geography
What is globalization? It refers to the process of increasing interdependence of the world’s economies and societies
Characteristics of globalization of economy:
Huge expansion of international trade
Business concentration>mix to become more competitive
global organization of production> companies distribute phases of produccion among different locations to save money. This is called outsourcing
large multinational companies>they have international dimension and huge resources, so they have influence over governments and economic institutions
globalization factors
information socity: new information and communication technologies make possible to organize global production and move capital from one place to another in seconds
cheaper and improved transport: facilitates the flow of goods and people
liberalization policies: implemented by governments
deregulation os financial markets: facilitates movement of capital between countries
elimination of custom duties and other obstacles to the import: of goods and other services. A product can be sold freely almost all over the world
collapse of the comunist bloc: former communist countries adopted the capitalist system. All countries now from a single global market except cuba and north korea (they are dictatorships, comunist…)
positive effects of globalization
increase of global wealth
strong growth and economic development in some countries for example china and india
social progress, especially in health and education
negative effects of globalization
developed countries and some developing countries have benefited more. Poorer countries are being marginalized in the global economy
ínequalities within countries have increased, in general, cities have benefited, but not rural areas
states are less able to control their economy because more and more decisions affecting the economy are now made outside borders
the role of international economic institutions
World bank: to reduce poberty and improve the standard of living in the world
international monetary fund: cooperation between the countries economy
world trade organization: make sure that international trade is smoth, free and fair
economic powers: group of countries that control most of the world’s economic production and trade
traditional powers: USA, japan and the EU
emerging powers: brazil, russia, india and china (bric)
regional powers: australia, the «asian tigers» (taiwan, singapore, hong kong and south korea) south africa and persian golf oil producers
economically least developed countries: latin america, south asia and sub-saharan africa
THE USA
The US population has one of the world’s highest per capital incomes. As a result, consumption is very high
However two principal weak points are:
families have heavy debt due to hight consuption
The US imports much more than it exports. This result is a trade defict
The characteristics of the US economy are:
WORLD LEADERS COMPANIES: companies
ENTERPRENURIAL: investments are highly valued in US society
investiments in RESEARCH
QUALITY UIVERSITY: education highly skilled skilled labour force
acces to large amounts of natural resources and energy
Attracks foreign inversement
DOLLAR= WORLD’S MOST IMPORTANT CURRENCY
JAPAN
Third largest economy: in the world after the US and China
Economic power based on high industrial, capacity, global export, high level of domestic savings, continued public investment and dominational of international financial markets
The weak points of this economy are:
ageing population high=social costs
Scare natural and energy resources= dependence on imports
Strong points of the Japanase economy
varied industry
robotics
exports of manufactured products
business are present on all countries
equal distribution of money. Low unemployement rate
The EU
first in volume of trade: because is a big group of countries and is in the centre of the world so it’s easy to transport things
germany, france and italy are the largest economies in the EU
EMERGING ECONOMIC PORWERS
brazil, rusia, india and china (BRIC)
REGIONAL POWERS
Australia
One of the most prosperous developed countries
Influence in fast asia and the pacific
Dominance of the services sectors
Minerals and agricultural products are competitive worldwide
The asian tigers
Cheap skilled labour produced high quality, low-cost goods
Leaders in some of the most innovative industrial sectors
The republic of south africa
Rich in natural resources
Highest GDP in Africa
The oil-producing countries
Their investment decisions have a significant impact on the global economy
Their presence is limited to energy and financial sectors