Globalisation

• What are the advantages of local sourcing?

  • Reduces transportation distance and air pollution
  • Ensures local producers meet environmental and ethical standards
  • Shorter delivery times and lower transport costs
  • Money spent stays in the local economy (multiplier effect)
  • Builds trust through face-to-face communication
• What are the disadvantages of local sourcing?

  • Reduces demand for TNC goods, harming economic growth in LICs
  • Higher prices due to local production costs
  • Local suppliers may be inefficient
  • Harder to terminate contracts without causing local tensions
• What is Fairtrade's main goal?

  • To increase profits for producers and growers
  • Information on profits returned to farmers is often unavailable
• What does TRAID do?

  • Works to reduce clothing waste
  • Operates 1,500 charity clothing banks across the UK
• What has contributed to the rise of thrift shopping?

  • Online apps like Depop, Vinted, and eBay for selling pre-owned items
• What is M+S's commitment regarding products?

  • Only selling Fairtrade tea and coffee
  • Using natural dyes in their products
• What was the EU's recycling target for household waste by 2020?

  50%
• What is the purpose of Keep Britain Tidy?

  • To eliminate litter and ensure responsible waste disposal
  • Encourages recycling and reducing food waste
• How did developments of transport and ICT promote globalisation?

  • Steam power- Allowed the UK to grow in the 1800s. Movement of goods and people made more easily. Trade routes to Africa and Asia. Made countries leading powers
  • Railways- Train networks expanded across globe in 19th and 20th century. Trans-Siberian railway- goes from Moscow to, China and Japan in 20th century.
  • Jet Aircraft- In 1960s, development of jet airplane made international travel more common
  • Container shipping- allows products to be transported in containers. Expensive ships were not needed for scale of containers- Increased spatial division of labour.
  •  Internet and Mobile phones- reducing communication costs. Time-space compression
• How has the World Bank encouraged globalisation?

  • Lending money to developing countries- Encouraging free trade economy by reducing tariffs/taxes and encouraging privatisation.
  • Strict conditions on its loans- reduces sovereignty
  •  Any funds are prevented from reaching the country if they cannot pay back
  • Tanzania- funded privatisation of water supply but company failed to improve supply, quality, reliability and increasing water bills
• How has the IMF encouraged globalisation?

  Channels loans from rich nations to countries that apply for financial help

  TNCs can enter those countries more easily-  free market economy

  Countries must agree to have a free market economy.

  USA has significant influence over the IMF.

  Loans have high interest- keep developing countries in cycles of poverty
• How has the World Trade organisation encouraged globalisation?

  • Advocates for trade liberalisation especially for manufactured goods. Campaigns for the abandonment of protectionist attitudes in favour of free trade
  • 2015- Persuaded China to begin exporting its rare Earth minerals in high volumes
  • Failed to stop EU + USA from protectionism especially food producers, harms farmers in developing countries
  • Lack of success in getting all 159 members to reach a global agreement on any aspect of trade
• What is a trade bloc?

  An agreement between a group of countries to remove all barriers to trade such as tariffs or quotas
• What are the benefits of trade blocs?

  • Creates market demand
  • Lack of taxes quotas- Raises volume of production and lowers the cost per unit
  • Access to bigger markets at no extra taxes- Tesco has benefitted from sourcing goods at cheaper price in EU countries
  • Protection from foreign competitors - EU blocked £50 million of imported Chinese clothing to protect domestic manufacturers in 2007
• What are the drawbacks of trade blocks?

  • Loss of sovereignty- EU decides on trade matters, human rights, immigration, consumer protection and climate action
  • Interdependence- Disruption of trade within a bloc may have severe economic consequences on all participating countries e.g. 2008 financial crisis: Many European banks had extensive cross-border exposures within the EU. When one country's banking sector faced distress due to exposure to risky assets or sovereign debt, it affected the stability of banks in other EU countries, leading to a broader financial crisis.
  • Tariffs, taxes and quotas on non-members- discourages trade outside of the trade bloc, leading  to interdependence. Isolates poorer nations in the Global South
• What methods are used to measure globalisation?

  KOF index, Kearney World cities index.
• What are benefits and drawbacks of KOF?

  Benefits-

  • Allows comparisons to be made for one country over time or between countries at any given time.
  • Covers a wide range of globalisation data
  • Uses data that is readily available

  Drawbacks-

  • Smaller countries are over-represented at the top of the rankings due to higher proportion/ importance of FDI. US scores relatively low but its culture influences every country in the world.
  • Doesn't include illegal immigrants (affects globalisation)
• What is an SEZ?

  Special economic zone-  areas with local management, unique benefits such as attractive tax incentives/ low tariffs and separate administrative procedures.

  The SEZs were intended to have a 'spill over effect' where high volumes of economic growth would trickle down to the central and western regions of China
• What were the benefits and drawbacks of the Open door policy?

  • Private and foreign firms were granted attractive tax incentives and low tariff which attracted FDI e.g China became the largest recipient of FDI among developing countries in 1990s. This contributed to development of infrastructure, technology and human capital along coastal districts.
  • Rapid urbanisation as people escaped  poverty- (Multiplier effect) e.g Shenzhen's population went from just 30,000 in 1979 to 17.6 million in 2020
  • Poverty reduced by 800 million people
  • Huge manufacturing industry- 44% of textile exports are from China
• What were the disadvantages to globalisation in China?

  • Pollution- 73% of Shanghai's water resources are contaminated due to chemical dumping from factories
  • Increased regional inequalities-Increasing wealth gap between coastal and inland provinces. In 2000, the wealthiest provinces were in Eastern China