• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Examine the relative importance of the different financial flows that connect global core areas with peripheral areas

Extracts from this document...

Introduction

Examine the relative importance of the different financial flows that connect global core areas with peripheral areas Financial flows, more specific flows of money and investment, from the developed core areas to the periphery of the world economy have a significant impact on the world’s structure. Historically, the movement of capital has been from rich to poor nations. Although the situation has been changing significantly over the last two decades, the old structure is globally still the most common one. This work will examine the relative importance of different financial flows that connect global core areas with peripheral areas. To begin with, transnational corporations (TNC´s) are very important for the global economy, as they are the main source of foreign direct investment (FDI). FDI mostly supports developing countries improving their infrastructure and raising the standard of living for the population. TNC´s play a major role in the world trade in terms of what and where to buy and sell. A not considerable proportion of world trade is intra-firm, taking place within TNC´s. ...read more.

Middle

However, loans can help countries to expand their economic activities and set up an upward spiral of development if spend wisely. Anyhow, many of the loans that burden the world´s poorest countries were given under dubious circumstances. A tendency concerning loans from developed countries to less developed countries is clearly visible when looking at recent data: In 2007, European and Central Asian countries were lending the most money to developing countries, with an increasing tendency. Special assistance concerning the lending of money is available for the heavily indebted poor countries (HIPC). Those countries are provided with support approach debt reduction. Another financial flow that connects global core areas with peripheral areas are remittances. Remittances sent back to their home nation by migrants represent the largest source of external capital in many developing countries. The World Bank estimated worldwide remittances at $251 billion in 2007. This number represents more than twice the level of international aid provide by the international community. ...read more.

Conclusion

The World Trade Organisation (WTO) exists to promote free trade. It plays a major role in the connection of the global core areas with peripheral areas, as it tries to ease international trade and to decrease the amount of bureaucracy needed. So, the WTO tries to arbitrate trade disputes between developed and less developed countries. The WTO has been successful, as today average tariffs are only a tenth of what they were in the 1990s and before. Also, the world trade has been increasing at a much faster rate. However, in some areas protectionism is still alive and well, for example in areas such as clothing, textiles and agriculture. Although every nation has an equal vote in the WTO, the rich world shuts the poor world out from key negotiations. To conclude this work, it can be said that all covered types of financial flows affect and influence the connection between global core areas and peripheral areas. However, it also can be said that governments, trade blocks and TNC´s are the most important financial flows. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Geography section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Geography essays

  1. Marked by a teacher

    Examine the strategies used in the transfer of capital between core and peripheral areas

    4 star(s)

    The positive effects this loan brought to India was the social benefit of 2.6 gallons of irrigation water for 270,000 hectors of land, and the environmental sustainment of the irrigation of another 600,000 hectors agriculture. Economically the dam brings the country a lot of hydroelectric power which is created in a environmentally friendly way.

  2. Foreign Talent-Dilemma in Singapore. as we shall explain, illustrate and seek to convince in ...

    We enjoy a clean and green environment, safe grounds in which our children play and social cohesion and racial harmony. The Singapore passport also entitles us to the invisible protection of the state, wherever in the world we may be, at work or on holiday.

  1. With reference to specific examples, examine the advantages of migrations

    Besides this, remittances are spent on current consumption, health, and education, leading thus, to improved standards of living for emigrant households in the country of origin therefore alleviating poverty to a certain extent.

  2. Is the introduction of foreign talent in Singapore beneficial to Singaporeans?

    Prime Minister Lee Hsien Loong mentioned two years ago that "if we want our economy to grow, if we want to be strong internationally, then we need a growing population." In other words, the population of Singapore needs to be large enough to ensure that economy can grow.

  1. Latin America - history, politics, immigration and literature.

    For the last 50 years Latin America as lived through a sustained period of economic and social deficiency. If it was not for drug exports, immigration, and the informal economy it would have been much worse for the nations of the hemisphere.

  2. 'Major innovations in agriculture have always proved to be controversial(TM) With reference to recent ...

    Much is wasted. It gets washed off the land before plants can use it. * It finds its way into water supplies and contaminates them. * In Netherlands uses 600 kg/ha/year. France, Germany and the UK 300 kg/ha/year. * In some LEDCs the use of modern fertilizers is increasing.

  1. Hong Kong is a heaven for the rich and hell for the poor . ...

    consider a ?high-quality education?; and the poor people are forced to send their child to government schools, which are free but the quality of education is comparatively lower. As a result, they may receive fewer opportunities in the future when they start to work in the labor market, due to

  2. Caribbean Studies. Essay on Caribbean Region

    is not clear. A territory under sovereignty of another country without being considered (completely) part of that country is called a dependency and a neutral territory is a territory that is not an integral part of any country, for example Antarctica.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work