29 terms

Geographic consequences of globalisation and global systems

Paradox of Free Trade
Some economists believe that free trade is only possible if industries in poorer countries are allowed to grow under a certain level of economic protection.
Workers benefit
In a globalised world, people can more easily move from one country to another to market their skills to employers and contribute to the economy.
Geopolitical issues
Force politics to merge and decisions that are being taken can be beneficial to people all over the world. e.g. Montreal Protocol on Ozone depletion
Economic benefit of Free trade
Reduces the barriers that once stood between nations trading freely with one another. This means companies and countries can profit.
Loss of tax revenue
Many companies are able to trade with one country while being based in another, large corporations often exploit tax havens such as Luxembourg, Switzerland, and Hong Kong to avoid paying taxes in the countries where they generate their profits.
'Labour drain.'
Since globalisation allows workers to easily move from one country to another, countries with limited job opportunities often find it difficult to encourage skilled workers to stay in their countries.
"Brain drain"
After receiving training in their home countries; many people emigrate and spend their professional career in a more lucrative economy at the expense of their home country. E.g. migrants working in the UK National Health Service
Loss of cultural identity
As Western ideas are sometimes imposed upon other nations.
Increase of demand of products
Happens as globalisation increases which in turn increases rate of production. Manufacturers find this profitable and this helps in the availability of more jobs.
Cultural and racial barriers
Can be broken down by migration and social media
Places immense pressure on the employed people of rich industrialised countries who are always under the threat of their jobs being outsourced to poorer nations.
Large scale immigration
Many critics of globalisation feel that the free movement of labour has resulted in the weakening of specific cultures.
Loss of sovereignty
Many nation states feel that they are losing control over key decisions and sacrificing their independence. It is this reason that is given for the UK not joining the Euro single currency and was a causal factor for Brexit
Communicable diseases
Could spread more rapidly such as the Ebola outbreak in West Africa
Company costs are reduced
As they can also hire workers in foreign countries to work for them using online tools and telecommunications.
Consumers Benefit
They get a greater choice of goods and services from Free Trade, since foreign companies can easily offer their products for sale. They also benefit from lower overall prices for goods, as a greater variety of goods for sale increases competition and drives prices down.
Political and economic power is placed in the hands of a few
The major agents of globalisation, such as the IMF and World Bank, are based in Wealthier nations.
Environmental impact
This can be seen in the increasing numbers of air miles for our food and declining air quality in places like China where many manufactured goods are produced.
Corporations Power is being concentrated
"ruling the world" ahead of governments because there is a lot of power and money invested by them due to globalisation.
Weak economies can be swamped
With products, ruining local markets. In Kampala in Uganda the dumping of cheap clothes donated to charity decimated the textile industry.
Technological development
Globalisation and free trade help in sharing of information and technology. This helps most of the poorer nation's progress at the same speed as the rich industrialised nations.
Specialisation of countries in one or 2 single products
Makes them particularly vulnerable to changes in the market price. If the price falls the country loses its source of income.
Free trade
Allows nations and economies to specialise, producing higher quality goods at better prices. If a country, for example, has large oil reserves but little land that's suitable for farming, it can focus on oil production while importing fresh food from abroad.
Extinction of languages
The dominant language of business is English putting some languages under threat
Free movement of labour
If a country has too few jobs and too many workers, people can easily move to markets in which the job market is better. An excellent example of free movement between countries can be seen in the European Union, particularly the Schengen Area.
Labour "Gaps"
Free movement of labour allows economies to fill vacancies that exist in their labour markets. For example, the United Kingdom has hired nurses from India to fill positions in its public hospitals that were previously empty due to local labour shortages.
Smaller, less wealthy countries
Find it difficult to compete with wealthier counterparts in a free trade system.
Trading Blocs
Undermine the idea of free trade by imposing tariffs on those outside the bloc
Have been major beneficiaries of globalisation and free trade seeing people in the Asian Tigers, MINT and BRICS countries lifted out of poverty and standards of living rise.