GEOGRAPHY A LEVEL EDEXCEL PAPER 2 QUESTIONS & ANSWERS

Globalisation - ANSWERSThe growing interdependence of countries, people and cultures worldwide through increasing connections including trade in goods and services and flows of capital, technology and ideas/ Shrinking world - ANSWERSAlthough physical distances around the world are unchanged, technology has massively reduced the time it takes to trade, travel, and communicate globally. Transport developments for globalisation - ANSWERS- Railways - Aircraft - Containerisation ICT developments for globalisation - ANSWERS- Mobile phones/telephones - The internet - GIS/GPS - Broadband/fibre optics Political and economic organisations - ANSWERS1. World bank 2. International monetary fund (IMF) 3. World Trade Organisation (WTO) Why were political and economic organisations needed post WW2? - ANSWERSFollowing the second-world-war, the economically weak western nations wanted to prevent the spread of communism from the east, which they saw as a threat. These organisations were established for economic development, and to control and oversee international agreements. Trade restrictions - ANSWERS- Tariffs - Quotas - Embargo - Subsidies Tariffs - ANSWERSA tax placed on goods that are imported from other countries Quotas - ANSWERSA limit placed on the number of goods that are imported from other countries Embargo - ANSWERSA ban placed on certain goods imported from other countries Subsidies - ANSWERSA sum of money granted by the government to help an industry or business keep the price of goods low WTO goal - ANSWERSThe WTO wants to eradicate barriers to trade Free Trade - ANSWERSTrade without any restrictions Free Trade process - ANSWERS1. Governments take away barriers that make trade more difficult and costly. 2. As coasts are reduced, TNCs will see a profit and want to invest in nations. 3. TNCs will bring new ideas, products, cultures, etc. to a nation 4. Also the TNC will generate wealth. 5. Their wealth and development will increase standard of life and demand for foreign products. 6. As an economy has more TNCs, they become more interconnected and interdependent for each other. Trading Blocs - ANSWERSCountries which group together to improve their economic interest and trading patterns. They often do this by placing barriers to trade with countries outside the group. NAFTA - ANSWERSNorth American Free Trade Agreement - USA, Mexico, Canada - Population = 472m - Combined GDP (PPP) = $20.2 tn EU - ANSWERSEuropean Union - Population = 508m = GDP (PPP) $19 tn MERCOSAR - ANSWERSSouthern Common Market - Six full members - Population = 289m - GDP (PPP) $4 tn - South America OPEC - ANSWERSOrganisation of petroleum exporting countries - A group of 12 major oil producing countries - African, South American, and Middle Eastern members - Control around 2/3 of global oil reserves - They can make sure they get a fair price from oil consuming countries ASEAN - ANSWERSAssociation of South East Asian Nations - 10 countries formed in 1967 - Combined population of 625 million - Combined GDP (PPP) = $3.6 tn - Seventh largest economy in the world Social positives of trading groups - ANSWERS- Withing social and political unions people are often free to live and work in the country of their choice within the union. - Living standards go up as trade prospers Social negatives of trading groups - ANSWERS- With relaxed borders it is easier for illegal immigrants to move around within the bloc - Legislation can limit workers as well as protect them Economic positives of trading groups - ANSWERS- Trade blocs protect the are'as economy from competition - Free trade within the bloc - Market access and trade creation - Economies of scale - Jobs may be created as a consequence of increased trade between member economies - Firms inside the bloc are protected from cheaper imports from outside. - Inefficient producers within the bloc can be protected from more efficient ones outside the bloc. - Being within a trading bloc encourages FOREIGN DIRECT INVESTMENT from TNCs - Trading blocs can help companies grow Economic negatives of trading groups - ANSWERS- The benefits of global free trade can be lost as countries concentrate trade withing their trade area or bloc - Trade blocs cost money Environmental positive of trading groups - ANSWERSSocial and economic unions can set high environmental standards Environmental negative of trading groups - ANSWERSTrading blocs increase food miles as the cheapest product within the bloc will be the most traded. Political positives of trading groups - ANSWERS- Weaker disadvantaged peripheral regions can be supported by the stronger areas. - The incentives of trade and political cooperation help to reduce the chances of violent conflict. - Giving smaller, individual countries greater political influence when dealing with other nations. Political negatives of trading groups - ANSWERS- Trade wars - Non-member countries of the trade bloc will be ostracised - Loss of some financial controls to a central authority - Trading blocs add another layer of government which costs money and add complications for countries making their own decisions - Loss of sovereignty - Some smaller regions don't like big government and this has led the drive to SEPERATISM Foreign Direct Investment (FDI) - ANSWERSan investment made by a company based in one country, into a company based in other countries (money, people...) Types of foreign direct investment - ANSWERS- Offshoring - Foreign Merging - Foreign Acquisition - Transfer Pricing Offshoring - ANSWERSSome TNCs build their own production facilities in 'offshore' low-wage economies. Foreign Merging - ANSWERSTwo firms in different countries join forces to create a single entity Foreign acquisitions - ANSWERSWhen a TNC launches a takeover of a company in a different country. Transfer Pricing - ANSWERSSome TNCs have sometimes channelled profits through a subsidiary company in a low-tax county. Government policies encouraging globalisation - ANSWERS- Neoliberalism - Privatisation - Enterprise Zones New Global Regions - ANSWERSDeveloping/emerging economies Privatisation - ANSWERSAllowing foreign investors to gain a stake in privatised national services and infrastructure. Neoliberalism beliefs - ANSWERS- Government intervention is markets impedes economic development. - As wealth increases, trickle down will take place from the richest to the poorest. Open Door Policy (1978) - ANSWERSDeng realised that China needed Western technology and investment, and opened the door to foreign businesses who wanted to set up in China. SEZ - ANSWERSSpecial Economic Zones in China, similar to UK enterprise zones. Open Door Policy timeline - ANSWERS1. In 1978 Deng Xiaoping Began the open door policy. 2. The first reforms were in rural areas - agricultural communes were dismantled and farmers were allowed to make a small profit. 3. At the same time (around 1979) the One Child Policy was also introduced. This curbed the rapidly growing population. 4. Industrialisation grew rapidly. 5. Over the next 30 years large migration took place. 300 million people moved from rural areas to cities. More would have left but the government had a system called hukou which prevented villages from being deserted. 6. New urban areas began to appear. Many of which are 'instant cities' 7. An urban mega-region grew around the Pear River Delta (SEZ) including Shenzhen, Dongguan and Guangzhou. 8. This took advantage of the industrilaising process which established SEZs. They established their own factories or created trade relationships. Many of the these were low wage. China got the nickname 'Workshop of the World. 9. By the 1990s, 50% of China's GDP was generated in SEZs allowing China's economy to mature. 10. This economic growth has allowed 400 million to escape poverty. 11. By 2015, many workers were earning $40 a day or more. Factors that make China attractive for FDI - ANSWERS- government backing - politically stable - emerging market - good infrastructure - positive image - stable currency - tax incentives - cheap skilled labour - cheap freight China FDI: government backing - ANSWERSMany Chinese companies TNCs would do business with are part owned or backed by the state. This reduces risk of losses. China FDI: politically stable - ANSWERSThe communist party has been in power since 1949. This reduces risk for TNCs. China FDI: emerging market - ANSWERSAs wealth trickles down into the Chinese population via the multiplier effect there is huge potential to sell goods. China FDI: good infrastructure - ANSWERSChinese government will build large industrial estates with mega buildings, roads, reliable water and electricity supply and TNC migrant employees will be employed. China FDI: positive image - ANSWERSChina used the 2008 Olympics to reimagine itself as a forward looking, powerful and wealthy country. There was criticism about Tibet. China FDI: stable currency - ANSWERSThe exchange rate for the Yuan is pegged to US$ and backed by Chinese government. Reduces risk of losses. China FDI: tax incentives - ANSWERSSEZs where can import and export paying reduced tariffs or taxes. This cuts costs and maximises profits. SEZs have more liberal and open minded economic laws. China FDI: cheap skilled labour - ANSWERSLabour is very cheap in China. Reduces cost and maximises profits. Highly skilled workers are driving up wages. Prolonged spending on health and education provide a healthy and skilled workforce. China FDI: cheap freight - ANSWERSIn the early 2000s shipping fees were low. However there is nie q shortage of shipping slots driving up the leixe. Companies with larger volumes get priority bookings. Relatively low prices still enable TNCs to outsource manufacturing to far off places and still make money. Switched on places - ANSWERSThose nations, regions or cities that are strongly connected to other places through the production and consumption of goods and services. Switched off places - ANSWERSIn contrast, places that are poorly connected. Two main ways to measure Globisation - ANSWERS1. KOF Index 2. AT Kearney KOF Index - ANSWERSmeasures/compares countries AT Kearney - ANSWERSMeasures/compares cities. Human reasons for a country to be 'switched off' - ANSWERS- Lack of skills and literacy deters inward investment (e.g. Somalia) - Politically isolated (e.g. North Korea, Myanmar) - Low prices for food exports due to overproduction and trade rules (e.g. Ethiopia) - Ethnic clashes and civil war between tribes (e.g. DR Congo) Physical reasons for a country to be 'switched off' - ANSWERS- Poor resources for agriculture (e.g. Eritrea) - Physical isolation and lack of coastline deters investors seeking an import/export base (e.g. Niger) - Highly vulnerable to climate change and natural hazards (e.g. Mozambique). Combined human and physical reasons for a country to be 'switched off' - ANSWERS- Natural resources are controlled by a small elite (e.g. Zimbabwe) - Natural resources are controlled by foreign TNCs due to old trade agreements that need renegotiating (e.g. Sierra Leone) - Infighting over natural resources - 'resource curse' (e.g. Sudan) TNC - ANSWERStransnational corporation (companies operating in a number of countries at any given time) Glocalisation - ANSWERS- The changing design of products to meet local tastes or laws - TNCs adapt this tactic to open and conquer new markets - Glocalisation adapts the business to address geographical variations around the world Job types - ANSWERS- Primary - Secondary - Tertiary - Quarternary Primary jobs - ANSWERSexploiting natural resources Primary jobs example - ANSWERSfarming, mining