WHAT IS THE ROLE OF NATION-STATE IN ECONOMIC GLOBALIZATION?

• For HYPERGLOBALISTS, states ceased as primary economic globalization (hindi na lang nation
state ang nagreregulate sa econ activities but also other orgs known internationally. Involved
ang global corporations.)
• People consume highly standardized global products and services produced by global
corporations in a borderless world
• There will be no national products, technologies, no national companies (tawag na sa kanila ay
global corporations)

• NEO-LIBERALS claim that nation-states have lost an important element of economic sovereignty
(nawala ang independence ng isang bansa dahil meron nang TNC)
• “Buy Taiwan, hold Italy and sell France” Thomas Friedman compared countries to individual
stocks.
• The major players of global economy are the TRANSNATIONAL CORPORATIONS or TNCs
(sometimes kilala as MNC or global corp ?? like mcdo, apple, nike)

IMPACT OF ECONOMIC GLOBALIZATION

• World Bank (WB) claims that globalization can indeed REDUCE POVERTY but it definitely does
not benefit all nations. (insert attribute – globalization is uneven process)
• The World System Analysis – capitalism under economic globalization creates INEQUALITY
(hindi lahat ng bansa may kakayahan to invest outside territory)
• The competitiveness of an economy and the impact of economic globalization depend on the
capacity of the nation-state for political intervention in order to regulate TNCs, IGOs and other
market players. (policies to be implemented to regulate activities of global corporations/traders
by decreasing taxes/limiting capital invested in territory) (POLICY OF PROTECTIONISM-protect
local produced/market example USA)
• Nation-states are not influenced uniformly by economic globalization

European Monetary Integration

• Germany, France, Italy, Netherlands, Belgium and Luxembourg created a common market
where goods and services, capital and labor moved freely
• European economic community, 1957
• European monetary system, 1979 (introduced particular currency used by European countries)
• European exchange rate mechanism
• European economic and monetary union, 1992
• European central bank, 1999
 • EURO as a reserved currency (European countries international currency with the exception of
united kingdom)

How economic activities conducted internationally could be regulated?

INTERNATIONAL TRADE AND TRADE POLICIES

• DAVID RICARDO’s comparative advantage (focus on particular product which you can take
advantage)
o Every single nation must have a relative advantage in something irrespective of its initial
condition
• Most-Favored Nation (MFN) Principle states that any negotiated reciprocal tariff reductions
between two parties should be extended to all other trading partners without conditions.

• Kennedy Round (1962) – tariff cuts

• Tokyo Round (1970) – subsidies and procurement codes
• Uruguay Round (1986/1994) – multilateral trade negotiations (attended by several nation states)
o World Trade Organization (WTO), 1995 (industrialized countries trade to developing
countries, specifically on agriculture)
• Doha Round – to lower trade barriers
• United Nations Conference on Trade and Development (UNCTAD) to promote trade and
cooperation between the developing and developed nations

WASHINGTON CONCENSUS

-set of free market economic ideas, supported by prominent economists and international
organizations, such as the IMF, World Banks, European Union, and United States

-essentially, advocates free trade, floating exchange rates, free markets and macroeconomic stability

10 POINTS OF WASHING CONCENSUS

-fiscal policy discipline

-effective public spending

-tax reform

-competitive exchange rates

-trade liberalization

-financial market liberalization

-liberalization of FDI

-privatization

-deregulation

-security of property rights

UNIT 2

What constitute the essence of the present day global corporations?

• The advent and impact of digitalization and instantaneous global communications

(programming)
• The structural transformation of global commerce from producer driven community to chains to
buyer driven (applications-online shops)
• The increasing role performed through the global system by financial elements and the
emergence of global financial firm. (dumami ang 3rd party- gcash)
• Do not concentrate to retailing or distributing of products only

BRICS Economies

BRAZIL, INDIA, and CHINA, SOUTH AFRICA

Also called as merging economies

They are not of the same footing of the industrialized or 3rd world world countries pero
malapit na sila dun because of rapid economic growth and increase FDI for past 3 decades.

• Have become the most dynamic sector of global corporate growth

• Represented in part by their significant FDI over the past three decades.

Youtube lectures

TNC

-nagtatag ng pasilidad sa ibang bansa

-ang kanilang serbisyong pinagbibili ay batay sa pangangailangang local

-shell, Accenture, telus

MNC

-pangkalahatang katawagan na tumutukoy sa mamumunuhang kompanya sa ibang bansa

-products are not based on the pangangailangan ng local market

-unilever, coca-cola, mcdo, uber, google, starbucks, Toyota

Outsourcing

Offshoring-service from other country

Nearshoring- near country

Onshoring/domestic outsourcing