Globalisation

Globalisation

Increasing inter-connectiveness of the world economically, culturally and politically

TNC

Trans-national corporation

MNC

Multi-national corporation

FDI

Foreign direct investment

Globalisation history

1712 = steam engine

1866 = telegram cable

1876 = telephone

1985 = mobile phone

Containerisation

Movement of goods using ships/transport using standard containers

Costs fallen 100% since 1950s

Mass Air Transport

1970 = jumbo jet (524people)

Open Skies Agreement resulted in increased competition and lower prices

Air freight increased 15% since 1970

Political globalisation

Increasing number and power of associations which influence/govern the world

Imperialism

Country that doesn't directly rule another but influences economically (USA)

IMF

Based in Washington, DC

Gives loans from HIC to LIC (must open to outside investment)

World Bank

Based in Washington, DC

Gives grants to certain countries under strict conditions

WTO

Based in Switzerland

Advocates open markets - freetrade

UN

In charge of peacekeeping

Undemocratic - 5 have veto power

Indonesia

Valuable resources yet poor living conditions and 1$ a day wages

General Suharto opened the economy for exploitation with IMF and WTO

Loans not used properly and increased development gap with interest payments

Only 20% of resource revenue is gained by government (80% TNC gain)

China Open Door Policy

Policy change = Free-market policies 1979 and joined WTO 2001

SEZ = shenzhen most successful, mainly export related manufacturing areas

Impact of policy = 300m moved to cities, 200 cities with over 1m, 50% GDP from SEZ, 300m middle class, Earnings $227 1978 > $7,591 2014

Offshoring

Company buys a factory that produces their products

Outsourcing

Company hires a factory to make goods on their behalf

Switched off areas

Corruption, debt, crime, unskilled labour, weak market, unstable

AT Kearney Index

Ranks cities by analysing cultural experience, political engagement - count TNC HQs, museums and foreign embassies

E.g London highest in Europe

FDI change

1980-2000 up 20%

Most by MNCs to HICs

28% to NICs

TNC motives

Raw materials, cheap labour, market seeking, accounting, political leverage and environmental exploitation

North Korea

Autocracy with isolationist policy

No social media/ heavy internet censors

Death punishment for breaking many rules ("traitor of the fatherland")

Coca-Cola India

Reason for move = free water, low wage labour and open invite

Problems = Agriculture stopped due to lack of water, high ground pollution, workers paid little Euro1.50, 50 villages have water shortages, polluted water into Ganges

HSBC

HQ in London, largest banking group

Employs 332,000 in 80+ countries

Offshoring angered workers and Trade Unions in UK/USA due to job losses

Anti-globalisation

Protests against TNCs

E.g France; Radio must play 40% French music, National Front, Burkini ban

Global Shift

Relocation of industry that has moved towards Asia from 1980s

Due to open-door policy, TNC power and FDI

Global Shift benefits

Employment and higher wages

Basic amenities can now be afforded

Higher state revenue increase social security

Global Shift drawbacks

Poor workers rights, low wages and long shifts in poor conditions

Income disparity (urban/rural)

Water depletion and Deforestation

Global Shift China

Positives = most FDI and 10% trade share, infrastructure, poverty reduction and better education (94% literacy)

Negatives = Loss farmland (3m ha polluted), health issues (over 30,000 deaths from respiratory problems), loss biodiversity

Detroit

Population declined 50% to 0.9m

Automobile industry left when wages rised

30% unemployed, 1/3 in poverty

Migration impacts

Positive = skilled, more revenue and can work in services

Negative = Congestion, habitat loss, higher crime and stretched services

Global Hub

City with global connections, strong infrastructure and many TNCs

Elite Migration

Very skilled migrants (Oligarchs)

High political, cultural and social influence

Source nation issues = brain drain and depopulation

Host nation = economic benefits, increased revenue, social tensions from lack of housing, shortage of school places

Cultural Diffusion

Spread of culture, seen as form of soft power

Influence culture

TNCs, media, migrants, tourists

Asian cultural change

Traditional diet = rice, seafood, low meat and dairy

New diet = more meat, dairy, fruit

Environmental Impact = deforestation for grazing, overgrazing causes desertification (80% desertification N China), fertiliser use

Development indicators

HDI = on quality of life, living, freedoms and environment

GII = measures gender disparity on health and empowerment

Lorenz Curve

Gini Coefficient

Number 0-1 that measures the degree of income inequality

Trade Protectionism

Increase tariffs to protest domestic industry against foreign competitive markets

Attitude to migration

IPSOS MORI:

77% GB wanted reduced migration 2015 but 72% wanted more NHS staff

Localism

Prioritising local goods over regional which supports local production, history and culture

Local to Ludlow

Promote food/drink products within 30 miles

Supports local producers

Reduce environmental impact by selling compost bags and reduce packaging

Fairtrade

Established 1992 to help LICs farmers with higher wages

60% increase in last 5 years

Eco footprint

Measures human demand on nature

Recycling

Manage resource consumption

Cut emissions (EU 58% 2001-10)

GB keep britain tidy introduced litter programmes to stop beach and park litter