Global systems and governance

What are some negative effects that TNCs have on host countries?

- low paid and often unskilled production takes place in LICs and the major operations take place in HICs

- if the TNC experiences problems, the overseas branch will be the first to close

- harsh working conditions

What are advantages of TNCs in host countries?

1. creates jobs

2. pay taxes

3. improves infrastructure

How much have Coca-Cola invested into the russian economy and what for?

$1.5 Billion - it has gone towards training, construction of manufacturing plants and improvements to infrastructure

How much of Coca-Colas sales are outside North America?

70%

How many products do Coca-Cola sell across all its companies?

400

How many countries do Coca-Cola operate in?

200+

What is Coca-Colas microfinance start up in vietnam?

Coca-Cola have provided startup schemes to over 4000 vietnamese women with merchandise, training and basic equipment to begin selling Coca-Cola

What is Coca-Colas USP?

It is the worlds number 1 soft drinks brand

Where does Coca-Cola manufacter?

USA

Why are farmers in india unhappy with Coca-Cola?

They deplete the underground water sources, as well as polluting it

Protectionism

a deliberate policy imposed by governments to protect their industry by placing tariffs on other imports

what is a trading bloc?

an arrangement amongst a group of countries to allow free trade between member countriesand to impose tariffs on other countries

What are free trade areas?

Members of unions abolish tariffs on tarde between themselves, but have restrictions on imports from non-member countries

What is neoliberalism?

an approach that favours privatisation, deregulation, free trade and reduced government spending

Criticism of the IMF

encourages members to pursue reckless economic activities knowing that they will be bailed out by the IMF

How has the IMF involved in sustainable development goals?

It has helped LICs and emerging markets access additional spending

Criticisms of the world bank

the world bank has been criticised for its lack of transparency and accountability. people argue that the world bank hasnt engaged enough with civil society and other stakeholders

Name 3 successes of the world bank

- Global water and sanitation partnership fund

- south asian water initiative

- nordic trust fund

Aims of the nordic trust fund

- combat climate change

- reduce poverty in LICs and NEEs

benefits of the UN general assembly

independent arbitrator to uphold international agreements

What happened in the arab spring?

in 2010, starting in tunisia, there were anti-government protests as a result of corruption in arab states

What is globalisation?

the increasing interconnectivenss of the world through economic, political, environmental and social means

What is capital?

The total liquid assets and money someone owns

What is FDI?

Foriegn Direct Investment - when an individual, firm or government own a stake in an overseas company

What is remittance?

money that a foreign worker sends home to their native country

What are the 7 dimensions of globalisation?

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

What is global governance?

the combination of intentional and patterned human interactions that regulate action worldwide for the common good

Explain the importance of the local economy to the global economy.

The global economy, which is the total of all the worlds capital, cant exist without that of the national capital, and vice versa. In the national economy, there is the local economy, which cant exist on its own, but the national and global economies cant exist without the local economy, due to it being the base.

What are the 4 factors of production?

land, labour, capital, entrepreneurship/enterprise

Capital Flows

Movement of money for the purpose of investment, trade or to produce goods

international trade

the exchange of goods and services among nations

What percentage of Somalia's economy is from remittances?

25%, around $1.3 billion every year

Why did UK and US banks ban remittances to Somalia?

There was remittance money that was going to terrorist and pirate groups

What was the impact of remittances to Somalia being blocked?

Many people who received remittances could no longer afford food and water, meaning that they struggled much more due to less income from abroad

What is containerisation?

A system of standardised transport that use large, steel containers of the same size to increase transport efficiency and decrease costs

Tariffs

Taxes on imported goods

What are high level services?

Services to business e.g. finance

What are low-level services?

Services to consumers e.g. call centres

Conglomerates

A collection of companies that report to one parent company

What are economies of scale?

The cost advantages that result from the larger size, output or scale of an operation

Why would a company want to go global?

To achieve economies of scale

What is an economy of scale?

it is the decreasing of unit cost of production with increasing the volume of production.

What does the KOF index aim to do?

Rank countries by globalisation

Where is the UK on the KOF index 2023?

5th overall

What is economic globalisation?

The movement of money and capital around the world through global trade and investment

What is social globalisation?

The movement and connecting of people and their cultures around the world

What is political globalisation?

The spreading of political ideologies and organisations e.g. capitalism and the UN

How has coca-cola mastered global marketing?

They are recognizable anywhere, due to the same logo, product and packaging

What is the notion of global shift?

The filtering down of manufacturing industry from HICs to LICs/NEEs

explain communication as factors of globalisation (how have links between countries grown)

Links between countries have grown significantly because:

1. development of computer technology

2. 24/7 global communication via the internet with 4.5 billion users

3. use of mobile phones makes markets easier to connect

explain financial systems as factors of globalisation

1. The world became increasingly financially integrated in the 80s and 90s due to financial deregulation

2. deregulation made it easier for capital to flow between countries

explain transport systems as factors of globalisation

products can be shipped faster and in larger quantities as a result of:

1. increased size of aircraft

2. growth of low cost air lines and air freight companies

3. handling and distribution efficiencies

4. containerisation

5. high speed rail networks

explain security systems as factors of globalisation (risks created and how they can be prevented)

Threats created by globalisation include:

1. terrorism - screening and monitoring movements by security forces

2. food imports - make sure imported products meet safety standards

3. biosecurity - prevent the introduction and spread of harmful organisms to minimise risk of transmission

4. cybercrime - internet police

5. supply chains - ensure products are authentic, safe and can travel through borders relativley freely

explain management systems as factors of globalisation

cost advantages are created from better manufacturing. Companies the invest in:

1. large production and assembly plants

2. global marketing and distribution networks to keep up with an increased production

explain trade agreements as factors of globalisation

A trade agreement is a formal agreement between 2 or more countries that removes trade barriers between those countries in the agreement. Advantages of trade unions include:

1. improving global peace and security

2. increasing global trade and economic co-operation

3. encouraging social and economic development in NEEs and LICs

Example of a tradebloc

EU

What is OPEC?

Organization of Petroleum Exporting Countries

What is a customs union?

a trade agreement that, as well as having free trade between members, all members operate a common external tariff on imports from abroad

What is a common market?

A trade agreement that as well as the free trade in goods and services, operates common external tariffs and allows for the free movement of people and capital

what is an economic union?

Groups of countries that not only allow free trade between member countries and the free movement of people and capital but also require member countries to have common policies on sectors such as agriculture, industry, and others.

what is the bottom up approach?

when local people are consulted and supported in making decisions to undertake projects

what is the top down approach?

when the decision to undertake projects is made by a central authority such as a government with no consultation with the locals

What is the role of the WTO?

To promote free trade among countires

when was the WTO established and by who?

in 1947 by 23 countries

3 examples of WTO members

UK, USA, Germany

Critisms of WTO

undermine self-determination and democracy

What is the Doha development agenda?

an agenda with the aim of lowering trade barriers around the world

What is the goal of the IMF?

To achieve sustainable growth and prosperity for all member countries

when does the IMF give out loans?

when countries are in economic crisis

How does the IMF generate money?

member countries pay quotas

When was the IMF established and why?

July 1944 as a result of the great depression

how many people do the IMF employ?

2765

Where must all head of the IMF be from?

Europe

What is the role of the world bank?

To reduce poverty by lending money to governments of poorer members

How does the world bank have an impact on a global scale?

it promotes economic development

Who is the current leader of the world bank?

Ajay Banga

How do the world bank and IMF differ?

The IMF focuses on macroeconomic and financial stability, but the world bank focuses on long term economic development

What is the main aim of the IPCC?

To provide scientific assessments on climate change and its risks

Who and when was the IPCC established by?

Established by UNEP and the WMO in 1988

criticism of the IPCC

Some argue that the outcomes may be more severe than stated in reports

What is the role of the UN security council?

To maintain global peace and security

Who are the permanent members of the UN security council?

China, US, UK, France and Russia

What benefits/achievemrnts have the UN security council done?

1. Nuclear disarmament since the cold war

2. Promotes geopolitical stability, by send peacekeepers to de-escalate in regions with conflict

What have the UN security council not done well?

They have a history of not agreeing on resolutions such as Russia's annexation of Crimea

What is the role of the UN general assembly?

to develop good relations between countries and settle disputes

negatives of the UN general assembly

Relies heavily on funding from HICs, meaning that there is criticism about bias

What is comparative advantage?

when a country can produce a good or service at a lower opportunity cost than another country

example of comparative advantage

Germany producing cars

What is fair trade?

trade between companies in developed countries and producers in developing countries in which fair prices are paid to producers

name 3 trading organisations excluding fairtrade

cafedirect, traidcraft and oxfam trading

how much did the uk export to china in dollars in 2022

35.6 billion

where does china rank among the uk’s trading partners

6th

why did china attack german wine producers

the EU passed anti-dumping tariffs on chinese solar panels

what is dumping

selling below cost

What is the TPP?

teh TPP is a theoretical group that has free trade between the USA and countries in asia and south america.

Negatives of the TPP

1. gives the US too much power

2. not clear how it would work

what is the aim of the TTIP

Free trade between the USA and EU

Why are China investing in Africa?

for raw materials and resources as well as buying land for food production

What do africa gain from chinese investment?

Rapid economic growth, tourism and improved infrastructure

When was mercosur formed?

1991