human geography f763 - globalisation
- 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)
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)
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)
5 factors that have led to globalisation developme
communtication / technology
growing awareness
international organisations
relationships growing between countries
increased migration
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)
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
environmental - money to spend on research however increasing demand for raw materials
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
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
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
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
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
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)
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
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
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 FLEXIBILITY - scores 2.51
DEREGULATION / PRIVATISATION - personal tax reduced - encourage top earners
GRANTS / SUBSIDIES TO FDI - short 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
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 :-
- further economic development in wales
- promoe industry efficiency
- more employment + safer
- 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
UK migration management
'CHERRY PICKING' by using point system
5 TIER SYSTEM FOR VISA'S :-
- high value entrepeneur's/investors
- skilled workers from companies
- low skilled workers (never allocated visa by gov)
- students over 16 (must have education place in UK)
- 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
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
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
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
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)
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 exports - agriculture (climate dependent), fluctuating prices, coffee fell 1980-2000 65% ovesupply
stragies to help - other coutries introduced by incentive + diversification
trade - China NIC
overall value of trade
- MERCHANDISE SURPLUS $260,000m + SERVICES DEFECIT $125,000m
balance of trade - MERCHANDISE 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
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
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
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
FARMERS - previous overdependency - loss of market, no local foods, forced to change landuse (wheat to peanuts)
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
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
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
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
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
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
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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