Have gone through rapideconomic growth since 1980/90s but still have highinequality
Examples: India, Thailand
OPEC (Organisation for PetroleumExporting Countries)
Oilrich but very unequal and often with poor levels of human rights
Examples: Saudi Arabia, Venezuela
NICs (Newly Industrializing Countries)
Countries that experienced rapid economic growth around 1960-70s. They have a significant influence on world economy
Examples: South Korea, Taiwan
MEDCs/HICs (More EconomicallyDeveloped Countries)/(High Income Countries)
Wealthy countries with a historic influence on the world economy. HQ of many TNCs, high standards of education, healthcare and many high-skilled jobs
Examples: UK, USA
Core
North America, Europe, Japan
Owns/consumes 80% of global goods and services
Highest income
Decision making power
Source of global investment
Tertiary and Quarternary industries
Semi-periphery
Transitional area i.e. emerging economies
Growing levels of industrialisation
Supplies core with manufactured goods
Secondary industries
Periphery
Most of Africa, parts of South and South East Asia, South America
Owns/consumes 20% of global goods and services
Low income (2.5 billion on less than $2 a day)
Make few decisions and provide little investment
Primary Industries
Core-Periphery Model VS Brandt Line
Brandt line classifies countries as more or less developed while core-periphery has a developing category. In Brandt line Northern Countries (+ Australia and New Zealand) are more devloped while everywhere else is lessdeveloped but with core-periphery US, Canada, Western Europe, Australia and Japan are core and everywhere else is divided into periphery and semi-periphery
Foreign Direct Investment (FDI)
By TNCs (mostly) into foreign businesses e.g. through buying shares
Repatriation of profits
TNCs take profit back to the country where they are headquatered, "economic leakage" or "loss of income"
Aid
Takes many forms e.g. unilateral from UN (from ODA (Official Development Assistance)), bilateral (govt-govt), disasterrelief (NGOs)
Migration
The majority of out-migration of labour takes place from poorer to richer countries, icreasing disparities as the less developed nations lose their most skilled and talented labour who will pay taxes and spend most of their earnings in their destination country
Remittance payments
Transfers of money made by foreign workers to family in their home country (2nd most important source of income in developing countries)
Pattern of flows of capital
Traditionally capital has flowed between core countries as products were made and consumed in those countries. As TNCs have invested in emerging economies such as China and Vietnam, capital now flows into these semiperiphery countries from the core countries as FDI. Capital also now flows from peripheral and semi peripheral countries back to the core countries in the form of profits.
As labour flows have increasedfrom peripheral to core countries, capital has flowed back to the peripheral countries in the form of remittances.
Capital in the form of aid normally flows from core to periphery countries
Capital flows occur between the core and periphery countries via the World bank and IMF in the form of loans
Deregulation of financial markets
removed regulations including fixed commission on trades, seperation of dealers and more leading to more competition, more mergers and takeovers and the opening of the London financial market to international banks
Development of technology
made it much easier to transfer money and also quicker
Remittances
foreign workers send money they make back to their family in their home country. More forgein workers mean more remittances and so increased flow of capital
TNCs
TNCs take their profits back to their headquater country
How might flow of capital change in the future
There could be more flows to less developed countries as they develop more and produce more products
In the next decade global flows could triple, powered by rising prosperity and participation in the emerging world
Pattern of labour flows
There are many flows within continents like Africa and Asia but the majority of flows between two continents are from poorer continents to richer continents like from Africa to Europe.
The largest inter-regional flow of labour is in Asia with around 3 million workers having moved from South Asia to West Asia. The second largest inter-regional flow is from Latin America to West America
Why have flows of labour increased
People from developing coutries wish to seek better employment oppurtunities and due to developments in transport it is now easier to travel across the world
Why are labour flows less free flowing than capital flows
There are restrctions on immigration which causes people to move less easily around the world than money
How might labour flow change in the future
As countries become more developed they may have less migration out of the country as better jobs become available in that country
Flow of products
Traditionally, primary products were traded between core countries or from peripheral areas to the core. In the 20th century, secondary products were traded between core countries as the production facilities werre located in these regions. In more recent decades, manufactured goods are increasingly produced in emerging economies, rather than the traditional core, and sold within these areas and exported to wealthier regions. The flows are becoming larger and more global as wealth increases and therefore demand for new products now comes from a much wider range of countries
Transaction costs
have been reduced by the improvements in flows of data and the ease with which capital can be transferred to pay for transactions
Transport & time
containerism has enabled more complex and long distance flows of products causing costs to be reduced while air transport has speed deliveryand reduced costs of more valuable and perishable cargo
Reduced tarrifs
tarrifs are the most obvious regulatorybarriers to trade but thanks to the World Trade Organisation they have generally been reduced in global trade
Trading blocs
provide tarriffree trade or other favourable conditions to fellow member nations within the bloc
How might product flow change in the future
As poorer countries become more developed and richer there will be increased demand for products causing the flow to increase. If further advancements in transport are made the costs will be reduced further encouraging greater movement of products
Services
Economic actiities that are traded without the production of material goods i.e. financial or insurance services
High level services
Services to businesses such as finance, investment and advertising
Low level services
Services to consumers such as banking, travel and tourism, customer call centres or communication services
flow of services
there is a large flow between the US and Western Europe with small flows between other regions
Why have flows of
Services like banking, insurance and advertising depend on communication and the transfer of informatio. They are footloose and can locate anywhere and advancing technology means they can still serve the needs of customers worldwide. Technology means more people/businesses can access these services which has caused the flow of services to grow
How might flow of services change in the future
More flows from semi periphery to core as those areas become more developed and start to take produce services not just products