Unequal flows

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  • Unequal flows
    • Unequal flows of capital
      • Negatives
        • Environmental degradation and exploitative workplace practices
        • Reparation of profits can exacerbate inequalities between regions
          • For example, a portion of VW profits made in Mexico are sent to Germany HQ
        • Risk of over reliance on FDI for economic growth
        • Growth of TNCs economically and politically, are they more powerful than nation states?
      • Positives
        • Increase in GDP growth rates in what were poorer areas eg asian tigers
        • Reduces pressure on migration
        • Equalises conditions and reduces international tensions and conflicta
      • Aid
        • Donors and recipients (multilateral and bilateral)
        • IMF, World Bank, UNICEF
        • E.g.. WHO deploys experts and equipment to help deal with Ebola breakout in West Africa
      • Trade
        • TNCs
        • Imports and exports
        • Reparation of profits
      • Investment
        • FDI
          • Investment in a country by individuals and firms from abroad
        • Loans and debt
        • Deregulation of financial markets has helped to facilitate the flows of capital around the world
    • Unequal flows of people
      • Much more restriction than flows of capital due to national limits on immigration
      • Impacted by the covid-19 pandemic
      • Statistics
        • Last two decades have seen rapid growth of migration due to demand for labour
        • 2/3 of all immigrants live in just 20 countries
        • 2/3 live in HDEs
        • Europe received most migrants , followed by North America
      • Positives
        • Migration can fill labour gaps
        • Remittances boost GNI of LICs
        • Research suggests that economic contributions outweigh the costs
      • Negatives
        • Brain drain from country of origin
        • Wage 'race to the bottom'- the more people working the job reduces the wage
        • Worker exploitation and lack of rights
        • Creates dependency on remittances
    • Unequal flows of services
      • Economic activity which are traded without the production of material good eg financial or insurance
      • Why has this flow increased?
        • Improvements in telecommunications- ease of transfer of information
        • De-regulation of money markets-  ability for banks and financial institutions to move overseas
        • Increasing interconnectedness- people demanding greater choice in service market
        • International division of laboir in service functions- outsourcing the lower level functions to lower wage economies


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