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Global Systems and Governance - Coggle Diagram
Global Systems and Governance
Globalisation
the process of the worlds economies, political systems and cultures becoming interconnected - started to accelerate in 1980s
no globalisation = individualism but complete globalisation = world acts like one community
the five flows (
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andas
S
nort
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Information
such as financial news or current event data e.g. earthquake can be spread across very easily - aspects such as email or social media mean large amounts of data can be exchanged instantly across the globe which means people living in different countries can work together
increasing flows = more interconnected e.g. people can learn about different cultures without leaving their country
Capital
Money that is invested, FDI has increased thanks to advancements in ICT - historically capital was invested within its country
increasing flows of capital = more interconnected e.g. most countries economies are dependant on other countries investments
Products
Historically products were manufactured and sold in same country although cheaper labour has meant companies now offshore or outsource their production then import products to where they are sold
as a result international trade of manufactured goods is increasing
Changing flows of products make the world more interconnected e.g. many of the manufactured goods in the UK are made elsewhere
Services
services are economic activities that are not based around manufactured goods - they are either low level (customer services) or high level (financial services that are based in developed countries)
Improvements in ICT have allowed services to become global industries
Labour
Flows of people who participate in the workforce from one country to another - essentially migration and the biggest is asia to Europe 20 million
more people are moving overseas - international migration increasing year on year
some migrants are highly skilled looking for better wages and working conditions but some migrants are low skilled workers due to unemployment in their own country
increasing flows of people create interconnectedness through bringing their culture where they migrate to
marketing is now becoming global as businesses us eglobal marketing to target masses and create economies of scale - can create higher brand awareness but marketing still needs to be adapted locally e.g. different cultures and regulation
Globalisation is a result of new system, technology and relationships
financial systems govern the flow of capital e.g. investment banks raise capital to invest globally, in 1980 de regulation occurred which allowed more access to countries as well as allowing them to invest in more companies. developments in ICT also allowed greater access to information
Trade agreements remove barriers to trade
Trade is primarily regulated by governments who use tariffs and quotas to regulate the volume of goods entering a country, the WTO govern the world trade and countries can enter into trade agreements such as NAFTA that reduce barriers such as quotas so both countries benefit
Transport and communications have improved global business
improved transportation systems e.g. aviation have allowed people to travel between countries easier than ever
containerisation has allowed goods to be transported easily and in great volume around the world.
communication satellites and optic fibre promote communication instantaneos in rural areas
Management and information systems have increased companies efficiency
new technology such as Enterprise resource planning has allowed companies to be very efficient EOS
By forming trade, this reduces war as countires become dependant
Production, EU and the USA dominate global exports such as Steel and Iron although there are some LICS such as Brail who are in the top 10 countries for exporters
in contrast to the telecom and office equipment exports which are dominated by emerging economies such as China
Consumption
There is a much higher demand for goods in HICs although in developing countries there is a high demand for aspects such as oil and fuel due to rapid industrialisation - in the least developed countries imports are low
Mcluhan said that the world has become a global village due to free reign of different flows
Global systems
Interdependence can occur because countries become dependant on each other socially economically, environmentally
economically - rely on each other for FDI
socially - flow of migration is crucial for some countries work forces
environmentally - countries may rely on others as the environment ids a global aspect e.g. climate change
politically - because of the worldwide political organisation - the UN stops war
Unequal Flows
Flows of people can create benefits and inequalities
people can move from countries with few jobs to countries with many jobs (undeveloped to developed)
people also tend to leave countries to escape war - these refuges tend to aim for the nearest safest country
those who move for economic reasons are not usually the poorest due to them having to pay for visas and living costs
it is easier for people of developed countries to migrate than people who are in less developed countries e.g. Japan has the most powerful passport because it has access to the most countries
Migrants can create economic growth due to them fufilling unwanted jobs or skilled jobs and they also create economic growth when remittance payments occur
However... unequal flows can create problems such as the brain drain through emigration , they are also vulnerable to working in dangerous conditions such as in qatar building world cup stadiums, unequal flows can also cause overpopulation
Unequal flows of capital
Majority of inflows are into LICs such as FDI, inflows into HICs are dominated by repatriation of profits
benefits include FDI which can spark economic growth through the multiplier effect as well as companies making use of the lower living cost to have cheap labour minimising costs, foreign aid can also build infrastructure
although, foreign aid can create dependency on remittance payments - dependency can also give governments little incentive to improve
FDI can also force local businesses out because they have superior technology
conflict between local people and businesses
Foreign aid can find its way to armed groups such as accusations that the US fund rebel groups in DR Congo
unequal flows of ideas
high income countries usually dictate how a country should be run, this is because HICs have more money and thus more power
for example, introducing deregulation in NEEs can promote free trade and developments however neoliberalism can be seen to increase financial crises and focus the concentration of wealth in few
benefits include
more developments - higher free trade
drawbacks include
concentration in few for wealth, more relaxed social and environmental laws, can lead to financial crash e.g. 2007/8
Unequal flow of technology
concentration of technology in some places can lead to rapid innovation for example in Silicone Valley they have developed innovations that provide worldwide benefits for healthcare
there are different flows to and from HICs to LICs such as manufacturing equipment ot LICs and the products such as telecom is exported from LIcs to HICs
Manufacturing technology can crate jobs in LICs, the trade agreements also strengthen between the HIC and LICs, create innovations in healthcare
However, the unequal flow of technology can also create inequalities and give the developed countries a clear competitive advantage over less developed countries, in addition, it is an injustice that the workers in LICs create the smartphones and receive so little
Unequal power relations caused by interdependance
more developed countries have more control, this can be seen in power relations and climate change as the more developed countries are the biggest contributors but are reluctant to change because it can harm their economy
in contrast, some of the poorest countries suffer the most
The IMF and the world bank govern the world's financial system and may attach conditional loans that include deregulation - these two organisations can be seen to reinforce unequal power relations
The WTO was created to reduce trade barriers however they are in fact widening the gap through supporting more HICs - this is achieved by underrepresentation of LICS as well as protection of HIC agriculture
International trade and access to markets
trade and investment in a globalised world
Volume - trade is occuring more than ever before - it temporarily decreased in 2008 financial crises
Pattern - Developed countries remain the biggest traders but emerging countries are catching up with china being the biggest exporter due to growth in manufacturing sector
More countries are opening themselves up to international trade by reducing barriers including
Trade blocs
Trade blocs are a group of countries in a trade agreements such as NAFTA which aims to increase the amount of free trade between the countries.
Trade blocs can usually be neighbouring countries but also be in the same industry e.g. oil trade bloc
Trade blocs include aspects such as reduced tariffs and higher quotas which benefit all involved
FDI is when a person, company or other group spends money in another country to generate a profit. Historically developed countries invested in other developed countries although this changes In general, countries with more money invest in countries with less in order to develop that country
Fair trade - Globalisation has left many vulnerable less developed countries open to exploitation, the small scale farmers can not compete with the TNC plantations and lead to them being paid much less therefore the fair trade foundation was set up in 1992 to give farmers a fair split
International trade is the import and export of goods around the world
Access to markets within international trade
access to markets is differential for different countries, access can be limited by trade barriers. Factors that can affect access to markets include the
wealth
, any
SDT or SEZ agreements
, Trade blocs
one example would be in the EU where they allow the lower developed countries reduced tariffs
Transnational corporations
These are companies that operate in 2 or more countries, they play an important role in the global economy with 80% of global trade being linked to them
TNCs can be politically powerful e.g. pressuring a country to create an SEZ. TNCs can spread culture e.g. mcdonalds bring western food and create jobs as well as bring in investment
Production and spatial distrubution
TNCs usually have a HQ in a developed city such as London. factories are often in areas with cheap labour and R&D facilities in areas with good supply of education
TNCS create a global supply chain that allows the to take advantage of economies of scale e.g. purchasing economies of scale. The TNC can also take advantage of cheap labour areas to reduce their labour costs
Linkages
TNCs can create links with other countries or between other companies.
When moving into international markets, a company may choose to use external growth such as mergers or acquisitions to achieve synergy as the other company may have a better understanding of the market in that country
TNCs can take advantage of offshoring or outsourcing
Most TNCs trade with HICs however there is a rapidly increasing demand for these products in emerging economies
Global Governance
global governance aims to regulate economic and political systems by setting up rules that companies and countries should abide by, and then monitoring whether the rules are followed and enforcing the rules by which a country can be taken to international court
institutions (or agencies) such as the UN or WTO are set up to provide growth and stability. There can be rules (that are binded by international agreements) and norms which should be followed
However, 1. Countries have to sign up voluntarily 2. it can be difficult to enforce the rules e.g. china claim south china sea and 3. it can be said that global institutions may act for political reasons
Inequalities and injustices
Loans provided by the IMF or the world bank may include SAPs or structural adjustment programmes
groups such as the G7 may only strengthen the power of the wealthiest countries
Members of security institutions can veto intervention e.g. syrian civil war
The global commons
The global commons are areas that do not belong to any particular country or organisation. Currently there are 4 global commons that includes; The high seas, Antarctica, Outer space and the atmosphere. The global commons ig governed by different international law created by different international bodies and NGOs want to protect the commons from exploitation
Pressures for the global commons
Although the global commons provide habitats for wildlife, they are also rich in resources that are very useful to humanity. Countries may feel they can exploit the commons as the costs are shared by everybody -
Tragedy of the global commons
Industrialisation and development are increasing the need for resources such as oil which the global commons are rich in. Industrialisation and development also pump co2 into the atmosphere and waste into the ocean (chemical waste)
New tech has made it easier to exploit these areas that were inaccessible before for example
the high seas
now face overfishing as well as the co2 that is pumped into atmosphere causing ocean acidification and rising ocean temp that can harm animals and seaweed which is an important carbon sink (178 million tonnes a year)
Protection
although every country has the right to use the commons to develop it must be sustainable which requires global cooperation
global institutions such as the Un have been set up and provided laws for the global commons and NGOs raise awareness for these issues. Although it can be hard to monitor as areas are huge and can not all be monitored e.g. ships displaying false flags in high seas to get away with overfishing
Globalisation Critique
benefits of globalisation
Globalisation allows integration which can help to solve global issues too big for one country e.g. climate change. Greater integration also increases understanding of culture and background
Development - FDI brings capital into a country which can improve education and infrastructure
Stability - as countries become more globalised they become dependant on each other which can reduce the risk of conflict between these countries
Economic growth - as more international trade occurs this can allow a country to benefit from its resources and specialist industries generating wealth and allows the country to access products that they would not be able to access themselves increasing the standard of living
Costs of globalisation
LOOK AT UNEQUAL FLOWS