Changing Global Interactions and Power

Definitions:

• Globalization: “the growing interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and more rapid and widespread diffusion of technology”(International Monetary Fund).

• Globalization: It is a term that was invented to emphasize that the globalization of a product is more likely to succeed when the product or service is adapted specifically to each locality or culture it is marketed.

  • E.g., the presence of McDonald’s restaurants everywhere on the globe = globalization and the changing menus of the restaurants to appeal to the local tastes = globalization

• Transnational Corporations (TNCs): Companies with branches in many parts of the world eg. Coca-Cola, Apple, MacDonald’s etc

The drivers of globalization:

• Transportation improvements:

  • For example, faster and bigger aeroplanes enable labour and goods to move easily from one place to another; road transport network improvements have allowed for cheaper means of moving goods and people; sea transport – larger container ships – facilitates the transportation of large volumes of goods.

• Freedom of trade:

  • For example, the EU, NAFTA, ECOWAS AND COMESUR have all contributed to allowing the free movement of goods, services, ideas and labour between member countries and across regional boundaries.

• Improvements in communications:

  • E.g., improvements in telecommunication and the Internet have contributed to the exchange of ideas and services through the Internet.

• Cheap Labour in developing countries – This is also aided by technology, for example, through outsourcing.

  • This makes it possible to outsource services to labour in different parts of the world.

    • Eg. Marking IB scripts online by different examiners in different parts of the world.

The drivers of globalization:

1. The KOF Index

   1. The KOF Index of Globalization was introduced in 2002 (Dreher, 2006). KOF is a Swiss Institute of Business Cycle Research.

      1. The overall index covers the economic, social and political dimensions of globalization.

   2. Economic globalization is characterized by long-distance flows of goods, capital and services as well as information and perceptions that accompany market exchanges;

      1. Political globalization is characterized by a diffusion of government policies.

      2. Social globalization is expressed as the spread of ideas, information, images and people.

2. A.T Kearney Index

   1. AT Kearney is a management consultancy firm that advises large corporations on international competitiveness.

      1. Founded in 1926 in the US (Chicago), it publishes its index in the Foreign Policy Magazine.

   2. The AT Kearney Foreign Policy index assesses the extent to which the world’s most populous nations are becoming more or less globalised, using twelve variables, which are subdivided into four “baskets” of global integration

Human and Physical Influences of Global Interactions

Political factors that affect global interactions:

• Multi-governmental Organizations

  • MGOs are organizations or countries that come together to form a single entity mostly for trading purposes. Eg.

    • EU- European Union

    • USMCA- United States Mexico Canada Agreement

    • SADEC- South African Dev`t committee

    • UEMOA-West African Economic Monetary of Africa

    • ASEAN

  • MGOs allow state boundaries to be crossed feely to facilitate the free movement of goods, services, finance, and ideas.

    • Members are encouraged to abolish tariffs and promote the exchange of ideas in areas of security, trade, etc

  • Ways by which MGOS can promote global interactions

    • They promote the free movement of people between countries.

      • For instance, in the EU and ECOWAS people can move freely thereby we can say they are practising globalization.

    • Free trade allows the free movement of goods between member countries.

      • It promotes global interactions because it leads to the development of homogeneous landscape-saving brands, banks, etc.

    • Some of the MGOs use a common currency, which allows the free flow of goods and services.

      • This common currency unites those countries, such as the Euro-using countries, financially.

    • MGOs sometimes have common policies that facilitate global interactions.

      • For instance, CAP (Common Agricultural Policies) in the EU helps farmers in all EU countries to increase agricultural output by receiving support in the form of subsidies from the EU and guaranteed markets.

    • Membership in MGOs facilitates global interactions through the free movement of capital between member countries.

      • This means banks can transfer money at no cost from one country to the other.

    • Free movement of ideas between members as a result of the Internet.

      • For instance, if you are a member of the EU, you cannot be charged for roaming charges if you visit another EU country.

  • This does not always lead to global interaction because:

    • Joining groups like the EU means you would be unable to be independent as their currency is even controlled by the EU’s central bank.

    • Foreigners would dominate the countries.

  • How can export-processing zones facilitate global interactions?

    • Export processing zones allow countries to have access to goods that they cannot produce on their own at relatively low prices.

    • Free zones also help in global interactions because they help in the transfer of skills from advanced countries to developing countries through the training of workers.

    • Free zones help to stabilize a country’s currency against other countries’ currencies.

      • This improves global interactions because the country would be able to trade with another country, like the US, and get a lot of the foreign currency into their country.

    • Export processing zones lead to bilateral and multilateral relations between countries, which enable manufacturing companies to sell their goods to different parts of the world.

Development Opportunities

The multidimensional process of human development and ways to measure it:

• UN Sustainable Development Goals criteria

  • Goal 1 – No poverty

  • Goal 2 – Zero hunger

  • Goal 3 – health and well-being

  • Goal 4 – Quality education

  • Goal 5 – Gender inequality

  • Goal 6 – Clean water and sanitation

  • Goal 7 – Affordable and clean energy

  • Goal 8 – Decent work and economic growth

  • Goal 9- Industry, Innovation and Infrastructure

  • Goal 10 – Reduce inequalities

  • Goal 11 – Sustainable cities and communities

  • Goal 12 – Responsible production and consumption

  • Goal 13 – Climate action

  • Goal 14 – Life below water

  • Goal 15 – Life on land

  • Goal 16 – Peace, Justice and Strong Institutions

  • Goal 17 – Partnership for the Goals

• Human Development Index (HDI)

  • Developed in 1990 by the United Nations

  • The health dimension is assessed by life expectancy at birth

  • the education dimension is measured by the mean of years of schooling for adults aged 25 years and more and expected years of schooling for children of school-entering age

  • The standard of living dimension is measured by gross national income per capita

  • Scale of 0-1

• gender inequality index (GII)

  • reproductive health, measured by maternal mortality ratio and adolescent birth rates;

  • empowerment, measured by the proportion of parliamentary seats occupied by females and the proportion of adult females and males aged 25 years and older with at least some secondary education; and

  • economic status expressed as labour market participation and measured by the labour force participation rate of female and male populations aged 15 years and older.

Changing Identities and Cultures

Cultural Diffusion

• the spread of cultural traits from one place to another through the processes of cultural change.

• There are several types:

  • Expansion diffusion – occurs when an idea develops in a source area and spreads into other areas while remaining strong at the source. E.g. spread of Islam from Saudi Arabia

  • Relocation diffusion – people who have adopted new ideas carry with them to a new location. E.g. Christianity to Africa from Europe.

  • Distance decay effect – The longer an idea takes and the further the distance it has to travel, the less likely it is to be adopted in new areas.

  • Adoption of mass culture – new cultural traits are taken in their entirety, perhaps abandoning old traditions

  • Adaptation/ Adaption of mass culture –cultural traits are modified so it can be accommodated within the context of an existing culture.

  • Cultural Hybridity– the extent to which different cultures are intermixed. Mixing of cultures can occur through; migration, media, transport revolution, Growth of global brands and even the internet

  • Cultural traits – characteristics of culture that give a culture its sense of identity – i.e what makes them different from others

  • Ethnicity – the shared sense of belonging to one ethnic group or another, based on ancestral lineage or cultural history.

  • Cultural diversity – the differences in cultural characteristics that are manifested in a given culture. Cultures that are not diverse tend to be homogeneous

Characteristics of a global culture:

• Language

• Dressing

• Music

• Movies/Television

• Sport

• Others(tourism, religion, education, architectural designs, etc.)

Barriers to global interactions:

• Censorship of the Internet

• The restrictions on migration to countries

• Physical/environmental barriers

• The resurgence of nationalism and anti-globalization movements

• The double-edged effect of MGOs

Geopolitical and Economic Risks:

• Threats to individuals and businesses include:

  • Hacking

  • Identity theft

  • The implications of surveillance for personal freedoms

  • Political, economic and physical risks to global supply chain flows

• Environmental Risks:

• Transboundary pollution (TBP) affecting a large area

• Localized pollution resulting from the global flow of goods

• Carbon footprints for global flows of food, goods and people

• Polluting manufacturing industries

• Food production systems for global agribusiness

Local and Global Resilience

• Strategies to build resilience:

  • reject globalization

  • find ways of controlling the risks of globalization

  • adapt to the risks by implementing mechanisms to manage them in the event of their occurrence