Global Systems and Governance
Bananas as a commodity and Fairtrade
In terms of world trade in agricultural produce, it comes fifth.
Bananas are the world’s most popular fruit, tend to be grown in lower latitudes with the tropical conditions essential for growth.
Many HDEs are entirely reliant on imports so without global food systems, this is impossible.
In the UK, bananas are cheaper than apples which are home-grown.
Bananas may be used as an incentive for consumers to use their stores, with supermarkets selling them as loss leaders.
A short shelf life, comparison websites and price match promises keep the price for bananas artificially low.
The buying power of supermarkets means they are able to negotiate the best possible price from farmers and plantations.
Fairtrade bananas have an increasing representation on shelves (1 in 3, in 2018)
Many of them are grown on small scale farms and sold via cooperatives.
Despite being several pence more expensive than regular bananas.
A shift in consumer awareness.
This is encouraged by major companies such as Cadbury’s and Nestle.
Fairtrade aims to pay farmers a guarantee minimum price for their products, as well as fair terms of trade and an additional development premium for reinvestment in the local community.
Able to develop infrastructure, schools, health clinics.
1210 Fairtrade certified producers organisation in 74 countries benefitting around 6 million people.
Unreasonable pressures of UK supermarkets on suppliers to keep prices low creates unethical cultivation of bananas.
Such as removal of natural vegetation for plantations in Latin America, heavily treated with pesticides.
Workers are paid little , living and working in poor conditions.
TNCs agave dominated the industry for years as huge capital was required to develop a mass reliable harvest in climates where prior colonialism there was no tradition of exports.
LArge areas of land kept costs lower, and spare land for when soils are exhausted due to the monoculture.
A banana republic refers to a country whose economy is based on one or few commodities. Pay is low as workers have limited alternatives.
Politically, countries are intrinsically unstable (Guatemala and Honduras)., corrupt government are indebted to large companies.
It is shifting away from TNCs, despite in the early 2000s, 5 companies still controlled 70% of the banana export market worldwide.
Consumer pressure (and Fairtrade) has resulted in supermarkets purchase from smaller wholesaler or directly from producers.
Raise awareness of trade injustices and imbalances of power.
The El Guabo Association of Small Banana Producers
- Formed in 1997 in SW Ecuador.
- One of the largest producers of Fairtrade bananas, exporting around 30,000 boxes weekly to USA and Europe.
- Prior to Fairtrade , the 339 family farms sold their bananas throguh intermediaries at a low price, meaning they could not cover basic costs, let alone a quality of life outside this.
Economic
- Stablised incomes and improvements to standards of living.
- Guaranteed fair wage and long-term supply contract, including direct access to new and international markets.
- Additional capital raised for reinvestment (washer tanks)
- Migrant labourers are helped (assistance to buy their own land)
Social
- Healthcare benefits
- Provision of medical and educational supplies.
- Social security system (retirements)
- Marginalised groups (HIV/AIDS sufferers) helped find employment.
Globalisation
A process by which national economies, societies and cultures have become increasingly integrated through global network of trade, communication and immigration.
Dimensions of globalisation.
Flows of Information
Cheap, reliable instantaneous communication means it can be shared at unprecedented levels.
Highly developed economies invest in less developed economies to take advantage of cheaper production costs.
Flows of Products and Labour
Global transport systems have never been cheaper or more efficient in moving people or goods.
High speed rail networks such as HS1, and containerisation have revolutionised travel.
Flows of Services
These follow the flows of investment and people and products.
Marketing is now globalised and uses internarional strategies to deliver intercontinental imagery.
Factors affecting Globalisation
New tech, communications and information systems
Mobile phones are one of the most important technologies for LDEs. As they connect individuals in ways that before were not possible.
Global Financial Systems
Banks operate across the world, linked together by vital transmission systems that allow lending and flows of capital.
Some believe the 2007 credit squeeze, and subsequent 2008 global banking crisis were triggered by the collapse of US house prices.
Transport Systems
The world has never been more accessible
A global transport network allows for the movement of people and goods across vast distances.
There are new opportunities and new threats without the friction of time and space.
Security
Cybersecuirty is a larger issue all due to a reliance on information systems in all walks of life
Trade Agreements
Without rules in the global trade, countries would resists some foreign imports whilst possibly favouring others.
Containerisation has meant that heavy goods can be transported around the world, distances never reachable prior.
Unequal flows
Some countries give and are given more.
Global Commons
Resource domains outside political and national reach.
Supra-national transcending conintental and national boundaries.
- Antartica
- High Seas
- Outer Space
- Atmosphere
- Cyberspace
Principle of Common Heritage
Guides international law.
Some localities belong to all humanity, with the resources available to everyone.
Tragedy of the Global Commons
Overexploitation of resources by individuals results, out of self-interest threatens the global commons, optimising for one in the short term does not compensate for all in the long term.
Evident in CO2 emissions.
Apart from the sea close to land which is an exclusive economic zone, the high seas are unowned.
Countries can use the resources, if one country takes more profits increase, which does not benefit other countries.
Can set trends.
UN Convention on the law of the Sea
UN Framework Convention on climate change.
The Plastic Gyre Problem
The Antarctica Treaty
Signed in 1959 by 12 countries studying in and around Antarctica.
Article I: Antarctic shall be used for peaceful purposes only
Article II: Freedom of scientific investigation in Antarctica and cooperation until the end will continue
Article III: Scientific observations and results from Antarctica shall be exchanged and made freely available,
Argentina, Australia, Chile, France, NZ, Norway, and the UK have overlapping territorial claims.
The US and Russia maintain a ‘basis of claim’
This act explicitly states that no new claim to territorial sovereignty shall be asserted whilst the Treaty is in force.
The high seas are threatened by accumulations of plastic, concentrated where currents meet.
They enter the oceans via industrial rivers, spilled transport, and storm drains.
Some nations are more culpable of this problem than others.
The North Pacific Gyre is the largest, lying between Hawaiii and Japan (3.5 million tonnes of mainly plastic waste).
Increased populations= increased demand for plastic consumption.
Consumption of plastic micro beads by small marine creatures such as fish , accumulating in the food chain.
This means that human food is increasingly tested for plastic content.
The ingestion of plastic for other marine creatures results. In the prevention of adequate absorption of nutrients, and can limit them eating further.
2009 Study of Leatherback Turtles
- Critically endangered
- 1/3 of them had plastic in their systems.
Management
The US, UK and a number of EU countries have all made progress in banning, or calling or the ban of micro plastics- mainly found in cosmetic products.
This already means that this market is narrowed to nations who disposable afford items such as these.
TNCs such as Neutrogena phasing out plastics (consumer reaction)
NGO Ocean Conservancy monitor oceans, raising awareness on emerging issues such as ocean acidification.
Ocean Conservancy collaborated with Norton Point making sunglasses out of recycled plastics.
This encourages beach cleaning as well as raising profits for Ocean Conservancy.
UN global campaigning seek to eliminate major plastic sources, with limited direct manipulation authority.
They set moral precedent.
Indonesia, Uruguay and Costa Rica have all pledged the application of reduction methods
These have coastlines.
They are not necessarily highly developed.
The oceans also face problems from whaling.
The International Whaling Commission has protected keys marine species , alongside the 1982 global ban on commercial whaling.
Japan use the excuse of ‘scientific study’ to continue hunting whales.
Management of these issues tend to only be initiated at ‘breaking point’.
Antarctica
Most of Antarctica is within the Arctic Circle.
Continent is fringed with ice shelves, where ice forms over the ocean.
Mountainous and rocky terrain is almost entirely covered in glacial ice, with an average height 2,300m above sea level.
Antarctic Convergence Zone is approx 32-48km wide, varying in latitude seasonally.
Upwelling currents are very rich in marine productivity, especially Antarctic krill.
West wind drift, water flows eastward due to westerly winds.
Factors affecting climate in Antarctica
- Latitude: Further from equator, the lower the angle that the sun is in the sky, giving less heat.
- Distance from sea: land warms up and cools down more quickly than the sea, the more inland, the warmer.
- Altitide: The higher you go, the colder, it is the highest continent.
- Wind Direction: Areas can be sheltered by the vast mountain ranges such as the Transantarctic Mountains.
- Albedo: light snow covered surfaces reflect the heat, colder than areas that are urbanised or vegetation covered.
Threats
Climate Change
East Antarctica’s Ice sheet is thickening, greater precipitation only slows sea level rise by a tenth of a millimetre a year.
West Antarctica’s Ice sheet is more vulnerable, this glacial ice slide into the sea will contribute a 5m rise.
Rainwater becomes more carbonic leading to ocean acidification.
Fishing
Nineteenth century saw Norwegian, British and American exploitation of blue whales for oil and baleen, then for meat and bonemeal.
Due to dangerously low stocks, commercial whaling ceased mainly in 1985.
Fishing has replaced whaling. Japanese fishing of krill.
Fishing ships directly destroy marine habitats and contaminate water.
Krill oil capsules can retail for as much as £40 for 100 capsules.
Krill underpins virtually the whole Antarctic food system.
Research
30 countries have research bases in Antarctica , including the UK (British Antarctic Survey)
Vital for research into climate change where ice cores have been extracted to include ice up to 400,000 years old.
Energy- generating foods are required due tot he living conditions, all of which has to be transported.
Although well briefed, scientists still disturb wildlife and the wider environment through vehicle exhausts, construction of buildings and other facilities such as fuel storage.
Mineral Resources
Deposits include coal, oil manganese titanium, gold and silver.
Sizeable deposits easy to reach are rare, and not economically viable to mine.
Any mineral exploitation has to overcome an extensively hostile environment.
No commercial mining since , but future demands is likely to pressure this.
In the 1970s/80s, members of the Antarctic Treaty were formulating nw minerals convention to allow future exploration.
This convention was adoption in 1988 but did not come into force as it was not ratified by all members.
Tourism
Glacial landscapes, wildlife, and historic sites have caused numbers to rise from less than 2000 annually in the 1980s to 27,000 in 2011-12.
Mostly ship-borne, visiting on small cruise ships
The Scott Polar Institute however found that tourists mainly do protect the environment, with more waste being produced by scientific research,
Governance
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McLuhan Global Village where free rein is given to economic and information flows.
International trade gives rise to a ‘world economy’ which prices, supply and demand are affected by global events.
2008 Global financial crisis slowed process of globalisation down, with recovery hit by setbacks in international conflict.
Flows of Capital
The movement of money for the purpose of investment, trade or to produce goods/services.
Foreign Direct Investment
Made mainly by TNCs based in one country, into the physical capital or assets of foreign enterprises.
- Setting up a subsidiary
- Acquire shares
- Mergers or joint ventures
Repatriation of Profits
TNCs investing in overseas production normally take any profit made from that investment back to their home country head-quarters, called economic leakage.
Aid
Provided through the UN (multilateral) , or bilaterally by one government to another. Aid can be supplied in the form of financial support or in the form of technology and expertise.
Remittance Payments
Transfers of money made by foreign workers to family in their home country. Remittances are becoming increasingly improtant for developing countries,
Migration
Economic migrants
Refugees
Asylum seekers
Evidence of Globalisation
Economic
Political
Cultural
Social
TNCs trade products internationally, using international outsourcing and offshoring to lower costs.
Industries move to developing countries saving money Ono labour, which brings economic growth there.
Trade Blocs create economic integration
Global transactions such as shipping costs.
Intergovernmental bodies and blocs, trade or defence,
Western democracy on eastern economies conversion from strict state intervention to laissez faire.
Deregulation policies especially within trade blocs.
Decline of communism.
Insurance and promotion of international cooperation and global peace, unity against poverty.
Media allows for cultural recognition, and transport allows for cultural experiences.
Greater international awareness of cultural issues, such as deforestation on tribal communities.
Threat of cultural homogenisation with westernisation
Impact on local sense of place, lost to larger international brands and cultures.
Multicultural societies
Ease of social interaction across physical boundaries
International charities, NGOs and governing bodies protect welfare such as the WHO.
Emergence of global criminal networks
Information and intelligence sharing.
Increased immigration (net record in 2022 of 606k UK), proposes threat to nationalisation of services.
2022 UK policy to limit family visas of international students from 2024.
Between core and periphery regions, the IMF and World Bank.
Migration
People moved from periphery locations to the core locations contributing to the economy throguh taaxess and living costs.
Loans
Can be through intermediateries such as the World Bank and IMF to periphery regions, from intermediaries to core locations or from intermediaries to core locations.
3-4% of the world’s population are international migrants.
14% HIC population international migrants
<2% LIC’s population international migrants.
Importance of international migrants on the NHS- only 63% tractors trained in the UK.
Overpopulation of developed countries and exploitation in high and low income countries for unskilled workers.
Glocalisation- marketing is slightly altered to appeal to local markets, such as KitKat in Japan.
TNCs invest profits for greater interest
Buying and selling of stocks from global corporations
Countries invest and take loans. From financial institutions such as the World Bank.
High speed rail
Economies of scale- increasing profit by producing a larger quantity of products (reducing manufacturing costs)
Global supply chains- organised management of product flows from resourcing to consumption.
Outsourcing- Hiring of other companies to complete tasks (advertising or call centres)
Offshoring- relocating company processes abroad
Restrictions include tariffs (a tax for importing and exporting goods), non tariff barriers (quotas) and outright bans.
Benefits of Unequal Flows
- Increased workforce (44% of cleaning industry in London is MEG)
- Ties to diaspora regions
- Remittances
- Ethically fleeing from conflict and poverty.
- FDI can improve quality of life
Problems of Unequal Flows
- Brain drain
- Dependency on migrant workers (Brexit)
- Overpopulation (inadequacy of services)
- Tensions of ‘job stealing’, racism, xenophobia
- Dependence on remittances.
- Dependence on aid
- Exploitation of workers
- Privatisation (concentration of profits)
- Cultural homogenisation
- Gaddafi (Libya dictator) funded IRA separatist military operations.
Global Governance
Collaboration of nations in matters of global significance.
Transnational Corporations
Linkages
Between countries and companies to expand the company.
Through the FDI benefitting the host country as it improves the employment of the country as well as the input of tax.
Mergers companies join to form one larger company
Acquisitions A TNC buys another company to expand,
Through integration
Horizontal taking ownership of a company often in a similar industry.
Vertical taking ownership of part of the supply chain,
Production
Economies of scale.
Global supply chains
Outsourcing such as subcontracting.
Offshoring such as labour movements.
Trading and Marketing Products
Consumption is associatared with HICs but also moving to NEEs
Take advantage of global marketing
- Trademark v Glocalisation
Climate change, immigration, famine and conflicts are all international issues due to globalisation.
International Trade
Trade and Investments in a Globalised World
Trade is increasing volume (only decreased during the Global Financial Crisis 2008)
Increased from US$8 trillion in 2006 to US$11 trillion in 2016
FDI has also risen from $400 billion to $1500 billion in 20 years.
Investments are now mainly concerned with HICs investing in LICs
Low income countries are also trading more, but is slowest.
developing countries share of world merchandise trade is 41%.
Trade Blocs have certain advantages over other countries such as reduced tariffs or higher quotas.
Access to Markets
Trade Agreements
Relationships with countries are created especially with lower income countries as they are able to trade for lower prices
Wealth
Countires with less wealth have less access to markets
- HICs can afford to pay for higher tariffs on exports and imports, as well as affording FDI.
Norms in Global Governance
Such as gender equality, however this is not able to be universally enforced via law.
Laws in Global Governance
Maintenance of global systems as failure to comply can result in prosecution or ostracisation.
- UN Declaration of Human Rights
Global Institutions
Oversee maintenance of global systems
Aim for global economic, social and environmental stability.
Some institutions such as the G7 are unrepresentative of all countries and criticisms include them only advancing intrinsic aims.
UN Security Council veto, institutions and treaties are voluntary.