GLOBALISATION
Globalisation
• Globalisation is the international integration of markets
for goods, labour and capital.
• Globalisation is the integration of economies through
markets across frontiers.
Integration of Economies
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Stock Markets are now accessible
from anywhere in the world!
Source: edrod, http://www.sxc.hu
The increasing reliance of
economies on each other
The opportunities to be able to
buy and sell in any country in
the world
The opportunities for labour
and capital to locate anywhere
in the world
The growth of global markets
in finance
Integration of Economies
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Made possible by:
Technology
Communication networks
Internet access
Growth of economic cooperation – trading
blocs (EU, NAFTA etc)
• Collapse of ‘communism’
• Movement to free trade
North South Trade Model
• Advanced North has R&D and advanced
technology to innovate
• South cannot initially compete with this.
• Nth innovates and X new goods to Sth.
• However, once Sth has new technology, it
can compete in world trade.
Benefits of Globalisation
Disadvantages of Globalisation
Global shifts in trade
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Inc. in manufactured products from the NICs.
Expansion of education in 1960s
World S of low skilled labour has grown
Previously scarce skilled labour has become
abundant.
• Losers are the low-skilled workers in the
developed world as manufacturing has shifted
eastwards.
Who are the BRICS?
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Brazil
Russia
India
China
• http://www2.goldmansachs.com/ideas/brics/brics-at8/index.html
“The BRICs markets –
• Brazil, Russia, India and China – have weathered
the global economic crisis remarkably well,
emerging stronger than before. They are on pace
to equal the G7 in size by 2032, seven years
earlier than originally predicted.
• Jim O’Neill,
• Head of Global Economics,
• Goldman Sachs.
BRICs by the Numbers
 China as big as the US by 2027? - in less than 18 years.
 BRICSs as big as the G7 by 2032, 7 years earlier than
originally thought.
 2000 - 2008, BRICs contributed almost 30% to global growth
16% in the previous decade.
 Since the start of the financial crisis in 2007, some 45% of
global growth has come from the BRICs, up from 24% in the
first six years of the decade.
 BRICs likely to account for 50% of global equity markets by
2050.
 more than 70% of global car sales growth in the next decade,
with China expected to account for almost 42% of this
increase.
Threats from China and India
• China and India may overtake the developed
nations as scientific and technological leaders
• By 2010 China produced more PhDs in science
than the USA (and trained in US).
• Off shoring by Western technology businesses
of R&D and ICT software development to India
(The Bangalore effect).
Growth environment score
Economic
Economic
Stability
Stability
Human
Capital
GES
Political Stability
Technological
Capabilty
WHAT IS THE
GES OF
KAZAKHSTAN?
Kazakhstan’s economic freedom
score is 63.7
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67th freest in the 2014 Index.
0.7 points higher than last year,
improvements (What are 3 improvements?)
investment freedom
business freedom
monetary freedom
Kazakhstan’s economic freedom
score is 63.7
• deterioration (what are the two things that
have got worse?)
• in the rule of law as measured by property
rights
• freedom from corruption.
Globalisation and the Kazakhstan
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Kazakhstan is an open economy
Strong links with other countries
Open financial markets
Globalisation creates opportunities and
threats, they key is to be competitive
Winners in Kazakhstan
from globalisation
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Businesses
Leading brands
Financial services
Niche high value manufacturers
Utilities and power
• Individuals
• People with cross cultural skills
• Consumers of low cost imports
Losers in Kazakhstan
from globalisation
• Businesses
• Mass market manufacturers
• Individuals
• Low and medium skilled workers in sectors
open to migrant labour.