Paper 3: power, places and networks

The process of interaction and integration among people, countries and governments worldwide

A measure of globalisation covering economic (36%), social (38%) and political (26%) dimensions, calculated using 24 variables

Long distance flow of goods, services and information

Spread of ideas, information, images and people:

• Tourism in and out

• Group membership

• “Cultural proximity“ including how many IKEA and McDonald’s stores a country has

• Letters/telecoms in and out

Diffusion of government policies

• Uses data collected since 1970 so temporal changes can be seen

• Calculated using many variables (24)

• “Trade in books“ has limitations as an indicator as low literacy rates or differing disposable income levels may affect this

• Criticism of number McDonald’s and IKEA stores as a measure (West-centric)

• Some countries may not want to join international groups because of hostility to other individual countries

0-100 with 100 being the most globalised

It is based on the KOF but each dimension is weighted differently so the economy accounts for 60% of a country’s global ranking and the other two factors are worth 20% each.

In 2016, Netherlands had the highest KOF score but Ireland had the highest EY score (89.6)

A policy of extending power through colonialism

A policy of private ownership

All assets/property are owned by the state

Superpowers are countries with global influence and economic, cultural, military and/or geopolitical power. Eg. the USA which has an annual military expenditure of $600B.

The idea that resources flow from a periphery of poor countries to a core of wealthy states enriching the latter at the expense of the former

The movement of skilled/intelligent workers from the periphery to the core

• Rich in resources (coal, oil, agricultural land)

• Two coastlines: excellent access to Eastern and Western markets

• Geographical size

• Suffered less damage in WWII compared to most of Europe so had a head start developing military and gave aid so gained allies

• UN headquarters, World Bank and IMF are based there

• Firm relations with Western Europe, commonwealth, Latin America and key Asian countries

The cost a country pays to import goods

• Suppliers cannot sell as cheaply in the external market

• Internal products are cheaper so they are more attractive to buyers

A group of the world’s 7 largest economies: USA, UK, France, Germany, Italy, Japan and Canada. Set up as a forum to coordinate global policy (formerly G8 until 2014 when Russia was “suspended indefinitely“ following the annexation of Crimea).

• Strengthened international economic/security policies

• Facilitates discussion of global issues such as climate change

• Small enough to meet consensus fast

• Supported disarmament programmes

• Only represents the West

• May not be an accurate grouping of the world’s biggest economies in light of the emergence of China

• Focus on G20 has weakened it

• Was not able to stop Russia’s actions in Crimea in 2014 by threatening suspension

Another intergovernmental forum comprising 19 countries and the EU

• Represents 65% of the world’s population (instead of G7’s 10%)

• Larger group with more diverse ideas

• Does not only represent Western interests

• Does not represent Africa at all

• Is a large group so cannot meet consensus quickly

The ownership of shares: a company, infrastructure, property or business is shared between different parties.

Transfers of money from a foreign worker to family members or other individuals in the worker’s home country

• Large-scale projects

• Carried out by governments or international organisations

• Usually well-funded

• Small-scale projects

• Involves local communities, run by locals for locals

• Usually not as well-funded

• emergency relief after natural disasters

• Often necessary

• Positive multiplier effect if spent effectively

• Can improve quality of life

• Sustainable development through providing skills/education

• Can develop dependency on aid

• May fuel corruption

• Can undermine the local economy

• Recipients may be forced into terms that don’t benefit them

Wheat in Tanzania

• Led by Canadian government (finance, advice, equipment)

• Increased food production, self-sufficiency and economic focus on the most valuable crop :)

• Historical farming community alienated, food becomes unaffordable for locals, locked into expensive imports :(

Oxfam in Tanzania

• Community-led youth schemes

• £3000 used for building materials, tools, etc

• Positive multiplier effect, healthcare, food production, employment, strengthens community, skills development, independence :)

• Doesn’t address main causes of poverty (poor trade, decreasing exports) :(

• Online e-commerce site that sells authentic African jewellery on a global market

• The start-up received support through the World Bank

• 70% of the artisans are women

Organisation for Economic Cooperation and Development (38 member countries). Aims to:

1) Restore confidence in markets

2) Re-establish healthy public finances

3) Support NEE development and “green growth“

4) Equip people with skills for emerging jobs

Organisation of Petroleum-Exporting Countries: aims to coordinate and unify petroleum policies in member countries.

The International Monetary Fund. Like the World Bank, it is a financial institution that provides loans to developing countries to reduce poverty. Finances development often focusing on investment projects and helping countries recover after natural disasters/wars.

• Has 180+ member states

• Provides loans for poor countries to aid development and recovery after natural disasters, wars, etc

• eg. the IMF and World Bank helped rebuild a devastated post-war Japan

• Dominated/run by a small number of wealthy countries

• Some argue it is pushing Western interests

• Outcomes can sometimes be negative (increased poverty) especially when SAPs are put in place

Structural Adjustment programmes are when a country, in return for accepting aid/a loan, must make adjustments to their economy. This could include doing things like: liberalizing trade, encouraging FDI, charging for some basic services (education/healthcare/etc) and having austerity measures reducing social expenditure

Groundnuts in Senegal

• Senegal borrowed money from the WB

• WB enforced SAPs

• Trade was liberalized and tariffs removed on imports, firms were privatised and governments forced to cut spending

• SAP resulted in Senegal paying more on debt than on healthcare and education combined

• A state is an independent political entity with clear geographical boundaries

• A nation is a large population that shares the same culture/language/traditions/etc. Not defined by borders

• States often coincide with nations- “nation-states“

The highest power and authority

A type of multinational political union where negotiated power is delegated to an authority by government or member states (eg. the EU)

Transnational corporations

Apple and Tata

• Based in the USA

• Has 785 suppliers in over 30 countries (including 349 in China)

• Ongoing issues in supply chain

• Chinese labour laws do little to protect workers

• In 2010 apple’s main supplier foxconn put up mesh netting around its buildings and increased its wages following 18 attempted worker suicides

• Based in India

• Comprises over 100 companies including cars, consulting, tea/coffee, hotels, power, transport, steel and chemicals

• Operates in over 80 countries and employs 600k people

• Has received criticism for its forward-thinking philanthropy being bypassed for profit

• Local businesses may benefit from TNC training

• TNCs often support local infrastructure projects such as roads, telecoms, etc

• Provide jobs for people in host country and local people receive a wage for their work

• Some TNCs disrespect human rights and employ children

• May prevent the growth of domestic manufacturing industry

• Pollution of surrounding environment

The theory or practice of shielding country's domestic industries from foreign competition by taxing imports

• Established in 2014 by BRICS with headquarters in Shanghai

• Established to compete with Western interests

• Important step of cooperation among BRICS

• Focus on infrastructure and sustainable development

Drugs, fraudulent medicines, human trafficking and counterfeit goods

• The production and trade of illegal substances

• Global drug trade is estimated to be worth $300B or 1%

• Associated with violence (in the US, 5% of murders are estimated to be drug-related)

• Diabetes, depression, high blood pressure

• WHO believes that 1% of meds in HICS and up to 30% in LICs are counterfeit

• Generates over $250B annually

• Contributes to labour exploitation, environmental damage and health implications

• Unregulated

• Implicates criminal groups such as Mafia

• Reduced tax revenues for governments

• Linked to bribery and corruption

• UNODC estimates there were 27,000 victims between 2010 and 2012

• 70% of victims are international (frequently taken from poor countries to rich ones)

• Complex process involving passports, visas, transport and supervision

The concept that, the larger the scale on which a good is produced, the lower the cost per-unit

The idea that the world is effectively shrinking due to improvements in infrastructure and transport making long distances faster to travel

Containerisation, the internet, satellites and planes

• Began in the 1960s

• The use of containers of a standard size

• Enables them to be moved between boats/trains/lorries worldwide

• 16m containers are shipped each year

• Companies don’t have to pay for shopfronts, cutting costs

• You can sell to a bigger audience

• Fewer employees needed

• Companies can communicate easily with consumers and each other

Areas that encourage FDI by making certain companies or places exempt from tax- leads to positive multiplier effect from TNC investment

Incheon Free Economic Zone (IFEZ)

• Created in 2002 when SK started the North Asian countries’ business hub

• Maximised incentive/opportunities for FDI including tax breaks

• Ideal as a FEZ because it’s a coastal city with an airport and sea port

• Has a well-qualified workforce as it’s close to Seoul, the capital

• Some incentives offered may lead to expensive foreign schools, which could widen the educational gap between rich and poor

• Foreign investors perceive a threat of war from North Korea

A specific type of FEZ which specialises in manufacturing for export. In an IPZ you must pay to dock your ship but there is no tax on imported goods.

Migration controls in the USA

• Some US citizens are worried about Mexican immigrants bringing drugs/crime into the US

• Extensive border fencing and increased patrols around cities such as San Diego and El Paso

• Cost to illegal immigrants has increased as they are forced to hire smugglers

• Flow of migrants has been pushed into more remote locations