Lily's super-mega-epic Globalisation Mind Map

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  • Globalisation
    • What is globalisation?
      • Countries think globally, act globally and make global decisions
      • Countries become more interconnected culturally, socially and politically.
    • Switched on/off.
      • Switched On
        • TNCs are more attracted
          • Government incentives, good workforce, good image (Olympics), strong workforce, emerging market promises a place to sell products
          • E.G China and India
            • Government incentives, good workforce, good image (Olympics), strong workforce, emerging market promises a place to sell products
    • How is it measured?
      • Social
        • Personal contact (international phone use, tourism, foreign population)
        • Flows of information (internet users, mobiles, TVs, newspapers)
        • Cultural proximity (Number of McDonalds/Ikeas, trade in books)
      • Economic
        • actual flows of trade, FDI (or the restrictions applied to these)
      • Political
        • number of embassies, membership of international organisations, UN security council missions, number of international treaties signed.
      • KOF index of globalisation reflects the extent of social, economic and political globalisation.
    • What are the flows?
      • Flows of capital
        • FDI has increased with ICT improvements.
        • Periphery to Core= Migration, Reparation of profits
      • Flows of labour
        • Huge increase in international migration, workers seeking higher pay. most is within continents
        • S to W Asia
          • Huge increase in international migration, workers seeking higher pay. most is within continents
          • S America to N
      • Flows of products
        • International flows increased (information and transport revolution), production moved to LEDCs
      • Flows of Services
        • Improvements to ICT allow services to spread globally, low level set up in LEDCs to save costs. High level in global hub cities.
      • Flows of information
        • Flows grown rapidly since the 90's (internet, email, social media)
    • Global shift
      • Causes
        • TNCs (cheaper in LEDCs), Transport/ IT revolution, free trade, government incentives
      • Effects in MEDCs
        • Negative= Jobs lost in production jobs, structural unemployment and deindustrialisation.
        • Positive= Releases labour for more productive/high tech sectors, cheaper goods from LEDCs (thriving retail sector), LEDCs developing leads to bigger demand for MEDC exports, less pollution.
    • Factors in globalisation
      • Financial = IT improvements make global transactions easier, faster, cheaper and safer. Encouraged FDI and trade.
      • Transport= goods transported faster (cargo planes, high speed rail), containerism, more trade and increased migration.
      • Communication Revolution= flows of information, capital and services have increased globally. Internet + mobile phones, migration and outsourcing encouraged.
      • Trade agreements= make information less expensive and easier, removal of tariffs and quotas. increases political interconnectivity.
      • TNCs= searching for larger economies of scale and cheaper costs, global marketing.
    • Banana trade
      • Environmental impacts= 2nd largest agrochemical input, causes deforestation, waste, reduced soil fertility, loss of biodiversity
      • TNCs have a large control on the market
        • Banana trade is dominated by US companies with plantations in Latin America
        • TNCs influence political decisions, Chiquita pressured the US to impose sanctions on the EU in the 1990's trade war
      • Production for export is dominated by ACP and Central America
        • For consumption, it's India, Brazil and Africa
        • Biggest consumers are EU and US (27% each in 2013)
        • These countries rely on this trade heavily.
      • Around 90% of the price consumers pay stays in the rich north.
      • Supermarkets
        • Retailers in the grocery sector are increasingly dominating.
        • Have concentrated power so suppliers have little option but to accept low prices, discounts or poor conditions or face being removed from supply list.
        • Pay very low prices and create competition, other companies relocate to places like West Africa where it's cheaper.
          • Plantation workers are exploited with long shifts in unbearable heat for little pay.
      • Trade war
        • Lome convention in 70's- EU gave former colony ACP countries good trade conditions.
          • To protect them from large US companies and to help them develop independently.
        • US TNCs filed a complaint to the WTO, the WTO deemed it unfair trade despite Latin America still being EU's biggest supplier.
        • The US imposed sanctions on EU products in the 90s, pressured by Chiquita.
        • 2009 Geneva agreement, EU agreed to reduce tariffs on Latin American bananas.
    • IMF and World Bank
      • IMF
        • Overseas global financial system, offers financial support as a last resort.
          • There are conditions to the help- cuts to spending on welfare/education/environment.
        • Stabalising loans
      • World Bank
        • Aims to reduce poverty.
        • Development loans or AID.
        • Often funds schemes that actually bypass the poor and only help the rich.
    • Unequal Flows
      • Unequal flows of people.
        • Good things
          • Origin country receives remittance payments.
          • Host country gains a strong workforce.
        • Negatives
          • Origin countries experience 'brain drain' and can't develop to full potential.
          • Host countries experience overpopulation, pressure on services and rising house prices.
          • Migrants willing to work for low wages experience exploitation.
            • This also drives down wages in the local area.
      • Unequal flows of money.
        • More money flows from MEDCs to LEDCs. LEDCs aren't able to invest anywhere.
        • Positives- FDI means companies and MEDCs can take advantage of cheaper materials and labour costs. The host country gets more capital and expertise. Foreign aid improves QOL and helps rebuild after disasters
        • Negatives
          • Foreign aid creates dependency and governments have little incentive to improve
          • FDI/TNCs have superiror capital/technology so can force out local businesses.
            • Causes conflicts between locals and foreign companies.
          • Foreign aid/remittances can find their way back to armed groups and fund conflict.
          • Companies pressure LEDCs to pass harmful laws (e.g. reducing human rights) so cots are cheaper.
      • Technology
        • MEDCs afford better/newer technology.
          • Better technology leads to rapid innovation, cheaper manufacturing, better access to information and services and better communication.
        • Repressive LEDC governments can threaten their people with weapons technology sold to them by MEDCS.
      • Information.
        • Neo-liberalist ideas that developed in MEDCs in the 80's to promote economic growth concentrate wealth in the hands of a few. If free trade within a LEDC is threatened a MEDC will intervene causing conflict.
          • MEDCs and TNCs argue that increased trade and privatisation are the best ways for countries to grow and they use this as an excuse to have exploitative TNCs in LEDCs
      • Global institutions.
        • IMF and World Bank are both US based and are run by MEDCs, LEDCs have no say in decisions.
        • Loans from the IMF and World Bank come with conditions for LEDCs, they have to make unfair changes (neo-liberalist attitudes or cuts to public spending)
        • The WTO works to reduce trade barriers but MEDCs have kept them to protect home-based industries from cheap LEDC imports.
    • Inequality in power.
      • South China Sea
        • China wants ownership of islands for military/oil and gas, they want the sea for fish and to control trade.
        • Claiming nine-dash-line, creating conflicts, intimidating neighbours.
        • Ignores ASEAN agreement signed in 2002.
          • Ignores UNCLOS rulings, brought up by the Phillipeans
          • China has such huge military power that only US can stand up to them, would cause conflicts.
          • China only negotiates with ASEAN countries 1-1 preventing them standing together.
      • Yamal Peninsula, Russia
        • Harsh, tundra environment that the Nenet people herd reindeers in.
        • Yamal megaproject initiated in the 90's to exploit gas reserves.
          • River Ob polluted, pastures taken over for construction (overgrazing on remaining), pipelines effect reindeer migration, reindeers were shot.
          • A few indigenous elites influenced into signing documents.
            • The Nenets have little influence, no political or legal base.
            • Project allowed to continue despite objections and no environmental impact assessment.
    • International trade
      • Barriers
        • Import licence- only some countries are authorised to trade.
        • Import quotas- Limit on volume of goods imported.
        • Subsidies- Government allows local producers to reduce costs to compete against imported goods.
        • Embargoes- Usually political and prevent trade to certain countries.
          • These affect LEDCs the most and other countries lose out on trade opportunities or the demand for products decreases or trade becomes more expensive.
            • Import licence- only some countries are authorised to trade.
            • Subsidies- Government allows local producers to reduce costs to compete against imported goods.
            • Quality restrictions- Countries prevent the import of products made in a certain way.
            • Import quotas- Limit on volume of goods imported.
        • Quality restrictions- Countries prevent the import of products made in a certain way.
      • Free trade
        • Neo-liberalism= Free trade is essential for economic growth, there should be no restrictions and governments shouldn't be involved.
        • Good thing: Lower prices for consumers, increased trade (economic growth), economies of scale, greater choice in goods.
        • Bad thing: LEDCs can't compete (rely on primary exports, lesser technology and industries), LEDCs forced to become neo-liberalists when in debt to WB or IMF, LEDCs forced to open markets too fast, home-based companies can't compete with imports
      • Fair trade.
        • Supermarkets work directly with co-operatives of farmers
          • Consumers pay more but farmers have a better QOL.
        • Cons: Not all farmers can be involved, money doesn't always reach/help the farmers
    • TNCs
      • TNCs source materials at the lowest costs, control their own supplies, control all production, have recognisable brands, outsource production.
      • Primary sector- Based where there are resources to exploit (usually LEDCs where there are resources left.)
        • Secondary sector- Manufacturing regions of developing countries
          • Tertiary sector- Footloose, operate wherever there are low-cost but highly-educated workers.
          • Attracted by: low labour costs, educated workforce with work ethic, government incentives, cheaper land, relaxed environmental restrictions.
      • TNCs grow by off-shoring, acquisitions, joint ventures and glolocalisation
      • Benefits and negatives are the same as global shift.
      • Apple
        • HQs and R+D in California, European HQ in Cork, production done by Foxconn in Shenzen.
        • Positives in Cork- largest employer, attracted  other high-tech firms, attracted a highly skilled workforce, infrastructure improvements, Celtic Tiger economy in the 90/00's
          • Negatives- Mostly employed foreign workers, avoided tax and created conflicts when both the US and Eu claimed Apple owed them
            • But foreign workers created a more diverse city.
              • Positives in Cork- largest employer, attracted  other high-tech firms, attracted a highly skilled workforce, infrastructure improvements, Celtic Tiger economy in the 90/00's
                • Negatives- Mostly employed foreign workers, avoided tax and created conflicts when both the US and Eu claimed Apple owed them
                  • But foreign workers created a more diverse city.
          • Issues in Shenzhen- poor working conditions (long hours, low pay), Poor health and safety (poisoned by lack of ventilation), students/children forced to work to graduate, 14 suicides between 2009-2010.
            • Apple has a complicated contract with Foxconn but now has a supplier code of conduct and audits it's factories regularly.
          • Environmental issues- non-renewable energy for data centres, toxic materials in manufacturing, factories discharging pollutants to water supplies, lack of recyclability of Apple products.
            • Apple launched 'Green my Apple', now uses 75% renewable electricity, invested in solar farms, removed toxic materials and now promotes recycling.
      • World trade and the WTO
        • WTO
          • Believe there should be fair competition and free trade and that countries shouldn't give special access.
            • Special access is allowed for trade blocs.
          • Can give SDT which lets the poorest countries bypass MEDCs tariffs. Allows LEDCs better market access and more profits in which to diversify their markets and develop.
            • These cheap imports can negativly effect MEDCs.
        • World trade
          • The volume of trade has increased. MEDCs are still biggest traders, but emerging economies are catching up. LEDCs have a much slower growth.
            • Poorest 49 countries make up 10% of the population but 0.4% of world trade.
            • Also an increase in FDI, with MEDCs no longer just investing in MEDCs. Emerging econimes also now investing in LEDCs
            • Increase in fair trade and ethical investment.
          • SEZs= these are areas that have different trade/investment rules to the rest of the country to help LEDCs develop.
          • How MEDCs benefit- more money to invest so avoid high tariffs imposed by LEDCs by opening factories. Put higher tariffs on LEDC goods, part of trade blocs with other MEDCs to give acess to other wealthy countries.
          • How LEDCs suffer- LEDCs have to pay higher tariffs on MEDCs. Rely on loans that have conditions of them opening their markets to foreign goods. Have to pay high tariffs to trade blocs they are outside of.
          • Poor market access means- Hard to establish new industries, high tariffs make products uncompetitive. Leads to a reliance on unstable primary products. Undercut by TNCs in their home markets.
            • Less money for education, healthcare etc so QOL is lower. Explotative sweatshops arise from TNCS. LAck of education means women are more opressed
          • Good market access- Increased trade means more economic growth. Wealthier citizens can afoford to impot a range of products, high-tech industries can devolp.
            • Better market access usually leads to higher-paid jobs with more disposable income and a better SOL.

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