human geography f763 - globalisation

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  • Created by: charlie
  • Created on: 09-02-15 20:37

Globalisation

'process when countries have been incorporated into capitalistic systems of production. Includes movement of capital and goods between countries and associated with growth of TNC's '

Economic:

  • world scale - TNC's filter down as companies search for cheaper labour (global shift to Asia) 
  • FDI encouragement 
  • NIC's emerge (1960's manufacturing development) 
  • WTO - liberalise trade + AID (multilateral / bilateral)

Cultural: 

  • HYBRIDISATION - migration + freedom of movement + HOMEGENISATION 
  • WEST to EAST (americanisation) + EAST to WEST (spread of islam) 

Political: 

  • global organisations encourage (UN, WTO, EU) + trade blocs (NAFTA)  +global terrorism 

Environmental: 

  • cross national boundaries (climate change...) + initialtives (Kyoto protocol) 
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Bhutan globalisation

background:

  • buddhist traditional beliefs 
  • strong closed community 
  • traditional isolationists 
  • opened to tourists 
  • 1999 (46 international tv channels)
  • telecommunication + clothing 

Impacts

positive 

  • cultures shared + country develops  + global issue awareness 

negative 

  • bad attitudes 
  • rapid infrastructure killed habitats 
  • pollution - litter, air, noise 
  • migration villages (create inequalities) 
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Wimbledon tennis ball - TN product

SLAZENGER 

  • tennis balls account for 1/5 of £165million annual turnover 
  • 1940's - 2002 produced in Gloucestershire 
  • labour costs reduced by moving to PHILIPPINES 

Process

  • focal point (PHILIPPINES)
  • dunlop slazenger factory (BATAAN) - manufacturing + deloping/testing 
  • developing/testing (LOUGHBOROUGH UNI) 

materials used at BATAAN 

  • core rubber (MALAYSIA) 
  • wool synthetic covering (GLOUCESTERSHIRE) 
  • wool (NEW ZEALAND) 
  • tins (INDONESIA) 
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5 factors that have led to globalisation developme

communtication / technology 

growing awareness

international organisations 

relationships growing between countries 

increased migration 

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key causes of globalisation

economic 

  • transport developments (containerisation / economies of scale)
  • communication (international linkages)
  • growth of TNC's looking for comparative adv (cheaper fuel, cheaper labour...)
  • FDI encouragement (avoid trade barriers / quotas / tariffs)
  • trade bloc growth (1/3 of world takes part, free trade)
  • global organisations (promoting free trade)
  • break up of communist blocs + encourage capitalism 

cultural 

  • media / internet (religion, communications)
  • spread of English business language (easier global communication)
  • political agreements for migration (better standard of life) 
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China impacts of globalisation (NIC)

background 

  • 1949 - peoples republic of china chairman + became strict COMMUNIST COUNTRY 
  • state owned farm and very inward looking 

Liberal reform 

  • 1978 - FDI encouraged 
  • 2001 - joined WTO 

economic 

  • concentrated economic zones (free trade / FDI / Guangdong / coastal areas?
  • GDP US$95 (2000) - US$3768 (2009

social 

  • growth increases disposable income + china POLARISED (development in east, stagnation in west) 

political 

  • greater influence on UN + large trade surplus straining relationships with EU + US 

environmentalmoney to spend on research however increasing demand for raw materials 

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Guangdong Province - southern China (Pearl River d

Background - SE coast 

  • 1980 - only 3 specific economic zones 
  • 1884 - Guangzhou given economic liberalisation 
  • 1985 - Peal River delta liberalisation 

Factors 

  • in-migration + gov policies + workforce capabilites 

Benefits 

  • employment + prosperity 
  • accoutns 82% of Guangdong GDP 
  • GDP $5144 (2.5x avg.) + infrastructure reinvestments 

Issues 

  • 5-6% migration brought pollution + 3/4 of cities have no sewage treatment 
  • low wage rates ($1 / hr) + 9/10hr days + no trade unions 
  • PRD labour shortages as GOV tries to rebuild west + supply chains begin to move overseas 
  • slowing international demand (recession) so try to stim. domestic demand by industialising WEST 
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Chongqing, China - western development

Background 

  • on river Yangtze 
  • upstream of 3 gorges dam 
  • slows down rural-urban migration 
  • increase domestic (inland) demand 

Acheivements 

  • Municipality status 1997 (Free trade zones / FDI)
  • Chang'an moto company created (1/3 largest in china) 
  • pop. INCREASING BY 1/2 million per year
  • 13 ECOPOLIS (emerging mega cities) 

issues 

  • crime rates, violent protests (2002)
  • smog 
  • untreated sewage in Yangtze 
  • landfill sites 
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UK impacts of globalisation (MEDC)

Economic 

  • low inflation as offshoring + attracts high level FDI as high R+D quality + infrastructure 
  • large disparity between regions (POLARISATION wealthy SOUTH)
  • deindustialisation + companies become TNC's through GATT and WTO 

Social 

  • infrastructure spending increased (health and edu.) - 2006 12.5% UK's workforce foreign - keep low skilled jobs 
  • high levels of immigration (600,000 eastern EU to UK between 2004 and 2006)
  • society becoming more cosmopolitan (nationalities) 

Political 

  • increased trading + EU influence + freer movement casues increased terrorism  
  • resentment due to loss of power to EU 

Environemental 

  • more international agreements + more demand for resources 
  • global enironment worsening from LEDCS + NICS growth 
  • increased pollution and greenfield site building + deindustrialisation 
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McDonald's TNC

background 

  • 68th largest economy in world 
  • UK 70% of restaurants owned locally 
  • 55% own ingredients from 17,500 british and irish farms 

economic impact 

  • $6.3 Bn a year 
  • $1.3 Bn on taxes a year 
  • advancements due to airlines, communication, containerisation, instant capital flows 
  • links between US economy and other nations due to McDonald's 

cultural 

  • diffusion of cultures through clothing, food, music, idols 
  • negative effect of local/traditional foods 
  • loss of local industries 
  • dereliction 
  • loss of community cohesion 
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European Tour

background 

  • 50 events with 56% held outside EU 
  • vast coverage by hosting and viewing countries 

social 

  • people become inspired to take on new sport 
  • traditional sports which arent covered as widely suffer 

economic

  • publicity of large brands through sponsorship 
  • local brands have to shut as outcompeted 
  • spiral of decline 
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UK globalisation SOUTH

Dyson 

  • 2013 took 650 graduates 
  • 250 from quaternary centre in Wiltshere 
  • High employment rate
  • skilled workforce 
  • Wiltshere contributes well to economy - accessiblitly to M4 so commutable 

Migration 

  • keeps net debt low and pay more in taxes than they take in benefits 
  • London life expectancy 81 years, 12 years more than north (due to UK economic restructuring) 

Political 

  • houses of parliament 
  • EU policies 
  • companies based in London feel at heart of decisions 
  • however membership in EU = loss of sovereignty (power/ contro)
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UK globalisation NORTH

Manchester (economic restructuring)

  • spiral of decline + dereliction 
  • competition with CHINA and INDIA due to their coparative advantage 
  • loss of jobs and causing migration 

Migration 

  • loss of community cohesion 
  • loss in autonomy (self government)
  • London house price 1/3 more expensive 

Environmental 

  • abandonement in north 
  • closure of Ryton, Coventry 2006 created many pollutants and probelms (53ha environment)

Political

  • exclusion
  • no autonomy 
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UK globalisation management

Social 

  • multicultural society (cosmpolitan)
  • workers right union 
  • increase personal inequlaity + favour more skilled 

Economic 

  • FDI keeps inflation low + cheaper production costs 
  • liberalisation + larger market for competitiveness 
  • regional disparities + loss of FDI control 

Environmental 

  • capital to regenerate derelict land - London Docklands (pollution/deindustrialisation) 

Political

  • loss of soverignty 
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UK national management - FDI causing control loss

HIGH LEVEL OF OPENESS

  • EU single market , FDI stock value:  1999-2011 SERVICES  (63.2%-71%) MANU.  (26.6%-19.3%) 

LOWER EFFECTIVE TAX RATES 

  • comparative adv. corporate tax 2015 - US 40% - UK 20% 

LABOUR FLEXIBILITYscores 2.51

DEREGULATION / PRIVATISATIONpersonal tax reduced - encourage top earners 

GRANTS / SUBSIDIES TO FDIshort term benefit 

STABLE EXCHANGE RATES 

  • post economic crisis - sterling depreciated against $ (+ve inward) but appreciated against €

DISTANCE + INFRASTRUCTURE 

  • HS2 - heal N/S divide, 70% jobs outside LDN, 0.8% GDP rise in 5 years
  • sucking more wealth to centre capitals + costing £42.6 Bn
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UK regional management - negative deindustrialisat

RDA's (r.development agencies) abolished + fragmented into LEP's (local enterprise partneships) which compete for policy resources 

WDA (welsh development agency) 4 aims :-

  1. further economic development in wales 
  2. promoe industry efficiency 
  3. more employment + safer 
  4. better environmental impact 

CAP :- 

  • area payments to farms as incentives 
  • based on produce 
  • better yield 

Cardiff Bay :- 

  • receiving UK gov money + EU funding 
  • More services put in place 
  • multiplier effect 
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UK migration management

'CHERRY PICKING' by using point system 

5 TIER SYSTEM FOR VISA'S :- 

  1. high value entrepeneur's/investors 
  2. skilled workers from companies 
  3. low skilled workers (never allocated visa by gov) 
  4. students over 16 (must have education place in UK)
  5. 6 SHUB TIERS : temporary work / sporting / charity / religion 

FACTS 

  • contributed 15-20% economic growth 2001-2005 
  • net migration increased 30% 
  • 2010 (250,000)
  • 2012 (250,000)
  • 2013 (150,000) - Cameron's point system 
  • 2014 (250,000) - Romani added to EU 
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horizontal TNC - TOYOTA

growth since 1937

  • fastest in world - 16% revenue increase 1998-1999
  • manages 6 continents - shifted from Japan to LEDC's + USA 
  • located in Burnaston, UK - 60-65% parts locally sourced
  • zero landfill status in USA + all waste sold ro recycle / reuse 

structure 

  • 'Just-In-Time' system - led purely by demand (unlike US frodism dehumanising methods)
  • flexible - parts flowing in and cars flowing out + kept minimum stocks - bought what they can afford 

Outsource 

  • better + more vairety of materials (specialisation in specific areas)
  • targets higher skilled workforce for R+D in MEDC's - loss of jobs for lower skilled workers in MEDC

Features 

  • operates in 27 coutries - 57 owned base plants - 522 subsiduary companies 
  • 76% manufactures outside company - 57% made by foregin activities 
  • devolution of power from main HQ Tokyo, Japan - 7 R+D outside Japan 
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TNC organisational structure

HORIZONTAL - producer driven 

  • GLOBAL HQ -key strategies / R+D / some diffusion by other global markets 
  • CONTINENTAL HQ - some strategies / R+D 
  • BRANCH PLANTS - subsidary owned companies 

VERTICAL - buyer driven 

  • GLOBAL HQ - total control 
  • CONTINENTAL HQ - subcontracted to other companies / supply chains 
  • BRANCH PLANTS - supply chains across nations 

TNC's VARY IN TERMS OF :-

  • number of countries operate in 
  • number of subsidiary companies owned 
  • share of production by subcontractors 
  • share of production by foreign activities 
  • degree to which ownership / management internationalised 
  • division of research + routine tasks by country 
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vertical TNC - NIKE

scale of production

  • 650,000 contract workers / 700 factories worldwide 

geography of production 

  • >75% workforce based in Asia 

BRANCH PLANT - SAMYNG, VIETNAM (+Ve)

  • 1995, employs 5200 direct + locally 
  • $54 a day (2x avg local wage) 
  • 75% now own TV's + 8% inc in moblie phone ownership 
  • 12-16 day annual leave + strict prohibition workers under 15 
  • since 2001 promoted edu + training to 85% of factories 

BRANCH PLANT - CAMBODIA (-Ve)

  • 2001, worker labouring 52 hours overtime 
  • childer aged 12 working
  • little report back due to VERTICAL STRUCTURE 
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trade

importance - aids delevopment / correlation high trade = MEDC (trade surplus) / more efficient than aid 

majority of trade - from NAFTA, EU, MEDC 

comparative adv - countries specialise in producing / exporting their cheapest goods 

economies of scale - greater scale production lowers average cost of each unit 

free trade benefits 

  • specialised coutries for comparative adv 
  • obtain goods cheaper than produced 
  • variety all year round 
  • speailisation + links created 
  • Visible trade - exchange of goods (food/fuel/commodities)
  • Invisible trade - movement of finance (tourism/spending)
  • Balance of trade - trade balance between visible goods 
  • Balance of payments - balance of imports + exports for visible + invisible 
  • terms of trade - relative price of raw materials compared to maufactured imports (decrease in LEDC's) 

IMF / WORLD BANK - money / funds to LEDC's, loans, cheap foreign procuts flood in (-VE for farmers)

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Trade - Bolivia LEDC

overall trade value - 

  • MERCHANDISE SURPLUS $1044m + SERVICES DEFECIT $368m 

balance of trade 

  • 85% merchandise 

balance of payments overall

  • SURPLUS $676m 

dominated imports 

  • MECHANDISE - manufacture 80%
  • SERVICES - transportation 40% 

countries imports mainly from 

  • Brazil - 20% 
  • USA - 12% 

dominated exportsagriculture (climate dependent), fluctuating prices, coffee fell 1980-2000 65% ovesupply 

stragies to helpother coutries introduced by incentive + diversification 

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trade - China NIC

overall value of trade 

  • MERCHANDISE SURPLUS $260,000m + SERVICES DEFECIT $125,000m

balance of tradeMERCHANDISE 89%

balance of payments overall$135,000m surplus 

dominating import 

  • MERCHANDISE - manufacturing 60%
  • SERVICES - travel 40% 

imports from 

  • local - ASIA, JAPAN 
  • worldwide - EU 

exports dominate - manufactures - 94% - environmentally unsustainable / takes up land 

management - domestic demand, western projects (3 gorges), devalue currency, trade blocs 

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trade - UK MEDC

overall value of trade 

  • MERCHANDISE DEFECIT $1,300,000m + SERVICES  SURPLUS $500,000m 

balance of trade - >50% services 

balance of payments overall - SURPLUS $5,000m

dominating imports 

  • MERCHANDISE - manufacture - 68%
  • SERVICES - travel - 30%

coutries imports from 

  • EU 50% - overdependent on EU, hard to trade outside 
  • China 10%

dominating exports - manufacture 60%

strategies - regional trade blocs, bilateral trade outsdie EU, tariffs, attract more maufacture FDI 

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unfair trade cocoa - GHANA LEDC

  • IMF - created after WW2 + wall st crash - gives out loans 
  • WORLD BANK - fund development - power lies with wealthier MEDC's 
  • 1987-2007 5.3% growth to 6.2% + 60% of export earning from cocoa 

PROBLEMS 

  • relies on decisions made by MEDC's - neo-colonialism 
  • commodity traders - look to buy off lowest price - downward pressure on prices 
  • tariff escalation - 7.7% overseas tariffs on unporcessed cocoa, 65% on processes product
  • WTO - mutual consent - no votes ever taken place 
  • rich countries can only give subsidies - dumps cheap produce to LEDC's as 'aid' - locals out of business 

DUE TO :-

  • terms of trade - export only raw + dependency - viscious cycle 
  • aid - strings attached + global finance + debt - repay with interest 
  • TNC's - ignore africa - Strategic adjustment policies - if money borrow they have to submit plans for approval 

FAIR TRADE MANAGEMENT - stronger bargaining power 

  • Kuapa Kokoo 1993 - with 40,000 members in 650 villages - provides with credit + profit on infrastructure
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regional scale trade - NAFTA

BACKGROUND

  • 1/1/1994 - MEXICO, CANADA, USA 
  • couter growth of NIC's / EU + increase US market strength 

IMPACT ON USA

MANUFACTURING 

  • wage + benefit reductions if US firms remain competitive against free trade with cheap mexican labour
  • 2100 branch plants move to mexico 
  • south of border (less demanding legislation) + high paid workforce in lower paid jobs 

FARMERS 

  • heavily subsidised - cheap foods , free export / dump on mexican market 

IMPACT ON MEXICO 

MANUFACTURING - higher foreign standards + business practices, improve competitiveness, free trade US + EU 

FARMERSprevious overdependency - loss of market, no local foods, forced to change landuse (wheat to peanuts)

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national scale trade - BILATERAL

EU - ACP banana growers 

  • 2000- Cotonou agreement 
  • 775,000 tonne tariff free quota 

NEEDED BECAUSE 

  • American colonies took over 
  • ACP outcompeted by favourable growing conditions 
  • larger scale TNC's own production 

Latin America 

  • originally €230 per tonne 
  • however had negative impacts so brought back to €175 per tonne 

now 

  • WTO reduced latin america tariffs 
  • EU grant €190m to CP producers to shift production systems to other types 
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global scale trade - GATT

GATT (general agreements on tariffs and trade)

  • 1947 - set up GATT
  • 1979 - memebrs increased from 20-99 + attempted to reduce tariffs and quotas 
  • 1995 - WTO took over - 152 members, settle trade disputes, free up trade, give general global rules 

SUCCESS

  • export growth 
  • tariffs now 1/10 of 1947

DRAWBACKS 

  • MEDC markets take control - rich mans club 
  • votes never occur - mutual consent 
  • doesnt control UK subsidised food dumping on LEDC's 
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Aid - bilateral positive

UK (donor) and Uganda (recipient) 

TYPE 

  • BILATERAL - BOTTOM UP (local community orientated)

BACKGROUND 

  • UK's department for internation development (DFID) gave $2M 
  • city community challenge (C3)
  • Kawempe, Kampala's worst slums first area to be targeted (population 300,000)

POSITIVES 

  • encouraged local ownership iniative 
  • provide own resources of land + labour 
  • 140 small businesses supported by 2003 + improved water + sanitation 

NEGATIVES

  • located in specifically urban slums 
  • not rural poverty 
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aid - bilateral negative

UK (donor) and Malaysia (recipient)

TYPE 

  • BILATERAL - TOP DOWN (£234M dam)

POSITIVES 

  • political relationship partially built between countries

NEGATIVES 

  • little economic benefits 
  • £1.3Bn on Hawk fighters from UK in return for £234M of aid 
  • Pergau dam project didnt benefit 
  • illegal aid was later declared 
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aid - voluntary

NGO (donor) Burkina Faso, West Africa (recipient)

BACKGROUND

  • 3rd poorest country in world 
  • 1 doctor per 57,000 + only 27% in primary edu. 
  • $400M through aid schemes + depts of 61% GDP 

TYPE -   voluntary 

  • BOTTOM UP (ASAP) 'fly with their own wings' - 19 villages - bursaries, health edu. , water filtration
  • TOP DOWN dam + reservoir, allotments, privatisation, £50m agricultural research centre 

POSITIVES 

  • dvelop living standards in communities + improved health + local income 
  • kickstart mulitiplier effect + develop economt 

NEGATIVES

  • corrupt political system + poor planning + not using locals 
  • not in sync with local culture + isolated modern development surrounded by poverty 
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aid - multilateral

IMF, WORLD BANK, MEDC'S (donor's) LEDC's, Kenya, Sri Lanka (recipient's)

BACKGROUND 

  • 1970-1990
  • Kenya - structural adjustment programmes (SAP's) increaed edu. cost to $180/month 
  • Sri Lanka - SAP's dam meant 1.5m had to be relocated 90km away 
  • budget doubled to $14Bn so raised taxes 

TYPE- MULTILATERAL - TOP DOWN - large scale / no trickle down effect 

POSITIVES 

  • economic growth + benefits gov. + overall country wealth 
  • Dam in Sri Lanka tripled energy + 120,000 ha irrigated 

NEGATIVES 

  • benefit most wealthy 
  • economic growth at expense of healthcare + edu. 
  • labour from other countries 
  • taxes raised + subsidies cut 
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Apple TNC

Pegatron Taiwanese elctronics manufacturing company  

PROMISES 

  • ethical responsibilty 
  • standards to protect wokers 
  • only 8 to one room 
  • working hour options 
  • 24hrs of training with an exam that needs to be passed 
  • measured working hours for 700,000 people 

REALITY 

  • romval of identity 
  • 80,000 people 
  • 12 in 1 room 
  • exam cheating 
  • can only tick certain boxes or fired 
  • 1-2 hrs training 
  • workers falling asleep 
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