Power Places & Networks

advantages of FDI for LEDCs

• export generated income is higher than domestic trade

• reduces negative trade balances

• wealth is spread as new industries emerge

• local areas benefit from more high-paying jobs

disadvantages of FDI for LEDCs

• less agricultural capacity as people are employed in other sectors

• urbanisation = pressure on cities

• workers exploited by TNCs

• narrow economic base = overdependence

advantages of FDI for HICs

• imports are cheaper from abroad

• LIC growth increases demand for exports from HICs

• industrial processes are more efficient

• more job prospects = worker mobility

disadvantages of FDI for HICs

• lack of jobs for unskilled workers = skills hap

• job losses are worse in concentrated industries

• local branch factories subject to change

definition of globalisation

increasing interconnectedness and interdependence of the world's economies, societies and cultures

3 types of globalisation

• economic globalisation driven by TNCs

• social globalisation = influence of ideas, culture, food, art, sport, etc. of one society on another

  • growth of online networks

  • migrant families & diaspora communities

• political globalisation = the development and influence of international organisations on nation-states to combat transboundary issues such as climate change

definition of global governance

attempts to regulated global systems like throuhg the UN, IMF, and World Bank

definition of global systems

organisation, groupings, and activites that link parts of the world

• TNCs

• stock exchange

• Internet of Things

description of KOF index

• measures economic, social, and political aspects

• economic → flow of trade, capital, services, and investments

• social → flow of information, ideas, images, and culture

• political → degree of political cooperation & participation in IGOs

drawbacks of KOF index

• outdated data & indicators

• only available for 122 countries

• trade indicators ignore informal economies

• ignores environmental factors

description of EY index

• only measures top 60 largest economies, measured by GDP

• measures economic indicators, e.g. openess to trade

description of New Globalisation Index

• based on financial, political, and social factors

• measures distance of traded goods & proportion of refugees

  • remote countries like Australia would score higher than France/Germany

  • more conservative countries like Jordan & Lebanon would appear more globalised due to their refugee numbers

description of AT Kearney Index

• 12 indicators across 4 categories

  • economic integration

  • connectivity

  • political engagement

  • personal integration

• only includes 62 countries

• Show a snapshot of partcipation in global interactions, not as good as peer reviewed surveys produced by the academic community

definition of global superpower

nation that can project its influence & be dominant on the global scale

definition of networks

things connecting countries together, e.g. transport infrastructure

definition of players

organisations that influence the global economy, e.g. IMF

definition of commodity dependency

dependency on exports of raw materials, resulting in greater exposure to risks, e.g. market dynamics

4 types of FDI

1. greenfield investment: investing into production capacity & employment

2. brownfield investment: investing into existing facilities, improving their capacities

3. mergers & acquisitions: multiple companies becoming 1 entity

4. joint ventures: strategic alliance between multiple companies

definition of FDI

Investment from one country into the structure, equipment, or organisations of another

3 reasons for power of TNCs

1. rationalisation: reducing workforce through mechanisation

2. reorganisation: improving production, administration, and marketing

3. diversification: developing new products

advantages of TNCs

• investment through FDI

• develop infrastructure

• improve education & technical skills

• increase employment

disadvantages of TNCs

• reduced demand for labour through mechanisation

• exploit local workers & resources

• profits go overseas

• manufactured products beyond price range of locals

• few skilled workers employed

• increased imports = increased national debt

impacts of counterfeit goods

• account for 2.5% world trade (same value as global drugs trade)

• Lost company revenue = less taxes for governments

• Lost productivity from dangerous drugs & pharmeceuticals

limitations of UNTOC

• lack of centralised data

• inconsistent national legislation

• restrictions in independent review mechanism

description of UNTOC

• 3 main protocols:

  1. punish & prevent trafficking of women & children

  2. Against smuggling of migrants

  3. against illegal firearms trade

• nexus = interconnection of TOC; trafficking of drugs, humans, migrant smuggling…

definition of remittances

Transfer of cash from migrants in host countrise back to family members in their countries of origin, total value of $431b

mangaging migration

• increasing employment time

  • rising age of retirement

• encourage women to work

• pension reform

• EU’s blue card system to attract elite/high skilled workers

definition of containerisation

various goods transported in standardised steel boxes which could be easily & cheaply moved between transport methods

description of the global village

• coined by Marshall Mcluhan in 1964

• “one world interconnected by an electronic nervous system”

• allows instant sharing of culture

• increases sphere of influence

• 30b devices that can connect to the internet worldwide (5.3b people)

• increasing communication due to technological innovations