Globalisation

• globalisation - the increased interconnectedness of people and places around the world
• 1783 - Steamship invented
• 1804 - Railway invented
• 1837 - Telegraph invented
• 1939 - Jet aircraft invented
• 1950s - containerisation
• the shrinking world effect - changes in peoples perception of near and far places (different what feels near and far compared to how the world was viewed by VIctorians)
• time-space compression - technological changes have helped overcome potential barriers to flow (as travel times shrink due to new inventions, different places approach each other in space time)
• global village - all parts of the world being brought together and is seen as a community as it becomes more connected due to the contracting of the world
• Bretton Woods Agreement

  • 1955 by delegates from 44 countries
  • at UN Monetary and Financial Conference held in New Hampshire
  • created WB and IMF
  • pegged all values of global currencies to USD making it globally significant and the value of USD to gold
• International Monetary Fund

  • channels loans from rich countries to developing countries in return for free market open economies
  • often leads to privatisation
  • controversial rules and regulations
  • favours supoerpowers strongly (USA has 16.5 % of vote shares)
  • has a scandalous history (former managing director got 4.5 years imprisonment for fraud and embezzlement in 2017)
• World Bank

  • gives direct grants to developing countries (distributed $ 65 billion in loans and grants in 2014)
  • imposes strict conditions on loans and grants
  • all presidents have been US citizens
• World Trade Organisation

  • set up in 1995, in 1948 the General Agreement provided rules for the system, created organisation GATT, last GATT round in Uruguay created WTO
  • advocates trade liberalisation especially for manufactured goods - removes tarrifs, subsidies, quotas
  • failed to stop EU and US subsidizing their own farmers
  • 98 % of global trade and GDP represented
• free trade policies - goods and services can be bought and sold internationally with little to no inhibitions to exchange
• foreign direct investment - investment made by a company or individual in one country into business interests in another country
• neo-liberalism - opening yourself up to other countries for trade
• trade blocs - intergovernmental agreements which allow govs to trade freely with others in the block

  • encouraged by removal of tarrifs
  • EU - member states have free movement, eligible for EU structural funds to develop economies, same currency
  • ASEAN - high income founding members (Singapore), promotes peace and stability, no members have nuclear weapons
• privatisation - governments selling state owned companies to provate overseas firms

  • eg. railway, energy supplies
  • increases efficiency + innovation
  • interests of public not taken into consideration
• advantages of trade blocs

  • smaller nation firms join to form TNCs
  • growing markets
  • raised demand
  • political stability
• disadvantages of trade blocs

  • loss of sovereignty
  • increasing dependance
  • loss of domestic market share
• China's open door policy

  • 1978, Deng Xiaoping began open door reforms
  • farmers allowed to make a profit
  • controls on no. of children allowed to curb population growth
  • rural to urban migration high (300 million moved in 30 yrs)
  • strict registration system 'hulou' prevented villages from emptying
  • soon 200 cities with 1 mil inhabitants
  • exports = $ 2 bil (1980) to $ 200 bil (2000)
  • 400 mil escaped poverty since reforms began
  • by 1990 50 % of GDP generated by SEZs
  • by 2005 50 % of exports came from foreign companies
  • by 2006 $ 60 bil per year in FDI
• KOF Globalisation Index

  • measures economic, social, political dimensions of globalisation
  • main trends = OECD countries rank well above average, small European countries top the list
  • some indicators look dated
  • trade flows dont include informal economy flows
  • cultural bias (Swiss Economic Institute)
  • choice and weight of indicators up to personal judgement
• AT Kearney World Cities Index

  • ranking established on analysing each cities business activity, human capital, political engagement, info exchange, cultural experience
  • current alpha cities = NY, London, Paris, Tokyo, HK
  • 2022 report themes include inflation, covid, climate, Ukraine
• TNC - an enterprise that is involved with the international production of goods and services
• Offshoring - the process of moving a part of a company's own production process to another country (eg. SEZs)
• Outsourcing - the process where a firm contracts with another company to obtain goods or services from it (eg. BMW)
• Global Production Network - a chain of connected suppliers that all contribute to the manufacture of goods
• glocalisation - adapting the goods of a business to increase consumer appeal in different local markets
• Factors that make a country switched on

  • env - wilderness areas = difficult for building / low agricultural potential (bad soil)
  • econ - high levels of gov debt = reduced subsidies / unskilled workforce / dependance / poverty = less transport and communications
  • political - corruption / ethos differences / civil conflicts / not committed to free market
  • physical - long distance from markets / lack of resources for energy or raw materials
• North Korea

  • KOF political globalisation score = 33.8
  • social globalisation score = 18.2
  • hereditary autocracy ruled by Kim Jong Un
  • since 1955 followed policy of Junche (self sufficiency)
  • emigration + foreign tourism prohibited
  • GNI per capita 2014 - $ 4600
  • trades with China, set up Kaesong SEZ employing 52k people
• Global shift - movement of certain economic activity away from Europe and USA towards the East

  • benefits = infrastructure investments / poverty reduction / waged work / education and training
  • costs = loss of productive farmland / shanty towns / degradation of environment / pressure on resource
• Outsourcing services to India

  • english speakers due to colonisation which ended in 1947
  • broadband capacity unusually high in Bangalore
  • benefits = workers earn good wages by Indian standards / companies become profitable
  • costs = exploitation of workers / repetitive work / business at night (time zones) / wider gap between rich and poor
• Outsourcing manufacturing to China

  • low-cost migrant labour
  • improved working conditions, sweatshops moved to other countries
  • costs = environmental degradation / worker exploitation
  • benefits = larger incomes as conditions improve / adopted tech + management techniques
• depopulation - falling population due to migration / falling birth rate
• dereliction - homes and industrial land that has been abandoned
• unemployment - the position of being without a job
• contamination - toxic chemical waste being dumped or disposed of in a way which threatens the environment
• deprivation - areas with high levels of unemployment, a lack of services and poor infrastructure
• deindustrialisation - the decline of regionally important manufacturing industries
• air and water pollution

  • India contributes 291 million tonnes of CO2
  • 75 % of the worlds total CO2 emissions propelled in recent years by asian economies came from road transportation
  • the electric vehicle market has expanded