topic 4

• Globalisation


  Range of processes and impacts that occur at a global scale
• Forms of globalisation


  • Economic
  • Social
  • Political
• Economic globalisation


  Caused by large transnational corporations (TNCs)
• Social globalisation


  Spread of western culture, art, music, sports and leisure
• Political globalisation


  Growth of democracies & influence on poor countries, decline on centralised economies
• Globalisation indices


  • KOF Index
  • EY Globalisation Index
  • The New Globalisation Index
• KOF Index


  Covers economic 36% (flow of goods, capital & services), social 38% (spread of ideas, information, images & people), political 26% (number of embassies, high commission countries)
• EY Globalisation Index


  Measures the 60 largest countries/territories by GDP according to level of globalisation, looks at: openness to trade, capital flows, exchange of technology and ideas
• The New Globalisation Index


  Differs from others as it measures the distance of goods traded, counts number of refugees in country
• Global superpower


  Influence policy on a worldwide scale, often in different regions at the same time, includes economic, cultural, military & geographical influence on the rest of the world
• Global organisations and groups

  • G7 & G8
  • G20
  • OECD
  • OPEC
• G7 & G8


  Powerful high-income countries (USA, France, Germany, Italy, UK, Japan & Canada) that meet to talk about global economy, global governance, energy policy and international security
• G20


  International assembly of the governments and central banks from 20 major economies, discuss policies related to global financial stability
• OECD


  Organization for European Economic Cooperation, established to run the US-financed Marshall Plan for the reconstruction of Europe, aims to restore confidence in markets, re-establish healthy public finances, foster new sources of growth, and ensure people can develop skills
• OPEC


  Organization of petroleum exporting countries, produce 65% of the world petroleum, gained economic and political power due to global dependency upon them
• World trade in materials, manufactured goods, and services doubled 2005-2015
• Asia, Europe, and North America continue to account for the bulk of the merchandise trade
• Share of manufactured goods in total merchandise exports increased from 67% (2014) to 70% (2015)
• Fuels & mining products decreased in merchandise exports
• China is the leading exporter and the USA is the world's leading importer
• Aid for trade


  Help poor countries use trade as a means of achieving economic growth & reduce poverty, plans to increase market access for poor countries, $50B available - Asia & Africa remain the main recipients
• Types of development


  • Top-down development
  • Bottom-up development
• Top-down development


  Large scale, carried out by governments, international organizations & experts, done by people from outside the area, impose upon, well-funded & quick response to disaster, no decision making from local people
• Bottom-up development


  Small scale, labour intensive, involves local communities & areas, run by locals for locals, limited funding available, local people making decisions, common projects: earthen dams, cottage industries
• Effectiveness of aid provision

  • Effectiveness
  • Ineffectiveness
• Effectiveness of aid


  Provides humanitarian relief, provides external resources for investment & finances projects, helps expand infrastructure, contributes to personnel training & builds technical expertise, supports better economic & social policies
• Ineffectiveness of aid


  Allows countries to postpone improving economic management, replaces domestic saving, direct foreign investment and commercial capital, promotes dependency rather than self-reliance, doesn't solve the long-term economic development problems of a country
• Global lending institutions


  • The World Bank
  • International Monetary Fund
  • The New Development Bank
• The World Bank


  Source of finance & technical assistance to developing countries, mission is to fight poverty, provide resources, share knowledge, achieve millennium development goals, has 2 development institutions: IBRD and IDA
• International Monetary Fund


  Oversees the global financial system by following the economic policies of its members, objective is to stabilise international exchange rates and facilitate development, helps stabilise the economic system, helped with the 2008 crisis
• The New Development Bank

  Supports public or private projects through loans, guarantees, equity participation and other financial instruments, headquarters in Shanghai, main focus on infrastructure & sustainable development projects, contributed $10B each from BRICS countries
• Types of development aid

  • Loans
  • Debt relief
• Loans


  Transfer of money or skills that require repayment over a set time, from rich to poor countries, promote efficient use of the borrowed funds
• Debt relief


  Many developing countries borrowed heavily in 1970-80s, Paris club & World Bank has approved a series of debt relief initiatives
• Structural adjustment programmes (SAPs)

  Loans requiring the borrowing country to cut government expenditure, reduce state intervention, promote liberalisation and international trade, 4 main requirements: greater use of resource base, reforms to increase efficiency, generate foreign income through diversification and trade, reduction in active role of the state
• Heavily Indebted Poor Countries (HIPC) initiative


  Launched in 1996 by IMF and World Bank, 2 main objectives: relieve certain low-income countries of their unsustainable debt, promote reform and sound policies for growth, human development, and poverty reduction
• Expanding market access


  Help countries diversify and expand trade, trade policies in rich countries remain highly discriminatory against developing countries exports, agricultural subsidies in rich countries lead to unfair competition, targets to increase ODA, remove tariffs & quotas, remove subsidies, agree and finance compensatory financing facility and deeper debt reduction for HIPCs
• Remittances


  Money or goods that migrants send back to families and friends in origin countries, often the most direct and well-known link between migration and development
• Illegal flows


  • Trafficked people
  • Counterfeit goods
  • Fraudulent medicines
  • Flow of drugs
• Trafficked people


  Global trend of movement of people into other countries (70%) or inside the country (30%), from poorer countries to more exploited relatively richer countries, caused by poverty, lack of education, violence, war, political instability, lack of human rights, leading to physical/psychological damage, sexual health problems, death, hostility, memory loss, trauma