Global Interdependence a Level

Global interdependence Visible Imports: Physical goods which are imported into a country. Visible exports: Physical goods which are exported. Invisible imports: services (whatever you cannot touch is invisible eg: interests, funds inflows…) which enter a country.

Invisible exports: services provided by your country. Balance of trade: income gained from visible exports- costs in paying visible imports. Balance of payments: balance of trade including invisible earnings or costs. + Trade surplus: earn more from exports than you lose from imports.

Trade deficit: earn less from exports than you pay from imports. ----Global inequalities in trade flows: awareness needed.?!?!?!? Factors affecting global trade: -Resource endowment:?!?!!? -Locational advantage: countries which are closer to each other can trade between them easier as they might spend less on transport costs, resulting in being cheaper to trade. -Historical factors: eg of colonial ties: UK with Canada , Australia, India, etc.

. -Trade agreements: RTA (Regional trade agreement) eg: EU. There are groups which share economical and economical opinions/aims. The largest ones are: EU, NAFTA.

Changes in the global market:?!?!?!? [Comparative advantage? ] GATT and the World Trade Organization GATT: General Agreement on Trade and Tariffs and its aim is to reduce tariffs and provide a forum for discussing problems of international trade. Two main issues: -EU and USA had strong farming subsidies (difficult for LEDCs to export). - Japan and remainig G7 had discussions over tariffs. In 1995 GATT was fucked and replaced by the WTO(World Trade Organization) WTP serves interests of developing countries in four ways (reasons why LEDCs became members): 1-facilitates trade reforms -provides a mechanisms for settleling disputes.

3-strengtheness the credibility of trade reforms. 4-promotes transparent trade regimes that lowers transaction costs. Fair trade: Fair Trade is an organized social movement and market-based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as social and environmental standards.

It focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate and flowers. -Role: 1- provide market access to otherwise marginalized producers, connecting them to customers and allowing access with fewer middlemen (person between producer and consumer). 2- It aims to provide higher wages than typically paid to producers as well as helping producers develop knowledge, skills and resources to improve their lives. - advocates also seek to raise awareness of the movement's philosophies among consumers in developed nations.

4- Fair trade products are traded and marketed either by an "MEDC supply chain" whereby products are imported and/or distributed by fair trade organizations (commonly referred to as alternative trading organizations) or by "product certification" whereby products complying with fair trade specifications are certified by them indicating that they have been produced, traded, processed and packaged in accordance with the standards. DebtOne of the greatest problems faced by less developing world countries is their level of foreign debt. By struggling to pay debt countries cannot invest in education, medical care, transport route and are often giving up more of their raw materials as pay off. Many countries particularly in Africa owe staggering amounts of money.

Causes of Debt * The legacy of colonialism — for example, the developing countries’ debt is partly the result of the transfer to them of the debts of the colonizing states, in billions of dollars, at very high interest rates. Odious debt, whereby debt is incurred as rich countries loaned dictators or other corrupt leaders when it was known that the money would be wasted. South Africa, for example shortly after freedom from Apartheid had to pay debts incurred by the apartheid regime. * Mismanaged spending and lending by the West in the 1960s and 70s.

Arguments about Third World Debt - Should richer countries be asked for money which has to be repayed?DEBATE - Six Reasons why international debt for the third world should be cancelled… 1) several governments want to spend more money on poverty reduction but they lose those money in paying off their debts 2) the lenders knew that they gave to dictators or oppressive regimes and thus, they are responsible for their actions, not the people living in the countries of those regimes. For example, South Africa has been paying off $22 billion which was lent to stimulate the apartheid regime. 3) many lenders knew that a great proportion of the money would sometime be stolen through corruption. ) the developing projects that some loans would support were often unwisely led and failed because of the lender's incompetence. 5) many of the debts were signed with unfair terms, several of the loan takers have to pay the debts in foreign currency such as dollars, which make them vulnerable to world market changes. The unfair terms can make a loan extremely expensive, many of the loan takers have already paid the sum they loaned several times, but the debt grows faster than they can repay it.

6) many of the loans were contracted illegally, not following proper processes.Consequences of debt abolition Some economists argue against forgiving debt on the basis that it would motivate countries to default on their debts, or to deliberately borrow more than they can afford, and that it would not prevent a recurrence of the problem. Economists often refer to this as "moral hazard". Debt Relief: Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. Barriers to tackling debt relief:Poor countries have to prepare Action Plans or SAP`s (special adjustment policy) which have to approved by the IMF and the World Bank Most HIPCs (highly indebted poor country) lack the skills to draw up such proposals All areas of the countries economy must be tackled for the IMF and the World Bank to approve the proposal IMF and the World Bank are reluctant to write cheques for money which might be spent on weapons Sometimes credit relief is still not enough (still debt too high like in Mozambique, Burkina Faso or Tanzania) Sometimes the LEDCs do not cooperate! with debt relief) the SAPs impose very onerous (heavy obligations) restraints on them (eg increased interest rates) Bloody confrontations may arise due to the imposition of SAPs (special adjustment policy) and lack of progress. Debt Crisis: When the country simply cannot repay the debt as it is continually growing due to high interest rates AID: What is AID? ) Short-term aid or relief aid: supplied after disasters, includes tents, medicine and food 2) Long-term aid or development aid: usually financial assistance or equipment, advisors and technicians 3) Multi-lateral aid: reaches the HPIC via organisations like the IMF 4)Bi-Lateral aid: goes directly from the donor country to the developing nation 5)NGO aid: derived from NGOs (non governmental agencies) eg OXFAM 6)Tied aid:when one country donates money or resources to another (bilateral aid) but with conditions attached.

These conditions will often be in the MEDCs favour, eg the controversial Pergau Dam project in Malaysia, where Britain used aid to secure trade deals with Malaysia. TOURISM: Carrying Capacity: The World Tourism Organisation argues that carrying capacity is the maximum number of people who may visit a tourist destination at the same time, without causing destruction of the physical, economic and socio-cultural environment and/or an unacceptable decrease in the quality of visitors' satisfaction. Sustainable tourism Sustainable tourism is envisaged as leading to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems. " (World Tourism Organization) Recession tourism Recession tourism is a travel trend, which evolved by way of the world economic crisis. Identified by American entrepreneur Matt Landau (2007), recession tourism is defined by low-cost, high-value experiences taking place of once-popular generic retreats.

Various recession tourism hotspots have seen business boom during the recession thanks to comparatively low costs of living and a slow world job market suggesting travelers are elongating trips where the dollar travels further. TRENDS IN TOURISM: tourism was increasing due to globalisation, increase in awareness of other destinations, low cost trips, better transport and easier accesibility However last years experienced a decrease in growth Reasons: financial crisis and H1N1 virus CYCLE MODEL OF TOURISM: EcotourismEcotourism is a type of sustainable development. The aim of ecotourism is to reduce the impact that tourism has on naturally beautiful environments. Any tourist destination can be harmed by increased tourism.

If areas are damaged or destroyed, they will not be available to future generations The ecotourism approach includes: * Ensuring that tourism does not exploit the natural environment or local communities. * Consultation with local communities on planned developments. * Making sure that infrastructure improvements benefit local people and not just tourists.Ecotourism now has the backing of the United Nations, which made 2002 the "International Year of Ecotourism". Guidelines for ecotourists Ecotourism sets out guidelines for how tourists should behave when visiting fragile environments. These include: * Protect the environment - keep to footpaths, don't leave litter or start fires.

* Don't interfer with wildlife - don't scare or feed the animals. * Protect resources - don't take too many showers or use air conditioning. * Support local communities - stay in locally owned accommodation and buy produce from local people. Eat local food and drink - avoid products that have been imported from MEDCs. * Respect local customs and traditions - some communities are offended when tourists wear inappropriate clothes in religious places, strip off on the beach or behave in a rowdy manner.

Locals appreciate tourists who try to learn the language and show an interest in their culture. Ecotourism is increasingly popular and many people appreciate remote locations, small numbers of tourists and less sophisticated facilities. If a resort becomes over-developed then they will choose alternative destinations.Case study: ecotourism at Uluru Uluru (formerly known as Ayers Rock) in Australia is one of the largest rocks (or monoliths) in the world. Until recently large numbers of tourists visited the rock and climbed it using a rope-and-pole path drilled into the side of the rock.

As a result the rock was becoming eroded. In 1985 the Australian government handed the land on which Uluru stands back to the Aboriginal inhabitants, the Anangu. The rock has spiritual significance for the Anangu and they do not climb it. The Anangu now ask tourists to respect the rock by not climbing it, and most tourists comply.