Life and Society | International Interdependence

Study Notes: International Interdependence

Hey everyone! Ever wondered how the phone in your pocket was made, where your favourite sneakers came from, or how you can watch a show from another country instantly? The answer is international interdependence! It’s a big phrase that simply means countries around the world depend on each other.

In these notes, we'll explore economic globalization - the way money, goods, and ideas flow around the planet, connecting us all. Understanding this is super important because it affects almost everything in our lives, from the prices of things we buy to the jobs we might have in the future. Let's dive in!

Part 1: Our Connected World - What is Economic Globalization?

Think of the world like a giant marketplace or a huge social media network, but for money, products, and people. Economic globalization is the increasing connection between the economies of different countries. This connection happens through four main "flows".

The Four Key Flows of Globalization:

1. Flow of Goods and Services
This is the trade of physical things and services across borders. It's why you can find products from all over the world in your local supermarket!

• Example: An iPhone is designed by Apple in the USA, its parts are made in countries like Japan and South Korea, it's assembled in China, and then sold in Hong Kong. That one phone has travelled the world!
• Example: When you stream a K-drama on Netflix, you are using a service from another country.

2. Flow of Labour (People)
This means people moving from one country to another for work. This can be for a short time or for many years.

• Example: A person from the Philippines working as a domestic helper in a Hong Kong family.
• Example: A banker from the UK moving to Hong Kong to work in a big international bank.

3. Flow of Capital (Money)
This one is a bit trickier! "Capital" just means money used for business and investment. Thanks to technology, huge amounts of money can move around the world in seconds.

• Example: A person in Hong Kong buying shares in an American company like Tesla.
• Example: A Japanese company like Uniqlo investing money to open new stores in China.

4. Flow of Information and Technology
This is the fastest flow of all! It's the spread of ideas, data, and technology across the globe, mostly thanks to the internet.

• Example: You can have a video call with a friend who is studying in Australia for free.
• Example: A new medical technology developed in Germany can be shared with doctors in Hong Kong almost instantly.

Key Takeaway

Economic globalization means that goods, people, money, and information are constantly moving between countries, making our world more connected than ever before.

Part 2: What's Powering this Global Connection?

So, why is all of this happening now more than ever? There are two main drivers making our world smaller and more connected.

1. Advances in Technology

Technology is the engine of globalization. Think about it:

• Transport: Giant container ships and cargo planes can move massive amounts of goods across oceans cheaply and quickly.
- Communication: The internet, fibre optic cables, and satellites allow us to communicate instantly, share information, and transfer money with just a click. This makes it easy for a company in one country to manage a factory in another.

Did you know?

A single large container ship can carry over 15,000 containers. That's enough space to carry about 750 million bananas!

2. International Politics and Policies

Technology makes globalization *possible*, but decisions made by governments make it *happen*. After major world wars, many countries decided that trading with each other was better than fighting. They started making agreements to encourage trade.

• Trade Agreements: Countries agree to lower or remove taxes (called tariffs) on goods they import from each other. This makes imported products cheaper and encourages more trade.
• Opening Up Economies: Many governments, like China since its "Reform and Opening Up", have changed their policies to welcome foreign companies and investment.

Key Takeaway

Globalization is driven by new technology that makes it easy to connect, and political decisions by governments that lower the barriers to trade and investment.

Part 3: Is Globalization a Superhero or a Villain? (The Pros and Cons)

Like most big ideas, economic globalization has both a good side and a bad side. It's not simply "good" or "bad" - it's complicated, and it affects different people in different ways. Don't worry if this seems tricky at first, the key is to look at the different viewpoints!

The Good Side (Positive Impacts) 👍

• More Choices, Lower Prices: As a consumer, you get access to a huge variety of products from around the world, often at lower prices because they are made where it is cheapest to do so. (Think of all the different brands of snacks, clothes, and electronics you can buy!)
• Economic Growth: It can help developing countries grow their economies by creating jobs in new factories and bringing in new technology and skills.
• Sharing of Culture & Ideas: We get to enjoy music, movies, food, and ideas from all over the world. This can lead to greater understanding between different cultures.

The Bad Side (Negative Impacts) 👎

• Job Losses: Companies might close factories in richer countries and move them to poorer countries where they can pay workers less. This leads to unemployment in the richer countries.
• Exploitation of Workers: Sometimes, workers in developing countries are paid very low wages and have to work in poor or unsafe conditions.
• Environmental Damage: Making and shipping products all around the world uses a lot of energy and creates pollution. Some companies move to countries with weaker environmental laws to save money.
• Increased Inequality: Globalization can make rich people and big companies even richer, but the benefits don't always reach the poorest people. The gap between rich and poor can grow wider.

Key Takeaway

Globalization is a double-edged sword. It can bring great benefits like cheaper goods and economic growth, but it can also cause serious problems like job losses, worker exploitation, and environmental harm.

Part 4: The Global Rule-Makers - Important International Organizations

With all this global activity, you need some "referees" or "managers" to help set the rules and keep things running smoothly. Here are three key organizations that play a big role.

• The World Bank:

  Think of this as a special bank that provides loans and grants to poorer countries for big development projects. Their goal is to reduce poverty.
  Example: The World Bank might lend money to a country in Africa to build new schools or a clean water system.

• International Monetary Fund (IMF):

  This is like the world's "emergency financial doctor." If a country's economy is in serious trouble (like it's about to go bankrupt), the IMF can provide an emergency loan. However, these loans usually come with strict conditions requiring the country to change its economic policies.
  Example: During the Asian Financial Crisis in 1997, the IMF gave loans to countries like South Korea and Thailand to help stabilize their economies.

• Organization for Economic Co-operation and Development (OECD):

  This is like a "think tank" or a "club" for about 38 of the world's wealthier, developed countries. They don't give out loans. Instead, they research economic issues and work together to find solutions and create policies for a better world economy.
  Example: The OECD might publish a report on the best ways for countries to improve their education systems or fight tax evasion.

Memory Aid Trick!

World BANK → Lends money like a BANK for big projects.
I M F (I'm in Monetary Failure!) → Provides EMERGENCY money when a country is in financial trouble.
O E C D → An ORGANIZATION of developed countries that talk and share ideas.

Key Takeaway

Organizations like the World Bank, IMF, and OECD act as important managers and rule-makers for the global economy, but their actions can be controversial and have a huge impact on countries.

Part 5: EXTENDED - Teamwork in a Crisis (A Case Study)

This section covers the extended part of the syllabus.

Our interconnected world means that when something goes wrong in one major country, the problem can spread like a virus. This shows both the dangers of interdependence and the importance of cooperation.

Case Study: The 2008 Global Financial Crisis (An "Economic Tsunami")

This was a huge economic disaster that showed just how connected we all are.

Step 1: The Spark in the USA
The crisis started with problems in the American housing market. Many people couldn't pay back their home loans, and this caused some major US banks to lose a massive amount of money.

Step 2: The Domino Effect
Here's where globalization comes in. Banks and investors from all over the world (Europe, Asia, everywhere!) had invested money in these American banks. When the US banks started to fail, everyone panicked. Banks stopped trusting and lending money to each other. It created a "credit crunch" that spread across the globe, causing businesses to fail and people to lose their jobs worldwide. One country's problem had become the entire world's problem.

Step 3: The Global Response (Competition vs. Cooperation)
At first, every country was worried about its own economy (competition). But they quickly realized the problem was too big to solve alone. They had to work together (cooperation).

Leaders of the world's biggest economies (known as the G20) held emergency meetings. They agreed on a plan:

• They all "injected" huge amounts of money into their banking systems to prevent a total collapse.
• They worked together to create new, stricter rules for banks to make sure a crisis like this would be less likely to happen again.

Key Takeaway

Global economic problems, like the 2008 financial crisis, show that interdependence means problems can spread very quickly. However, it also proves that cooperation between countries is essential to solve major global challenges.