Globalisation: Economic & Political Causes

• Globalisation is the increasing interdependence between countries through flows of capital,trade, goods and services, culture, and ideas
• LEDCs are more present in global markets whilst MEDCs become more interdependent, increasing globalisation

Economic Causes

• Transnational companies(TNCs) have increased in volume and Influence. Many TNCs have incomes higher than GDPs of countries.
• Online purchasing,stocks traded across countries, and Foreign Direct Investment(FDI) are becoming more common between countries.
• Financial businesses trade currencies in large amounts to make profit.

Political Causes

• Trade blocs (e.g. NAFTA, EU) have become more influential and have reduced trade tariffs and protectionist measures.
• International Governmental Organisations(IGOs) harmonize economies and promote democratic ideology.
• Political views are expressed in worldwide media outlets(e.g BBC, CNN, FOX).

Migration

• International immigration creates family networks across the globe that lead to the spread of culture and finance through remittance.
• International tourism has increased because more people can travel abroad due to lowered transport costs.

Flow of Commodities

• Goods can easily be imported increasing interdependence(e.g. UK bottled water imported from Fiji(10,000 miles away)
• Manufactured goods has increased in volume due to low-cost countries like Bangladesh and Vietnam.

Cultural

• Americanisation and Westernisation of other, often developing, parts of the world.

Technology

• The Internet has rapidly allowed the spread of information and knowledge
• Social networking sites have become very popular; Facebook had 1.5 billion users in 2015 and allows the spread of culture and opportunities for migration and tourism.
• Server farms exist currently(e.g Microsoft's data centre in Washington) which store substantial amounts of data

Types of Globalisation

• Transnational corporations(TNCs) trade products internationally through outsourcing and offshoring for lower costs.
• Industries have moved to developing countries to save money on labour.
• Trade blocs create economic integration and promotes development, and also boosts income from companies overseas.
• Global transactions of money; buying something shipped from china.
• Governments form trade deals and trade blocs in order to increase connections to trade.
• Western democracies influence political growth such a as the development of market economies in former communist states.
• International organisations harmonize national economies and political relations (e.g. the UN).
• International immigration is creating multicultural societies where people share and adopt cultures
• Social networking has revolutionized human connections due to being able to interact with people globally and access international info.
• Global NGOs and charities are involved in improving education and health
• Lengthening of connections - travel further and goods are brought in further away.
• Deepening of connections - connections are penetrating more aspects of life in depth.
• Connections occur at a faster speed - people can talk in real time from any place.

Interdependence

• International political issues require countries cooperation for solutions, but issues must have unanimous decisions from nations.
• Countries rely on others to intervene during political unrest and prevent ethnic cleansing.
• Countries are dependent on the flows of labour, products, and services to grow their economy.
• Migration has caused social interdependence by creating diasporas (groups of migrants of the same origin living in another country).
• Countries rely on each other for leisure activities like TV programs - cultural, social and economic integration e.g. TV program sold to other countries making money

Increasing Globalisation

19th and 20th Century

• Steam power in the 1800s. Britain led the world, moving goods and armies quickly into key areas.
• Jet aircraft- More efficient have allowed goods to be transported quickly. Increased competition has led to easier travel abroad.
• Containerisation - The transport of goods is extremely important to the global economy as it allows businesses and consumers to lower the costs of transport.
• Telegraph - Cables across the Atlantic allowed for instant communication and revolutionised businesses.
• Telephones and Mobile use - Smartphones allow for easier global communication.
• Broadband and fibre optics - Since the 90's huge data can be transferred quickly through cables along the ocean floor providing accelerated faster speeds for homes.
• GPS - Satellites allow companies to track goods across the world which lead to more google maps.
• Internet - 40% of the population can access the internet where through social media has rapidly spread spread of news, opinions, and knowledge.

Dimensions of Globalisation

• When countries share things with each other, it's known as a flow. Things flowing from one country to another are physical or can be ideas and concepts.
• Flows - capital, labour, products, services and information. These are the dimensions of globalization that make it exist.
• Capital flows - the movement of money for investment trade and business production.
• Labour flows - the movement of people who move to work in another country.
• Product flows - the movement of physicals goods from one country to another.
• Services flows - 'footloose' industries that can locate anywhere. Services can be produced in a different country to where they are received(international call centres).
• Information flows - of any type can flow from one place to another.

Decision Making Influences Globalisation

• Switched-off areas are excluded from global flows so those countries are left behind.
• Landlocked countries can't trade, so they rely on neighbours to travel through while countries' political agenda may limit flows,
• LEDCs countries cannot invest in ports, infrastructure, incentives,etc while those with instability or weak currencies will deter I&B.
• Poor fertility of land, mountainous or arid conditions can reduce a country's ability to produce a commodity for trade.
• Countries are vulnerable to climate change leading to unfavourable conditions .
• Terrorism or active conflict can be detrimental to connectivity, and corruption within the government means lost investment.
• Some countries see global flows a threat cause import raw materials and migrant create tensions
• IGOs aim to enable switched off countries to be more globalised.
• IMF - International Monetary Fund loans money to poorer developing nations whilst opening their markets which leads to privatisation
• IMF is a hinderance as LEDCs countries fall into debit and industries privatised as profits leave countries with country cutting in education hurting countries economy
• World bank similar to IMF loans money to developers limiting government and instead makes debts.
• WTO - World Trade Organisation aims to trade by removing tariffs , subsidies and quotas.
• EU and USA have implemented protectionist measures preventing equal opportunities to trade

Free Market Liberalisation

• This is a strong governance model associated with the policies by Ronald Reagan in the US and Thatcher in the UK who believed the government intervention in markets would hinder.
• Market liberalization deregulated the banking and financial sectors which led to the rise of London.

Privatisation

• In the UK prior to the 1980's important assets like railways were owned by the UK. Thatcher privatized these industries allowed the government to raise, but critics say this has compromised quality of services leading to negatively affecting consumers.

Encouraging Business Startups

• Incentives are provided like constructs to encourage business. Beginning Sunday trading attracted businesses like Disney to establish shops due to high opportunities.

FDI - Foreign Direct Investment

• Increase economic or industrial activity within a country.
• Offshoring : TNCs set production facilitate in developing countries that have work forces.
• Foreign Merger - TNCs from different countries form one larger company.
• Foreign Acquisition - Often, another company from abroad is acquired possibly due to localjob loss
• Transfer pricing: TNCs sometimes direct profit to tax heavens.
• Limit governments which:
• Government restricting flow information through the internet by sensoring limiting culture .
• Limiting migration. Trade protection and subides by tariffs.

Trade blocs

• Governments may sign agreements to trade nations reducing restrictions of flow

Benefits of Trade Blocs

• Larger potential market to sell to larger potential revenue while serving for more demand increasing volume of production
• Reliabe trade in esstenial materials like better pathways for imports.

Disadvantages of Trade Blocs

• Intrest of trade bloc within countries are foreigned excluding them to find hard.
• Lack of oppurtinity damaging competition.
• For example NAFTA doesnt guarentee treatment of all countries.

Trading restrictions

• Tariffs forimporting and exporting.
• Quotas for importing and requirements
• Country importing and exports.
• Countries enter trade agreements decreasing cost.
• Trade agreements remove certain restrictions.

Uneven Globalisation

• KOF index measure for political, economic and social
• At keamy is measures of globalised cites consider communication, technology and political factors.

Political

• Membership of international organisationsnumber of foreign embassies
• Participation in international traits
• Economic - flows of goods
• Service in capital
• flows to fdi
• Social- Personal contact through international
• Phone calls tour numbers and numbers users per 1000
• Cultural proximity thro number of macdonalads

At Keanery Index

• Economic integrationimports and service
• Personel contacttraffic/tourism
• remittatnices
• Techonological internet users +secure sever

Globalisation Gaps

• Income has risen in contiends but african have less - Increase in euroth america in poor.
• Income in capata in Asia has risen japan china

Winners and Losers

• TNCs = companies operating across multiple countries
• Have there headquarters prouction sales.
• Companies provide make raw good product services.
• HQ for big desicons , meetings with global organisations
• Implicatons TNC bad reptuations.
• Natrucal Distansters
• Outsoucing to save money and time.
• Manufactures companies that better taxes.
• The adaptatoin to customers good

Migration

• Urban pull factoris more job than rural due to businesses an tcns
• Better services.

Internattional migration

• Elite very whaelthy.
• Economic skilled but low income

Culture and Social Globalisation

• Language, tradtions, diet can influenc by Media and Social Media and Tnc.

Culteral Erosin

• Being exposed to change reduciton for culture of younge.
• The French goverment attempted to control by foreign language is 40 per cent french.
• China the great firewall of china prevents unfavouable infromtoain.
• Iran banned barbie dollls wasn appropriate.
• Localism reduction local produce.

Explore the driving forces behind globalization. This covers the impact of TNCs, online purchasing, and FDI. It also looks at the role of trade blocs and international organizations in fostering global interdependence.