Globalisation EQ1

Question 1

Globalisation definition

Answer 1

It is used to describe a variety of ways in which places and people are now more connected with one another than they used to be.
It is the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders.

Question 2

Economic globalisation

Answer 2

• the growth of TNCs, accelerates cross-border exchanges
• information and communications technology supports the growth of firms and a more international economy
• increased online purchases

Question 3

Social globalisation

Answer 3

• International immigration creates extensive family networks that cross national borders.
• global improvements in education and health see rising life expectancy and literacy rates
• social interconnecninity rises thanks to spread of universal connections e.g internet

Question 4

Cultural globalisation

Answer 4

• ‘successful’ Western traits can begin to dominate other territories e.g Americanisation.
• the circulation is ideas and information has accelerated due to 24-hour reports

Question 5

Political globalisation

Answer 5

• the growth of trading blocs e.g EU allow TNCs to merge and make acquisitions in neighbouring countries, while reduced trade restrictions and tariffs help markets to grow
• growth of global organisations e.g World Bank work internationally to harmonise national economies

Question 6

The connections between places represent different kinds of network flow. These flows are movements of:

Answer 6

• Capital: At a global scale, major capital (money) flow are routed daily through the world’s stock markets. A range of businesses buy and sell money in different currency to make profit. In 2013, the volume of these foreign exchange transactions reached US$5 trillion per day.
• Commodities: Valuable raw materials such as fossil fuels and minerals have always been traded between nations.
• Information: The internet has brought communications between distant places, allowing goods and services to be bought as the click of a button. Social networks have boomed in size, with 1.5 billion users on Facebook by 2015.
• Tourists: Many of the world’s air passengers are holiday makers. There has been an increasing number of people of emerging countries travelling abroad too. China is now the world’s biggest spender on international travel, with 120 million outbound trips made in 2014.
• Migrants: Of all global flows, the permanent movement of people still faces the greatest number of obstacles due to border controls and immigration policies. Most governments have a mixed attitude towards global flows, with embracing trade flows but attempting to resist migrant flows. The combined number of economic migrants and refugees worldwide almost reached one quarter of a billion in 2013. One issue of migrants is the negative impact on the countries economy in which they are working on.

The combined effect of these global flows has been to make places interconnected. One result of this is the increased interdependency of places.

Question 7

Interdependency

Answer 7

This is when two places become over-reliant on financial and/or political connections with one another

Question 8

Important innovations in transport include:

Answer 8

• Steam power: Britain became the leading world power in the 1800s using steam technology.
• Railways: In the 1800s, railway networks expanded globally. By 1904, the 9000km Trans-Siberian Railway connected Moscow with China and Japan.
• Jet aircraft: Recent expansion of cheap flights sector, including easyJet, has brought it to the masses in richer nations
• Container shipping: Around 200 million individual container movements take place each year. Everything from chicken drumsticks to patio heaters can be transported efficiently across the planet using intermodal containers.

Question 9

Time-space compression (or shrinking world effect)

Answer 9

This refers to the heightened connectivity changing our conception of time, distance and potential barriers to the migration of people, goods, money and information.

Question 10

The work of international organisations

Answer 10

For many decades, 3 international organisations have acted as ‘brokers’ of globalisation through the promotion of free trade policies and FDI. These are the International Monetary Fund (IMF), World Bank, and World Trade Organisation (WTO)

Question 11

IMF

Answer 11

The IMF channels loans from rich nations to countries that apply for help. In return, the recipient must agree to run free market economies that are open to outside investment. The IMF rules and regulations can be controversial, especially the strict financial conditions imposed on borrowing governments

Question 12

World Bank

Answer 12

It lends money on a global scale. It also gives direct grants to developing countries. In 2014, it distributed a total of US$65 billion in loans and grants. The world bank also imposes strict conditions on it’s loans and grants.

Question 13

WTO

Answer 13

It advocates trade liberalisation, especially for manufactured goods, and asks countries to abandon protectionist attitudes in favour of untaxed trade. However, they have failed to stop the world’s richest countries, such as UK and USA, from subsidising their own food producers, which is harmful to farmers in developing countries who want to trade on a level playing field.

Question 14

Attitudes and actions of national governments

Answer 14

Free-market liberalisation: It involves removing price controls, breaking up monopolies (e.g. trade union monopolies of labour supply) and encouraging competition - including foreign competition, which increases efficiency further and promotes globalisation.

Privatisation: Successive UK governments have led the way in allowing foreign investors to gain a stake in privatised national services and infrastructure. Over time, ownership of many assets have been passed overseas e.g Keolis owns a large stake in southern England’s railway network.

Encouraging business start-ups: Methods range from low business taxes to changes in the law allowing both local and foreign-owned businesses to make more profit.

Question 15

Trading blocs

Answer 15

Voluntary international organisations that exist for trading purposes, bringing greater economic strength and security to the nations that join

Question 16

Tariffs

Answer 16

The taxes that are paid when importing or exporting goods and services between countries

Question 17

China and it’s 1978 Open Door Policy

Answer 17

The changes in 1978 began the radical ‘Open Door’ reforms which allowed China to embrace globalisation while remaining under one-party authoritarian rule.

The earliest reforms included farmers being allowed to make a small profit for the first time, as well as strict controls on the number of children to curb population growth.

China’s transformation into an urban nation gained rapid momentum. Over the next 30 years, the largest migration in human history took place. 300 million people left rural areas in search of a better life in cities. Soon there was 200 Chinese cities with 1 million inhabitants or more.

Initially, urbanisation fuelled the growth of the low-wage factories that gave China the nickname ‘workshop of the world’. The world’s largest TNCs were quickly to establish branch plants, or trade relationships with Chinese-owned factories in newly established special economic zones (SEZs). By the 1990s, 50% of China’s GDP was being generated by SEZs.

Question 18

North Korea: a switched off place

Answer 18

For nearly 70 years, North Korea has been ruled as an autocracy by a single family. They have chosen deliberately to remain politically isolated from the rest of the world:

• Ordinary citizens do not have access to internet or social media.
• There are no undersea data cables connecting North Korea with anywhere else.
• North Korea was divided from South Korea in 1948. South Korea has become a developed country, home to many global brands. A comparison of the two countries and the differing policies of their governments, illustrates clearly how political decision making affects globalisation.

Question 19

Glocalisation

Answer 19

This refers to changing the design of products to meet local tastes or laws. It is an increasingly common strategy used by TNCs in an attempt to conquer new markets. It makes business sense because there are geographical variations in:
-people’s tastes
-religion and culture
-laws
-local interest
-lack of availability of raw materials.
An example of this is McDonald’s. In India, due the variation religions, there are chicken burgers served alongside Veggie burgers and cheese patties.