1.

Where is economic power

concentrated in the world?

1. Where is economic power

concentrated in the world? [continued]

In the 3 global economic cores of North

America, Europe & Asia. Of the 500 largest
TNCs in the world in 2010, 139 are based
in the USA & 71 in Japan. The three cores
are referred to as the triad. Around 80%
of all global economic wealth & trade is

concentrated in this triad, which is

linked through a complex system
of global finance, stock exchanges,
international airports & government centres.

2. How have economic groupings of

countries changed between 1975 and 2002?

2. How have economic groupings of countries

changed between 1975 and 2002? [continued]

Some groupings of countries have become

wealthier whereas others have stagnated/
become poorer. This has created a world
of the rich, those getting richer, & those
either stagnating/getting poorer. Some
developing regions like North Africa

have stagnated. The deceloping world

has become richer, North America,
Western Europe & Japan. Huge gains
in wealth have occurred in Asia. The
Middle East & sub-Saharan Africa have
become poorer. Collapsed communist
countries early 1990s > ^ poverty.

3. Why are economic groupings useful?

4. Give examples of MEDCs and

describe their economic structure.

They allow the comparison of different

development pathways. Countries
can, & do, move between groups e.g.
Singapore was once classified as a NIC
but is now a fully developed country.

Examples are UK, USA, Australia &

Singapore. Annual per capita income
(2006) is >$11 115. 70% jobs are
tertiary. TNCs are based here. R&D
& quaternary industry important.

5. Give examples of NICs and

describe their economic structure.

6. Give examples of RICs and

describe their economic structure.

Examples are Brazil, South Korea & China.

Annual per capita income (2006) is $3
596-$11 115. 30%+ jobs secondary&
manufacturing exports important.

Examples are Thailand, Indonesia & Tunisia.

Annual per capita income (2006) $906$3 595. High primary employment. In key
cities, manufacturing is growing rapidly.

7. Give examples of LEDCs and

describe their economic structure.

8. Give examples of Least developed countries

(LDCs) and describe their economic structure.

Examples are Egypt & Peru.

Annual per capita income (2006)

Examples are Malawi, Bangladesh &

Haiti. Annual et capita income (2006)

9. What are inter-governmental

organisations (IGOs)?

10. Who are the members of the EU,

what is its role & global importance?

Formal groupings of countries, exist where

countries have signed agreements for
economic gain. Such groups contain
'like-minded' countries, usually at similar
levels of development. In most cases
the groups protect the interests of memb

Formed in 1957; 27 European countries,

including the UK. It is an economic union, with
internal free trade & migration. It has 7.5% of
world population but 31% of total global GDP.

11. Who are the members of the OECD,

what is its role & global importance?

12. Who are the members of the OPEC,

what is its role & global importance?

Formed in 1961; 30 members, 25 MEDCs. All

are democratic market economies. The OECD
monitors economic performance & works to
reduce corruption & bribery. 75% global GDP
is generated within the 30 member countries.

Formed in 1960; 12 major oil exporters in

the Middle East, South America & Africa.
Safeguards the interests of oil exporting
countries. It has a large influence on the
global oil price. Members have 65% of
global oil reserves & 35% production.

13. Who are the members of the G8,

what is its role & global importance?

14. Who are the members of the G20,

what is its role & global importance?

Formed in 1974; UK, USA, France,

Canada, Germany, Italy, Japan, Russia.
An informal forum of the super-rich &
powerful countries. 15% of the world's
population but 65% of global GDP.

Formed in 1999; 19 countries, including

Chindia & Brazil, plus the EU. Increasingly
relevant following global recession '08-'09;
many G20 NICs growing rapidly & are cash
rich. Accounts for 85% of global GDP.

15. Who are the members of the G77,

what is its role & global importance?

16. What are usually the

motives of political groupings?

Formed in 1964; most African, Asian & Latin

American nations (131 total). A grouping of
developing nations formed to give a collective
voice to the developing world. Its influence is
lessening as the G20's influence has grown.

They are usually economic, to press

for the interests of their member states.

17. What do more formal trade

blocs allow for their members?

18. Give examples of formal trade blocs.

They allow free trade, without taxes,

tariffs or quotas, between member states.
Also, countries wishing to export intoo the
bloc often have to pay trade taxes and/
or have quotas imposed. The external
barriers help protect trade within the bloc.

European Union (EU), North American

Free trade Area (NAFTA) & Association
of South East Asian Nations (ASEAN).

19. What does the World Trade

Organisation (WTO) try to do?

20. What has happened as trade blocs

have have become more common?

They work to reduce trade barriers & create

free trade between blocs. Inreasingly, the
world is caught between these 2 forces.

As they've become more common, freetrade agreements have also increased.

There is general agreement that free
trade is good, but there is an increasing
unwillingness to make it more free.

21. What are some significant

shifts in wealth & power that
international trade growth has led to?

21. What are some significant shifts

in wealth & power that international
trade growth has led to? [continued]

Developed nations have maintained their

'top slot'. 'Asian Tiger' NICs have developed
almost to developed-country levels. In
the last 10 years, the 'BRICs' have all
gained economic power & wealth. Asian &
Latin American NICs & RICs have grown

but often in a 'boom & bust' fashion. Many

Afrcian countries have barely benefited, with
population growth outstripping economic
growth, leading to economic stagnation.

22. What are TNCs?

23. How does the world's largest

TNCs compare to a country?

They are transnational corporations

which are major companies with a global
'reach' and a presence (production,
HQ, sales) in at least 2 countries. They
are economically powerful, politically
influential & are important creators of wealth.

Walmart is the world's largest TNC & had

a turnover in 2010 of $408 bn. In '09-'10, it
employed 2 100 000 people. Its turnover was
equivalent to the GDP of Norway ($413 bn).

24. How do TNCs grow?

24. How do TNCs grow? [continued]

They focus on expanding their global

operations: Acquisitions - Walmart took
over Asda in the UK in 1999. Joint ventures
- in 2007, Walmart & Indian company
Bharti Enterprises announced the joint
opening of Bharti Walmart stores in India.

Franchising - 75% of McDonald's

restaurants worldwide are franchises;
local entrepreneurs pay fees to the parent
company for the right to set up a McDonald's.

25. Comparing Walmart & McDonald's,

what is their business sector ('09-'10)?

26. Comparing Walmart & McDonald's,

what are/is their employee numbers,
turnover & global network ('09-'10)?

Walmart: Food & household goods retailer

based in USA. McDonald's: Fast food
restaurants and cafes based in USA.

Walmart: 2 100 000, $408 bn, 8 500 stores

in 15 countries. McDonald's: 1 700 000,
$24 bn, 32 000 outlets in 117 countries.

27. Comparing Walmart &

McDonald's, what are some corporate
issues and criticisms ('09-'10)?

27. Comparing Walmart & McDonald's,

what are some corporate issues
and criticisms ('09-'10)? [continued]

Walmart: Mega-retail stores damage

smaller, locally owned stores. Consumers
benefit from lower prices. Low pay & lack
of union representation. Large carbon
footprint due to global supply chain fuel use.
McDonald's: Accused in the past of promoting

deforestation for cattle grazing land. Health

issues, e.g. obesity, in relation to sugar &
fat content of its food. Low paid 'McJobs'.

28. How have Walmart and McDonald's both

made efforts to reduce resource consumption?

29. Define glocalisation.

About 30% of McDonald's packaging

is recycled. Walmart reduced its
corporate carbon emissions by 5%
'05-'08 & is aiming for 20% by 2012.

When as companies expand globally they

can't just export the same brand & products
worldwide. Instead, local laws, tastes,
incomes & traditions means companies
must adapt products for new markets.

30. Give examples of

McDonald's glocalisation.

31. Why do companies glocalise?

In the UK, organic milk is used & everything

comes from British & Irish farms, consumers
value local sourcing. The menus are
adapted to local tastes e.g. halal meat
is used in the Middle East & there is no
beef & vegetarian options in Hindu India.

TNCs have brands that are increasingly

recognised worldwide & in individual countries
& regions products are adapted to meet the
needs of local tastes & maximise tastes.

32. Give 3 positives of TNCs.

32. Give 3 positives of TNCs. [continued]

Jobs - the 200 000+ technology workers in

Bangalore are employed by TNCs including
IBM, Cisco Systems & Google. Trade China's economic growth has resulted
from TNCs locating manufacturing plants
in its Free Trade Zones, boosting exports.

Connections - TNCs' complex global networks

create connections that tie local & national
economies into the global economic system.

33. Give 3 negatives of TNCs.

33. Give 3 negatives of TNCs. [continued]

Exploitation - TNCs have been accused of

exploiting workers in the developing world
by paying very low wages in 'sweatshop'
conditions. Unemployment - Outsourcing
jobs to the developing world can lead
to job losses in developed countries.

Identity- local cultures & traditions can be

eroded by TNC brands & Western ideas.

34. What are the costs of TNCs

for the TNC source country?

35. What are the benefits of TNCs

for the TNC source country?

Job losses dur to outsourcing of jobs.

Abandoned production locations create
derelict land. Outsourcing TNCs may
become unpopular & suffer negative
media coverage & falling sales.

Environmental pollution from factories

is 'exported' overseas. TNC growth
leads to higher profits, & more tax being
paid. Strong global companies are
successful, securing HQ & R&D jobs.

36. What are the costs of TNCs

for the TNC host country?

37. What are the benefits of

TNCs for the TNC host country?

TNCs may pay no/very little taxes. New

locations become polluted as environmental
laws are weak. Workers on low wages, with
long hours, may be exploited & mistreated
& suffer poor health. May out-compete
local suppliers, forcing out of business.

Economic growth due to job creation &

rising consumption. Falling levels of poverty.
Local supply chains may be created,
leading to further job creation & business
growth. TNCs demand infrastructure &
communications that may benefit local people.