Transcript Lesson PowerPoint - Topping Geography

L/O: To examine the importance of
transfers of capital between the developed
core areas and the periphery
Recap – What financial flows are
there?
Types of flows
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Loans
Debt repayment
Remittances
FDI
Aid
Repatriation in the transfer of capital
OUTSOURCING!
Key ideas
• A range of flows of finance create global
networks.
• Countries become dependent upon one
another for economic success.
• Decision makers at national and international
scales have influence over flows
e.g.
• Core (UK)
Asset rich
Home of TNCs
Capital rich
Periphery(Kenya)
Human resource
Land resources
need for capital
When a country’s imports exceed its exports, it has a
current account deficit
DEFINITIONS
Check back through your notes from Core Section 2.
Can you clearly say what each of the economic
flows of capital are?
What possible case studies could you use? You need
one for each!
TASK 1: You have 30 minutes to recap or conduct
further research. You may summarise your notes
ONLY on ONE post-it.
TASK 2: MIND MAP
You now need to expand your ideas to create an
A3 mind-map. You may only use your post-it to
help you.
A few ideas…
OUTSOURCING – NIKE http://prezi.com/mvlslepq8h2r/nike-casestudy-supply-chain/
http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/14
826_Nike-web.pdf
REMITTANCES – MEXICO / USA and HK / PHILIPPINES
http://www.economist.com/node/21553458
http://www.pewhispanic.org/2013/11/15/remittances-to-latinamerica-recover-but-not-to-mexico/
http://www.ibtimes.com/remittances-worldwide-increase-2013except-mexico-us-crisis-hurting-mexican-economy-1421714
http://www.scmp.com/business/economy/article/1365652/disastersshow-philippines-reliance-remittances
DEBT RELIEF – AFRICA / HIPC
http://blogs.worldbank.org/africacan/africandebt-since-debt-relief-how-clean-is-the-slate
http://online.wsj.com/news/articles/SB1000142
4127887323744604578474653386550248
What about the informal economy in
financial flows?
• How is capital transferred between core and
periphery within the informal economy?
International capital flows
• The importing of a good or a service (think
outsourcing)
• Flows from core to periphery: Core can receive
higher rates of return than otherwise
• Workers in resource rich peripheral areas can
access capital they need to increase
productivity and wages
Capital
• Financial or physical assets which can generate income,
such as property or investments.
• Capital is one of the factors of production, it is the
stock of man-made resources used in the production of
goods and services. The other factors of production are
land, labour and entrepreneurs.
• Money is just a representation of goods or resources try building a boat on a deserted island with just a
pocket full of Euros.
Geographyalltheway
• Since 2002 – net flow to the developed world
of $229 billion
• $784 billion in 2006
• Hard currency – long term and reliable value
of a currency
• Soft currency – likely to depreciate or
fluctuate against other currencies
• Therefore LICs / NICs have felt the need to
increase their hard currency reserves.
• Therefore their currency reserves will be less
likely to lose their value.
• E.g. investment in gold instead of soft
currency which may be worth very little in a
few months time.