A-Level Notes: Edexcel
,Globalisation 3.1 - Globalisation Past and Present Globalisation
- widening of global
connections (links to new
Historical Globalisation ICT Developments places further away)
> trade - 1492 columbus reached the - 1969: undersea fibre optic cables - deepening of connections
Americas - 1983: invention of the internet (type of communication)
> colonialism - british empire controlled ¼ of - 2004: Facebook social media - creates interdependence
the world - Mobile banking: M-Pesa in Kenya, ⅓ of
> co-operation - WW2 ended 1944, GDP if sent through the system
organisations formed (Bretton Woods) = time-space compression / shrinking
world
Factors affecting globalisation:
1. Transport - containerisation (MSC Irina Flows of
2003) globalisation
2. Communication - ICT - commodities
3. Migration - remittances - tourists
4. Travel - jet engine 20th century - capital
5. Trade - TNCs - migrants
6. Tourism - pleasure periphery - information
, Attitudes to FDI
Globalisation 3.2 - Economic & Political Decision Making - during decolonisation (50s - 70s) =
newly independent countries rejected
National Governments international trade as they wanted to be
International Organisations
1. Join trade blocs self-sufficient
World Bank
- EU: 27 members, free movement of - 4 Asian countries (Singapore, Taiwan,
- loans money to developing countries (e.g. 2014, $470 million to
goods/capital/people, singular currency adopted by 19 South Korea, Hong Kong) chose export
Philippines for poverty reduction scheme)
members led growth = Asian Tiger Economies
- recipients must adopt trade liberalisation policies
- ASEAN: 10 members, low tariffs, politics > economics, - this made countries realise FDI wasn’t
- this means countries may choose to borrow money from Bank
pledged to remain nuclear weapon free in 1995 an exploitative
of China
- USMCA: US, Mexico, Canada, freer markets for Subsidies - payments by the
- all presidents are American (cultural bias)
economic development government to a company to attract FDI
WTO
- disadvantages: trade distortion (makes goods from SEZs - area set up by the government
- works to reduce trade barriers
non-members more expensive), unemployment (firms which are tariff/quota free with reduced
- asks countries to abandon protectionist attitudes in favour for
shut down as it is cheaper to import goods), cultural tax (usually coastal areas)
untaxed trade
erosion (imported goods replace local ones), - limited environmental regulations +
- headquarters in Geneva, Switzerland
sovereignty loss (nation gives up determination of unions banned workers from striking
- failed to stop rich countries subsidize their own food producers
- argued that this only benefits developed + emerging world immigration policies)
IMF 2. Free Market Liberalisation
Open Door Policy 1978
- provides loans to countries with short-term difficulties (2008, - reduces government intervention in economy
- allowed farmers to make profit =
Greece received loans to help with existing debt) promotes by Margaret Thatcher and Ronald Reagan
industrialisation
- recipients must adopt trade liberalisation policies - competition between firms = innovation = attracts FDI
- 300 million rural-urban migration
- criticised for promoting western model of economic - however, may create income inequality
- SEZs created (Pearl River Delta)
development 3. Privatisation
- by 2006, $60bn per year in FDI
FDI - in UK, steel/car/electric/gas/water industries now
- joined WTO (2001) agreed to export
- controlling ownership in a business in one country via an privately owned = allows FDI into the country
rare earth minerals
organisation in a different country - however, not all countries do this (France, state has a
Still closed door
- offshoring: TNC moves operations to a different country (usually stake in 81 firms)
- 34 foreign films per year
where there is cheaper labour) 4. Encouraging Business Start-Ups
- FDI restrictions in some areas (coca
- foreign mergers: TNCs from different countries join - 1994 Uk ‘Sunday Trading’ = attractive market for FDI
cola acquisition of Huiyan Juice blocked
- foreign acquisitions: TNC takes over another (usually in a - gov grants to businesses in ICT, renewable energy
2008)
hostile manner) - lowered taxes + minimum regulation encourages for
- information flows restriction (no google
- transfer pricing: TNCs channel profits through tax havens (e.g. firm creation, innovation, and competition
or facebook)
Amazon —> Ireland) - may cause environmental issues and degradation
, Switched Off Areas
Globalisation 3.3 - Degree of Globalisation > two-speed world: switched on develop faster than
switched off area
1. Political reasons (North Korea)
Measuring Globalisation Role of TNCs - one party communist dictatorship
> glocalisation - adapting products to suit - emigration + tourism prohibited
KOF Index the local market (McDonalds only has - no internet access, social media, or undersea cables
- 24 indicators vegetarian options in parts of India - NOTE: 2. Economic reasons (Sahel)
- economic: capital, FDI, GDP not always possible e.g. Lego is Lego) - poor infrastructure, literacy, and income
- social: tourism, internet access > outsourcing - a firm contracts another - unattractive for FDI + lacks market size
- political: foreign embassies, company to obtain goods (e.g. BMW has - has a subsidence farming economy which relies on
international organisations, UN 2500 suppliers) aid from charities
peacekeeping missions > outsourcing creates global production
- indicators are outdated networks (GPNs) 3. Physical reasons (Sahel + Himalayans)
- trade flows don’t include informal ✅broadens markets available = more - has countries that are landlocked (e.g. Chad)
economy profit - high transport costs = exports unattractive for FDI
AT Kearney ✅outsourcing is more flexible than - himalayas isolate Nepal, Bhutan, China (however,
- 12 indicators offshoring as TNC can quickly shift supplier tourism is changing this)
- economic integration, technological if cheaper options become available 4. Environmental Reasons (Sahel)
connectivity, political engagement, ✅increased local job opportunities - has arid climate (200-400mm rainfall per year)
personal contact ❌less direct control (2013, UK horse meat - leads to desertification = limits land availability for
- only includes 62 countries (create scandal) crops
96% of global GDP - excludes ❌natural disaster in one area can halt - harsh climates means transport infrastructure is
developing world) production (2011, Japan tsunami halted more costly
Nissan production to Sunderland)
❌unmanaged safety (2013, Rana Plaza HOWEVER
killed 1100 people) > TNCs invested in raw materials (cotton in Mali)
> Mali folk music have a large following on YouTube
, Global Shift - relocating of the global economic
Globalisation 3.4 - Global Shift Winners and Losers centre of gravity from the West to Asia
BENEFITS India China COSTS India China Deindustrialisation
Waged work Outsourcing 1978-2012 Loss of Increased 2014, 40% farmland REDCAR, TEESIDE
adds $150 economy productive factories and degraded by pollution
billion to grew 9.4% land housing 1. Social impacts
economy per year - unemployment: 1200
families without jobs
Unplanned Dharavi biggest Rapid urbanisation = - increased crime + cycle of
Poverty Increased Extreme settlements slum in India due squatter settlements
reduction quaternary poverty was deprivation
to urbanisation
sector + 84% in 1980,
200,000 new was 10% in 2. Economic impacts
jobs 2016 Resource Higher Major consumer of oil, - 2739 claimed
pressure water/energy use gas, timber unemployment benefits
Education Skilled in TNC - 900 supply chains closed
English investment = Pollution 2018 Mumbai 4th 2013, Beijing air - less income = lower GDP
language + new skills most polluted pollution 20x WHO
35,000 and training megacity recommended + 85% 3. Environmental impacts
engineers rivers in Shanghai - abandoned factory and
per year undrinkable brownfield sites
- contamination and
destruction of habitats
Investment in International 2016 Loss of Deforestation + 2015, WWF lost 50%
infrastructure Airport 22,000km biodiversity climate change vertebrates since 1970
Mumbai has high-speed
40 million rail
passengers Land Soil pollution Building of factories
per year degradation
, Globalisation 3.5 - Migration and Globalisation
Rural-Urban Migration Megacities International Migration
> push - drought, flooding, low > city where population > high paid professional workers attracted to global hubs (e.g.
incomes, less opportunities, lack exceeds 10 million London, New York, Dubai)
of services, less investment > 34 megacities (21 are > they hire maids/drivers = attracts low skilled migrants
> pull - better quality of life, better in Asia) > 2015, 27% of UAE’s population were from India
incomes and jobs, better > influenced by > they send remittances home to families
opportunities, better services, rural-urban migration SOURCE COUNTRY
better communications ✅remittances boost income of families (made up 25% Nepal’s GDP
2014)
✅unemployment rates decrease (unemployment in Poland has
Challenges from rural-urban migration and megacities: halved since joining EU)
Socio-economic impacts ✅cultural diffusion
- housing pressure (slums) ✅less demand for goods = less deforestation
- poverty (low wages) ❌loss of skilled and educated workers
- lack of taxes (govs can’t fund health services) ❌ negative multiplier effect
- unhygienic (diseases) ❌families broken up / elderly may not have family to care for them
Environmental impacts ❌mass emigration seen as country’s failing to provide
- slums cause deforestation HOST COUNTRY
- farmland loss (flood risk) ✅fill low wage and labour intensive jobs
- more vehicles (pollution = climate change) ✅cultural diffusion
- low water and energy supplies Counteracts ageing population
❌undercutting of wages
❌social tensions
❌pressure on housing and services
❌loss of green space and overcrowding