6.1 Geopolitical and Economic Risks

6.1.1 Threats to Individuals and Businesses

6.1.1.1 Hacking, ID Theft

• Stealing intellectual property

• Taking control of online bank accounts

• Viruses

• Disrupting computer controlled services

Different types of Methods:

Phishing - Internet Danger

Occurs when visiting sites or reading emails.

• typically a link that will pretend to be someone else and request credentials, e.g. bank details, Nigerian uncle, fake blackmail.

Trojans - Computer Danger

Occurs when using infected sites, outdated software, links and attachments

• Intercepts data that you input, they will typically copy your information and quickly use to steal data.

• can be performed by collecting data when it’s entered, using web injection, and/or bypassing two-factor authentication

Interception - Connection Dangers

Occurs when using unprotected internet connections or Wi-Fi hotspots

• can be used to directly change visible data on a device, URL/IP remapping, causing trusted links to send you somewhere else.

• All data can be intercepted and stolen

Case Study:

Bangladesh Bank Heist - https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

• False instructions were sent to the Federal Reserve Bank of New York, to send US$1 billion to the Bangladesh bank, performed over 35 transactions. $81 million were successfully sent to the hackers account in the Philippines before New York realised, only retrieving $18 million since.

6.1.1.1 (2) Implications of Surveillance for Personal Freedoms

To what extent should a society accept government surveillance of its citizens personal data

UN surveillance guidelines:

• Any government surveillance should be properly regulated by legal frameworks, and must fall under a specific aim

• Any form of illegal surveillance should be criminalised

• Anonymity online should a personal right

• Measures must be taken to avoid commercialisation of trade in surveillance technology

Case Study:

Surveillance in China

1. Characteristics of surveillance

   • 1 camera per 3 people

   • 30x more cameras than US

   • initially started to suppress protests

2. Aim of surveillance

   • Have a record of public crime

   • help people who have lost items

3. Impact

   a) Positives

   • People feel more safe

   • Decrease in crime rates

   • Facial recognition can be applied globally

   b) Negatives

   • Suppression of masses to maintain power

6.1.1.2 Economic, Political and Environmental Risks to the Supply Chain

Environmental Risks:

• Natural disasters

• Extreme weather

• Pandemic

Geopolitical Risks:

• Political instability

• Trade restrictions

• Terrorism

• Corruption

• Theft and illicit trade

• Piracy

Economic:

• Demand shocks

• Price volatility

• Border delays

• Currency fluctuations

• Energy Shortages

Case Studies:

Environmental - Japan Earthquakes

• The 2011 earthquake and tsunami that affected the Fukushima plant, also caused damage to several trade and production infrastructures, causing problems to arise in supply chains, as they could not handle good/services throughout the country

Geopolitical - Boko Haram and Somalia Pirates

• in Somalia there is a large quantity of trade pirates due to the close proximity to the Bab al-Mandab Strait, which is a major choke point for trade ships. causing issues in supply chains for other countries

• Boko Haram is a terrorism group located in Nigeria and cause fear of travelling through the country, therefore limiting the supply chains that run throughout Nigeria

Economic - Argentina hyperinflation

• Argentina is facing a case of hyperinflation, with annual inflation rates reaching over 100%. With their weakening currency imports and exports decrease, causing supply chain issues as they no longer have access to good that they can’t produce at large scales.

6.1.2 New and emerging threats to political and economic sovereignty of states

6.1.2.1 Profit Repatriation and Tax Avoidance by TNC’s

Repatriation:

• the act or process of restoring or returning someone or something to the country of origin, allegiance, or citizenship

Case Study:

Glencore - Zambia Copper Mines

Situation:

• Nearly all copper mines in Zambia are owned by TNC’s

• in the last 10 years US$29bn worth of copper has been extracted from Zambia while paying minimal tax

• Copper accounted for 2.3% of Zambia’s GDP but makes up 70% of their exports

Transfer Pricing:

• involves TNC’s selling products internally between subsidiaries, therefore avoiding high tax rates in the original country (Zambia) by selling in low tax countries like Switzerland

• Glencore owns the Mopani copper mines, who sells to glencore at a loss, therefore artificially reducing the price. Then they sell it from Switzerland at full market price, with low tax rates.

Glencore:

• Largest commodities trader in the world

• Annual revenue (US$180bn) is 8x larger than Zambia’s GDP (US$20bn)

• Able to buy out governments with bribing

6.1.2.2 Disruptive Technological Innovations

Disruptive Technology

• Disruptive technologies is an innovation that significantly alters the way that consumers, industries, or businesses operate

• e.g. Tv’s, GPS, cars, planes, etc

6.1.3 Renewed nationalism & tribalism

6.1.3.1 Globalisation and Tribalisation

Globalisation: 🔗 4.1 KOF

• The process of interaction and integration among people, companies, and governments worldwide

• e.g. McDonald’s, Ikea, Coca-Cola

• The rate of globalisation is slowing down, as visible in Graph 1

Tribalisation/Nationalism:

• Promoting the interests of a particular nation, with the aim of gaining sovereignty and renewing identity

• Currently seeing a rise in HIC’s like most of the EU and America

• Often related with religion, e.g. Boko Haram

Case Study:

Boko Haram - western education is a sin (Tribalisation/Nationalism)

• Based in north east Nigeria

• Main belief being, remove all western culture and ideology from the country

• main religion belief is Islamic

Brexit (Tribalisation/Nationalism)

• UK withdrawing from the EU., voted for by UK citizens in a referendum

• Brexit happened because the UK population believed decisions about the UK should be made by the UK

• the overall desire was to reinstate their sovereignty

U.S. States - Donald Trump (Tribalisation/Nationalism)

• ‘Make America Great Again’

• US - Mexico border, Anti immigration

6.2 Environmental Risks

6.2.1 Transboundary Pollution (TBP)

6.2.1.1 TBP and it’s consequences

Transboundary Pollution: 🔗 2.1.3, 4.2.1, 5.1.1

• Emissions that are produced, and travel across land without recognition of borders.

Acid deposition:

• rainfall that has a pH of less than 5.5 as a result of sulphur dioxide and nitrous oxides dissolving in water vapour held in the atmosphere.

• typically caused by sulphur dioxide pollution from coal-fired power stations and nitrous oxides from petrol powered vehicles

Dry Deposition - when particulate matter falls close to the source (generally not transboundary)

Wet Deposition - when the pollution is carried by wind away from the source and to another location, this is a large problem for smaller countries like in the EU

Strategies to Reduce Impacts:

Gothenburg Protocol - 1983

• signed by all EU countries, Russia, America, and Canada

• called for the reduction of acidification, eutrophication by setting emissions ceilings for sulphur dioxide, nitrogen oxides, volatile organic compounds and ammonia

Case Study:

Global action following the Chernobyl accident

• After the explosion polluting particles Caesium-137 were discovered in extremely high levels 2 weeks after the explosion in Austria, Slovenia, Norway, Sweden and Finland.

• the World Association of Nuclear Operators (WANO) was formed, with the main goal - to maximise the safety and reliability of nuclear power plants worldwide

6.2.2 Environmental Impacts of Global Flows

6.2.2.1 Localised Pollution, and Impacts Along Shipping Lanes

Choke Points:

• shipping routes where there is a high density of ships, e.g. Suez canal, Panama canal, Baltic sea, East asia, etc

Other Environment impacts of Shipping

• Deliberate and accidental oil and chemical discharges

• Waste dumping

• Air pollution

• Damage to sea floor from the anchor

• Noise pollution for sea life

• Pest organisms that become invasive through ballast water (pacific sea star from japan, moving to port Phillip bay)

Case Study:

Singapore Oil Spills

• Singapore has the 2nd busiest port in the world - as well 4 of the busiest ports are also located in Asia

• Due to high traffic and the narrowness of the channel, there has been 11 major oil spills

6.2.2.2 Carbon Footprints of Different Flows

Flow of Goods

Food Miles:

• total pollution created when transporting the food you purchase

Meat production:

• one of the highest producers of pollution due to the production of the product

  → increasing global middle class

  → ∴ increased consumption of meats as number of HIC’s increase

  → Nutrition transition - change of diet

Flow of People

Migration:

• The movement of people from LIC’s to HIC’s is a major contributor to global emissions, with the rate of migrations being at an all time high

• Between 2008 and 2033 will add 7 million people to the UK, which will add around 500 million tonnes of CO₂ by 2033

Tourism:

• Increased globalisation, leads to increased tourism

• Tourism hotspots like Europe lead to higher localised pollution

6.2.3 Environmental issues from global shift of industry

6.2.3.1 Polluting Manufacturing Industries

Global Shift:

• The gradual movement of manufacturing from HIC’s to newly industrialised countries (NIC’s)

• Global shifts started as the rise of globalisation begun

• the main goal of moving manufacturing is to decrease costs with use of either lower tax rate laws, cheaper labour, less trade barriers, and potential FDI

Environmental Impact:

• typically there are lower environmental regulations and restrictions in emerging economies

• Lack of infrastructure that is sustainable

• desire for profit is being placed over desire for sustainability

Case Study:

Industry Shift From USA to Mexico - Environmental Impacts

• 1 item = 1.4kg of CO₂

• Heavy metals are being produced without adequate processing methods

• Illegal dumping

6.2.3.2 Environmental issues from global agribusiness

Agro-Industrialisation:

• large-scale, intensive, high-input, high-output, commercialised, technologically advanced forms of farming food and fibre

• Western farming practices

Positives and Negatives of Agro-Industrialisation:

Past 50 Years: Positive Impact

• Wheat yields have increased from 2.6 to 8 tonnes/hectare

• Barley yields have increased from 2.6 to 5 tonnes/hectare

• Dairy production has increased from 4,000 L/yr to 5,800 L/yr

Environmental Impacts: Negative Impact

• Food production accounts for 26% of all global GHG emissions with livestock making up 31% of that.

Eutrophication:

• Occurs when runoff from farms using high nutrience fertiliser flows into water systems causing blue algae to grow causing a hypoxic aquatic environment, this deoxygenates the water further increasing the hostility.

• Agriculture accounts to 78% of all cases of eutrophication around the world.

6.3 Local and global resistance

6.3.1 Civil society response to environmental and social risks of global interactions

6.3.1.1 Greenpeace

Background:

• Founded in 1971

• Based in the Netherlands

• Operates in more than 55 countries

• they are a global campaigning network

Campaigns:

Asian Pulp Paper (APP) & Mattel

6.3.2 Strategies to build resilience

6.3.2 (2) Crowdsourcing

6.3.3 New tech, cyber-tech and e-passports