Globalisation

• What is globalisation?

  Globalisation is the increasing integration of local, regional, and national economies into a single international market.
• What are the main components involved in globalisation?

  It involves free trade of goods and services, movement of capital and labour, and interchange of technology and intellectual capital.
• How has globalisation affected trade between nations?

  Globalisation has led to more trade between nations and increased transfers of capital, including foreign direct investment (FDI).
• What is FDI?

  FDI stands for foreign direct investment.
• How has the division of labour changed due to globalisation?

  Labour has been divided between several countries, leading to more migration and participation in global trade.
• Which countries have increased their participation in global trade?

  Countries like China and India have increased their participation in global trade.
• What does it mean for countries to become more interdependent?

  It means that the performance of one country depends on the performance of other countries.
• What event illustrated the interdependence of countries during globalisation?

  The global credit crunch of 2008 and 2009 illustrated this interdependence.
• What are the factors contributing to globalisation in the last 50 years?

  • Trade in goods
  • Trade in services
  • Trade liberalisation
• How have developing countries contributed to trade in goods?

  They have acquired capital and knowledge to manufacture goods.
• What role does efficient transport play in globalisation?

  Efficient transport makes it easier and cheaper to transfer goods across international borders.
• Why do MNCs move production to developing countries?

  They move production to take advantage of cheaper labour costs.
• What is an example of trade in services that has increased due to globalisation?

  The trade of tourism, call centre services, and software production has increased.
• What is the role of the World Trade Organisation (WTO) in globalisation?

  The WTO advocates for free trade and has contributed to the decline in trade barriers.
• What are Multinational Corporations (MNCs)?

  • Organisations that own or control production in multiple countries
  • Use marketing to become global
  • Benefit from economies of scale
• How do MNCs benefit from economies of scale?

  They can lower costs of production by spreading fixed costs over a larger output.
• What has increased due to international financial flows?

  The flow of capital and foreign direct investment (FDI) across international borders has increased.
• How have countries like China and Malaysia financed their growth?

  They have financed their growth with capital flows.
• What has facilitated the increase in international financial flows?

  The removal of capital controls has facilitated this increase.
• How has the spread of IT impacted globalisation?

  It has made communication easier and cheaper, leading to greater interconnectedness.
• What is containerisation?

  Containerisation is the distribution of goods in standard sized containers for easier and cheaper shipping.
• What are the benefits of containerisation?

  It makes shipping cheaper, faster, and helps meet world demand.
• Who primarily benefits from containerisation?

  Mainly MNCs have been able to exploit containerisation.
• What are some potential negative impacts of containerisation?

  It could result in structural unemployment.
• What are the consequences of globalisation for individual countries?

  • Trade imbalances
  • Inequalities in access to health, education, and markets
  • Income and wealth inequalities
  • Cultural spread and potential loss of diversity
• What is an example of a trade imbalance?

  The US runs a large current account deficit with China.
• How can globalisation lead to income and wealth inequalities within countries?

  If the benefits and costs of globalisation are not evenly spread, inequalities can arise.
• How does globalisation affect cultural diversity?

  Some argue it weakens culture and leads to a loss of diversity, while others see it as a positive spread of culture.
• What are the impacts of globalisation on governments?

  • Loss of sovereignty due to international treaties
  • Difficulty in resisting international forces
• What are the impacts of globalisation on producers and consumers?

  • Benefits of specialisation and economies of scale
  • Increased competition leading to lower costs and efficiency
  • Producers can switch to cheaper labour locations
• How does globalisation affect world GDP?

  Globalisation leads to a general increase in world GDP, raising living standards and reducing absolute poverty.
• What challenge arises in calculating the growth due to globalisation?

  It is hard to calculate the proportion of growth that is due to globalisation.
• How has increased demand from China affected commodity prices?

  It has contributed to the increase in the price of commodities and raw materials.
• What did Oxfam research in 2015 suggest about wealth distribution?

  It suggested that 1% of the world owns more than the rest of the world.
• What is a potential downside of increased availability of goods and services due to globalisation?

  Some services might become homogenised, such as hotels.
• How can workers benefit from globalisation?

  Workers can take advantage of job opportunities across the globe.
• What is structural unemployment, and how can it arise from globalisation?

  Structural unemployment can arise when production shifts to lower labour cost countries, leading to job losses in higher-cost nations.
• How might the shift of production to lower labour cost countries be viewed?

  It can be seen as beneficial for job creation or harmful due to exploitation and poor working conditions.
• What are the environmental impacts of globalisation?

  • Increased pollution from industrialisation
  • Concerns for the environment as incomes rise
  • Negative impacts include deforestation, water scarcity, and land degradation
• How does increased consumer living standards relate to environmental concerns?

  Higher living standards may lead to more pollution, but consumers may also show more concern for the environment.