GLOBAL ECONOMY

MILLENIUM DEVELOPMENT GOALS

(UN in 1990s)
• Extreme poverty and hunger
• Universal primary education
• Gender equality and women empowerment
• Child mortality
• Maternal health
• Diseases like HIV/AIDS and malaria
• Environmental sustainability
• Global partnership for development
WHAT IS EXTREME POVERTY?
-a condition characterized by severe
deprivation of basic human needs including
food, safe drinking water, sanitation facilities,
health, shelter, education and information
EXTREME POVERTY REPORT
(UN, 2015)
1.9 billion

836 million

400 million (2030,World Bank)

 WHY IS EXTREME
POVERTY FALLING?

ECONOMIC GLOBALIZATION
ECONOMIC GLOBALIZATION
It refers to the increasing integration of economies around
the world, particularly through the movement of goods,
services, and capital across borders. The term sometimes
also refers to the movement of people (labor) and
knowledge (technology) across international borders (IMF,
2008)
 TYPES OF ECONOMIES
1. Protectionism
2. Trade Liberalization
 PROTECTIONISM
- a policy of systematic government
intervention in foreign trade with the
objective of encouraging domestic
production
- e.g. tariffs
- China, Japan and US (Ritzer, 2015)
 TRADE LIBERALIZATION
- Free trade
- Goods and services move around the
world more easily
- e.g. bananas, shoes, mobile phones
 FAIR TRADE
- concern for the social, economic
, and environmental well-being of
marginalized small producers
e.g. COFFEE, wine, tea, chocolate,
bananas, cotton,
 WHAT IS GLOBAL STRATIFICATION?
• unequal distribution of wealth, power, prestige,
resources, and influence among the world’s nations
• an extreme difference between the richest and
poorest nations
CLASSIFICATION SYSTEMS OR
TYPOLOGIES OF GLOBAL
STRATIFICATION
 FIRST TYPOLOGIES
After World War II: First World, Second World, and Third
World
• First World: Western capitalist democracies of North
America and of Europe and certain other nations (e.g.,
Australia, New Zealand, and Japan).
• Second World: communist nations belonging to the Soviet
Union
• Third World: all the remaining nations, almost all of them
from Central and South America, Africa, and Asia
CAPITALISM VERSUS COMMUNISM
A: The means of production are controlled by private businesses
B: The means of production, resources, and property are owned and controlled
by the egalitarian society
A: Individual citizens run the economy, while the government has no role in
production or prices
B: The government runs the economy and has a role in production or prices
 BASIS FOR COMPARISON CAPITALISM
Meaning Capitalism is an economic system in which
the trade and industry of the economy is
owned and controlled by private
individuals, to make profit.
COMMUNISM
Communism refers to social system in
which country's trade and industry are
controlled by the community and the
share of each individual relies on his ability
and needs.

Basis Principle of Individual Rights Principle of Community Rights

Promotes Class Distinction Egalitarian Society

System of Government Democratic Totalitarian

Government interference No or negligible High

Wealth Distribution Every individual has to work for himself to Wealth is distributed as per needs and
create wealth. ability.
Factors of production Privately-owned State-owned

Preference to Individual freedom Society

Market Free and Competitive State-controlled

Profit Belongs to the private individual only. Shared by all the people of economy.
 SECOND TYPOLOGIES
Developed
Developing
Underdeveloped
 THIRD/ TODAY’S TYPOLOGIES
- wealthy (or high-income) nations
- middle-income nations
- poor (or low-income) nations
Basis: gross domestic product (GDP) per
capita (the total value of a nation’s goods
and services divided by its population)
 WEALTHY NATIONS
- most industrialized nations
- North America and Western Europe;
Australia, Japan, and New Zealand; and
certain other nations in the Middle East and
Asia (e.g., Japan and Singapore)
- leading nations in industry, high finance, and
information technology and exercise political,
economic, and cultural influence across the
planet
 MIDDLE-INCOME NATIONS
- less industrialized than wealthy nations but more
industrialized than poor nations
- Central and South America, Eastern Europe, and
parts of Africa and Asia and constitute about one-
third of the world’s population
- have abundant natural resources but still have
high levels of poverty, partly because political and
economic leaders sell the resources to wealthy
nations and keep much of the income from these
sales for themselves
POOR OR LOW-INCOME NATIONS
- least industrialized and most agricultural of all the
world’s countries
- nations in Africa and parts of Asia and constitutes
roughly half of the world’s population
- have some natural resources that political leaders
again sell to wealthier nations while keeping much of
the income they gain from these sales
- rely heavily on one or two crops, and if weather
conditions render a crop unproductive in a particular
season, the nations’ hungry become even hungrier
THEORIES OF GLOBAL
STRATIFICATION
 A. MODERNIZATION THEORY
- posits that countries go through evolutionary stages
and that industrialization and improved technology
are the keys to forward movement
- Two historical events: Columbian Exchange
(America and Europe) and Industrial Revolution in
the 18th and 19th centuries
 B. WALT ROSTOW’S STAGES OF MODERNIZATION
- historical approach in suggesting that developed countries have tended to pass through 5
stages to reach their current degree of economic development
• Traditional Society: This stage is characterized by a subsistent, agricultural based
economy, with intensive labor and low levels of trading, and a population that
does not have a scientific perspective on the world and technology.
• Preconditions to Take-off: Here, a society begins to develop manufacturing, and
a more national/international, as opposed to regional, outlook.
• Take-off: Rostow describes this stage as a short period of intensive growth, in
which industrialization begins to occur, and workers and institutions become
concentrated around a new industry.
• Drive to Maturity: This stage takes place over a long period of time, as standards
of living rise, the use of technology increases, and the national economy grows
and diversifies.
 C. WORLD SYSTEMS THEORY
- Immanuel Wallerstein
- three-level hierarchy:
• peripheral: Peripheral countries are dependent on core countries for
capital and have underdeveloped industry.
• core: Describes dominant capitalist countries which exploit the
peripheral countries for labor and raw materials.
• semi-peripheral: Countries that share characteristics of both core and
periphery countries.
- Core countries (e.g., U.S., Japan, Germany) are dominant, capitalist countries
characterized by high levels of industrialization and urbanization. Core countries are
capital intensive, have high wages and high technology production patterns and
lower amounts of labor exploitation and coercion.
- Peripheral countries (e.g., most African countries and low income countries in South
America) are dependent on core countries for capital and are less industrialized and
urbanized. Peripheral countries are usually agrarian, have low literacy rates and lack
consistent Internet access.
- Semi-peripheral countries (e.g., South Korea, Taiwan, Mexico, Brazil, India, Nigeria,
South Africa) are less developed than core nations but more developed than
peripheral nations. They are the buffer between core and peripheral countries.
 D. DEPENDENCY THEORY
- created in part as a response to the Western-centric
mindset of modernization theory
- states that global inequality is primarily caused by
core nations (or high-income nations) exploiting
semi-peripheral and peripheral nations (or middle-
income and low-income nations) creating a cycle of
dependence (Hendricks 2010)
THE GLOBAL FREE TADE ON TRIAL
“GLOBAL FREE TRADE HAS
DONE MORE HARM THAN
GOOD”
 ACTIVITY
- Coffee
- Sports Car
- Laptop
- Hamburger
- Wristwatch
- Shoes
- Wine
(Short Bond Paper, Arial, 12, Single Spacing)
 ACTIVITY
- List the ingredients or raw materials. Identify the corresponding country from
which each ingredient or raw material came from.
- Identify the countries involved in the manufacturing of the chosen product.
Indicate the corresponding service the country does for the product.
- Aside from the Philippines, list other countries in which the product is being sold.
- Cite the kinds of technology that made the creation of the product possible.
Consider communications and transportation.
- Write five to ten statements about the creation of the product.