Eco essay

INTRODUCTION

• Globalisation is the process of interaction among the countries of the world that brings their economies and societies together to develop the global economy.

• It is the interaction and interfacing of economies for purposes of trade.

1. Development of technology

• Technology makes communication easier, faster and more efficient, which enhances globalisation.

• Internet and mobile technology allow greater communication between people in different countries.

• Example: a South African business can order goods from a supplier in China online in minutes.

2. Multinational enterprises

• Multinational enterprises are companies that set up factories, shops or services in many countries around the world.

• They use links around the world to expand their markets and make large quantities of goods, so trade between countries grows.

• Examples: Coca-Cola, KFC, BMW and Vodafone.

3. Trade liberalisation

• Trade liberalisation is the removal or reduction of trade barriers, such as import duties, between countries.

• The growth of trading areas such as the Southern African Development Community and the European Union has reduced national trade barriers.

• Example: members of a free trade area can trade without paying import duties on each other's goods.

4. Natural resources

• Natural resources are not evenly distributed across the world.

• This makes some countries depend on others for their resources.

• Example: South Africa has many minerals but no crude oil, so it imports oil and exports minerals.

5. Foreign direct investment

• Foreign direct investment is when a company establishes a lasting business in a foreign country.

• It moves capital, technology and jobs across borders and creates an integrated global supply chain.

• Example: BMW builds a car factory in South Africa.

6. Free trade zones

• Free trade zones, also called export processing zones, are designated areas where goods can be landed, handled, made and re-exported without customs intervention.

• They offer tax holidays and relaxed labour rules to attract foreign capital.

• Examples: China, Mexico and Morocco.

ADDITIONAL PART (10): THE CONSEQUENCES

• Structural changes: the tertiary sector now dominates South Africa's economy.

• Employment conditions (positive): multinational enterprises bring new jobs and skills for local people.

• Change in trade patterns (positive): consumers get a greater variety of goods and more competitive prices.

• More exports lead to economic growth (positive): production increases, which creates jobs and reduces poverty.

• Environmental deterioration (negative): demand for natural resources and the effects of tourism damage the environment.

• Interdependence (negative): countries depend on each other, which is dangerous in a crisis, as the war between the United States and Iran shows.

• My view: globalisation helps growth and jobs, but developing countries need protection against its costs.

CONCLUSION

• Technology, multinational enterprises, trade liberalisation and investment drove the world's economies closer.

• Governments should keep trading openly, but they should also protect their workers and environment so the benefits are shared fairly.