Unequal flows
- Created by: rainbowhan
- Created on: 03-03-23 18:31
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- Unequal flows
- Unequal flows of capital
- Negatives
- Environmental degradation and exploitative workplace practices
- Reparation of profits can exacerbate inequalities between regions
- For example, a portion of VW profits made in Mexico are sent to Germany HQ
- Risk of over reliance on FDI for economic growth
- Growth of TNCs economically and politically, are they more powerful than nation states?
- Positives
- Increase in GDP growth rates in what were poorer areas eg asian tigers
- Reduces pressure on migration
- Equalises conditions and reduces international tensions and conflicta
- Aid
- Donors and recipients (multilateral and bilateral)
- IMF, World Bank, UNICEF
- E.g.. WHO deploys experts and equipment to help deal with Ebola breakout in West Africa
- Trade
- TNCs
- Imports and exports
- Reparation of profits
- Investment
- FDI
- Investment in a country by individuals and firms from abroad
- Loans and debt
- Deregulation of financial markets has helped to facilitate the flows of capital around the world
- FDI
- Negatives
- Unequal flows of people
- Much more restriction than flows of capital due to national limits on immigration
- Impacted by the covid-19 pandemic
- Statistics
- Last two decades have seen rapid growth of migration due to demand for labour
- 2/3 of all immigrants live in just 20 countries
- 2/3 live in HDEs
- Europe received most migrants , followed by North America
- Positives
- Migration can fill labour gaps
- Remittances boost GNI of LICs
- Research suggests that economic contributions outweigh the costs
- Negatives
- Brain drain from country of origin
- Wage 'race to the bottom'- the more people working the job reduces the wage
- Worker exploitation and lack of rights
- Creates dependency on remittances
- Unequal flows of services
- Economic activity which are traded without the production of material good eg financial or insurance
- Why has this flow increased?
- Improvements in telecommunications- ease of transfer of information
- De-regulation of money markets- ability for banks and financial institutions to move overseas
- Increasing interconnectedness- people demanding greater choice in service market
- International division of laboir in service functions- outsourcing the lower level functions to lower wage economies
- Unequal flows of capital
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