Consequencs of Globalisation

  • Created by: keeels
  • Created on: 11-05-14 13:02

Economic consequences

Globalisation has caused an increase in global trade (because of the spread of global business by TNCs) Trade has increase in most countries, but especially in NICs and countries in the OECD. Increased trade has different effects on their economy

OECD Members - Globalisation has caused the desindustrialisation of many richer countries - manufactoring industries have moved from richer countries to poorer countries mainly because wage costs are lower. For the growth of their economies to continue, rich countries have had to change to a post-industrial economy - one that is based mainly on the service industry

  • Positive consequence- this has led to increased wealth for many people. One reason why many rich countries, like UK, educate their population to a high level is that this attracts investment from TNCs because more people can work in the highly paid service sector
  • Negative consequence - Many manual workers lost their jobs and struggled to find new work because of deindustrialisation. The economies of some cities (e.g Sheffield in the UK, famous for steel manufacturing) were ruined by deindustrialisation. Recovery has been slow because the economies were based almost entirely on one industry
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Economic consequences NICs

Globalisation has caused the industrialisation of many countires - manufactoring industries have been moved to NICs, changing their economy from agriculture- based to manufacturing based

  • Positive consequence- increased wealth in poorer countries. NICs, like china, attract investment from TNCs because of large workforces with lower wage demands than richer countries. This has brought wealth to some people in NICs
  • Negative consequence - the income gao between rich and poor countries has become wider. The wealth isn't spread evenly in NICs (e.g Indonesia) - a few people become wealthy,while many remain poor
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Moral and social consequences

Globalisation has meant nay countries have become more industrialised. TNCs move factories from richer countries to NICs, and sweatshops are also set up for sub-contract work. Agricultural workers from rural areas move to urban areas to to work in factories and sweatshops -rural urban migration. This can lead to the expoitation of workers

Workers are paid very low wages 

Many workers are killed or injured in accidents because there are fewer health and safety regulations e.g Yongkang is an industrial city in China famous for the number of amputees from factory accidents

Workers have fewer rights. If they strike because of poor conditions they may lose their job, or the factory may be moved to another place (where the workers wont strike)

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morally wrong

  • Dangerous, poorly paid work has just been moved from richer countries to poorer countries, instead of just being stopped altogether
  • Some sweatshops employ children, which is illegal in richer countries
  • Products made in NICs are cheap because conditions are poor and wages are low - exploitation. Many people think peeople in richer countries should take more responsiblity and pay higher prices for products produced in NICs, so the workers get a fairer wage 
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