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Global Groupings


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Global Groupings

  1. 1. Going global Global groupings
  2. 2. Economic groupings (1) <ul><ul><li>Geographers use economic development as a basis for dividing the world’s 193 countries into groups. </li></ul></ul><ul><ul><li>Measures of development, such as per capita gross domestic product (GDP) and the human development index (HDI) , are used to rank countries. </li></ul></ul><ul><ul><li>The World Bank uses per capita gross national income (GNI) as the basis of its classification. </li></ul></ul><ul><ul><li>Using the World Bank classification, the world can be broadly divided into two categories — ‘ developed ’ and ‘ developing ’. However, such an approach no longer works well. </li></ul></ul>
  3. 3. Economic groupings (2) <ul><li>Geographers now often use a more complex system of classification based not just on income, but on type of economy. Sometimes there is overlap between groupings. </li></ul>Economic groupings of nations, with examples of member countries
  4. 4. Political groupings (1) <ul><ul><li>Countries, usually at similar development levels and in the same part of the world, agree to form trade blocs by signing international agreements (see next slide). </li></ul></ul><ul><ul><li>These allow for tariff- and quota-free trade. </li></ul></ul><ul><ul><li>The World Trade Organization works to increase free trade between blocs. </li></ul></ul>
  5. 5. Political groupings (2) Selected regional trade bloc groupings
  6. 6. World trade (1) <ul><ul><li>Economists generally agree that ‘trade is the engine of growth’. </li></ul></ul><ul><ul><li>Free trade is therefore responsible for creating wealth. </li></ul></ul><ul><ul><li>The World Trade Organization’s current round of talks, begun in Doha in 2001, aims to increase free trade further. </li></ul></ul><ul><ul><li>There are serious question marks over free trade and whether everyone, particularly the world’s poorest people, benefits from it. </li></ul></ul>
  7. 7. World trade (2) <ul><ul><li>More developed countries have generally maintained their share of world trade. </li></ul></ul><ul><ul><li>Asian newly industrialised countries (NICs) have rapidly increased their share. </li></ul></ul><ul><ul><li>Africa and Latin America have barely benefited. </li></ul></ul>
  8. 8. Global wealth <ul><ul><li>In the world’s 50 poorest countries, average income is around $0.80 per day. </li></ul></ul><ul><ul><li>In 2001, 34% of the population aged between 15 and 24 in the poorest countries was illiterate. </li></ul></ul><ul><ul><li>About 60% of the poorest countries experienced civil conflict between 1990 and 2001. </li></ul></ul><ul><ul><li>The gap between the richest and the poorest nations has grown. </li></ul></ul><ul><ul><li>Initiatives such as fair trade are designed to ensure that people in the least developed countries gain a better share of global wealth. </li></ul></ul>
  9. 9. Transnational corporations (1) <ul><ul><li>Transnational corporations (TNCs) are major companies which have a presence (e.g. production, headquarters, sales) in at least two countries. </li></ul></ul><ul><ul><li>Many TNCs are so economically powerful and politically influential that they rival national economies in terms of wealth. </li></ul></ul>How the wealth of TNCs compares with that of nations 2006 GDP of selected nations World’s top five TNCs (2006) TNC 131 5 Zimbabwe 207 General Motors 57 65 Bangladesh 274 BP 45 128 Pakistan 318 Royal Dutch/Shall 48 115 Nigeria 351 Wal-Mart 34 206 Thailand 377 Exxon Mobil Rank GDP ($bn) Country Revenue ($bn) TNC
  10. 10. Transnational corporations (2) <ul><ul><li>TNCs globalise production by investing in the developing world. </li></ul></ul><ul><ul><li>The economic growth of China and India over the last 15 years has been fuelled by foreign direct investment (FDI) from TNCs. </li></ul></ul><ul><ul><li>TNCs bring both benefits and costs to the countries they invest in (see next slide). </li></ul></ul>
  11. 11. Transnational corporations (3) Costs Benefits Host country <ul><li>Profits go to the HQ country </li></ul><ul><li>Workers are paid low wages and may be exploited </li></ul><ul><li>Health and safety may be ignored </li></ul><ul><li>Environmental impacts may be large </li></ul><ul><li>Job creation </li></ul><ul><li>Supplier companies and linked industries may grow </li></ul><ul><li>Creates connections with the rest of the world </li></ul>Source country <ul><li>Loss of jobs due to global shift </li></ul><ul><li>Derelict land due to factory closures </li></ul><ul><li>The costs of regeneration </li></ul><ul><li>Dirty industries and pollution are ‘exported’ </li></ul><ul><li>TNCs may generate greater profits and pay more taxes </li></ul>