Economic Geography

1. Economic Geography Spatial organization and distribution of economic activity • Outcome of financial decisions (government, business, consumers) • Highly uneven at all scales • Technology and access to resources shifts economic advantages

2. Uneven Distribution(GDP Per Capita)

4. Tripolar Economy • Dominated by core countries in three global regions: U.S., Europe, Asia • Disproportionate share of global, cultural, and financial influence • “Where the world’s business is done” • Coming to an end?

5. Industrial growth of Europe, Asia • European Union • Expanding to east: Will it include western Russia someday? • 2013: Croatia • China, India, Japan, other East Asian states • Four Tigers: Taiwan, South Korea, Singapore, Hong Kong • Thailand becoming “fifth tiger” • Will China be the new economic force? • Relative decline of U.S. in “Tripolar Economy”

6. Economic Activities • Primary • Secondary • Tertiary • Quaternary

7. Primary Activities • Mining • Basic “Land Based” Economies (extracting raw materials) • More common in periphery • Used to be more prevalent in core • Agriculture • Fishing • Timbering

8. Primary Activities

9. Industrial Revolution: How and where it began ~1855 Geography of the Coal Industry

10. Primary activities often lead to“Resource Dependency”(“Banana Republic,” “Oil state,” etc.)

11. Resource Dependency • Heavy reliance on one specific resource • Food • Precious Metal or Stone • Oil / Petroleum-related • Downturn in market / blight = BIG financial / social problems

12. 85% of Niger’s Economy: Exports of U

13. Cartel(Strategy used to treat resource dependency) OPEC

14. Secondary Activities: Processing and manufacturing materials • Periphery, Semi-Periphery • Slowly leaving core (not completely gone… YET!) • Manufacturing / Production of Goods

15. New High Technology Landscape in France

16. Major Manufacturing Regions Notice relative location to coal belts!

17. Agglomeration (clustering / centralizing of an industry) • Availability of ancillary (service) industries • Access to infrastructure / labor • “Economies of Scale” advantage Auto Parts

19. Agglomeration Diseconomies • Traffic, pollution, full waste dumps • High rent, taxes, costs for concentration of industry • May endure same effect as “Resource Dependency” • Turmoil and unemployment when market is down • Detroit, Flint, Orlando?

20. GM posts $38.7B loss for 2007, offers buyouts to 74,000 hourly workers http://www.latimes.com/business/la-fi-gm13feb13,0,7042004.story February 12, 2008 DETROIT (AP) - General Motors Corp. reported a $38.7 billion loss for 2007 today, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help. But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia. The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers. Ford Motor Co. and Chrysler already have announced similar buyout offers. GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before. http://abcnews.go.com/blogs/business/2012/02/gm-posts-record-7-6-billion-profit/

21. Deindustrialization in the Core • Relative decline in industrial employment • Automation and “runaway shops” • Reinvestment in higher profit areas • Sunbelt states (non-union) • Semi-Periphery and Periphery

22. Economic StructureUS Employment by Labor Sector

23. Collapse of Industrial (Rust) Belt Factory jobs replaced in Pittsburgh, Cleveland, Boston, others by high-tech and financial industries

24. Some cities have adjusted… others have not. Cleveland, Ohio Detroit, Michigan

25. Pittsburgh, PA NOW. then…

26. Where did they go?

27. Export Processing Zones (EPZs) Lower wages, taxes + Weaker labor, safety and environmental regulations + Ability to pit workers against each other, or to repress unions = “Race to the Bottom”

28. SEZ’s (Special Economic Zones) 1. Shanghai 2. Shenzhen and more! Established by Chinese government for trade $$$

29. EPZs, SEZs, FTZs “Free Trade Zones” • More than 3,000 FTZ’s / EPZ’s worldwide • Mostly in Periphery, Semi-Periphery • Manufacturing and / or Warehousing ports • Frequently controversial: above local laws Jebel Ali (Dubai) Free Zone Kingston (Jamaica) Free Zone

30. MaquiladorasMexican assembly plants in SEZs along border

31. Northern Mariana Islands (U.S. Territory)

32. Tertiary Activities U.S. stock exchange • Not location specific • Ubiquitous • Periphery and S-P gaining in tertiary activities for reasons similar to primary and secondary activities • Fewer restrictions • Financial / Tax advantages • More income? Sales, exchange, trading goods and services Call Center: India

33. The Changing Times of India August 1, 2004 (CBS) - For decades, American manufacturers of everything from blue jeans to semiconductors have searched the world for the cheapest labor they could find. It may have cost hundreds of thousands of American jobs, but it's made American products more affordable. Now, some of the most familiar companies -ones we deal with every day - are moving a whole new class of jobs overseas. They call it outsourcing. As Correspondent Morley Safer first reported last January, that person at the other end of the line is more likely to be in India than in Indiana. To many American employers, India is Nirvana. It has a stable democracy, an enormous English-speaking population, and a solid education system that each year churns out more than a million college graduates -- all happy to work for a fraction of the salary of their American counterparts. India epitomizes the new global economy -- a country that often looks on the edge of collapse, a background of grinding poverty, visually a mess. And yet, whether you know it or not, when you call Delta Airlines, American Express, Sprint, Citibank, IBM or Hewlett Packard's technical support number, chances are you'll be talking to an Indian…who take on phone names such as Sean, Nancy, Ricardo and Celine so they can sound like the girl or boy next door. "The real name is Tashar. And name I use is Terrance," says one representative. "My real name is Sangita. And my pseudonym is Julia," says another representative. "Julia Roberts happened to be my favorite actress, so I just picked out Julia." American movies are part of an agent's training in how to sound all-American.

34. Quaternary Activities • Predominantly occurs in core • Access to resources in core that are not available in the periphery: • • Technology • • Education • • SkilledLabor • Advantages of agglomeration and economic inertia Processing knowledge and information

35. Silicon Valley, California

36. Economic Globalization From above (elites) From below Country 1 Country 2

37. Globalization from “Above” • Governments and elites in every country • Multinational Corporations • International Agencies • UN, USAID, others • Global trade / finance institutions • World Bank, IMF, WTO • “Golden Rule”Economics

38. Globalization from “Below” • Non-Governmental Organizations (NGOs) and various Int’l Agencies • - “Fair Trade” organizations • - Greenpeace • Amnesty International • Grameen Bank • Heifer Project • Farmer-to-Farmer • “Grassroots” organizations • Alliances of (specific) communities with a common concern, often via Internet. • “Think Globally, Act Locally.” • Wall Street Protests, 2012

39. Trade Alliances(Free Trade Agreements) • North American Free Trade Agreement NAFTA = US + Canada + Mexico, 1994 • Central American Free Trade Agreement DR-CAFTA = US + some Middle American Countries, 2006 • ALBA What’s ALBA?

40. Venezuela, Cuba • Bolivia • Nicaragua • Dominica • Antigua / Barbuda • St. Vincent & the Grenadines • Ecuador • St. Lucia • Joining Soon: • Suriname, Haiti, Others? • Observers: • Iran, Syria ALBA Bolivarian Alliance for the Americas (ALBA) Alternative to NAFTA, CAFTA “SUCRE”

41. Developmentalism: • A series of steps that all countries will go through that eventually lead to prosperity and to becoming a “developed” country Principles of Developmentalism: • Progress made through development “stages” • Follow the model created by core countries • All countries are in one stage or another (could be early in the process or already finished) • Eventually everyone reaches high consumption

42. Problems with Developmentalism • “Development” generally in urban industrial areas • Production flows out: Reliant on cheap labor • Profits leave the country (no investment in community—just investment for business purposes) • Led by the “Golden Rule?” • Agglomeration in urban areas leads to: • Over-Urbanization • Rural poor head to cities for jobs • Formation of “Megacities:” • Rio de Janeiro, Buenos Aires, Sao Paolo, Calcutta, etc. • Shantytowns, Favelas • Not nearly enough jobs to support HUGE populations

43. Urban Growth Rates 4/5 growth in Periphery; 50% under poverty line

44. World Urban Dwellers

45. xxxxxx Number of Core Cities in Top 30 1950 21 1980 11 2010 5

46. Cities of the World

47. Urban Growth • Although Tokyo is the largest city in the world today, the fastest growing “megacities” in the world are in the periphery or semi-periphery • Mumbai, India • Lagos, Nigeria • Karachi, Pakistan • Kuala Lumpur, Malaysia • Sao Paolo, Brazil • Mexico City, Mexico • Many others… Mumbai, India

48. Case Study: Rio de Janeiro

49. ~1,100,000 (18.7%) people around Rio live in favelas* • Growth Rate: Rio: 7%* Favelas: 24%* • ~50% of favela residents have running water* • 70% minority population (black, native, or mixed) • Why? • - Lack of market (abandonment of rural areas for city) • Lack of access to market / exports • Can’t compete with large agricultural corporations • Lure of jobs / possibilities in big city • Most end up worse (no job, no land, nothing to go back to) • Abundance of cheap labor keeps wages very low • Situation worsens, greater need for more “development” Rio * World Bank 2009

50. An Uneven Scale… • “Early starters” have huge advantage • “Economic Inertia:” easier to continue already functioning process / structure / methods of exploitation than to start a new one • “Late starters” actively kept out of Core “club” • Political or military pressure / control • Periphery leaders often supported to ally their personal interests with those of the external Core country, not with own people / country • Financial interests of core (“Race to the Bottom”) • Ultimately, why would Core countries want to change current system?