Globalisation

Globalisation is the increasing integration of the world's economies, so that countries become more interconnected and interdependent through trade, investment, technology and the movement of people.

The driving factors are what the specification asks for:

• Improvements in transport — container shipping and air freight made moving goods across the world cheap and reliable • Improvements in communication — the internet lets a firm manage a supply chain across a dozen countries in real time, and lets services be delivered from anywhere • The removal of trade barriers — tariffs have fallen worldwide, and free trade agreements have multiplied (4.1) • The growth of multinational companies — firms that produce in many countries, moving production to wherever it is cheapest • Deregulation of financial markets — money can be moved between countries almost instantly • The opening up of large economies, notably China and India, to world trade

The result is the supply chain most students already know without naming it: a phone designed in one country, using minerals mined in a second, components made in a third, assembled in a fourth and sold everywhere.

Development means more than output. A country can produce a great deal and still leave most of its people poorly educated and in poor health, so the specification names five measures, and the point of having five is that no single one is enough.

The sustainability dimension runs across all three rows. Economically, a developed country that loses its manufacturing base becomes dependent on services and on imports, which is a narrower foundation. Socially, the regions that lose factories suffer long-term unemployment, falling incomes and declining communities — the structural unemployment of 3.2 in its clearest form. Environmentally, shipping goods around the world adds substantially to emissions, and consuming more of everything uses more resources.

The sustainability judgement here is the harder one, and the specification asks for it directly.

Economically, foreign investment and export earnings can fund development that would otherwise take generations, and some countries have used exactly that route to raise incomes enormously. But an economy built on being the cheapest place to produce is not sustainable, because there is always somewhere cheaper — so the gains last only if the country uses the period of investment to build skills, infrastructure and industries of its own.

Socially, incomes rise and people move out of subsistence work, but often into conditions that a developed country would not permit, and the benefits may reach a narrow group while inequality widens.

Environmentally, the risks are largest here. Production moves to countries with weaker environmental regulation, so pollution and resource depletion are exported along with the jobs — deforestation, contaminated water, poor air quality. A country under pressure to attract investment has a strong incentive not to tighten the rules.

The balanced judgement most questions want: globalisation has raised incomes and reduced poverty substantially in the countries that attracted investment, but the gains are unevenly shared and carry real environmental and social costs, and they are only sustainable if the country builds capabilities of its own rather than remaining the low-cost producer.