Influencing The Global Economy:
- USA heavily influences the global economy especially in LDCs where US Dollars is accepted as currency
- USA promotes free trade and free market capitalism but this benefits the USA mainly. The same goes for the EU.
- Free trade removes taxes and quotas and allow trade to be made more cheaply. The EU does this but the EU and America does not do this fully as it would mean that the markets would flood and damage MEDCs.
- Capitalism is the approach for western countries as it likes free trade and economic liberalisation. This allows superpowers to open up the foreign markets to sell exports and import cheaply.
IGOs
Influencing The Global Economy:
- Dominated by core powers but do help LDCs. Beneficial to increase world development but some see them as neo-colonialism.
Advantages:
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Disadvantages:
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WTO (World Trade Organisation): Promotes free trade,
headquarters in the EU.
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Trade benefits MEDCs through control to access LEDC markets |
‘Strings attached’ aid e.g Thailand and America |
IMF & World Bank:
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Aid development
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Add conditions e.g country must allow American goods in |
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Improves infrastructure leading to the economy growing
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Reliant on trade bloc |
TNCs
Influencing The Global Economy:
- Important in maintaining superpower wealth as they increase globalisation and dominate natural resource trade and goods.
- Large profits return to the source country e.g USA.
- TNCs are able to control technology through patents reducing competition from LEDC TNCs.
- Resource TNCs (Gazprom) important for control in terms of superpowers.
- USA dominates world TNCs (Google, Facebook, Apple) and have increasing profits coming from other countries.
- Tactics such as glocalisation and offshoring means that the markets expand and grow becoming even richer.
Advantages:
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Disadvantages:
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Provide jobs |
Exploit workers |
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Economic growth for infrastructure
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Cause pollution
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Raises GPD |
Cause cultural erosion |
Cultural
Globalisation Influencing The Global Economy:
- Western TNCs benefit from cultural globalisation and responsible for causing it.
- TNCs such as McDonalds and Google lead to more westernisation where the cultures of one country changes to become more like the USA.
- The spread of music, language and arts can happen this way and it is a form of soft power.
- Good because those in LEDCs see an increase in lifestyle and standard of living and they take in the ideology of a country and become consumers of the same products and get profit back to the USA.