Globalisation, trade, aid and tourism: the processes of globalisation and the role of transnational corporations, the patterns of world trade and the difference between free and fair trade, the types and value of aid, and tourism as a development strategy.

What this dot point is asking

This is part of Eduqas GCSE Geography A (C111) Theme 6, Development and Resource Issues, a core theme in Component 2. Eduqas expects you to explain the processes of globalisation and the role of transnational corporations (TNCs), the patterns of world trade and the difference between free and fair trade, the types and value of aid, and tourism as a development strategy.

Globalisation and TNCs

TNCs have two sides for a host country.

• Benefits: investment, jobs, training, technology and infrastructure, raising incomes and skills.
• Drawbacks: low wages, poor working conditions, pollution, and profits sent back to the home country rather than reinvested; they may also leave if costs rise.

World trade

Trade is the buying and selling of goods and services between countries, and it is unequal.

• Poorer countries often export low-value raw materials (crops, minerals) and import high-value manufactured goods, so they earn little and pay much.
• The terms of trade are stacked against them, and the price of a single raw-material export can crash, hurting the economy.
• Trade blocs (like the EU) and tariffs further shape who trades with whom and on what terms.

Free trade and fair trade

Eduqas wants the contrast between two trade ideas.

• Free trade removes barriers (tariffs and quotas) so goods flow freely. It can boost growth, but producers in poorer countries often get low, unstable prices and cannot compete with subsidised producers in richer countries.
• Fair trade guarantees producers a fair, stable minimum price plus a community premium, in return for good working conditions. Farmers earn more and can plan and invest, though it reaches only some products and farmers and costs consumers a little more.

Aid

Aid is help (money, goods or expertise) given from one country or organisation to another.

• Emergency (short-term) aid responds to a disaster (food, shelter, medicine).
• Long-term (development) aid funds schools, clinics, water and infrastructure.
• Bilateral aid is country to country; multilateral aid goes through organisations (the World Bank); NGO aid comes from charities (Oxfam).

Aid can fund vital development, but can also create dependency, be misused by corrupt governments, or come with strings attached (tied aid). Eduqas rewards weighing the benefits and drawbacks.

Tourism as a development strategy

Tourism can drive development in some poorer countries.

• Benefits: brings income, jobs and foreign currency, and funds infrastructure (airports, roads) that locals can also use, as in Kenya or Jamaica.
• Drawbacks: much money leaks back to foreign-owned hotels and airlines (economic leakage); jobs can be low-paid and seasonal; and tourism can damage the environment and culture.
• Managed well (ecotourism, local ownership), tourism can be a sustainable route to development.

Try this

Q1. Define globalisation. [2 marks]

• Cue. The process by which the world's economies, cultures and people are becoming increasingly connected and interdependent.

Q2. Explain one drawback of relying on tourism for development. [4 marks]

• Cue. Much tourist money leaks back to foreign-owned hotels and airlines, jobs are often low-paid and seasonal, and tourism can damage the environment and culture.