Global Governance

Tiger Economies

Singapore, Hong Kong, South Korea, and Taiwan. A group of nations in the Southeast of Asia that are booming economies and industrialisation.

The Global Shift

The decentralisation of production abroad to places with lower costs due to Foreign Direct Investment (FDI).

The Five factors in Globalisation

Financial, Transport, Govt. Support, Security, Management & Information systems

Trade

The action of buying and selling goods/services

World Trade Organisation (WTO)

The only globalisation organisation that manages the rules of international trade, aiming to ensure it flows smoothly, predictably, and freely to promote economic growth and living standards worldwide.

Trade Bloc

A group of countries that form an agreement to reduce or eliminate trade barriers, such as tariffs and quotas, among themselves to encourage economic integration and coorperation.

Foreign Direct Investment (FDI)

An investment by a resident of one economy in a business located in another economy, with the goal of establishing a lasting interest and significant management influence.

Fair Trade

Trade between companies in developed countries and producers in developing countries in which fair prices are paid to the producers.

Visible Trade

Trade if goods are exchanged because they can be counted, weighed, and given a value. E.g. Foodstuffs and Manufactured good.

Invisivble Trade

Trade if services are exchanged e.g. Tourism

Free Trade Areas

Tariffs and quotas reduced or abolished on goods between members; restrictions on goods coming into the area. E.g. NAFTA

NAFTA

North American Free Trade Agreement

Customs Unions

Member countries operate a tariff on goods coming into the region. E.g. Mercosur

Mercosur

The Southern Common Market. The South American Trade Bloc set up in 1991 by: Argentina, Brazil, Paraguay, and Uruguay.

Common Markets

Same as Customs Unions but with freer movement of labour and capital. E.g. EEC (previously the EU).

Economic Unions

Same as FTAs, CUs, & CMs, but with requirements for members to adopt common policy in areas such as agriculture, fisheries, transport, pollution, industry, energy, and regional development. E.g. Current form of the EU.

The EU

The European Union

UN

United Nations: Known as the 'Guardian of international peace, security, and human rights'. It promotes the development of poorer nations through work with the IMF and World Bank.

TNC

Transnational Corporations. A global company which operates in more than one country. Headquarters often located in HICs whilst factories in LICs where workers are cheap.

International Division of Labour Case Study

IKEA

IKEA info summary

Factories are close to their buyers. Made advances in sustainability in wooden furniture. Expanded globally over the years.

IKEAs affect on globalisation

Standardised its brand and product design while incorporating local adaptations.

Special and Differential Treatment (SDT)

Agreements which let the least developed nations bypass developed nations tariffs, which gives them greater market access.

3 examples of nations for each trade characteristic.

Developing - Rwanda

Emerging - China

Developed - Germany

Interdependency

What happens in one place increasingly has impacts on other places.

4 types of dependency

Economic, Political, Social, and Environmental.

3 Benefits to Interdependency

Remittances, FDI, Labour Flows

3 Problems of Interdependency

Brain Drain, Loss of Profits, Worker Exploitation.

Outsourcing

Hiring of other companies to complete company tasks that are essential, but are not necessary to complete by the company itself.

Example of Unequal Power (Mini CS)

The Arab Spring, 2010.

Vertical Integration

Owned entirely by that TNC from the raw material to the finished product. E.G. BP or Shell.

Production

Action of making or manufacturing from components or raw materials, or the process of being manufactured.

Distribution

Movement of goods and services from the source through a distribution channel, right up to the final customer, consumer or user.

Consumption

The final purchase of a good or service by the consumer

Global Marketing

Treating the world like one single market, using one marketing strategy to advertise products to customers all over the world.

Case study example for Global Marketing

Coca Cola

Fair Trade company

Social movement looking at helping producers achieve better trading conditions and to promote sustainability.

World Trade Case Study

Banana Wars

Comparative Advantage

Specialise in a good that a country excels at, trading these for the things they're not good at. Production increase if each country concentrated on what they're doing best.

GINI Index

Measure showing disparities of wealth, 0 is even development, 1 is uneven development.

Somalia

Located on the Horn of Africa, an LIC affected by conflict and terror."Remittances" have been instrumental in keeping Somalia afloat ($1.6Bn annually). Left in a "Remittance Dilemma". Remittances blocked by UK & US due to risks of funding terrorists.

Global System

Systems put in place to help the world work together. E.g. The World Trade System, Laws regarding the movement of people.

Global Governance

"Movement of political integration aimed at negotiating responses to problems that affect more than one state or region. E.g. United Nations (UN), European Union (EU)."

Globalisation

The world becoming more interconnected through trade + cultural exchange, as well as things like technology, politics, society, and the environment.

3 Examples of Trade Blocs

EU - European Union. PIF - Pacific Islands Forum. NAFTA - North American Free Trade Agreement"

Land

Anything supplied by nature which helps in the production of output/creation of wealth.

Labour

Human effort that helps in the production of output/creation of wealth.

Capital

Anything manmade which is used to produce goods and services/wealth.

Enterprise

The factor of production that organises the other factors of production into a unit to produce a good/service. It undertakes all the internet risks in hope of making a profit.

BRICS

Brazil, Russia, India, China, South Africa is a multilateral bloc of emerging economics, which was formed to increase their influence in global politics + economic, challenging westernised institutions.

MINT

Mexico, Indonesia, Nigeria, Türkiye, are a group of emerging economies that are identified as having rapid growth potential, large populations and increasing global importance.

IMF and World Bank

IMF - International Monetary Fund which provides loans for stabilisation, and low interest loans to LICs (short term).

World Bank - Provides developmental loans and disaster relief loans (long term).

Diaspora

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

Leakages

A loss of income from an economy. Most usually refers to the profit sent back to their base country from TNCs.

De-Regulation

Reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.

Global Village

Terminology created by Marshall McLuhan in which the entire world is becoming more interconnected because of the propaganda of media technologies throughout the world.

Tariff

A tax or duty placed on imported goods with the intention of making them more expensive for the consumer.

Protectionism

The institution of polices (tariffs, quotas, regulations) that protect a country's industries against competition from cheaper imports.

High level services

Businesses such as finance, investment, and advertising. More in HICs.

Low level services

Services to consumers such as banking, travel + tourism, call centres or communication services. More in LICs and NEEs.

'Footloose' industries

Industries can locate anywhere without constraints from resources or other obstacles.

Lorenz Curve

Shows the degree of income inequality in a given economy or population. The further away the Lorenz Curve from the line of obstacles equality (45 degrees), the greater the degree of income inequality.

Gini Coefficient

A commonly used measure of income inequality. 0 = Perfect Equality 1 = Perfect Inequality

Containerisation

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

Congolomerates

A collection of different companies or organisations which may be involved in different business activities but all report to one parent company - most TNCs. e.g. Disney.

Economies of Scale

The cost advantages that result from the larger size, output, or scale of an operation as savings are made by spreading the costs or by rationalising operations.

ASEAN

Association of South East Asian Nations

Everything But Arms (EBA)

All imports to the EU from LICs are duty and quota-free except arms and ammunition.

Developing Trade Characteristics (LIC)

Low average incomes ($1,045), life expectancy low (50-60 years), conflict and weak governance.

Agriculture and raw material trade still plays an important role (Rwanda)

Emerging Trade Characteristics (NEE)

Transport infrastructure improved, attract TNC investment, Life expectancy increase.

Rapid industrialisation and agricultural & manufacturing trade.(China)

Developed Trade Characteristics (HIC)

Life expectancy is typically 75-85 years, HDI scores for these nations are high.

Office work, “hi-tech” manufacturing. (Germany)

Horizontal Integration

A TNC diversifies its operations by expansion, merger, or takeover. E.G. Disney or Meta.

Economic Interdependence

230 million people live in a countries they weren’t born in.

Some sectors of the UK economy rely on Eastern European labour.

Remittance sent home by migrant workers post-BREXIT.

E.g. Trade Blocs

Political Interdependence

1990s, Thomas Friedman proposed his ‘Golden Arches’ for heavy conflict protection.

Two countries with McDonald’s will never wage war due to economies being interlinked.

2022, Russia and Ukraine weakened the argument.

Social Interdependence

Social ties can be strengthened by migration.

UK interconnections developed by a large Indian diaspora.

Extensive family networks now link India with the UK.

Environmental Interdependence

Shared use of “global commons” makes all states interdependent. (Atmosphere, Oceans)

Trust other states will work towards the shared goals of climate change mitigation and biodiversity protection.

Siamese Rosewood stripped from South East Asia, forest loss could be irreversible.

World Government

The notion of a single common political authority for all of humanity.

Dimensions of Globalisation - Economic Globalisation

• Trade and Aid

• TNCs

• Capital Flows (e.g. Remittances)

Dimensions of Globalisation - Social Globalisation

• Migration (refugees, economic, Asylum Seekers)

• Flows of Labour

• Social networks (Social media)

Dimensions of Globalisation - Cultural Globalisation

• Westernisation (certain brands of clothing)

• Cultural Diffusion (loss of identity)

• Greater awareness of culture

• Media sources (TV/Film)

• Ability to travel internationally, exposed to other cultures

Dimensions of Globalisation - Time-Space Compression

Increase use in technology which will increase communication and thus a higher global productivity.

Dimensions of Globalisation - Environmental Globalisation

• Impacts of degradation

• Linked by “Global Commons” (Antarctica)

• NGOs (WWF/GreenPeace)

• International Organisations (UN)

Dimensions of Globalisation - Political Globalisation

• Trading Groups

• Governmental and Global Institutions (UN)

• Trade Blocs (EU, PIF, NAFTA)

Soft Power

Credible, expertise, morals for positive change gaining admiration from governments and the public.

UNCLOS

United Nations Convention for the Laws Of the Sea

Exclusive Economic Zone (EEZ)

A maritime area extending up to 200 miles from a nations coastline where the nation has special rights over exploring, using, and conserving marine resources.

What is beyond the EEZ?

150 EEZs make about 42% of the Ocean

Rest is considered the High seas, virtually ungoverned open territory yet nations do work together to manage these and keep them sustainable.

Globalisation Critique

Looks at the negative impacts and limitations of globalisation and questions the idea globalisation equally benefits everyone.

Argues it:

• Increase inequality

• Benefits TNCs and rich countries the most

• Damages cultures and environments

Hyperglobalists

Support globalisation viewing it as a new geographical era accepting the importance of decision-making on a greater level then individual states. (e.g. EU)

Sceptics

View globalisation as nothing new and the world has always been integrated. Sceptical of free movement of goods, instead focus on nation state power, seeing globalisation as a cultural threat. (e.g. USA, India, China)

Transformationalists

They accept the process of increasing globalisation but think that the role of governments is changing rather than being overtaken by group decision-making.

E.g. The Arab Spring’s succeeded (2010-13) partially because of Facebook by-passing government censorship.

Economic Critiques

1. Increased Inequality - unequal trade in Africa

2. Exploitation of Workers - Bangladesh Garment Industry and the Rana Plaza Collapse in 2013 killing roughly 1,100

3. TNC dependency - Dependent for economic sovereignty

Digital Divide

Different levels of IT access, infrastructure, and skills across the globe. (e.g. South Korea v. Myanmar)

Social and Cultural Critiques

1. Cultural Homogenisation - spreading western culture with brands like Netflix, Nike, and Apple everywhere

2. Loss of identity - Cultural imperialism

Human Trafficking

Political Critiques

1. Loss of National Sovereignty - IMF Structural Adjustment

2. Power of TNCs - Democratic Deficit

Decolinasation, Conflicts

Environmental Critiques

1. Increased environmental damage - Amazon Rainforest, Fast Fashion

2. Ecological unequal exchange - uneven distribution

Great Pacific Garbage Patch, Deep Sea mining

Anti-Globalisation Movement

Activists who target the:

• World Bank

• IMF

• OECD

• WTO

• NAFTA

• FTAA

• TPPA

• MAI

• GATS