Geography chapter 1

1.1 Is the balance of economic power shifting?

Learning objectives

  • You know why the balance of economic power is shifting.
  • You understand the connection between globalisation and the shifting of trade patterns
  • You can explain using a map what the multipolar world order might look like.

Goods production shift

The ==production chain== is shifting from western countries to non-western countries especially the BRICS. Western ==multinational companies== (MNOs) are the main drivers for this shift. these are the reasons:

  1. Since 1980, MNOs have been relocating their manufacturing industries to low wage countries. in addition to manufacturing emerging countries are developing and providing products.
  2. The emerging countries form an interesting market. purchasing power is increasing.

Trade patterns are changing

  • The production chain is divided
  • Transport of goods has become faster and cheaper
  • Trade borders are dissapearing due to globilisation and the ==WTO== (world trade orginization)

Global shift

Europe and USA used to rule the WTO but the power has been shifting to China and emerging countries but core countries remain the most important in the economy. There is a global shift happening and we are on the way to multipolarity in the global economy with multiple key places in the world.

1.2 Development of the world economy

Learning objectives

  • You know which terms belong with different phases of the world economy.
  • You understand that a trade war could threaten globalisation.

Colonial relationships (1500-1945)

The 16th century is a century of discovery with Europeans discovering new areas in Africa, America and Asia.

  1. 1500-1800: the phase of ==trade colonialism==. Raw materials are being transported from south America. Plantations are built in Africa, but also in America by African slaves. Areas inland remain untouched.
  2. 1800-1950: the phase of ==industrial colonialism==. Due to the rise of industrialization European countries need to be assured of raw materials and a market

On the way to independence (1945-1990)

Outcome of world war 2:

  1. ==Decolonization==
  2. Three blocks are created. The western block (USA) and the communist block (Soviet union) opposing each other. They threatened nuclear attack but never dared to attack each other directly: the ==Cold war==. Both blocks try to influence the third block: ==LEDCs== (less economically developed countries).

Free trade changes the world after 1990

After the Soviet Union the free market economy is becoming the most important economic system. Key features are free entrepreneurship, establishment of the price of products through the law of supply and demand. This market thrives best without trade borders (==free trade==)

  • Countries can specialize in production of products that the country can best or cheapest produce
  • Companies can access a foreign market.

1.3 Development at different speeds

Internal causes

1.Natural causes

  • Development opportunities. Fertile ground, not too mountainous, sufficient rainfall and natural resources.
  • Location. Landlocked has less oppurtunities than coastal.

2.Human causes

  • Political system
  • Population growth and age structure
  • Degree of inequality measured with Gini coefficient

External causes

  • Colonial past
  • Role in world economy

1.4 Europe: winners and losers

Diffrences in europe

Eastern and southern Europe is lagging behind compared to the economic heart of the north west. After the 90s industrial areas started experiencing problems: mainly ==heavy industry== or ==labour-intensive== companies. This is due to competition of low-wage countries. They must look for a new form of income: ==restructuring==.

Ruhr region: from grey to green

This region was formerly mine and steel industry but with the declining demand of coal and steel they had to restructure: ==the de-industrialisation==. This was successful but this area had it’s advantages

  • It forms a large market (dense population and relatively wealthy)
  • Easy accessibility (on the Rhine, major motor ways and train tracks)
  • Well trained labour force

South Germany, more than Bavaria alone

Southern Germany used to be agricultural and poor. But is now is a leading region in European economy. it is ==capital intensive== and has ==agglomeration advantage==.

1.5 The Netherlands

position in the world