Global systems and global governance

• Flows of capital

  • core regions- economically important, attract investment(US), global power concentrated here
  • Periphery regions- poor, experience exploitation(LEDCs), suffer out-migration and lack of investment
  • remittances from core regions to periphary
  • FDI(investment by govs overseas to buisnesses) to periphary
  • Outdated due to rapid growth of NEES, other countries seen as core
• World Bank

  • financial and tech assistance to developing countries, aim to reduce poverty and support development
  • provided low intrest loans , can support education, health etc.
• International monetary fund(IMF)

  • org of 189 countries to foster financial stability, faccilitate international trade, and reduce poverty
  • ensure stability of monatary system, keeps track of global economy, gives help to members with difficulities
  • imf does not lend for specific projects
  • stop economic crash
• Flows of labour

  • deregulation of policies has made flows easier and international
  • restrictions on immigration, migrants mainly move to seek jobs
  • many migrant move shorter distances(more familiar)
  • Asia has the largest regional flow
  • GULF and TIGER states are more attractive for jobs(econ)
• Benefits of flows of labour

  • remittances can be sent home
  • migrants in host country pay taxes = good for economy
  • migrants get a better standard of livingif earning more money
• Somalia remittance dilema(flows of labour)

  • dependent, main source of income
  • $1.2 bn compared to exports of $500 ml
  • they have no control, banks stopped remittances as they werent sure if it was funding terrorism, would be fired if caught
• Flows of products

  • movement from area of production to consumption
  • globalisation=international flows, which is facilitated by reduction in costs of trade (tariffs)
  • now have electronic banking systems
  • transport cost reduced- containerisation
  • Tariffs reduced
  • everyone benefits but gap between rich and poor is increasing
• Patterns of production, distribution and consumption

  • 1950s- local/national
  • globalisation shifted manufacturing from HIC to LIC
  • Product flows changing, economies grow = more wealthy MC = more demand for product(consumerism)
  • LICs are shifting to NEES- eg TIGER economies and BRIC as they develop their own TNCs
• Flows of services and info

  • grown rapidly, info easily transferred globally dur to internet
  • Aids globalisation
  • Social media- worldwide comms
  • more employment available
  • High level services concentrated in HICs(london)
  • Low level services developed world to developing(call centers in India)
• Call centers in India(flows of services and info)

  • positive- growth of indian economy, better SOL
  • negative- low labour costs compared to London, only benefited certain parts of india
  • good for London- low labour costs
  • bad for London- insufficient supply to meet demand
• Global Marketing

  • promoting, selling products and services
  • globalisation = international, grown buissnesses profit and recognition
  • Economies of scale- cost advantages that result from larger size or scale of an opperation and savings are made by spreading the cost
• Glocalisation

  • TNCs adapt products around the specifics of a local culture in which they are sold
  • allows integration of local markets into world markets
  • for example- Mc donals having a crispy chinese
• Factors in globalisation- communication

  1960s- satelites, cheap wireless coms, even rural areas can access internet

  growth in software meant free communication from anywhere worldwide

  eg whatsapp
• Factors affecting globalisation- transport

  • improved transport=efficient travel for people and products
  • containerisation= fast and cheap worldwide
• Factors affecting globalisation- trade agreements

  • govs control tarrifs and banning of products which can make it more expensive for countries to sell their products abroad and consumers to buy
  • bilateral trade agreements- country removes controls in exchange for other so benefits both
  • WTO- stops unfair trade agreements and tariffs
• Factors affecting globalisation- security

  • countries need each other to trade, so trade makes war less likely
  • work together to improve security
  • conflict can arise due to globalistation- developed countries exploit developing to secure resources
• Factors affecting globalisation- management and IT systems

  • large companies benefit from economies of scale, reduce cost of making item by using specialist equiptment and raw materials in bulk for lower prices
  • outsourcing- country pays another to do work( cheap labour)
• Factors affecting globalisation- Financial services

  • investment banks raise capital by selling shares to investors who recieve some profits that the company gains
  • financial deregulation, removed barriers for capital coming in/out, of a country, banks can charge ppl more for their services
  • people have offshore banks- personal wealth
• Global systems examples

  • IMF- promote financial coorp to reduce poverty
  • UN- promote development of poorer nations through IMF and WB
  • WTO- deals with globa rules of trade
  • WB- source of financial and tech assistance to developing countries
  • TNC- global company operating in multiple countries
• How have global institutions impacted globalisation?

  • helped improve coorp, stability and development
  • however often led by powerful nations
  • so could lead to increased inequality, conflict, as LICs are limited
• Unequal flows of people (LIC to HIC)

  • Benefits- remittances for workers so home econ grows, workforce for host country
  • Inequalities- host becomes dependent on migrant workers, desperate migrants vulnerable to exploitation
• Unequal flows of money(HIC to LIC)

  • Benefits- country recieving can improve QOL, rich countries can take advantage of low labour costs to maximise profits
  • Inequalities- TNCs profit goes to host, injustice for LIC
• Unequal flows of ideas(HIC to LIC)

  • benefits- some can educate LICs on econ growth
  • Inequalities- privatisation of profits are concentrated not nationalised so LICs dont benefit
• Unequal flows of technology (Both ways)

  • Benefits- LICs economy can develop, open factores to increase employent
  • Inequalities- employees that manufacture tech recieve very little in comparison to selling prices
• Geopolitical intervention

  • when a state exercises its power to influence a cource of events outside its bordes
  • Embargo- government restriction placed on imports- might be imposed if a country is abusing human rights
• Russia and Ukraine timeline

  • 1991- after separation of R and U, U became divided, WEST- ukranian wanted ties w EU, EAST- russian wanted ties w russia
  • 2013- protests broke out about having trade ties w russia
  • 2014- russia takes control over crimea and moved troops to the border
  • 2014- talks to de-esculate conflict, Ukraine elected pro-europian parties
  • 2021- russia demanded ukraine was banned from joining NATO
  • 2022- russia attacked ukraine then retrieted after a few years
  • 2023- 500,000 killed, 10,000 civillians killed during russia invasion
• Uk involvement in russia x ukraine

  • provide id to ukraine through the UN
  • as part of NATO tried to settle conflict via negotiations, provided billions of euros in military equiptment for ukraine
• Impact of global systems - Nigeria


  • tbc
• Global trade investments

  • used to be concentrated in developed countries
  • now HICs investing into LICs
  • China invests a lot into Africa
  • HICs remain largest exports but also NEEs
  • LICs are trading more but slow
  • international trade- trade blocs
• Chinas investment in Africa

  • profit with low labour costs
  • big market of natural resources
  • most trade in Nigeria and South Africa
  • trade volume was 170 bn USD in 2017
  • Advantages- chinas loans are cheap, brings afordable goods into market for Africa
  • Disadvantages- Debts African countries are in, resources may be used as collateral if loans arent paid
• Major trade groups

  • EU
  • USMCA
  • Pacific allience
• Trade blocs

  • support free trade between menber countries with no tariffs
  • countries outside the bloc have to pay an additional tariff
  • promotes trade within the bloc by discriminating non members
• Positives of grouping nations

  • living standards increase
  • insufficient producers in bloc can be protected from efficient ones outside the bloc
  • reduces chance of violent conflict
  • jobs created due to increased trade
• Negatives of grouping nations

  • Trade wars- blocs dispute w each other
  • non member countries are frozen out
  • cost money which comes from taxing people
• Impacts of differential access to markets

  • may be improved by trade agreements, eg. LICS able to trade at lower prices
  • HIC exploit LIC for low labour costs
  • HIC can affort imports others cant
• social impacts of differential access to markets

  • better market means higher paying jobs so increase standard of living, but less market access decreases quality of life
• Economic impacts of differential access to markets

  • LIC- face high tariffs when trying to trade abroad, makes them dependent on selling low value products so they have less money to invest in industry
  • HIC- economic growth, wealthy citizens can buy expensive imports
• LDC and special differential treatment

  • special support to overcome disadvantages
  • some LDCs arent aware of them so dont benefit from SDT
  • allow more stable export revenue
• Mexico and NAFTA(now USMCA)

  • NAFTA has meant german car bussinesses started manufacturing in Mexico, turning them into 7th largest car exporter
  • however only in the north near the border with USA(big wealthy market), the south still remains poor(insufficent finance, lack of training)
  • NAFTA hasnt provided jobs for everyone- poorly ediucated and unskilled, therefore small scale family buisnesses have little investment
• Banana trade - TNCs

  • examples- chiquita, Fyffes
  • used to control 80% of markets
  • but rise in other producers indicates a growth in fair trade
  • increased number of national growing companies that sell produce to TNCs or directly to retailers