1.2 Development of the world economy

• Aardrijkskunde
• Middelbare school
• vwo
• Leerjaar 3

What are we going to do today?

Recap 1.1 Is the balance of economic power shifting?

Check the assignments

Instruction 1.2 Development of the world economy

Let's practice!

Recap 1.1

What is the world system theory?

Why is the balance of economic power shifting?

What is the connection between globalisation and the shifting of trade patterns?

BRICS-countries are:

1. Brazil, Russia, Iceland, China and Sudan
2. Bali, Russia, India, Colombia and South Africa
3. Brazil, Russia, India, China and South-Africa
4. Brazil, Romania, Indonesia, China and Sweden

The share of the BRICS countries increased from 10 to 35% in this period.

World system theory

Learning objective: You can describe the economic world system (of Wallerstein) and classify countries/areas within this model.

Goods production shift

Western multinational companies (MNOs) in particular are driving this shift.

What reasons do the MNOs have?

• Nowadays products are not only made, but developed in low-wage countries.
• Emerging countries are a new market due to the increase in purchasing power.

Trade patterns are changing

World trade has increased because:

• the production chain is divided;
• transport of goods is faster (just-in-time);
• trade borders are disappearing.

Homework check

Questions you have answered:

1. How many people live in BRICS countries (share of the total/ in percentages)?
2. How big are the economies of the BRICS countries combined (share of the total/ in percentages)?
3. Why do certain countries want to expand the organisation?
4. Which countries want to expand, and which (countries) are more sceptic/ undecided towards expansion?

Geographical dimensions

physical

cultural

social-political 

economic

Colonial relationships (1500 - 1945)

What period in history is the period of great discoveries?

• 16th century

European colonialism:
1500 – 1800: trade colonialism
1800 – 1950: industrial colonialism

Great discoveries or embarrising period?

Colonial relationships (1500 - 1945)

European colonialism:
1500 – 1800: trade colonialism
1800 – 1950: industrial colonialism

In what areas did a former colonizing country strengthen its grip on the colony?

• education, administration, trade and culture

On the way to independence

What developments took place after 1945?

• decolonisation
• Cold War

During the cold war, the different power blocks traded outside/  inside their own power block.

On the way to independence

During the cold war, the different power blocks traded inside their own power block.

The Cold War resulted in a new grouping of the world:

• Western countries
• Communist countries
• Developing countries
  

Free trade changes (after 1990)

In which year did the Soviet Union break up?

• 1990

Which economic system has become the most important system in the world?

• free market economy

What are the characteristics of a free market economy?

• free entrepreneurship
• price is determined by supply and demand

Free trade

The free market economy works best without trade borders. What is trade without borders also called?

• free trade

What are the advantages of free trade?

• a country can specialise
• companies gain access to foreign markets

Free trade

What is a disadvantage of free trade?

• Foreign competition that causes companies to go bankrupt

What development makes the American manufacturing industry feel threatened?

• Economic rise of China

To do

Section 1.2: 1, 2a, 2c – 2e, 5

Finished early? Write down your answers to the first two learning objectives of 1.2.

Done? Improve your skills!

Page 6 and 7 of your workbook.

Which three trade flows can we distinguish between 1500 and present day?

1. (trade)colonialism, decolonisation, free trade
2. trade colonialism, industrial colonialism, free trade
3. (trade)colonialism, decolonisation, Cold War
4. industrial colonialsm, Cold War, decolonisation

What is global shift?

1. The expansion of world trade
2. The relocation of the main production areas
3. That something is shifting in the world globally
4. The expansion of contacts between countries in the world

Global shift happens from:

1. periphery -> core
2. (semi)periphery -> core
3. core -> (semi)periphery
4. semi-periphery -> periphery

Next lesson

1.3 Development at different speeds

Homework:

1.2: Exercise 1, 2a, 2c – 2e, 5