Global Groupings

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  • Created by: em42
  • Created on: 28-04-15 09:44
1. Where is economic power concentrated in the world?
In the 3 global economic cores of North America, Europe & Asia. Of the 500 largest TNCs in the world in 2010, 139 are based in the USA & 71 in Japan. The three cores are referred to as the triad. Around 80% of all global economic wealth & trade is
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1. Where is economic power concentrated in the world? [continued]
concentrated in this triad, which is linked through a complex system of global finance, stock exchanges, international airports & government centres.
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2. How have economic groupings of countries changed between 1975 and 2002?
Some groupings of countries have become wealthier whereas others have stagnated/become poorer. This has created a world of the rich, those getting richer, & those either stagnating/getting poorer. Some developing regions like North Africa
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2. How have economic groupings of countries changed between 1975 and 2002? [continued]
have stagnated. The deceloping world has become richer, North America, Western Europe & Japan. Huge gains in wealth have occurred in Asia. The Middle East & sub-Saharan Africa have become poorer. Collapsed communist countries early 1990s > ^ poverty.
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3. Why are economic groupings useful?
They allow the comparison of different development pathways. Countries can, & do, move between groups e.g. Singapore was once classified as a NIC but is now a fully developed country.
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4. Give examples of MEDCs and describe their economic structure.
Examples are UK, USA, Australia & Singapore. Annual per capita income (2006) is >$11 115. 70% jobs are tertiary. TNCs are based here. R&D & quaternary industry important.
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5. Give examples of NICs and describe their economic structure.
Examples are Brazil, South Korea & China. Annual per capita income (2006) is $3 596-$11 115. 30%+ jobs secondary& manufacturing exports important.
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6. Give examples of RICs and describe their economic structure.
Examples are Thailand, Indonesia & Tunisia. Annual per capita income (2006) $906-$3 595. High primary employment. In key cities, manufacturing is growing rapidly.
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7. Give examples of LEDCs and describe their economic structure.
Examples are Egypt & Peru. Annual per capita income (2006)
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8. Give examples of Least developed countries (LDCs) and describe their economic structure.
Examples are Malawi, Bangladesh & Haiti. Annual et capita income (2006)
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9. What are inter-governmental organisations (IGOs)?
Formal groupings of countries, exist where countries have signed agreements for economic gain. Such groups contain 'like-minded' countries, usually at similar levels of development. In most cases the groups protect the interests of memb
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10. Who are the members of the EU, what is its role & global importance?
Formed in 1957; 27 European countries, including the UK. It is an economic union, with internal free trade & migration. It has 7.5% of world population but 31% of total global GDP.
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11. Who are the members of the OECD, what is its role & global importance?
Formed in 1961; 30 members, 25 MEDCs. All are democratic market economies. The OECD monitors economic performance & works to reduce corruption & bribery. 75% global GDP is generated within the 30 member countries.
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12. Who are the members of the OPEC, what is its role & global importance?
Formed in 1960; 12 major oil exporters in the Middle East, South America & Africa. Safeguards the interests of oil exporting countries. It has a large influence on the global oil price. Members have 65% of global oil reserves & 35% production.
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13. Who are the members of the G8, what is its role & global importance?
Formed in 1974; UK, USA, France, Canada, Germany, Italy, Japan, Russia. An informal forum of the super-rich & powerful countries. 15% of the world's population but 65% of global GDP.
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14. Who are the members of the G20, what is its role & global importance?
Formed in 1999; 19 countries, including Chindia & Brazil, plus the EU. Increasingly relevant following global recession '08-'09; many G20 NICs growing rapidly & are cash rich. Accounts for 85% of global GDP.
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15. Who are the members of the G77, what is its role & global importance?
Formed in 1964; most African, Asian & Latin American nations (131 total). A grouping of developing nations formed to give a collective voice to the developing world. Its influence is lessening as the G20's influence has grown.
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16. What are usually the motives of political groupings?
They are usually economic, to press for the interests of their member states.
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17. What do more formal trade blocs allow for their members?
They allow free trade, without taxes, tariffs or quotas, between member states. Also, countries wishing to export intoo the bloc often have to pay trade taxes and/or have quotas imposed. The external barriers help protect trade within the bloc.
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18. Give examples of formal trade blocs.
European Union (EU), North American Free trade Area (NAFTA) & Association of South East Asian Nations (ASEAN).
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19. What does the World Trade Organisation (WTO) try to do?
They work to reduce trade barriers & create free trade between blocs. Inreasingly, the world is caught between these 2 forces.
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20. What has happened as trade blocs have have become more common?
As they've become more common, free-trade agreements have also increased. There is general agreement that free trade is good, but there is an increasing unwillingness to make it more free.
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21. What are some significant shifts in wealth & power that international trade growth has led to?
Developed nations have maintained their 'top slot'. 'Asian Tiger' NICs have developed almost to developed-country levels. In the last 10 years, the 'BRICs' have all gained economic power & wealth. Asian & Latin American NICs & RICs have grown
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21. What are some significant shifts in wealth & power that international trade growth has led to? [continued]
but often in a 'boom & bust' fashion. Many Afrcian countries have barely benefited, with population growth outstripping economic growth, leading to economic stagnation.
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22. What are TNCs?
They are transnational corporations which are major companies with a global 'reach' and a presence (production, HQ, sales) in at least 2 countries. They are economically powerful, politically influential & are important creators of wealth.
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23. How does the world's largest TNCs compare to a country?
Walmart is the world's largest TNC & had a turnover in 2010 of $408 bn. In '09-'10, it employed 2 100 000 people. Its turnover was equivalent to the GDP of Norway ($413 bn).
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24. How do TNCs grow?
They focus on expanding their global operations: Acquisitions - Walmart took over Asda in the UK in 1999. Joint ventures - in 2007, Walmart & Indian company Bharti Enterprises announced the joint opening of Bharti Walmart stores in India.
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24. How do TNCs grow? [continued]
Franchising - 75% of McDonald's restaurants worldwide are franchises; local entrepreneurs pay fees to the parent company for the right to set up a McDonald's.
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25. Comparing Walmart & McDonald's, what is their business sector ('09-'10)?
Walmart: Food & household goods retailer based in USA. McDonald's: Fast food restaurants and cafes based in USA.
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26. Comparing Walmart & McDonald's, what are/is their employee numbers, turnover & global network ('09-'10)?
Walmart: 2 100 000, $408 bn, 8 500 stores in 15 countries. McDonald's: 1 700 000, $24 bn, 32 000 outlets in 117 countries.
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27. Comparing Walmart & McDonald's, what are some corporate issues and criticisms ('09-'10)?
Walmart: Mega-retail stores damage smaller, locally owned stores. Consumers benefit from lower prices. Low pay & lack of union representation. Large carbon footprint due to global supply chain fuel use. McDonald's: Accused in the past of promoting
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27. Comparing Walmart & McDonald's, what are some corporate issues and criticisms ('09-'10)? [continued]
deforestation for cattle grazing land. Health issues, e.g. obesity, in relation to sugar & fat content of its food. Low paid 'McJobs'.
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28. How have Walmart and McDonald's both made efforts to reduce resource consumption?
About 30% of McDonald's packaging is recycled. Walmart reduced its corporate carbon emissions by 5% '05-'08 & is aiming for 20% by 2012.
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29. Define glocalisation.
When as companies expand globally they can't just export the same brand & products worldwide. Instead, local laws, tastes, incomes & traditions means companies must adapt products for new markets.
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30. Give examples of McDonald's glocalisation.
In the UK, organic milk is used & everything comes from British & Irish farms, consumers value local sourcing. The menus are adapted to local tastes e.g. halal meat is used in the Middle East & there is no beef & vegetarian options in Hindu India.
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31. Why do companies glocalise?
TNCs have brands that are increasingly recognised worldwide & in individual countries & regions products are adapted to meet the needs of local tastes & maximise tastes.
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32. Give 3 positives of TNCs.
Jobs - the 200 000+ technology workers in Bangalore are employed by TNCs including IBM, Cisco Systems & Google. Trade - China's economic growth has resulted from TNCs locating manufacturing plants in its Free Trade Zones, boosting exports.
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32. Give 3 positives of TNCs. [continued]
Connections - TNCs' complex global networks create connections that tie local & national economies into the global economic system.
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33. Give 3 negatives of TNCs.
Exploitation - TNCs have been accused of exploiting workers in the developing world by paying very low wages in 'sweatshop' conditions. Unemployment - Outsourcing jobs to the developing world can lead to job losses in developed countries.
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33. Give 3 negatives of TNCs. [continued]
Identity- local cultures & traditions can be eroded by TNC brands & Western ideas.
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34. What are the costs of TNCs for the TNC source country?
Job losses dur to outsourcing of jobs. Abandoned production locations create derelict land. Outsourcing TNCs may become unpopular & suffer negative media coverage & falling sales.
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35. What are the benefits of TNCs for the TNC source country?
Environmental pollution from factories is 'exported' overseas. TNC growth leads to higher profits, & more tax being paid. Strong global companies are successful, securing HQ & R&D jobs.
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36. What are the costs of TNCs for the TNC host country?
TNCs may pay no/very little taxes. New locations become polluted as environmental laws are weak. Workers on low wages, with long hours, may be exploited & mistreated & suffer poor health. May out-compete local suppliers, forcing out of business.
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37. What are the benefits of TNCs for the TNC host country?
Economic growth due to job creation & rising consumption. Falling levels of poverty. Local supply chains may be created, leading to further job creation & business growth. TNCs demand infrastructure & communications that may benefit local people.
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1. Where is economic power concentrated in the world? [continued]

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concentrated in this triad, which is linked through a complex system of global finance, stock exchanges, international airports & government centres.

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2. How have economic groupings of countries changed between 1975 and 2002?

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2. How have economic groupings of countries changed between 1975 and 2002? [continued]

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3. Why are economic groupings useful?

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