies, societies, and cultures become increasingly integrated through the global network of trade, communication, transportation, and immigration

Trade, investment, and capital flows

The focus of globalisation has been primarily on economic relationships such as international

Economy, politics, technology, culture, environment, and society

The main dimensions of globalisation

Deregulation of world financial markets

Occurred in the late 1900s, meant that the activities of financial institutions were no longer confined within national boundaries

Diaspora

A large group of people with a similar heritage or place of origin who have moved and settled in places all over the world

Mexico, Indonesia, Nigeria, and Turkey

MINT economies that are more recently emerging than the BRICS economies

Periphery/semi periphery countries to core countries (exacerbating disparities and causing a brain drain, although remittances carry)

Majority of out-migration of labour takes place from

Developed countries in North America and Europe

Much of the world’s labour flows have been from developing countries in South Asia, Africa, and Latin America to

Over short distances within the same region or between neighbouring regions

Despite significant increases in cross border movements, most migrants move

North America, Europe, Gulf states

Areas that attract labour migrants from the furthest afield

South Asia to Western Asia (Gulf states)

The largest inter-regional labour flow is from

Around 3 million

Amount of workers that migrated from South Asia to Western Asia between 2010-2015 in search of plentiful employment opportunities caused by the construction boom in the Gulf States

Containerisation

A system of standardised transport that uses large standard sized steel containers to transport goods. These containers can be transferred between ships, trains, and lorries, enabling cheaper and more efficient transport of goods

Perishable goods

Containerisation increasing the efficiency of transporting goods has allowed for more trade of

High level services

Services to businesses such as finance, investment, and advertising. Have become concentrated in cities such as London and New York as well as growing emerging economies such as Singapore, Hong Kong, and Shanghai

Low level services

Services to consumers such as banking, travel and tourism, customer call centres, or communication services

Conglomerates

A collection of different companies or organisations that all report to one parent company (most TNCs)

Decentralised from the developed to developing world (due to lower labour costs)

In recent times low level services have been largely

Digitisation and satellite technology

Flows of information have been transformed by the growth of

Quaternary sector (e.g. pharmaceuticals, engineering, accounting etc. R+D intensive)

The rapid and significant growth of global information flows caused by technology growth has meant rapid expansion of the

Marketing

The process of promoting, advertising, and selling goods or services

Factors causing the global shift in the pattern of production (deindustrialisation)

Lower land and labour costs, incentives offered to TNCs by periphery and semi periphery governments in the form of tax breaks and special economic zones have encouraged them to relocate production abroad, transfer of technology by TNCs has enabled developing countries to increase their productivity while labour costs remain low

Transport, communications, trade, migration, containerisation, travel, global marketing, capital/investment, TNCs, collapse of communism

The main factors that have influenced globalisation since the 1990s

Leaves the world exposed to volatile capital flows (triggered 2008 financial crash)

Disadvantage of globalisation leading to trade liberalisation and freer movement of capital

Terrorism, biosecurity, cybercrime, security of supply chains, and food imports meeting standards

Globalisation has increased security threats such as

Management and information systems have led to

Higher order business activities (R+D and marketing) being based at corporation headquarters and strategic hubs around the world, low order activities (production and assembly) being located at low production cost locations or near to large markets for the finished product, global corporations focusing on key strategic activities and outsourcing non strategic activities, rapid growth of the logistics and distribution solutions industry

Free trade area

Trading bloc where trade barriers between member countries are eliminated, but each member country maintains its own tariffs against non member countries

Customs union

Free trade area with a common external tariff against non member countries

Common market

Customs union with free flow of goods, services, capital, and labour between member countries without any restrictions

Monetary/economic union

Common market with a common tax system or currency

Improved global peace, security, trade, and economic co-operation, as well as encouraging development in non core countries

Advantages of growth of trade blocs on a global scale

Loss of sovereignty, legislation, trade diversion (due to external tariffs)

Disadvantages of trade blocs on a national scale