1. L/O: To examine the importance of transfers of capital between the developed core areas and the periphery Recap – What financial flows are there?

2. Types of flows Loans Debt repayment Remittances FDI Aid Repatriation in the transfer of capital

3. OUTSOURCING!

4. Key ideas A range of flows of finance create global networks. Countries become dependent upon one another for economic success. Decision makers at national and international scales have influence over flows

5. e.g. Core (UK) Periphery(Kenya) Asset richHuman resource Home of TNCsLand resources Capital rich need for capital When a country’s imports exceed its exports, it has a current account deficit

6. DEFINITIONS Check back through your notes from Core Section 2. Can you clearly say what each of the economic flows of capital are? What possible case studies could you use? You need one for each! TASK 1: You have 30 minutes to recap or conduct further research. You may summarise your notes ONLY on ONE post-it.

7. TASK 2: MIND MAP You now need to expand your ideas to create an A3 mind-map. You may only use your post-it to help you.

8. A few ideas… OUTSOURCING – NIKE http://prezi.com/mvlslepq8h2r/nike-case- study-supply-chain/http://prezi.com/mvlslepq8h2r/nike-case- study-supply-chain/ http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/14 826_Nike-web.pdf REMITTANCES – MEXICO / USA and HK / PHILIPPINES http://www.economist.com/node/21553458 http://www.pewhispanic.org/2013/11/15/remittances-to-latin- america-recover-but-not-to-mexico/ http://www.ibtimes.com/remittances-worldwide-increase-2013- except-mexico-us-crisis-hurting-mexican-economy-1421714 http://www.scmp.com/business/economy/article/1365652/disasters- show-philippines-reliance-remittances http://www.economist.com/node/21553458 http://www.pewhispanic.org/2013/11/15/remittances-to-latin- america-recover-but-not-to-mexico/ http://www.ibtimes.com/remittances-worldwide-increase-2013- except-mexico-us-crisis-hurting-mexican-economy-1421714 http://www.scmp.com/business/economy/article/1365652/disasters- show-philippines-reliance-remittances

9. DEBT RELIEF – AFRICA / HIPC http://blogs.worldbank.org/africacan/african- debt-since-debt-relief-how-clean-is-the-slate http://blogs.worldbank.org/africacan/african- debt-since-debt-relief-how-clean-is-the-slate http://online.wsj.com/news/articles/SB1000142 4127887323744604578474653386550248

10. What about the informal economy in financial flows? How is capital transferred between core and periphery within the informal economy?

11. International capital flows The importing of a good or a service (think outsourcing) Flows from core to periphery: Core can receive higher rates of return than otherwise Workers in resource rich peripheral areas can access capital they need to increase productivity and wages

12. Capital Financial or physical assets which can generate income, such as property or investments. Capital is one of the factors of production, it is the stock of man-made resources used in the production of goods and services. The other factors of production are land, labour and entrepreneurs. Money is just a representation of goods or resources - try building a boat on a deserted island with just a pocket full of Euros. Geographyalltheway

13. Since 2002 – net flow to the developed world of $229 billion $784 billion in 2006

14. Hard currency – long term and reliable value of a currency Soft currency – likely to depreciate or fluctuate against other currencies

15. Therefore LICs / NICs have felt the need to increase their hard currency reserves. Therefore their currency reserves will be less likely to lose their value. E.g. investment in gold instead of soft currency which may be worth very little in a few months time.