What is globalisation?
This is the process by which economics, societies and cultures become more interconnected.
Whats the idea of global systems?
The idea that the world is now one interdependent system in which countries are all connected.
- These connections are economic, political and social and environmental.
What is the globals systems theory?
- Too simplistic to look at countries in isolation.
- World should be seen as a single system which is divided into 3 tiers.
- Its ethnocentric to assume that westernisation is the ‘bets’ and that all countries should follow this theory.
What is Wallerstein’s world systems theory?
Core:
- Highest levels of education, with high salaries and the best technology.
- These generate the most wealth in the economy.
Semi-Periphery:
- Places where core and periphery processes both occur.
- Exploited by the core countries but also exploit periphery countries.
Periphery:
- Places where there are lower levels of education, lower salaries and standards of technology.
- Generate the least wealth in the economy.
Summary of the worlds systems theory:
- World systems theory suggests that the world is a very unequal place.
- There are unequal flows of people, money, ideas and technology.
- Suggests that exploitation needs to occur in order for the theory to run smoothly.
Benefits and problems for the source country:
- If over-populated people leaving may improve standard of living for remaining citizens.
- People send remittance payments back to source.
- TNCs located in LICs will likely send profits back to HQs in HICs.
- People leaving to find work elsewhere may create a ‘braindrain’.
- Result in a loss of skills and cause about shortages.
- FDI by TNCs into LICs is part of the process of de-industrialisation within HICs.
Benefits and problems for the destination country:
- Migrants boost productivity in sectors which locals are difficult to recruit e.g. car washing etc.
- Internet and mobile communications benefit businesses and public services in LICs.
- FDI by TNCs provides new employment and ways of working.
- Migration can lead to resentment especially during times of economic decline.
- FDI can result in local businesses losing out on business and custom.
- Negative multiplier effect if TNC moves back out of the country is economic conditions change e.g. cheaper to locate elsewhere.
Unequal flows in Qatar-
Benefits and problems arisen for Qatar and the source countries from which migrants have come to work:
(90% pop are migrants)
Qatar:
Infrastructure projects can be completed quickly at low cost:
- Hope to diversify the economy.
- Includes 2022 world cup.
Bad publicity from reports of exploitation:
- Revealed the evidence of forced labour, and overcrowding.
Rapid change can cause social disunity:
- Conservative country concerned with westernisation.
Not long term sustainable:
- Cannot afford to continue with the pensions etc.
Source:
Loss of workers from over populated countries:
- Provides those who remain with more resources.
Remittance payments:
- Some earn well and will send remittance back to support family.
North Korea takes 70% of earnings.
Exploitation and poor conditions:
- NO unions
- 1000 workers from India and Nepal died in 2012.
Source country loses potential workers.
Explain how TNCs can create unequal flows?
People:
- Highly skilled workers are in demand and can flow around the world globally largely from the core.
Money:
- FDI flows to host country but the majority of the profits will return to home nation.
Ideas:
- Originate in the core but can flow as part of FDI to countries where they will be made and developed.
Technology:
- FDI allows technology to flow but the source of the innovation will remain in the core. As this is where R&D remains.
