* Financial flows
Examine the importance of loans, debt repayment, development aid, remittances, foreign direct investment and repatriation of profits in the transfer of capital between the developed core areas and the peripheries.
Capital flows, both into, and out from the core developed areas of the world and the periphery is highly dependant on the mechanism of flow of flow being discussed.
Development aid, remittances, foreign direct investment all result in flows of capital from core out to peripheral areas. China has rapidly boosted its foreign investment in the last decade, largely in riskier areas of the world. Similarly, a more globalised world has swelled the number of people who are able to send remittances. For some countries, remittances account for a considerable proportion of GDP, such as Tajikistan (43%). International lending organisations continue to allocate loads for development. The IMF and World Bank are significant lenders, however the Asia Development Bank has become a significant lender in the Asia Pacific region, lending 10.8 billion in 2008.
Conversely, debt repayment and the repatriation of profits draw capital from the periphery back to the developed core. Offshore corporate tax avoidance cost the US treasury $180 billion.
Development aid, remittances, foreign direct investment all result in flows of capital from core out to peripheral areas. China has rapidly boosted its foreign investment in the last decade, largely in riskier areas of the world. Similarly, a more globalised world has swelled the number of people who are able to send remittances. For some countries, remittances account for a considerable proportion of GDP, such as Tajikistan (43%). International lending organisations continue to allocate loads for development. The IMF and World Bank are significant lenders, however the Asia Development Bank has become a significant lender in the Asia Pacific region, lending 10.8 billion in 2008.
Conversely, debt repayment and the repatriation of profits draw capital from the periphery back to the developed core. Offshore corporate tax avoidance cost the US treasury $180 billion.
Examine the influence of governments, world trading organizations and financial institutions (such as the World Trade Organization, International Monetary Fund and World Bank) in the transfer of capital.
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One of the major stories of the early 21st century is the increase in investment coming from developing nations, especially China (see graph). The USA and other developed nations are considerable foreign investors.
However, The USA also remains a significant source of investment. As nations invest in other countries they are able to exert control through the provision of services, the creation of jobs and the building of infrastructure. While the World Bank, IMF and World Trade Organisation are the world lenders there are many questions around the level of transparency, the equity of loans to nations and the transparency of decision making about how loans are spent. |
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* Labour flows
Explain the causes and effects of one major flow of labour between two countries.
Mexican - US Immigration
There is a long history of labour exchange between USA and Mexico. However, it must be pointed out that many citizens of the USA are of Hispanic decent. There is a neatly complimentary match between the US and Mexican labour force. However, as standards of living raise in Mexico, there are distinct changes taking place in the migration between Mexico and USA.
Mexicans have numerous reasons to desire labour in the USA. These include income, working conditions and opportunity for advancement.
There are also many benefits gained by the USA from Mexican immigration. Mexican migrants are quite mobile and therefore fill gaps in labour demand quickly. However, Mexico also has demands for labour and effectively competes with the US agriculture sector for labour.
There is a long history of labour exchange between USA and Mexico. However, it must be pointed out that many citizens of the USA are of Hispanic decent. There is a neatly complimentary match between the US and Mexican labour force. However, as standards of living raise in Mexico, there are distinct changes taking place in the migration between Mexico and USA.
Mexicans have numerous reasons to desire labour in the USA. These include income, working conditions and opportunity for advancement.
There are also many benefits gained by the USA from Mexican immigration. Mexican migrants are quite mobile and therefore fill gaps in labour demand quickly. However, Mexico also has demands for labour and effectively competes with the US agriculture sector for labour.
The effects of Mexican immigration can be divisive in the USA. Recently Presidential nominee Donald Trump has been able to generate significant support by advocating harsher treatment of Mexican immigrants and making openly racist comments.
* Information flows
Explain the role of ICT in the growth of international outsourcing.
Indian Outsourcing
India has made significant investment in its outsourcing sector. This results for the highly educated and low cost labour India is able to offer. India dominates the outsourcing of service industries, while China has dominated the manufacturing industries.
The industry has been supported by government moves, such as the installation of reliable IT infrastructure. Much of India's economic development in the last 20 years has come as a result of the growth in software, tech and outsourced services which are all reliant on the IT infrastructure.
However, India is unlikely to continue to dominate outsourcing of services as more low cost and efficient nations such as the Philippines start to compete.
India has made significant investment in its outsourcing sector. This results for the highly educated and low cost labour India is able to offer. India dominates the outsourcing of service industries, while China has dominated the manufacturing industries.
The industry has been supported by government moves, such as the installation of reliable IT infrastructure. Much of India's economic development in the last 20 years has come as a result of the growth in software, tech and outsourced services which are all reliant on the IT infrastructure.
However, India is unlikely to continue to dominate outsourcing of services as more low cost and efficient nations such as the Philippines start to compete.
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