THE GEOGRAPHER ONLINE

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      • Unit 1: Changing Population >
        • 1. Population and economic development patterns
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        • 1. Causes of global climate change
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        • 1: Global trends in consumption
        • 2: Impacts of changing trends in resource consumption
        • 3: Resource stewardship
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        • 1. Global interactions and global power
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      • 1. Populations in Transition
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      • Oceans and their Coastal Margins
      • Hazards and disasters - risk assessment and response
      • Freshwater - issues and conflicts
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      • Measuring Global Interactions
      • Changing Space - The Shrinking world
      • Economic Interactions and Flows
      • Environmental Change
      • Sociocultural Exchanges
      • Political Outcomes
      • Global Interactions at the Local Level
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Economic interactions and flows


Index

1. Financial Flows
2. Labour Flows
3. Information Flows

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Financial Flows

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Key Terms
  • Investment: expenditure on a project in the expectation of financial (or social) returns.
  • Official development assistance (ODA): aid given by governments and other agencies to support the economic, social and political development of developing countries.
  • Profit repatriation: returning foreign-earned profits or financial assets back to the company's home country.
  • Debt: money owed to private creditors, between countries or to international agencies such as the World Bank or IMF.
  • Free trade: a hypothetical situation whereby producers have free and unhindered access to markets everywhere.
  • Loan: money borrowed that is usually repaid with interest.
  • Remittance: a transfer of money by a foreign worker to their home country.
  • Protectionism: the institution of policies (tariffs, quotas, regulations) that protect a country's industries against competition from cheaper imports. 
  • Terms of trade: the price of a country's exports relative to the price of its imports, and the changes that take place over time.
  • Trade deficit: when the value of a country's exports is less than the value of its imports. 

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Discuss the various financial flows in the following image. Print image and annotate with examples.

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Flows of Finance and capital between core and periphery
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Print and make notes on the following PowerPoint Presentations
Global flows - economy and finance from Steven Heath
global_flows_-_economy_and_finance.pptx
File Size: 1563 kb
File Type: pptx
Download File

Rostow's stages of development from Steven Heath
rostows_stages_of_development.pptx
File Size: 1288 kb
File Type: pptx
Download File


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Collaborative Research: Create a Google document where each person researches a case study on the importance of:
  1. Loans
  2. Debt repayment
  3. Development aid
  4. Remittances
  5. Foreign direct investment
  6. Repatriation of profits

For each case study you should explain the Financial Flow and how it works, give a real life example with factual content and assess the importance of it.
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Example Available



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IB Style Question:
Examine the strategies used in the transfer of capital between the core and periphery areas [15]  
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Example available

Governments


The aim of all national governments is either to try and balance their budget or to get a budget surplus (unfortunately most countries run a deficit). As well as balancing spending and taxation governments also need to look at the their levels of imports and exports. Governments can increase or decrease imports and exports in some of the following ways
National governments can try and increase flows of global trade in a number of ways including:
  • Joining a trading bloc or trading organisation
  • Promoting free trade and ending protectionism
  • Opening enterprise zones and attracting TNCs
  • Devaluing their currency
They can also try and reduce flows of global trade in some of the following ways:
  • Using protectionist measures (tariffs and quotas)
  • Imposing sanctions or embargoes with other countries
  • Switching to more planned economies
  • Increasing regulations and environmental controls (more red tape)
  • Imposing ownership regulations on foreign companies


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Make some notes on how governments influence world trade:
  • Protectionism: Is it on the way back?
  • Government Influence on Trade

World Trade organisations

The WTO started its life as GATT (General Agreement on Tariffs and Trade). GATT was established in 1948. GATT involved member countries meeting (rounds) to discuss and agree tariffs over trade. The final round in Uruguay (1986-94) agreed to establish its successor the WTO. The WTO officially began life on the 1st January 1995. The WTO Is based in Geneva and now has 153 members who between them represent 97% of total world trade. Although GATT only looked at the trade of goods, the WTO also looks at the trade of services and intellectual property rights. The aim of the WTO is to:
  • Liberalise (free) world trade (reduce protectionism)
  • Create a forum for governments to negotiate global trade agreements
  • Be a place to settle trade disputes
  • Be a place to set and clarify trade rules.
  • The WTO's most recent negotiations were in Doha, Qatar. The aim of the negotiations was to involve LEDCs more in global trade. One of the major sticking points in the talk was Europe's and the US's refusal to cut farm subsidies.
Despite its work, the WTO has had some critics. It is criticised for favouring MEDCs especially over its agricultural subsidies, allowing counterfeiting and breaking of copyright/patents to continue in member countries and having no power to punish countries who break trade rules.

Financial Istitutions
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International Monetary Fund (IMF)
The IMF like the World Bank was created at Bretton Woods in 1944. It started with only 46 members but has now grown to include 186. Member countries all contribute to a pool of money which member countries can then borrow on a temporary basis to overcome budget deficits/imbalances. The IMF was extremely important after WWII to help stabilise the global economy.

The IMF has taken a leading role during the current global economic crisis. It has sold gold reserves to increase it pool of money and the G20 leaders have pledged a further $500 billion to allocate to other members suffering from budgetary problems. Even though the IMF is currently taking a leading role in the economic crisis, it has been heavily criticised. Criticisms include:
  • The IMF have supported some undemocratic governments that have been favourable to European and US TNCs.
  • SAPs imposed on borrowing countries were often damaging, forcingcountries to sell state assets and to cut funding to education and health.
  • The IMF has forced countries to impose strict austerity measures in order to receive money (increased taxes and reduced spending). Greece has had to follow very strict austerity measures to get help from the IMF and EU.
  • The main funding nations (MEDCs) have too much influence over decisions.
  • The head of the IMF always comes from Europe
  • That it often has reactionary policies rather than preventative ones.

http://www.imf.org/
World Bank
The World Bank was established in Bretton Woods in 1944 and has its headquarters in Washington DC. The World Bank is not a traditional high street bank, but a global one owned by its member countries (187 countries). It has two main institutions, the International Bank for Reconstruction and Development and the International Development Association. The bank has over 10,000 employees and over 100 offices around the world. In its early days the bank did not lend much money, but then in the late 1960's and 1970's it started lending more money to developing countries in order to fund schools, hospitals, infrastructure projects, etc. In the 1980's the World Bank along with the IMF imposed SAP (structural Adjustment programmes) on many of its borrowers.

From the 1990's onwards the World Bank is now more interested in helping countries achieve the UN's Millennium Development Goals. This includes reducing poverty, improving health and education and ensuring sustainable growth.

The World Bank has had a number of criticisms including:
  • Its imposition of policies on developing countries (particularly the damaging SAPs)
  • Its assumption that LEDCs cannot develop without outside help and knowledge
  • The largest contributors (MEDCs) have too much power over policies
  • That the head of the World Bank always comes from the US
  • That it focuses too much on GDP growth rather than improvement in living standards.
  • Some development projects were environmentally damaging e.g. dams causing deforestation
  • Some projects involved expensive technology which countries could not fund themselves.

http://www.worldbank.org/

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IB Style Question:
Explain how various organisations influence the financial flows [10]



Labour Flows

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Key Terms
  • Labour migration: migration from one country to another when the primary purpose is to seek employment. 
  • Underemployment: a situation where people are working less than they would like to and need to in order to earn a reasonable living.
  • Mass migration: the migration of a large group of people from one geographical area to another.
  • Guest worker: a foreigner who is permitted to work in a country on a temporary basis, for example a farm labourer. 
  • Maquiladoras: assembly plants in Mexico, especially along the border between the USA and Mexico, to which foreign materials and parts are shipped and from which the finished products are returned to the original market
  • Assimilation: the process of becoming integrated into mainstream society.
  • Total fertility rate: the number of children an average woman would have, assuming that she lives her full reproductive lifetime.
  • Ethnographic: an ethnography is a type of case study that focuses upon the cultural patterns that develop within a group.
  • Time-space distanciation: the stretching of social systems across space and time
  • Migrant culture: the attitudes and values of a particular society to the process of migration.


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Case Study
Create a set on notes on the flow of Mexicans to the USA 
'Global Interactions' book page 73-80
(There is a useful link here to the case studies we looked at in migration - Core 1)

You will need to explain:
How many people have migrated?
Reasons for their migration (stick to the work related issues)
Causes and Effects of this migration (It is VERY important to look at both country of origin and destination here)
How has the USA tried to limit migration from Mexico? (what methods have they used)
How successful have the US attempts been to limit this migration?

Background
More than 11% of Mexico’s native population lives abroad, making it the country with the most emigrants in the world. 97% of all Mexican emigrants reside in the United States, which are more than 12 million (legal and illegal) migrants. Estimates on the amount of Mexican emigrants of indigenous origin in the U.S. range between 50% and 90% of the entire emigrant population.

Possible Resources:
  • Overview of situation
  • How US Policies Fueled Mexico's Great Migration
  • Why wave of Mexican immigration stopped
  • BBC case study
  • Illegal Immigration Explained - Profits & Poverty, Social Security & Starvation
  • Big Mexican Breadwinner: The Migrant Worker
poverty-in-mexico-fact-sheet.pdf
File Size: 417 kb
File Type: pdf
Download File



Information Flows

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Key Terms
  • Outsourcing: the concept of taking internal company functions and paying an outside firm to handle them.
  • Supply chain management (SCM): the control of materials, information and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
  • Outsourcing city clusters: the spread of outsourcing from the main city in a region to neighbouring urban areas linked by high-level transport and communications systems.
  • Back office industry: offices of a company handling hig volume communications by telephone, electronic transactions or letter. They are footloose and are increasingly decentralized to places where space, labour and other costs are relatively low. 
Watch the two YouTubes below and discuss what Outsourcing is.

Outsourcing: The process of taking internal company functions and paying an outside firm to handle them. The process of outsourcing part of your business operations to another company is known as subcontracting.
The reasons companies outsource can vary, but may include:
  • To reduce costs
  • To improve quality of service
  • To access and benefit from outside expertise
  • To avoid training costs
  • To focus on core business
  • To improve choice
  • To reduce risk (less investment, less direct employees)
  • Avoid pay health insurance, pension contributions, etc. for workers
In order for cities, regions or countries to become attractive locations for TNCs to outsource, they will have to fulfill numerous requirements including:
  • Improving internet speed, capacity and reliability
  • Improve language skills of workers especially in English
  • Improve IT skills and understanding
  • Train workers in culture and customs of potential customers home countries
  • Ensure reliable telephone connections
  • Offer 24 hour service - important the contracting company is in a different time zone or even hemisphere.
  • Offer a high quality service cheaper than potential customers can provide themselves

Outsourcing in the world
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A.T. Kearney, Criteria used to rank major outsourcing locations
at_kearney_offshoring_report.pdf
File Size: 2368 kb
File Type: pdf
Download File

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Create a one page document explaining which regions are the most attractive in the world for outsourcing.
  • Why is it? (what do they offer)
  • Advantages and disadvantages (home sentiment) 
  • Use facts and figures



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Case Study: Outsourcing and Apple

Create a mind map with examples of how Apple outsource around the world. Use Coggle to make the mind map.
(Where - What - Why?)


Sources:
  • iPod Marketing strategy
  • How the U.S. Lost Out on iPhone Work
  • Welcome to iPod City
  • Child labour, lost wages uncloaked by Apple factories audit
  • iPhone: Made In Shenzhen, Assembled by Foxconn
  • The shame of Apple


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IB Style Question:
Explain why companies outsource certain functions [10]


www.thegeographeronline.net
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The Geographer Online is an educational website aimed at providing geography teaching resources for all levels. 
Created and Developed by: Steven Heath

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  • Home
    • How to make a website: Tools and experiences
    • Maps and Regions
    • Travel Photographs and Videos
    • Live: Global Hazards and Disasters
    • Geography in the news
    • The Big Geography Challenge
  • New IB Geography 2017 onwards
    • IB Geography Introduction
    • Part 1: Geographical Themes >
      • Option B: Oceans and coastal margins >
        • 1. Ocean–atmosphere interactions
        • 2. Interactions between oceans and coastal places
        • 3. Managing coastal margins
        • 4. Ocean management futures
      • Option D: Geophysical Hazards >
        • 1. Geophysical systems
        • 2. Geophysical hazard risks
        • 3. Hazard risk and vulnerability
        • 4. Future resilience and adaptation
    • Part 2: Core Units (SL&HL) >
      • Unit 1: Changing Population >
        • 1. Population and economic development patterns
        • 2. Changing Populations and Places
        • 3. Challenges and opportunities
      • Unit 2: Global climate—vulnerability and resilience >
        • 1. Causes of global climate change
        • 2. Consequences of global climate change
        • 3. Responding to global climate change
      • Unit 3: Global resource consumption and security >
        • 1: Global trends in consumption
        • 2: Impacts of changing trends in resource consumption
        • 3: Resource stewardship
    • Part 3: HL Core Extensions >
      • Unit 4: Power, places and networks >
        • 1. Global interactions and global power
      • Unit 5: Human development and diversity
      • Unit 6: Global risks and resilience
    • Internal Assessment
    • Why should I study IB Geography?
  • IB Geography (Old Syllabus)
    • IB Core >
      • 1. Populations in Transition
      • 2. Disparities in Wealth and Development
      • 3. Patterns in Environmental Quality and Sustainability
      • 4. Patterns in Resource Consumption
    • Part 1: Geographical Themes >
      • Oceans and their Coastal Margins
      • Hazards and disasters - risk assessment and response
      • Freshwater - issues and conflicts
      • Urban Environments
    • Global Interactions - HL >
      • Measuring Global Interactions
      • Changing Space - The Shrinking world
      • Economic Interactions and Flows
      • Environmental Change
      • Sociocultural Exchanges
      • Political Outcomes
      • Global Interactions at the Local Level
    • IB Guidance >
      • Syllabus Guidance
      • IB Examination Guidance
    • Extended Essay
  • IGCSE Geography
    • Theme 1: Population and settlement >
      • Population Dynamics
      • Migration
      • Settlements
      • Urban Settlements
      • Urbanisation
    • Theme 2: The natural environment >
      • Plate Tectonics
      • Coasts
      • Rivers
      • Weather and Climate
      • Climate and Ecosystems
    • Theme 3: Economic development >
      • Development
      • Food Production
      • Industry
      • Energy
      • Tourism
      • Water
      • Environmental Risks of Economic development
    • GCSE Key Terms
    • GCSE Coursework
    • Alternative to Coursework
    • IGCSE Geography Examination Advice
    • IGCSE Revision Games
  • Key Stage 3
    • Year 6 >
      • My Place
      • Rivers
      • Brazil
    • Year 7 >
      • Maps and the world
      • Rocky Landscapes
      • Settlement
      • Weather & Climate
    • Year 8 >
      • Maps Introduction
      • Plate Tectonics
      • Economic Activity
      • Biomes
    • Year 9 >
      • Map Skills - review
      • Development
      • Coasts
      • Tourism
      • Paradise lost - Tourism in Thailand
  • AS Level Geography
    • World at Risk
    • Crowded Coasts
  • Geography Skills
  • Donations & Contact
  • YouTube Channel
  • Essential computer programs