Globalisation benefits some more than others
·Countries like China, Brazil and India have benefitted from globalisation because they have large and cheap workforces, cheap raw materials, decent infrastructure, available land, less strict laws and governments who are open to foreign investment.
But, there are some people who think globalisation is increasing global inequality because free trade and free movement of labour benefits rich countries more than poor countries.
ADVANTAGES OF TNC INVESTMENT
What are the advantages of investment by TNCs in developing countries?
Jobs for local people
The host country will receive more income from taxes
TNCs often run programmes that aim to improve the development of their host country
Improved quality of life of locals by TNCs investing in infrastructure, services and communication links
HOW ARE GOVERNMENTS INCREASING GLOBALISATION?
How are governments increasing globalisation?
Promoting free trade
Competing to attract investment from TNCs
Handing over services and industries to privatecompanies
An advantage of investment by transnational corporations in developing countries is that the host country will receive more income from taxes.
REDUCING GLOBAL INEQUALITY
Strategies for reducing global inequalities:
NGO-led intermediate technology
IGO-funded large infrastructure
Investment by TNCs
- India is a rapidly developing emerging country in Southern Asia. It's growing population is currently at 1.3 billion.
- The British colonised India up until 1947. Since then, the country has been run by its own democratically elected government.
- India's development is moderate (HDI = 0.61).
- Inequality is a big issue, with some people being very wealthy but more than 20% living in poverty.
- Education is improving, but the literacy rate is still under 70 percent
- India's main exports are services and manufactured goods.
EMPLOYMENT IN INDIA
Primary industry (e.g. agriculture) employs 50% of the workforce.
As time goes on, primary industry is becoming a smaller component of India's economy. Currently, primary industry accounts for only 17% of GDP.
Secondary industry (manufacturing) has recently grown and now employs 22% of the workforce.
Secondary industry is stimulating economic development because:
-Provides people with more reliable jobs
-Exporting manufactured goods is more profitable than exporting raw materials.
Tertiary (services) and quaternary (knowledge) industries have recently grown and now employ 29% of the workforce.
This growth is largely due to growth in IT firms and in supplying services such as customer service centres to foreign companies.
- Tertiary and quaternary industries account for 53% of India's GDP.
INCREASED DEVELOPMENT IN INDIA - GLOBALISATION
· Over 50% of Indians own a mobile, which has allowed many people to set up their own business resulting in increased income.
· India has good transport links: 12 major ports, 20 international airports and an extensive rail network. This attracts trade and investment.
· Manufacturing and IT are outsourced to India by some large transnational corporations resulting in more jobs, more income from taxes and cutting-edge business and technology practices.
INCREASED DEVELOPMENT IN INDIA - GOVERNMENT POLICI
- India received US$2.2bn in aid from the International Monetary Fund in 1991. This aid was conditional on India changing its economic policies.
- India made primary education free and compulsory in 2009, leading to a more educated workforce and the associated benefits.
- The already good transport links are being upgraded.
- India receives some of the largest amounts of foreign direct investment (FDI) worldwide.
CONSEQUENCES OF DEVELOPMENT IN INDIA
Rapid economic change in India has led to changing fertility and death rates, rural-urban migration and city growth, and created different regions with different socio-economic characteristics.
- Death rates have fallen because of improved healthcare and education.
- This is causing population size to increase rapidly, the average age of the population to decrease, and life expectancies to increase. Fertility rates have fallen because of increased wealth and education.
- This is causing population growth rates to gradually slow
- Created regions with different socio-economic characteristics
- Some regions are developing more quickly than others and this is leading to increased inequality between the urban rich and rural poor.
- Indian cities are growing because of rural-urban migration and natural increase.
IMPACTS - ECONICALLY, INDIA IS GROWING RAPILY
Benefitting some people massively
- All age groups have improved health.
- Some age groups have improved education.
- Gender equality has improved.
Causing problems for others
- Working conditions are often poor and sometimes dangerous.
- Rural-urban migration is meaning children in rural areas get a worse education and may have to work as farmhands to help their families.
- Despite improvements to gender equality, it is still unsafe for women in many urban areas.
FUNDING - TOP DOWN
What are the main sources of funding for top-down development strategies?
Transnational corporations (TNCs)
Governments from developed countries
Loans from international organisations
The rapid economic development experienced by India has impacted the environment in the following ways:
Increased land and water pollution
· The sprawl of urban areas is polluting the land and water in surrounding areas.
· Sorting and disposal of waste is rarely done as safely as it should be.
Increased greenhouse gas production
· India's energy consumption has increased alongside its development.
· Most energy is obtained by burning fossil fuels, which release greenhouse gases.
Increased air pollution
· Due to industrialization, there are now more factories and cars than ever before in India. This means that there is more air pollution.
o India's capital, Delhi, is the most polluted city worldwide.
INDIA'S RELATIONSHIP WITH THE WORLD
India is playing an increasingly important role in both regional and global politics as it becomes more and more developed.
Additionally, the Indian government is beginning to improve its relations with its neighbours as well as global trading partners.
INDIA AND EU
India has historically had a good relationship with the EU, which eventually led them to become strategic partners in 2004.
In 2007, negotiations for a free trade agreement began.
To try and promote further development in India, the EU supports education and health programmes.
INDIA AND USA
India's relationship with the USA has improved dramatically because:
The USA expects India's development to boost trade, employment and economic growth for both countries.
The USA sees India as a massive market for renewable and nuclear energy.
FOREIGN INVESTMENT COSTS
· Not all the profits made by TNCs stay in India.
· TNCs sometimes cause environmental issues (e.g. one Unilever factory disposed of mercury-contaminated glass in a waste dump).
· TNCs can move around the host country to exploit local government incentives (e.g. Unilever closed factories in Dharwad and Mumbai as soon as local tax breaks finished).
FOREIGN INVESTMENT BENEFITS
· Transnational corporations (TNCs) provide jobs (e.g. Unilever employs 16,000 Indian people).
· More companies means more income for India.
· TNCs sometimes operate programs that help development, or work with charities to help improve the host country's health.
CHANGING INTERNATIONAL RELATIONS
· Increased tension between India and China.
· Developed nations are worried about losing economic power to India.
· India can cooperate with the world on global issues.
· Global trade agreements increase the effectiveness of political actions.
FALLING DEATH RATES
Consequences of falling death rates in India:
1 Population size is rapidly increasing
2 The average age of the population is decreasing
3 Life expectancy is increasing