39. Globalisation and development

Introduction
1. Globalisation: pressures leading the world to become one 'market', competition between giant firms, the risk that national producers will be squeezed out.
2. Development: moving people beyond a life where feeding family is a constant struggle and uncertainty. Underdevelopment: <$1 a day.
Government efforts to increase world trade
1. WTO (1995).. Over 50% tariff-free imports.
  1. Free trade ideal for companies at similar stages of development (encourage competition)
    1. Less developed countries would benefit from protection of infant industries, until able to compete with MNC's.
The case for globalisation
1. Increased competition forces local producers to be efficient = cutting prices and increase standards of living.
2. Providing the opportunity for best ideas to be spread globally. (AIDS medicine, water irrigation, mobiles)
3. MNC's: provide employment, training, allow local entrepreneurs to learn.
4. Providing outlets for exports, boost standards of living by reducing dependence on subsistence farming (enough to feed the family).
5. Provided opportunity for some countries to break away from poverty (Mexico, China, India).
The case against globalisation
1. The economic case against
  1. Harder for local firms to create local opportunities.
  2. Concern that new production doesn't necessarily mean new wealth.
    1. Exploitation
      1. Extremely low wage rates, poor working conditions.
2. The social and cultural case against
  1. Makes lives less interesting by reducing differences between countries/cities.
  2. Everywhere starts to look like everywhere else
  3. Built on exploitation
  4. Hard for local producers to build and grow in a way that is suited to local needs.
Globalisation and the British economy
1. Deindustrialisation
2. Share of exports of goods between 1953-2009 dramatically declined.
3. Strong position in sales of services. 2010 2nd to America.
4. World trade has brought significant increase in living standards. Cheap imports from China kept inflation low.
Development
1. 1981, 50% <$1.25 a day. 2005, 21%.
2. Countries such as Mexico, China and India.. Key factors have been:
  1. Greater willingness to accept inward investment from MNC's.
  2. Greater enterprise (local businesses)
  3. More stable government
  4. Easier access for exports (WTO)

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39. Globalisation and development

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