Globalisation Notes Part 1.pdf

Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

Key issues / Content Focus

Learning Outcomes Students will be able to:

How do nations sustain their economic development in a globalised world? Sustaining Economic Development in a Globalised World  Globalisation and its challenges and opportunities scarcity of resources globalisation and its effects on national and world economies competition for investment and markets e.g. industrial parks, port and air services effects on employment and competition for talent balancing economic development with environmental management e.g. air pollution and tourism industry in Southeast Asia

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understand how scarce resources affect national and world economies

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explain how globalization creates opportunities and challenges for nations

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understand how environmental management is necessary to ensure economic growth

Taken from http://www.seab.gov.sg/SEAB/oLevel/syllabus/2008_GCE_O_Level_Syllabuses/2192_2008.pdf

 What is globalisation? Globalisation is the process by which people, their ideas and their activities in different parts of the world become interconnected or integrated.

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

 What causes globalisation? Identify Factor

Describe factor (What is the factor all about?)

Developments in transportation and communications

Transportation:  Transportation is the means by which people, materials & goods are transferred from one place to another.  There were major improvements in transportation technology over the years including the widespread use of steam engine th in the 19 century & the development of commercial jet aircraft, large ocean-going vessels & containerization in the th 20 century.  Reduced the amount of time needed to get from one place to another.  Countries have also built efficient & integrated transportation infrastructure (e.g. airports, seaports, railways & highways) to facilitate the increased mobility of goods & people in the world.  Easier & cheaper for goods & people to move around the world

Communication:  Improvements in technplogy have made communication among people faster & more convenient.  People across the world communicate with one another through telephone, electronic mail, fax & video conferencing.  Satellite technology enables messages to be transmitted from one location & received in another part of the world almost simultaneously.  Optical fibre systems can carry a very large amount of information & transmit information very quickly.  The invention of the Internet also allows people to communicate, conduct business, obtain information & purchase goods & services on-line.

Explain Factor (How would the factor lead to globalization?)  With increasing mobility of goods and people, information and ideas spread faster.  Interconnectedness is established among different countries & it is also easier to integrate new ideas in different places.  Globalisation

 Improvements in communication technology enable people to communicate, do business & access information more conveniently and efficiently.  Inter-connectedness is established among different countries & it is also easier to integrate new ideas in different places.  Globalisation Furthermore,  Advances in communication technology allow Transnational Corporations (TNCs) to co-ordinate & control their worldwide activities easily. (e.g. instructions from the headquarters located in one country could be easily sent to branches or factories located in other countries quickly & easily via emails or the telephone)  Inter-connectedness is established among 2

Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

different countries through the operations of the TNCs & it is also easier to integrate new ideas in different places.  Globalisation Transnational Corporations (TNCs)

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TNCs are large global firms that operate in a number of countries and have production and service facilities outside the country of their origin. Examples of TNCs include Toyota Motor and Boeing. TNCs set up their operations in different countries because they wanted to benefit from lower cost of production as well as to source for new markets, components & resources.

 Through the operations of the TNCs, economies around the world become more integrated and interconnected.  Globalisation

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

 What is the impact of globalisation? Identify Impact

Economic

Describe Impact (What does the impact come about? / What is the impact all about?) Improvements in standard of living  Countries which are globalising enjoyed increase in income level.  As countries open their doors to foreign investment & trade, they earn more revenue.  The government can then use the revenue to develop the country in areas such as education, health, transportation, housing & defence.  Furthermore, with free trade, consumers can purchase a variety of goods at competitive prices.

Increased competition among nations i) Investment & market  When TNCs seek out locations to set up their production facilities, governments would compete intensively with one another to attract TNCs to invest in their country.  Many countries now face competition from China as the labour cost in China is low & the Chinese are able to provide welldeveloped industrial infrastructure such as rail & road networks. (Refer to textbook page 52 & 53 for more examples)

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Talent With globalization, countries not only compete for investment, they compete for talents as well. People who are highly skilled are in demand all around the world & very often, these people would move to companies / countries which offer them the best employment benefits.

Explain Impact (How would the impact affect people &/or countries?)  Through globalization, people have access to better social facilities (e.g. better healthcare services, better transport system) as well as a greater variety of consumer goods & lifestyle choices  People enjoy improved quality of life & higher standard of living  People benefited from globalization

 Competition for new investments is very intense & some countries with poor facilities & political instability are unable to attract the investments they needed  Without foreign investments, these countries lack the funds & resources to develop their economies  These countries are unable to earn more revenue  These countries are trapped in the poverty cycle & they remain poor compared to the rest of the world  The mobility of talents could lead to a brain drain in certain countries if they are unable to keep their talents.  These countries would not have sufficient talents to develop their economies & attract foreign investments  These countries will lag behind the rest of the world in its development and will not be able to enjoy economic progress

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

Widening income gap between the rich and the poor  As a result of globalisation, developed countries experience rapid income growth as they own most of the manufacturing activities.  Furthermore, many TNCs are from developed countries & these TNCs are able to earn huge profits by drawing investments, skilled people & resources away from poor areas & relocating them in other regions that benefit them.  In addition, international trade also generates a lot of revenue for developed countries.  However, developing countries do not benefit so much from globalisation because they often face trade restrictions from developed countries & have difficulties selling their products to these countries.  Furthermore, due to the lack of skilled labour, developing countries are also unable to produce better quality goods that can fetch higher prices than goods from developed countries.  In addition, developing countries usually depend on labourintensive industries which are unable to generate huge amount of revenue for the country as these industries produce low value-added goods & the workers are also paid very low wages.  

Globalisation also results in a situation whereby the rich in developed countries continue to prosper due to the better opportunities brought about by globalisation. However, for the poor in these countries, globalisation brings about economic uncertainties & problems such as retrenchment.

 The income gap between the rich and the poor countries widens.  Poorer countries feel resentful towards the richer ones  Lead to tension between the rich and poor countries

 The rich in the developing countries become richer whereas the poor become poorer.  The income gap between the rich & poor in developing countries widens  The poor feel resentful towards the rich in the society  Lead to tension & greater division amongst different groups in the society  Furthermore, the widening income gap between the rich & the poor in developing countries also leads to political instability as the poor blame the government for not taking better care of their welfare & support for the government drops

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

Social

Increased awareness of foreign culture  Through globalisation, people are more aware of foreign cultures  For example, through the use of advanced technology like the Internet, people can learn about the culture and history of another country without leaving their homes. Loss in local culture  Globalisation leads to a situation in which global brands such as Starbucks and MacDonald’s dominate the consumer markets in developing countries.

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Globalisation also leads to the spread of pop culture such as rap music and MTV across the globe

Think about this: What are the kinds of music or tv programs you like to watch? Are you familiar with your own culture or the culture of other societies?

 This helps to bring the different countries together as with increased awareness, there will be less misunderstandings and cultural clashes.  May help to promote peace and stability in the world.

 The infiltration of global brands & corporations into the markets of developing countries leads to the closing down of local businesses which do not have the resources to compete with these huge corporations.  The global corporations dominate the markets of developing countries & create a homogenous culture across the world through their identical outlets & standardized methods of operation.  Loss of local brands and culture

 Some people feel that these cultures influence the youths negatively.  This is so as these youths lose interest in their own local culture & they embrace the foreign culture totally  Some people are uncomfortable with this & they feel that these foreign cultures are forcing their beliefs and languages upon the world & “killing” local cultures  These people may feel resentful towards western countries as these countries are taken to be the sources of negative foreign cultures that are seen to corrupt the local people & destroy local cultures  Affect relations between countries negatively  Also creates tension between youth and older generations who oppose foreign cultures

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

Environmental

Environmental degradation i) Deforestation & related problems  Globalisation does great harm to the natural environment because: a) Many TNCs which set up factories in different parts of the world use natural resources such as timber, oil & metals at a rapid rate b) Developing countries are more concerned with profits and markets rather than environmental protection c) Developing countries lack the resources necessary to implement & enforce environmental regulations  Rainforest in many countries have been cut down to make way for the development of industries, agriculture and transportation.  For example, the Brazilian government allows trees to be cut down at a rapid rate for economic activities like forestry, mining & cattle ranching which can generate revenue for the country  deforestation in Brazil  Furthermore, the tropical rainforests in Indonesia are disappearing very fast as they have been cleared to make way for cash-crop cultivation & development projects (e.g. building of factories & transport facilities). ii) 

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Global warming With globalization, goods are moved freely around the world & such movement of goods contributes to global warming because aeroplanes & ships produce large quantities of greenhouse gases (e.g. carbon dioxide & nitrogen oxides). Furthermore, factories & different modes of transportation around the world also release an huge amount of fumes into the air every day. The presence of these gases leads to an increase in global temperature.

 The clearing of the forests results in environmental problems such as soil erosion, extinction of flora and fauna, increase in flooding, water pollution & haze  Cause environmental damages which would affect development & human activities negatively  For example, environmental problems like haze will result in less tourists  less revenue for the country  less funds available for development  slowing down of a country’s development

 Global warming has a huge negative impact on the world.  It can lead to rising water level due to the melting of icebergs  low-lying areas could be totally submerged under the sea  great economic loss & people become homeless  Furthermore, the increasing temperature may lead to the extinction of flora and fauna because their natural habitats would be destroyed

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

Environmental management  With globalisation, there is increased awareness in environmental management.  Countries are aware that sustainable development is the key to further growth & to sustain development, they have to ensure that the environment is well-preserved so that future generations can continue to use the available resources to generate income & enjoy high standards of living.  Thus, countries try to ensure a sustainable source of energy supply through conservation efforts as well as to look for alternative sources of energy such as wind, solar & geothermal.

 Efforts have been put in to reverse the damages done on to the natural environment  May help to prevent the worsening of environmental problems & avoid an environmental catastrophe

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Chapter 2: Sustaining Economic Development in a Globalising World (Part I)

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