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Global systems and Global governance
Terms in this set (145)
Examples of International financial institutions
- The World Bank.
- The World Monetary Fund.
- The World Trade Organisation.
- The International Governmental Panel on Climate change.
Strengths of International financial institutions
- They increase global cooperation and development.
- They increase global stability.
Weakness of International financial institutions
- These organizations have their own vested interests (Reasons for involvement) which could influence their decisions and actions.
- Money given by other nations can often be lost as corrupt nations don't use the money on the projects they said they would.
The role of the World Trade Organisation - International Financial Institution
- Intergovernmental organisation of 126 nations which regulates global trade.
- It provides guidance and a framework of how trade should be conducted, helps agree deals and helps resolve problems.
- Consequences are enforced if these guidelines and commitments are broken.
Strengths of The World Trade Organisation - International Financial Institution
- Trade can flow easily around the globe due to agreed contracts.
- Every member is treated the same no matter how developed they are.
- Lower trade barriers means that more things can be traded and therefore there are more jobs, sales and better economic growth.
Weaknesses of The World Trade Organisation - International Financial Institution
- There is a one member one vote system, but the smaller countries still get dominated by the more developed nations, causing less democracy than intended.
The role of The International Monetary Fund - International Financial Institution
- Consists of 189 countries.
- Attempts to regulate financial cooperation, make economic growth sustainable and maintain good employment rates.
- Works with developing countries to prevent poverty and maintain economic stability.
Strengths of The International Monetary Fund - International Financial Institution
- Countries needing a financial loan can borrow from the fund to complete essential projects.
- Countries can get financial advice on how to run their economy.
- Promotes global economic stability and cooperation between members.
- The fund encourages various positives behaviour such as increased economic responsibility and challenging corruption.
Weaknesses of The International Monetary Fund - International Financial Institution
- Some criticise the fund for either being too slow or eager to help countries with failing economies.
- Some countries are criticised for proposing unrealistic domestic budgets because they know the fund will bail them out.
- The decisions regarding which countries can borrow money tend to be made by the larger nation members
- Members seeking a loan from the fund have to agree to certain conditions which put the country in further economic strain.
The role of The World Bank - International Financial Institution
- Consists of 189 members.
- Aim to tackle poverty by providing loans and help to countries and World economic programs.
- The International Bank for Reconstruction and Development (IBRD) gives loans to MIC's.
- The International Development Association gives loans to LIC's.
Strengths of The World Bank - International Financial Institution
- Governments and members can get low interest loans and zero interest grants.
- Countries can then use this to improve domestic areas such as Housing and Education.
Weaknesses of The World Bank - International Financial Institution
- When the trust authorises a loan it gives conditions meaning that the member basically gives over control of its economy.
- When the trust takes over the running of it's economy it has very little voting power to influence change.
- The trust works alongside the private sector meaning the member may experience services such as healthcare being shifted from public to private.
"The compression of the World and the intensification of consciousness of the World as a whole, both concrete global interdependence and consciousness of the global whole"
Types of Globalisation
Economic globalisation example
- Rice grown in China (accounting for 90% of global production) is shipped around the World to use in Europe and America.
Environmental globalisation example
- The United Nations Climate Change Conference set goals to reduce the effects of climate change.
- E.g signatories encouraged to spend $100 billion per year to mitigate the effects of climate change.
- The fleeing of migrants from Syria and Lybia mean populations become more diverse as people settle in different countries.
- Countries embrace the traditional cuisines introduced by immigrating cultures.
- Such as the immigration of Bangladeshi communities in the 1970's establishing curry houses around Brick Lane.
- The formation of the EU in 1993 set standardised procedures and laws to be followed by members.
- A nation must behave in a manner which suits all the countries within the union.
- Scientists in Harwell, Oxfordshire creating parts for the Russian Federal Space Agency and European Space Agency.
The KOF index
- This scale shows the extent of globalisation.
- It is calculated by measuring political, social and economic factors.
- The scale is not interested in environmental factors.
Political - KOF index
- This aspect of the scale concerns the mixing of governmental policies.
Economic - KOF index
- This aspect of the scale concerns flows of money, services, goods and information.
- E.g Trade between nations, Migrant remittances paid back to their home nation, Trading BLOCs (taxes and quotas on external imports) and subsidies for farmers within the BLOC.
Social - KOF index
- This aspect of the scale concerns the spreading of information, people, ideas and images.
Countries with the highest KOF index
- The Netherlands.
Similarities between countries with the highest KOF index
- They are all in the EU (Except Switzerland).
- They are all HIC's.
Reasons for countries having the highest KOF index
- They are all within the Single Market and are landlocked so have a high capacity for trade.
- As being part of the EU the countries will allow "the freedom of movement" and will experience high migration and tourism.
- Switzerland has the 2nd most banks in the World top 100 assets meaning it deals with lots of finances.
UK KOF index
- High Social (12th) and Political (6th) globalisation.
- Low Economic (59th) globalisation.
Croatia KOF index
- Has a balanced distribution of ranks which aren't particularly significant.
- Economic (44th), Social (43rd) and Political (46th).
New Zealand KOF index
- Strong Economic (21st) rank.
Advantages of the KOF Index of globalisation
Comparison - Advantages of the KOF index of globalisation
- The index allows us to make comparisons between the globalisation level of countries.
Longitudinal - Advantages of the KOF index of globalisation
- The index is a longitudinal study which has been calculated every year since 1970.
- This allows us to trace the globalisation of one particular country through time.
Consideration - Advantages of the KOF index of globalisation
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Disadvantages of the KOF index of globalisation
- Smaller dominance.
- Ignored aspects.
- Better perception.
Smaller dominance - Disadvantages of the KOF index of globalisation
- The top of the Index is dominated by smaller nations suggesting there is a bias within the data.
Ignored aspects - Disadvantages of the KOF index of globalisation.
- The Index doesn't take into account trade from the "Informal economy" which is trade not governed by the state. So the data may be unrepresentative of what trade is actually occurring.
- Illegal immigrants are not counted within the rank as they are unregistered civilians. This therefore means a country's social globalisation may not be fully represented.
Better perception - Disadvantages of the KOF Index of globalisation.
- Countries positioned higher in the index are perceived to be better than those nearer than the bottom.
- However, a country can be successful without being heavily involved in or reliant on globalisation.
Global flows of capital in 2002
- The greatest flows of capital were between North America and Western Europe.
- The 2nd greatest flows of capital between both Northeast Asia and North America and Northeast Asia and Western Europe.
Global flows of capital in 2012
- The greatest flows of capital were between North America and Western Europe, but to a lesser extent than a decade before.
- The 2nd greatest flows of capital were between Western Europe and Northeast Asia, Northeast Asia and North America and Western Europe and Eastern Europe / Central Asia.
- New flows of capital were introduced as places became globalised.
- There has been an increase in global GDP in the decade between the two maps.
The analyst's view of Interdependence
- Nation states are less important than what they used to be.
- Increasing flows of people, capital, goods and ideas across international boundaries illustrates the demise of the national state.
- The growth of trade BLOCs and TNC's signal a new world order where individual countries are less important than in the past.
Issues of Interdependence
- Impacts on International Labour Markets.
- Inequality between countries.
- Inequality within countries.
- Geopolitical issues.
Positives impacts on International Labour Markets - Interdependence
- Unemployment is reduced in areas with less job opportunities because workers can migrate to work.
- Key skills and labour shortages can be addressed by having a global workforce e.g foreign nurses working in the NHS.
- When workers return home to their home nation with new skills and ideas they have picked up.
Negative impacts on the International Labour Market - Interdependence
- Countries lose their most talented workers who are attracted to countries with better wages. This can create a training gap as remaining workers lack relevant skills.
- Outsourcing of production (Moving factories) to low labour cost countries leads to deindustrialisation of the local area. This causes structural unemployment where workers who have been trained in a certain sector then lack certain skills needed for other types of jobs.
Inequality between countries - Interdependence
- Communication and transport improvements increase the integration of economies. This means developing nations e.g in Asia and Sub-Saharan Africa are catching up with well established, richer countries.
- The Development Continuum (excluding the very least developed countries) has condensed.
- Developing countries have increased their average incomes more quickly and have faster economic growth rates than richer countries.
Inequality within countries - Interdependence
- Developing countries have a more unequal index rating than developed countries. In many ways this inequality has got worse.
- This inequality has a similar story in developed countries like the UK and Sweden as the share of national income taken by the top 1% has increased.
- Inequality within Latin America has decreased during the last decade.
The Gini index - Inequality within countries
- This is used to show the level of inequality of income distribution within a country.
- A coefficient score near 1 means the country's income goes to one person, while a coefficient of 0 would mean the country's income is divided evenly among the population.
Outsourcing - Inequality within countries
- When TNC's base themselves in developing countries and actually employ skilled workers which they pay well. These wages can often be 40% higher than wages paid by local firms.
- By contrast unskilled workers in rural areas don't have the same opportunities. As a result inequality can arise.
Investment - Inequality within countries
- People with money originally benefit from investment and gain more from growth.
- However poorer people stay poor as they have less money originally.
- This creates inequality.
Geopolitical issues - Interdependence
- Economic integration e.g sharing currency could decrease the likelihood of armed conflict between countries.
- Food, energy and water shortages resulting from globalisation could cause conflict in certain areas.
- Some regions do not share the same values as the richer countries driving globalisation. This can cause civil wars and increased communications spread the same unrest to other countries.
- Trade can be used as a weapon during times of conflict between nations or trade BLOCs. E.g sanctions imposed on Iran in 2006 after they refused to stop nuclear testing negatively affected the country's ability to mix within the World economy.
Flows of capital
- Capital includes all money moving between countries used for investment, trade or production.
Why flows of capital have increased
- These flows have increased due to the degradation of World financial markets in the late 20th Century.
- This freed up banks, insurance companies and investment companies from national boundaries.
- This therefore led to increased flows.
- This term refers to the global power being in the hands of a small block of developed nations.
- This term refers to less developed countries who are being exploited are are suffering from lack of investment, leakages and out migration (people moving out of the country.
Why the theory of the Core and Periphery outdated
- This theory is outdated because their has been a rapid growth of MIC countries such as BRIC and MINT economies.
- As a result more countries should perhaps be deemed "Core countries" that originally were as they are also influential.
Different flows of capital
- Foreign Direct Investment (FDI).
- Repatriation of profits.
- Remittance payments.
Foreign Direct Investment (FDI) - Different flows of capital
- This type of investment is mainly given by TNC's or possibly governments based in one country.
- This involves physical capital or assets in foreign business e.g having an overseas investment in the form of acquiring shares.
Repatriation of profits - Different flows of capital
- TNC's invest in overseas production and then they send the profits back to their country of origin.
- This is often called "economic leakage" as flows tend to go back to richer countries.
Aid - Different flows of capital
- This is a source of financial support for poorer countries.
- This can come in many forms: contributions from rich countries give Official Development Assistance (money) to multilateral organisations e.g the UN, from government to government or through NGO's.
- This can often be in the form of technological expertise or food resources.
Migration - Different flows of capital
- Out migration of labour (workers leaving a country) occurs from poorer countries to richer countries.
- Therefore, these less developed nations lose skilled workers who spend their money and pay taxes in their adopted country.
- These workers will often pay remittances back to their families in their home nation.
Remittance payments - Different flows of capital
- Foreign workers pay their remaining money back to their families in their home nation.
- In developing nations this is the second most important source of income even above foreign aid.
Flows of labour characteristics
- This flow is not as freely moving as financial markets in the process of globalisation.
- This is because it is harder for people to move around as a result of immigration standards and procedures.
Flows of capital characteristics
- This flow can move much further distances e.g monetary aid from Britain to Bangladesh.
- However, flows of labour tend to cover short distances as most migrants don't go far to work.
Patterns in flows of labour
- The largest inter-regional flow is between South and West Asia: 5 million migrants have moved from India, Pakistan and Bangladesh to Qatar and Saudi Arabia.
- Flows in Southeast Asia are balanced out as there is lots of migration between countries.
- Many people from Central America e.g Mexicans move to the USA.
- Much of the movement in Sub Saharan countries occur between neighbouring countries.
Why flows of products have changed
- Transaction costs.
- Transport and Time.
- The WTO.
Transaction costs - Why flows of products have changed
- These have been reduced because of the improvement of data flows and how easy it is to transfer capital.
Transport and Time - Why flows of products have changed
- These have been reduced due to containerisation allowing more complex and further reaching flows of products.
- Also, air transport has both increased the speed of flows and has reduced costs.
The WTO - Why flows of products have changed
- This organisation has been responsible for the reduction of tariffs, which act as barriers to trade.
- This has made this type of flow easier.
Flows of Services
- This flow concerns economic activities that are traded without the involvement / production of material goods. E.g financial or insurance services.
- These can be divided into High level services and Low level services.
High level services - Flows of Services
- This is the term for services for business such as advertising, investment and finance.
Low level services - Flows of Services
- The term for services to customers such as Banking, Travel and Tourism and Communication services.
Changes in Flows of Services
- There has been an increase of low level services moving from developed to developing nations. These services would have traditionally been in cities such as London or Singapore.
- TNC's have extended their influence globally e.g HSBC and TUI Tourism. Companies based in a number of countries are called Conglomerates.
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- This flow is dependent on both the movement of people when migration occurs and the speed at which communication and data can be transferred.
Changes in Informational flows
- Digitalisation and Satellite technology have changed the way that this flow moves:
- Improved telephone networks = cheaper and easier communication.
- Mobile phones make communication easier.
- Emails and the Internet allow information to travel globally instantly.
- There has been an increase in media coverage due to Satellite technology.
- The term for promoting, advertising and sell products or services.
- The term for when marketers see the World as one single market to promote to.
- The company aims to produce products to suit various regional marketplaces. They aim to create an iconic and recognisable brand, where the same product can be marketed the same way across the globe.
- If this is achieved the company can operate economies of scale ; cheaper costs due to large production spreading costs.
- This is the term for conducting business according to both local and global considerations.
McDonalds - Glocalisation examples
- This company have 36,000 restaurants in 100 countries globally.
- In Hindu countries such as India beef has been removed off the menu.
- In Muslim countries pork has been removed from the menu.
- They have increased the number of McCafes in prominent coffee growing nations
- This not only suits business (not having to import goods long distances), but it suits the local economy (providing a consistent customer).
KFC - Glocalisation examples
- This company has pledged to work alongside local business planners in the UK to make stores look and feel like they fit in the area. This reduced opposition from local people fearing homogenisation.
- They have created vegetarian meals in India such as Chickpea burgers in order to suit the local market. This is both good for locals and good for the business (new sale market and reduced waste).
Gillette - Glocalisation examples
- This company have introduced a special razor for the Indian market.
- It is deliberately priced cheaply at around 26p so people living in remote villages can afford the product.
- The product is deliberately easy to rinse because water can be in short supply in remote villages.
- It is manufactured in a specific design so it suits the way that Indians hold their razors.
- This creates a large potential market as 1.3 billion people live in the country (1/7 of the World).
- This nation experiences inequality because past civil wars, corruption and AIDS have halted it's development.
- 1/3 of it's 35 million population live below the national poverty line.
- Life expectancy is only 59 years old.
Weaknesses of Unequal flows of People and Money in Uganda
- The presence of the British East Africa Company in the country meant that Uganda had more imports than exports. They were also getting low income for their primary produce as the price is dictated by more developed nations.
- Overfishing due to demand for fish from Lake Victoria is unsustainable. The Nile Perch (introduced by the British) also eats these fish. Indigenous fish are therefore due to extinction levels.
- This meets the needs of the World rather than Uganda itself.
Unequal flows of People and Money in Uganda
- When Uganda was part of the British Empire the British East Africa Company influenced Ugandan exports. Low value primary products such as coffee, tea and cotton were exported around the empire and continue to dominate the countries exports.
- Fish in Lake Victoria are one of Uganda's staple food sources and also one of their most influential resources.
Unequal flows of Ideas and Technology in Uganda
- Smallholdings in Uganda known as Shambas now have access to modern technology.
- Cheap wireless technology means phones and the internet now function in remote villages.
- The Village phone offers loans to people wanting to set up a mobile phone business. This gives the user a phone, a car battery to charge it and an antenna which can pick up signals 25km away.
Benefits of unequal flows of Ideas and Technology in Uganda
- Ugandan farmers can access the internet to look up the price they should pay for seeds and to research new farming techniques.
- The village phone scheme helps boost the local economy as it encourages local people to set up their own business.
Weaknesses of unequal flows of Ideas and Technology in Uganda
- Tensions may be created between Ugandans who have access to the technology and those who do not.
The Trend in Inequality
- 40% of income growth has gone to the top 10% richest people in the World.
- The richer people benefit far more than the poorer people , leading to more inequality.
- The income growth of poorer countries also grow, but to a much lesser extent than the growth of richer countries.
Why inequality matters when everyone is getting richer
- People compare themselves to others, so inequality leads to dissatisfaction and conflict.
- Inflation (price rises) is fueled by inequality because rich people drive prices up by being able to afford goods. This means sellers raise prices to this level.
- The poor are priced out even though their income may have increased and are now unable to afford things e.g rising house prices in Oxford.
Migrant workers in Qatar
- Migrant workers from countries such as Nepal migrate to Qatar to assist with preparations for the 2022 football World Cup.
- They do this in order to pay off the debts they have in their home country or to improve the economic situation for them and their families.
Exploitation - Migrant Workers in Qatar
- Migrants are promised one salary, but construction companies then rip up contracts during migration. Workers are often not paid at the rate they were promised.
- Forced labour is a form of modern slavery as construction companies confiscate documentation, ID and Passports. Migrants are forced to work as they cannot return home. Workers can only leave when the company decides.
- Poor living conditions see 600 men share 2 kitchens with 12 men per room.
- Poor working conditions mean that workers die from injuries or the condition.
- Workers not getting paid for months or at all, which is ignored by the police.
Union Carbide Bhopal disaster context
- This American TNC produced pesticides for India.
- The company was located in Bhopal, in central India.
- The industrial accident happened at 12:05am on the 3rd December 1984.
- It is the worst industrial disaster in history.
Union Carbide Bhopal disaster causes
- The factory was located in Bhopal due the abundance of cheap labour and lax health and safety laws.
- The pesticides contained a very dangerous chemical which had not been revealed.
- Tank 610 held twice as much MIC (40 tonnes) allowed by safety regulations.
- Water that was being used to clean factory pipes entered the chemical MIC tank. The mixture of water and the chemical caused an explosion.
- Shanty towns had been developed around the factory, something which would not have happened in a MIC economic country.
Union Carbide Bhopal Immediate impacts
- Between 16,000 and 30,000 people died.
- People were crushed as they ran away.
- Clouds of toxic gas swept through the shanty town. Half a million suffered severe side effects such as headaches, paralysis and convulsions.
- Some people fell unconscious in their doorways.
Union Carbide Bhopal Long term impacts
- One person still dies everyday as a result of the disaster.
- Children born since the industrial disaster are born with genetic defects. Children are born without lips, noses or ears and sometimes whole hands are missing.
- Local water wells still contain poisons which have been washed into supplies.
Union Carbide Bhopal current status
- The factory has still not been cleared up.
- No one has ever been charged for the disaster.
- Compensation paid to victims has accounted to £600 pound each (£285 million in total).
How globalisation affects inequality
- Global governance.
TNC's - How globalisation affects inequality
- Large companies and organisation become more powerful and influential.
- This creates a greater divide in society as those in the economic top 1% live alongside the poor.
- Some companies such as McDonald's have a bigger GDP than undeveloped countries, halting their ability to develop
Migration - How Globalisation affects inequality
- Better transport links and relaxed border mean that people can migrate easier.
- Minority members of society may fail to integrate and are not given equal opportunities.
- Migrant workers are given poor jobs with little regard for their rights. Their situation may be used and abused e.g Qatar World Cup construction workers.
Technology - How Globalisation affects inequality
- Technological advancements spread across the globe due to globalisation.
- Inequality is created when some people have access to it while others cannot afford it.
- Those who cannot access or afford the technology are put at a disadvantage as they are not on a level playing field with other members of society.
Global governance - How Globalisation affects inequality
- Globalisation leads to the creation of global political agreements and interdependent systems reliant upon each other.
- Larger countries both in size and economically have more power than smaller nations, creating inequality.
- Some countries may be forced to bail out other countries when they themselves may not be in the best economic state. Larger countries have the financial resources to be able to do this, but it could put strain on smaller countries.
Measures of Inequality
- Income inequality.
- Pay inequality.
- Wealth inequality.
Income inequality - Measures of Inequality
- This is the extent to which income is distributed between a group of people.
- It takes into account wages, bonuses, investments, interest on savings, share money, benefits, rent and pensions.
- Inequality can be measured by looking at an individual or household.
Gross income - Income inequality
- This is the term for household income before taxes.
Net income - Income inequality
- This is the term for household income including taxes and benefits from the state.
Pay Inequality - Measures of inequality
- This includes pay from employment alone.
- It is normally given on a weekly or monthly basis and may include bonuses.
- It describes the difference in pay between people either in a company or across a nation.
Wealth Inequality - Measures of inequality
- This includes the total amount of assets that an individual or household has.
- This could take into account Financial assets, stocks, property ownership and pension rights.
- This therefore refers to the unequal spread of assets among people.
Possible effects of inequality within society
- Shorter life expectancy.
- Poorer maths and literacy skills.
- Higher infant mortality rate.
- Higher levels of teenage pregnancy.
- Higher average rates of murder and crime.
- Higher rates of substance abuse, mental health issues and lower levels of trust.
Global patterns in inequality
- Scandinavian countries, The Middle East and parts of North Africa have low inequality.
- HIC's tend to have less inequality than LIC's.
- USA, East and Southeast Asia have medium inequality.
- Latin America and southern Africa suffer from the greatest inequality.
Reasons for Denmark having low inequality
- This nation has a good redistribution of wealth system which taxes the richest and gives the money to the poorest.
- The nation also has an equal pay system which means that less money needs to be redistributed in the first place.
- It has a low Gini ranking of 0.38.
- This is the term for the difference in size, degree or circumstance which results in lack of equality.
- It is an unfair situation in society where some people have more money and opportunities etc than others.
- This is the term for the state of being inferior in quality or sufficient in amount.
- It is not having enough money to meet needs such as food, clothing or shelter.
Types of poverty
- Relative poverty.
- Extreme poverty.
Relative poverty - Types of poverty
- This is when people lack the minimum amount of income needed in order to maintain the average quality of life in their society.
- This is anyone living below X% of the country's average income.
Extreme poverty - Types of poverty
- This is a severe deprivation of basic human needs such as food, clean water, sanitation, healthcare and healthcare etc.
- According to The World Bank anyone living on less than $1.90 a day meets this criteria. If you receive less than this you will die.
The Global trend in extreme poverty
- Overall this form of poverty is decreasing.
- The % of people in poverty has fallen from 85% to 12% between 1800 and 2012.
- However, this is misleading because the World's population has increased to 7 billion in this time, whereas the population in the 1800's was only 1 billion.
- The number of people living in this form of poverty has decreased down to 1 billion since the 1950's.
Specific region trends in extreme poverty
- In 1800 almost all people in the World were living in this type of poverty.
- Around 1950 the World was divided with Asia and Africa lagging behind Europe and both North and South America.
- In the 1980's the rapid growth of India and China mean that Asia is less troubled by this form of poverty.
- After 2000 even African countries are becoming less affected by this form of poverty.
Child mortality - a good measure of human development
- This is the term for the amount of children who die before the age of 5.
- It is a good measure because there are certain factors which contribute to child deaths. If housing, sanitation and healthcare are inadequate in a country this will contribute to high numbers of child deaths.
- This is the term for when local people are consulted and supported in making decisions to undertake projects or development that meet one or more of their specific needs.
- This is the term for when a decision to undertake projects or development is made by a central authority with little or no consultation with the local people it will effect.
- This is the term for a trade agreement or aid package that is negotiated between two countries.
- This is the term for an agreement which is negotiated between more than two countries or groups of countries at the same time.
- This is the term for a group of countries in geographical proximity in which trade barriers for goods are eliminated e.g The EU single market.
- This is the term for a trade bloc which allows free trade with no barriers between its member states but imposes common external tariffs to trading countries outside the bloc.
- This is the term for a strategy used by companies who arrange for goods to be produced or provided by other companies, usually at one location.
- This saves them money.
- These are rules, norms and laws that make and remake global systems.
Why Global governance is so complex
- Global governance is complex because different organisations form different interpretations, engage in different ways and enforce rules in different ways.
Consequences of the complexity of global governance
- The complex nature of global governance and different ways rules are interpreted can cause various problems.
- E.g breaches of human rights protection and nations managing to avoid conservation management.
- The recognition that the World is not composed of national states operating independently in an international system. We are all dependent on each other and the actions of one member can influence the whole group.
Examples of Interdependence
- Buying an Apple product.
- The effects of the Icelandic Volcano eruption (2010).
- International cooperation to insure security.
- Nations working together to insure the Millennium Goals are reached.
Inequality in Global Systems
- Some states and corporations such as drug cartels in Mexico can drive and manipulate systems to take advantage of them.
- They do this by bribing officials and they are able to transfer hug sums of money using global financial markets.
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Historical Production trends
- In the 1950's around 95% of manufacturing was based in industrialised countries in Western Europe, North America and Japan. These products were used on a domestic basis.
The change in Production trends
- Decentralisation has occurred as developing nations have the capacity to host manufacturing TNC's. The movement to developing nations is called "The Global Shift". Incentives include: competitive prices, cheap yet skilled and educated labour, cheap land acquisition and government tax breaks. The chance to build brand new factories from scratch with the latest technology is also an incentive.
Effects of the change in Production trends
- Developed nations have experienced deindustrialisation and mass unemployment within the sector.
- Between 1983 and 2013 UK manufacturing employment fell by 50%.
- Technological TNC's in developed nations improve productivity speeds, but labour costs don't rise making it cheaper to produce goods in developed countries.
Current Distribution and Consumption trends
- Consumption of manufactured products tends to be focused in richer, more developed nations.
- Things being produced in newly industrialised countries (NIC's) tend to be sold within Europe, North America and Japan.
The change in Distribution and Consumption trends
- As time goes on newly industrialised countries (NIC's) become more affluent and wealthy, wanting to consume the products which are being produced in their country.
- In the future more manufactured products are expected to be distributed in the East. This is because the largest trade passage will evolve between India and China. Asian countries will export more goods between each other and Western financial companies will exploit this new market.
The Global Shift affecting British Industry
- The Steel Industry.
- The Car Industry.
- The Confectionery Industry.
The Steel Industry - The Global shift affecting British Industry
- In 1994 38,000 British workers were employed in the steel industry but in 2015 this had dropped to 18,000.
- The growth of cheap Chinese steel has meant that there is less demand for EU produced steel.
- In 2015 China produced steel at a rate of 882 million tonnes a year, while Britain only contributed 12 million tonnes.
- In early 2016 TATA steel announced it would be cutting 1,050 jobs in the UK with 750 of these redundancies being at Port Talbot, Wales (Britain's biggest steelworks).
The Car Industry - The Global shift affecting British Industry
- The UK car industry has remained relatively strong despite the global shift.
- There are a number of large automotive companies such as Mini in Oxford, Nissan in Sunderland and Jaguar-Land Rover in the West Midlands and North West.
- The UK made 1.7 million cars in 2016 which were predominantly sold to European markets.
- In 2016 the industry accounted for 12% of British exports.
- These 30 manufacturers supported a further 2500 parts providing companies.
The Confectionery Industry - The Global shift affecting British Industry
- Cadbury were taken over by TNC Kraft in 2010 for £11.5 billion.
- As a result the Somerdale factory was closed down and 400 jobs were lost.
- While the company insist that the heart of the company remains in Bournville, Birmingham, they continue to make products in Poland.
Pattern of Nike production
- 26.9% of Nike workers are located in Italy.
- 23.2% of Nike workers are located in Vietnam.
- 12% of Nike workers are located in Indonesia.
- Around 11.4% of Nike workers are located in Egypt and China.
Pattern of Nike product consumption
- 46% of sales were from North America, 18% from Western Europe, 12% from China, 11% from emerging markets, 4% from Central and Eastern Europe, 3% from Japan etc.
- The majority of Nike sales are distributed within it's home country.
- There has been a 25% increase in Chinese Nike consumption (2009).
- Japan demonstrates that just because a country is developed it doesn't mean that consumption is bigger than developing economies such as China.
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