Global Systems and Governance Y13 HG

What is a global system?

Systems put in place to help the world work together

What is globalisation?

The world becoming increasingly more interconnected through trade and cultural exchange

What is global governance?

The movement of political integration aimed at negotiating responses to problems that affect more than one state or region

What was the 2008 global financial crisis, the cause, the effects and recovery?

• the collapse of the the Lehman Brother’s global bank

• Cause: lending of mortgages to people with poor credit histories who wouldn’t repay them → these mortgages were then pooled together to create a bigger one → caused nationwide house price slump in America as it was difficult to sell properties at any price

• Effects: no money was lent to anyone so no financial aid

• Recovery with international trade and access to markets , but also setbacks with international conflicts

What are the factors of globalisation?

• culture

• Environment

• Politics

• Technology

• Society

• Economy

How is culture a factor of globalisation?

• westernisation - countries adopting western cultures, values and practices e.g McDonald’s from America

• Cultural diffusion - the mix of different cultures from all over the world in a country

How is environment a factor of globalisation?

impacts of degradation (env damage) linked by commons (areas of the world that are out of reach and are ungoverned) e.g deforestation to make room for agricultural land

How is politics a factor of globalisation?

• trading groups e.g EU allowing free movement of people to and from other countries which increases trade

• Governmental and global institutions e.g UN prevent conflict allowing global economy to flourish

How is technology a factor of globalisation?

• higher productivity due to improved transport (e.g containerisation - ability to move more products around the world at the same time by cargo ship AND internet access) increasing levels of trade as it is easier and cheaper to move goods, services and info across borders

How is society a factor of globalisation?

• migration = more workers

• Social networks - promoting products etc

How is economy a factor of globalisation?

• trade and aid for resources

• TNCs for resources and goods that u usually wouldn’t be able to access from other countries

• Capital flows - assets/ items of monetary value

What is meant by net zero?

Amount of emissions released is the same amount absorbed which is managed by strategies like carbon capture

What is the difference between the factors and dimensions of globalisation?

• factors: why globalisation happens

• Dimensions: the flows of globalisation (what is experienced and where globalisation happens)

What are the dimensions of globalisation?

1. economic - the integration of national economies through capital flows

2. Social - flow of people through migration, tourism and global communication networks

3. Political - flows of products → growing importance of global governance structures and role of international organisations

4. Flows of services facilitated by HICs → HQs in world cities e.g London, Tokyo, NY

5. Cultural - flow of information across different societies

6. Security → financial and food security

What are the factors of production?

• land - natural resources to make the goods

• Labour - the workforce

• Capital - investment used to provide places and machinery to make the goods

• Enterprise - those taking the risk of establishing businesses and organising the production of goods

What are core regions?

HICs → BRIC (Brazil, Russia, India, China

What are periphery regions?

LICs. → MINT (Mexico, Indonesia, Nigeria, Turkey)

What is the IMF?

the stands for International Monetary Fund and lends loans to stabilise economies in HICs

What is the world bank?

Gives out low or no interest loans and grants to LICs to support development

How do the world bank and the IMF make money?

Loan money from core regions

What do core regions gain from periphery regions?

Gain labour and migration (fills skill shortages e.g in NHS)

What are remittances payments?

Money sent back to periphery regions as migrants move to core regions and get payed from jobs

What country heavily relies of remittances?

Nepal relies on remittance by 28.8% which is almost a third

What county has the highest total value of remittance payments?

India

What is the case study for remittance?

• Somalia in the Horn of Africa

• 40% of somalians rely on remittances to meet their basic needs

• A terrorist group called Al-Shabaab was taking some of this remittance money, causing some US and UK banks to remove remittance transfer as well as war

• This was caused by lack of anti money laundering laws and little government regulation (only been a government since 2012)

• No remittances meant that many people in Somalia could not afford necessities like healthcare and education

What are leakages?

Profit in periphery countries leaving to core regions

What is profit repatriation?

Profit the HQ of the TNC is making

What does NGO stand for?

Non Governemental Organisation e.g charities

What is de regulation?

The reduction or elimination of government power in a particular industry to create more competition within this industry

What is diaspora?

A large group of people with similar heritage who’ve moved and settled in places all over the world

What is flows of labour?

Labour markets not as free flowing as financial markets in the process of globalisation due to restrictions of immigration e.g USMCA visa needed for trade

What 3 parts of the economy most affected by flows of labour?

• NHS → 21% UK nurses non British, 30% UK doctors non British

• Construction → 10% UK construction workers from abroad

• Manufacturing of products → 38% manufacturing of food products are migrants

What is the disadvantage of this evidence?

• the data is over ten years old

• There has been 4 prime ministers since Theresa may

What are the benefits of increased flows of labour?

• fills skill shortages e.g in NHS

• They work and contribute to tax revenue

• Add more cultural diversity

• Remittances can be sent home to periphery regions

• Migrants get a better SOL

What are the 5 dimensions of globalisation?

1. Flows of capital

2. Flows of people

3. Flows of products from NEEs to HICs

4. Flows of services facilitated by HICs

5. Flows of information

How has globalisation impacted the flows of information?

• it is cheap, reliable and quick communication between almost all parts of the world, allowing info and capital to be shared

• Money flows electronically around the world → HICs usually invest in LICs to take advantage of cheaper production costs

How has globalisation impacted the flows of products?

• global transport systems are cheap and effective in moving people and goods

• High speed rail networks and international airport hubs and containerisation have reduced time and space for travel

• tourists move around the world to greater distances encouraged by global marketing and cheap flights

How has globalisation impacted the flows of service?

• marketing is now globalised and uses international strategies to deliver inter continental imagery/ messages

• TNCs use the same adverts to advertise their products in different parts of the world

What has the increase is information from globalisation led to?

Increased technology

What has the increase is products from globalisation led to?

Increase in trade agreements and transport

What has the increase is services from globalisation led to?

Increase in migration and media

What is containerisation?

Using large steel containers to transport goods usually on cargo ships, trains, lorries

What is protectionism?

A policy from the government that imposes restrictions on trade in goods and services with other countries

What are tariffs?

A tax placed on imported goods with the intention of making them more expensive to consumers so they don’t sell at a lower price price than home based goods

What are conglomerates?

A collection of different companies or organisation which may be involved in different business activities but all report to one parent company

What are economies of scale?

The cost advantages that result from the larger scale of an operation as saving are made by spreading the costs

What are high level services?

Services to businesses such as finance, investment and advertising

What are low level services?

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

What is WTO?

World trade organisation - regulated world trade through negotiations of trade barriers

What is R&D?

Research and development (quaternary sector) e.g Apple in California

What is footloose?

Industries that can locate anywhere as they don’t have any ties e.g Amazon located near motorways

How is labour internationally divisioned?

• highly skilled highly paid, decision making research and managerial jobs are concentrated in more developed countries

• Unskilled poorly paid, assembly jobs are concentrated in developing countries that have lower labour costs

How can you categorise countries?

• HICs, LICs, NEEs → UK , Nepal, China

• Tiger economies → countries in Asia that developed before China e.g Singapore, Hong Kong, South Korea

• BRIC → Brazil , Russia , India , China

• MINT → Mexico , Indonesia , Nigeria , Turkey

What are economic migrants?

Those who love countries for job opportunities

What are refugees?

Those who have been granted the right to stay in a country as it has been proven their life would’ve been in danger if they stayed in their home country

What are asylum seekers?

those who escape from war and conflict by moving to a safer country because their lives are in danger

What is the global shift?

95% of manufacturing industrialized in economies of Western Europe, North America, and Japan in 1954 caused by decentralization due to foreign direct investment by TNCs

What are the impacts of the global shift?

• jobs in HICs lost as production moved overseas

• More pollution in LICS and NEES due to increased emissions from making products (e.g car factories moving from Detroit to Mexico)

• Investment begins in business, finance etc (tertiary sector)

How has the Uk been affected by global shift?

• 600,000 jobs lost in manufacturing but similar number gained in business services

• Manufacturing now only accounts for 1/10 of GDP compared to 30% in 1970

What is the difference between global marketing and flow of information?

• global marketing → advertising products internationally, increasing recognition and profit

• Flow of info → through movement of people, speed of data, and communication transfers of culture, language, tech and business

Where are products mainly manufactured?

In NEES and then exported worldwide

• e.g Dyson designed in Uk but manufactured in Malaysia where it is sold in 65 countries worldwide but mainly in EU

What is Apple’s international division of labour?

HQ , R&D in California → raw materials from D.R of Congo → production in China → consumers globally mostly in HICs → tech support, product testing & call centres in Rep. of Ireland

How is the pattern of distribution and consumption changing?

• NEEs are becoming wealthier

• Shift from West to East as the centre of economic activity

How is consumption predicted to be like in the future?

• consumption will be more important than product location due to developments in tech and transport (containerisation)

• India into China expected to be biggest trade group

What factors of globalisation lead to the expansion of it?

• global marketing → rise in global brands (e.g McDonalds) → introducing western culture causing local cuisines and culture to be lost

• Growth of TNCs through mergers and expansion → TNCs join together to form one big company to expand what they own and their money (e.g Diageo joining with another TNC to own Guinness)

• Containerisation → vast quantities can be shipped at low costs globally

How has financial security been impacted by globalisation?

• Growth of online banking led to increase in fraud from skimming and mail theft

• This was facilitated by improved technology

How has food security been impacted by globalisation?

• ability to trade globally, quickly and in large amounts (containerisation from improved tech) allows food to be transported even in remote areas

What are trade blocs?

• A group of countries within a geographical region that protect themselves from imports from non members

• are a form of economic integration

• e.g USMCA and EU

What are the different levels of integration?

TOP:

1. Political union

2. Fiscal union

3. Monetary union

4. Common market e.g EU

5. Customs union e.g EU

6. Free trade area e.g USMCA

7. Preferential trade area e.g ASEAN

8. Independant economy

BOTTOM

What is a common market?

Members of countries trade freely in all economic resources, removing all barriers to trade e.g EU

What is customs union?

Remove tariff barriers between members, allowing members to negotiate with 3rd parties

e.g EU

What is a free trade area?

Two or more countries in a region agree to reduce or eliminate barriers to trade coming from other members e.g USMCA

What is a preferential trade area?

Countries within a geographical region agree to reduce or eliminate tariff barriers on selected goods from other members of the area e.g ASEAN

What are the successes and failures of USMCA?

Successes → increased Trade leading to lower prices for consumers

Failures → decreased employment in manufacturing as it moved overseas

What are the positives of trade blocs?

• workers have more choice in where they want to live and work within the region

• Increased trade caused consumption and higher demand, creating lower prices

• Jobs created due to increased trade

• High environmental standards can be set by social and economic unions

• Trade and political cooperation reduces chances of violent conflict

What are the negatives of trade blocs?

• relaxed borders = easier for illegal immigrants o move around the bloc = political issues

• Trade blocs may argue with other another (trade wars) e.g Boeing (US) / Airbus (EU) dispute

• Trading blocs increase food miles as cheapest product within bloc will be most traded

• Another layer of government added, costing money and adding complications for decision making