Global Systems and Governance

• These notes cover global systems, governance, and related topics.

Key Global Organizations

• World Bank: Supports growth in developing countries through development projects.
• IMF (International Monetary Fund): Stabilizes loans in both developed and developing countries to support economic stability.
• WTO (World Trade Organization): Manages trade rules and resolves disputes between countries, aiming to prevent business exploitation. Has 160 members with 23 joining, 117 of whom are developing countries, and oversees 97% of global trade among its members.
• FAO (Food and Agriculture Organization): Promotes agricultural growth by negotiating fairer trade agreements between LICs and HICs.
• UN (United Nations): Established after WWII to promote international security and cooperation, consisting of 193 member states.
• UNDP (UN Development Programme): Works in 170 countries to eradicate poverty and reduce inequality, focusing on millennium development goals and sustainable development goals.

UN Issues

• UN Veto Power: The five permanent members of the UN Security Council can veto any "substantive" resolution, an issue highlighted when Russia vetoed a resolution to stop the war in Ukraine in February 2022.
• UN Peacekeepers: Despite having 100,000 peacekeeping forces, missions have been ineffective, such as the failure to prevent the deaths of 500,000 civilians in the Somalia civil war and a delayed response in the DR of Congo in 2014.

Globalisation Approaches

• Bottom-up Approach: Used by the World Bank, focusing on helping local people to progress and stabilize the country's economy.
• Top-down Approach: Used by the IMF, stabilizing economies by working with governments, with the expectation that benefits will reach local people.

Globalisation Concepts

• Tragedy of the Commons: Individual self-interest can lead to the exploitation of shared resources.
• Interdependence: Mutual reliance between two or more groups or countries.
• Trade Blocs: Groups promoting trade activities and liberalization by reducing tariffs within member countries.
• Financial Systems: Global borrowing and investing, with banks operating as large international institutions.
• Transport and Communications: Faster transportation, increased migration, and fiber optic cables enabling rapid information and money transfer.
• Security: Stricter regulations upon country entry, systems to limit conflicts, and organizations like the UN to protect civilians and ensure security.
• Management and Information: Global supply chains, outsourcing, and offshoring to maximize profits.
• New Technologies: Advancements facilitating flows of information, money, and migration.
• Ebbs and Flows: Ebbs refer to the outgoing of labor, while flows refer to the incoming of goods.
• Dimensions: Globalisation includes capital, labour, information, products and services (CLIPS).
• Global Marketing: Marketing strategies on a global scale
• Shrinking World: Concept of the world feeling smaller due to interconnectedness.

Containerisation

• Malcolm McLean introduced containerisation in 1956.
• Reduced trade time between Europe and Australia from 70 to 30 days.
• Led to the decline of some ports (e.g., Liverpool) and the rise of others (e.g., Felixstowe).
• Some canals require widening to accommodate larger container ships (e.g., Panama Canal expansion costing £5 billion in 2006).

Foreign Direct Investment (FDI) and Migration

• 52% of FDI is in the developed world due to market size, stability, and access to services.
• Global FDI amounts to $1.3 trillion.
• Lee's Migration Model: Illustrates obstacles, push, and pull factors of migration.
• Pull Factors (Crewe): Skill shortages, minimum wage, $30,000 annual GDP per head in 2006, opportunity to earn 4x more than in Poland.
• Push Factors (Poland): 18.2% unemployment rate, $13,000 annual GDP per head in 2006 (half of the UK).

Historical Context

• In 1954, 95% of manufacturing was in industrialized economies of Western Europe, North America, and Japan.
• Global international migrants reached 232 million in 2013.
• UK immigration increased sixfold from the 1990s to the 2010s, reaching 232,000.
• The Assisted Passenger Migration Scheme in 1945 offered UK citizens £10 boat travel to Australia with promised jobs and housing.

Trade and Finance

• Protectionism: Government policies restricting international trade to protect local businesses.
• Remittance Payments: Payments sent by economic migrants to their home countries.
• Economic Leakages: Money transferred out of the country where it is made.
• Fair Trade vs. Free Trade: Fair trade aims to guarantee prices and improve conditions, while free trade is based on market prices; fair Trade requires a subscription which is the reinvested into the respective country.

Banana Trade

• 30% of UK bananas sold are fair trade.
• Bananas are grown in hot, rainy climates like India, Brazil, and Africa with Asia producing 17% of all bananas with India being the biggest producer but also biggest consumer.
• 20 million tonnes are exported annually, 90% from South America.
• Dominated by TNCs like Chiquita, Dole, and Del Monte, producing 60% of bananas for export using vertical and horizontal farming.
• TNCs previously controlled 80% but fell to 60% in the late 2000s.
• Banana production generates 2 tonnes of waste for every 1 tonne produced.
• Bananas provide 60% of the calorie intake in Uganda.
• Provides employment for 300,000 people in the Philippine industry and supports economies like Ecuador and Costa Rica.
• Low wages and poor working conditions, such as $400 monthly minimum wage in Ecuador and child labor in Honduras.
• Banana Wars: Arose from preferential treatment for Caribbean banana exports to Europe, challenged by the US, impacting livelihoods and leading to retaliatory tariffs.

Global Trade

• Skilled Chinese workers earn $600 monthly, influencing manufacturing shifts to countries like Ethiopia.
• Apple shareholders benefit from Chinese sales.
• EU imposes tariffs on imports that could be grown within the EU.
• Ten nations, including China, USA, Germany, and Japan, account for over half of global trade.
• World trade and global GDP have risen 2% annually since 1945, with a pause during the 2008/2009 financial crisis.

Deglobalisation

• Global flows of long-term investment halved from 2016-19.
• FDI from China to America decreased from 30billionannuallyto30 billion annually to 30billionannuallyto5 billion.

Transnational Corporations (TNCs)

• Branches are vulnerable to sudden changes due to a lack of decision-making power.
• Average wages from TNCs are 49% higher than local firms, but TNCs may undermine the UN's fair trade efforts.
• Outsourcing: Hiring workers in other countries for specific tasks.
• Offshoring: Relocating operations to countries with lower pay rates and available skills.
• BRIC: Brazil, Russia, India, China.
• MINT: Mexico, Indonesia, Nigeria, Turkey.
• Glocalisation: Adapting global products to suit local conditions.

Development Goals and Climate Agreements

• Millennium Development Goals: Eight goals set by the UN by 2015, including eradicating poverty, reducing child mortality, and combating HIV, with varying degrees of success across countries.
• Sustainable Development Goals: Seventeen goals set by the UN in 2015 to reduce disparities by 2030, including zero hunger, quality education, climate action, and responsible production and consumption.
• Agenda 21: A 1992 UN program for environmentally and socially sustainable development in the 21st century, adopted by 178 governments.
• UN Paris Climate Summit (2015): A legally binding climate deal set to come into force in 2020, involving pledges to reduce greenhouse gas emissions and provide financial aid to developing countries, with review mechanisms every five years.
• IPCC (Intergovernmental Panel on Climate Change): A UN advisory panel informing climate change policy through global conferences and agreements.

Impact of Globalisation on Flows

• Capital investment has shifted from domestic to international (FDI increased from 400billionin1996to400 billion in 1996 to 400billionin1996to15 trillion in 2016).
• Manufacturing has declined in developed countries due to cheaper labor abroad.
• Services have become global industries due to technology and deregulation of financial markets.
• International migration has increased, leading to shared culture and ideas.

Effects of Globalisation

• Time-Space Compression: The rapid innovation of communication and transportation technologies transforms perceptions of space and time.
• Transport and air travel costs have dropped by 30% and 88% respectively.
• Consumption is still concentrated in HICs, but NICs are demanding similar consumer products.
• Temporary contracts have become common.
• Interdependence can prevent war
• NATO - formed for security

Labour

• Indians in the UAE make up 30% of the workforce and send £15 billion in remittances to India.
• Exploitation of workers is a concern, with many deaths recorded during construction for the 2022 World Cup.
• Remittances contribute significantly to GDP in countries like Tajikistan.
• Increase after hazards with 11 million sent to Fiji after cyclone Winston

Trade Policies and Agreements

• Structural Adjustment Policy: Trade liberalization, promoting agricultural commodities, privatization, and charging for basic services.
• Bilateral Aid: Aid given directly from one country to another.
• Bilateral Trade: Trade between two countries.
• Multilateral Trade: Trade between multiple countries.
• Competitive Advantage: Gained by offering greater customer value through lower prices or more benefits.
• Trans-Pacific Partnership (2015): A trade deal of 12 Pacific nations, with the USA later pulling out.
• Export volume has increased eightfold since the 1980s.
• Disadvantages: Exploitation, environmental deregulation, protectionism, and stunted growth.
• WTO's trade rules: No preferential access, promote free trade, fair competition, and predictability.

Trade Barriers

• Import licenses, quotas, voluntary export restraints, and restrictions on goods produced with child labor.
• Custom Unions: Impose tariffs on imports from outside member countries.
• Common Markets: Allow free movement of labor and capital (e.g., EU).
• ASEAN: Association of Southeast Asian Nations, also agree to ban nuclear weapons.
• SDT (Special and Differential Treatment): Let least developed countries bypass developed countries' tariffs such as EBA

Free Trade vs. Fair Trade

• Free Trade: increases nations economic growth focusing on trade policies internationally, but may negatively impact marginalised people and the environment.
• Fair Trade: to empower marginalised people and improve quality of life and interfere with free marker

Global Commons and Governance

• High Seas Treaty 2023: aims to help place 30% of seas into protected areas by 2030 currently only 1.2.
• Global Governance: Integration aimed at negotiating responses to problems affecting multiple states or regions.
• Global issues are also in the Atmosphere.
• Benefits of Globalisation: Faster economic growth, quicker access to technology, cheaper imports, and jobs in developing countries.
• Disadvantages of Globalisation: Environmental damage, exploitation of developing countries, interdependence, loss of culture, and reduced government power.