Download Chapter 7: Interdependent Global Economy

7
Interdependent Global Economy
The role multinationals play in Irish and global trade
The global environmental issues of global warming,
deforestation and desertification
Asylum seeker and refugee issues in Europe
Chapter 7: Interdependent Global Economy
Multinationals
 Directly invest in many countries by building factories and by
employing workers
 78,000 world wide
 Account for over 10% of global GDP
 Responsible for approximately one third of global exports
Chapter 7: Interdependent Global Economy
Multinationals (continued)
 Employ an estimated 3% of the global workforce
 Important source of employment, export trade and economic
growth in many countries
 Economic difficulties can result if decide to move elsewhere
 Positive and negative economic impact
Chapter 7: Interdependent Global Economy
Irish trade and Multinationals
 Irish government encouraged foreign-owned companies to establish
operations in Ireland
 Major source of employment
 Accounts for the majority of Irish exports
 Industrial Development Agency (IDA) responsible for the attraction and
development of foreign investment in Ireland
 Crucial role in Irish economy
Chapter 7: Interdependent Global Economy
Irish trade and Multinationals (continued)
 IDA companies contributed €19 billion in direct expenditure to the
economy while exports from IDA client companies account for over
70% of all Ireland’s exports
 Information and Communications Technologies
 Medical Technologies
 Pharmaceuticals and Biotechnology
 International Financial and Business Services
Chapter 7: Interdependent Global Economy
Irish trade and Multinationals (continued)
 Seven of the world’s top ten information and communications technology
companies operate in Ireland
 Fifteen of the top twenty-five global companies involved in medical
technology have a manufacturing base
 Nine of the top ten global pharmaceutical companies are located here
 Irish economy is especially influenced by the global trading patterns in
certain economic activities
Chapter 7: Interdependent Global Economy
Multinationals and Ireland case study: Dell Inc.
 Multinational computer firm
 Employs over 100,000 people worldwide in more than 50 different countries
Dell in Ireland
 Limerick from 1989
 2009 employed nearly 3,000 mostly assembly-line workers in Limerick
 1,500 staff in the Dublin region involved in sales, marketing and support for
customers across Europe
 Contributed about 5 per cent to
Ireland's GDP by 2009
Chapter 7: Interdependent Global Economy
Dell in Ireland (continued)
 January 2009 announced that it was cutting 1,900 jobs in its Limerick
operation
 Transferred entire Irish production to a new plant in Lodz, Poland
 Labour costs in Poland were cheaper – workers in Lodz earn €3 an
hour compared with between €10 and €14 an hour in Ireland
 The Polish government had invested €52.7 million into providing new
facilities for Dell at its new plant in Lodz
Chapter 7: Interdependent Global Economy
Multinationals and China Case Study: The Textile Industry
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Since 1995 China has been the largest exporter of textiles in the world
Important sector of China’s economy
Today 7.6% of China’s total trade volume is accounted for by textiles
Growth has given rise to significant environmental concerns
Chapter 7: Interdependent Global Economy
Multinationals and Africa Case Study: The Tea Trade
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Tea is a crucial commodity to a number of African countries
Accounts for as much as 30% of Malawi’s foreign exchange
In Rwanda, it is responsible for around 15% of its total exports
In Kenya, the world’s leading exporter of tea, 10% of the population
are employed by the tea sector
 Most tea workers and farmers in Africa receive low and insecure
incomes
 Inappropriate laws and policies and poor farming practices
 Small holder farmers receive only a fraction of the price their produce
fetches at auction
Chapter 7: Interdependent Global Economy
Global environmental issues – Global Warming
 Scientists have measured increases in global average
air and ocean temperatures
 The temperature increase is global but is greater at
higher northern latitudes
 Global average sea level rose at
an average rate of about 8.1 mm
per year from 1993 to 2003
 Caused by the melting of glaciers,
ice caps and polar ice sheets
Chapter 7: Interdependent Global Economy
The Greenhouse Effect, Global Warming and Climate Change
 Causing climate change
 Precipitation declined in the Sahel, the Mediterranean, southern Africa and
parts of southern Asia
 Rise in ocean levels has resulted in a greater threat of flooding in low-lying
areas like Bangladesh
 Humans have caused climate change through their use of greenhouse gases
(GHGs)
 Created a global greenhouse effect –
trap heat from escaping back
into the atmosphere
Chapter 7: Interdependent Global Economy
Solving Global Warming
 Limit our use of greenhouse gases
 Kyoto Protocol – reduce emissions to below the 1990 level of emissions by
the years 2008 – 2012
 Many countries believe that to develop they will have to industrialise – and
use more fossil fuels
 China/India did not sign the Kyoto protocol
 USA did not sign either in part because of the refusal of China and India to
commit to the reductions
Chapter 7: Interdependent Global Economy
Global environmental issues – Deforestation
 Removal of the tree cover below a certain limit and
converting the land to another use
 Forests sustain the livelihoods of hundreds of
millions of people globally
 Store more than one trillion tonnes of carbon and
support a rich biodiversity
 About 13 million hectares of forests are converted
to other land uses every year
 Result of the interdependent nature of the global
economy
Chapter 7: Interdependent Global Economy
The Amazon Rainforest –
Deforestation and the interdependent global economy
 Largest rainforest in the world, 800 million hectares
 Over the past 40 years, about a fifth of Brazil’s Amazon
rainforest has been deforested
 Cattle industry has been a major contributor to the
deforestation of Amazon rainforest
Chapter 7: Interdependent Global Economy
Global environmental issues – Desertification
 Land degradation in arid, semi-arid and dry sub-humid (dryland) areas
 Results from various factors including climatic variations and human activities
 Dry lands cover up to 41.3% of the world’s land surface
Causes of desertification
 Climatic – low soil moisture, changing rainfall patterns and evaporation levels
 Indirect causes are mostly
human and include poverty,
over-exploitation of the land,
and the local political situation
Chapter 7: Interdependent Global Economy
Global environmental issues – Desertification
The international dimension of desertification
 Global Warming – Drylands store approximately 46% of the global
carbon share
 Internal and cross border migration – link between dryland
degradation and food production. Such pressures can result in
massive migration flows
Chapter 7: Interdependent Global Economy
Social and political decisions in an interdependent global economy
Asylum seekers and refugees
 Asylum seekers are people who look to live in another country because of fear
of persecution in their own country
 Movement of asylum seekers creates significant global migration patterns
 Impact on source and destination countries
 Human rights issues can also develop around the migration of asylum seekers
The EU and asylum
 Sharp decrease in the number of asylum applicants in the EU
Chapter 7: Interdependent Global Economy
Asylum applications in France
 Overall decline in asylum applications in the EU since 2002, not the
experience of every EU country
 2010 there were 47,790 applications received for asylum in France
 Largest number of applications received by any EU country
 13 per cent increase over 2009 (42,100 claims)
Chapter 7: Interdependent Global Economy
Ireland and Asylum seekers
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In 1992 there were just 92 applications for asylum in Ireland
In 2009 approximately 2,000 people applied for asylum
The top five applicant countries for 2010 accounted for 49.3% of applications
Nigeria 20% of all applicants
China (11.8%)
Pakistan (10.3%)
Democratic Republic of Congo (3.7%)
Afghanistan (3.6%)
Currently (2011) 9,107 refugees in Ireland
Chapter 7: Interdependent Global Economy
Social and political decisions in an interdependent global economy
– Human rights issues
Greek
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detention centres
1,000 reception places available for asylum-seekers
10,273 asylum applications were lodged in 2010.
Hold detainees in conditions that do not comply with
international standards
 Detain unaccompanied children