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

Furthermore, loans are an important financial flow that connects global core areas with peripheral areas. Many poor countries are currently paying back large amounts in debt repayments to banks, lending agencies and governments in developed countries while at the same time struggling to provide basic services for their population.         
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. Most of the remittances (one-third of the global amount) originate in the USA, most of the rest is sent from Europe and the Middle East. Latin America and the Caribbean is the region receiving the highest level of remittances per capita.         
Overall it is remarkable that remittances finance some of the less developed countries of the world. However, the global financial crisis has seen a distinct fall in remittances which is having a very noticeable impact in some countries.

Governments are the major players in the global economy. National governments present their influence through national policies and membership of major international organisations. They influence the transfer of capital to developing countries in a number of ways, for example tariffs, quotas and regulations with regards to imports from developing countries; taxation and regulation affecting the work of non-governmental agencies abroad; a control of the number of foreign workers allowed in the country and advocacy in international institutions. Although considerable changes have occurred with the formation of trade blocks such as NAFTA, ASEAN and the EU, nation-states, particularly the more powerful ones, are still extremely important in the flow of finances towards developing countries.

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.