Globalisation Crib Sheet

NB: when discussing globalisation some sources discuss remote events such as setting up of East India Company. As term ‘developing countries’ is used students should focus on modern post-colonial era – probably shouldn’t go further back than 1960s

|Advantages |Disadvantages |
|Multinational companies (MNCs) have more opportunities for Foreign |MNCs tend to use cheap labour – many jobs badly paid, with poor |
|Direct Investment (FDI) can create more work opportunities for local|conditions, using child labour etc. |
|people. | |
|Competition between domestic and foreign producers gives local |Can be difficult for local companies to compete against MNCs, |
|consumers more choice, may reduce inflation |especially infant industries, could lead to increased unemployment |
|Some developing countries seem to experience dramatic economic |Many countries seem to benefit less from globalisation. Some |
|growth as a result of globalisation (e.g. BRICs Brazil, Russia, |countries producing raw materials, agricultural produce may have to |
|India, China) |operate in rigged markets (especially by EU, NAFTA etc.). Even |
| |inside BRICs can be wide differences in income distribution |
|Globalisation leads to increased tourism which can boost GDPs of |Tourism tends to create seasonal, badly paid jobs. Also is unstable,|
|developing countries |vulnerable to economic downturns in developed countries, terrorist |
| |incidents, natural disasters etc, |
|Globalisation may lead to increased aid from developed countries – |Aid may lead to dependency, corruption in developing countries |
|perhaps can boost developing countries’ economies | |
|Globalisation leads to more opportunities for students to attend |Universities in developing countries lose fees if students study |
|university in developed countries - can improve developing |abroad. Also can lead to ‘brain drain’ if economy loses most able |
|countries’ economies (especially in the future) by boosting |people and eventual negative economic impact |
|intellectual capital | |
|Makes countries more interdependent – faster exchange of innovation,|Growing interdependence of international economy can lead to more |
|technical knowledge |financial collapses. Economic downturns in developed economies will |
| |affect developing ones |
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|Globalisation leads to greater migration of labour. This reduces |‘Brain drain’ (see above) |
|unemployment in developing countries. Also workers’ remittances can | |
|boost GDP of developing countries | |
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