Introduction
‘The United Nations (UN) tried to address the different problems in the world, The
efforts were guided by the eight Millennium Development Goals, which they creatg
in the 1990s, Among these eight goals, the eradication of extreme poverty and hunge
ranked as the frst. The other seven goals include: achieving universal primary educati
promoting gender equality and women empowerment, reducing child mortality, impr
sustainability, and having a global partnership for development (United Nations, 204
‘The UN tried to achieve them by the year 2015, 4
Since there are different standards of living around the world, we can expect differen
meanings attached tot. In the Philippines, a persons ofically
less than 100,534 pesos a year, around 275 pesos a day. This is called the poverty line g
poverty threshold. But we are going to focus on extreme poverty which, according tp
the UN (2015), is @ condition characterized by severe deprivation of basic human neet
including food, safe drinking water, sanitation facilities, health, shelter, education,
information. The UN defines extreme or absolute poverty as living on less than $1.25 a day
‘The organization aims to eliminate extreme poverty forall people by 2030.
It wasthree years ago ane the results werein. The UN (2015) reported that 836 milo
people stillivein extreme poverty but that is down from 1.9 billion, so there is success orat
least 2 lot of progress. The World Bank predicted that by 2030 the number of people livin
in extreme poverty could érop to less than 400 milion. Of course that assumes everyth
will keep improving as it has been, However, climate change has to be considered since
isa threat to these improvements in global poverty.
‘Most people who have been lifted out of extreme poverty are still poor and bein
poor comes with serious problems, from disease to lack of water. Income inequality i
rampant and one in seven people stil live without electricity.
‘So why is extreme poverty falling? The answer to this is really complicated. A set of
factors lke better access to education, humanitarian aid, and the polices of internation
OE The Contemporary World
Scanned with CamScannerorganizations like the UN haye made a difference. However, the greatest.
contributor is economic globalization. The world’s economies have become
more interconnected and free trade has driven the growth of many developing
economies.
Economic Globalization and Global Trade
‘According to the United Natlons (as cited in Shangquan, 2000), “Economic
slobalization refers to the increasing interdependence of world economies as a
result of the growing scale of cross-border trade of commodities and services,
flow ofinternational capital, and wide and rapid spread of technologies. itreflects
the continuing expansion and mutual integration of market frontiers, and is an
irreversible trend for the economic development in the whole world at the turn
of the millennium.” (p.1)
eeonome Pence
There are two different types of economies associated with economic
globalzation—protectionism and trade liberalization. (Protectionism means
objective of encouraging domestic production. This encouragement involves
giving preferential treatment to domestic producers and discriminating against
foreign competitors” (McAleese, 2007 as cited in Ritzer, 2015, p. 1169). Trade
protectionism usually comes in the form of quotas and tarifs. Tariffs are required
fees on imports or exports. For instance, a pen that costs $1.00 in Country A and
in Country B, it would be given five-dollar tariff. The pen would become §6 in
Country 8 This policy was practiced during the mercantiist era, from sixteenth to
seventeenth centuries until the early years of the Industrial Revolution (Chorev,
2007). The Great Depression of 1929 marked the peak of protectionism. Until
today, protectionism exists in the world economy despite the growth of trade
liberalization. Countries such as China, Japan, and the United States are being
accused of practicing protectionism (Ritzer, 2015).
World War l heavily in Shifting of the dominant economic policy
from protectionism eee trade. Free trade agreements
and technological eee mean goods
and services move around the world more easily than ever. We are talking about
everything from shoes and bananas to innovations and ideas. Let us take mobile
phones as an example. Mobile phones seem to have good consequences for
everything including reducing poverty. According to economist Jeffrey Sachs,
mobile phones are the ‘single most transformative technology” when it comes
to the developing world, Phones give people access to banking and payment {
‘Chapter 2: The Global Economy B
Scanned with CamScannerThe products that we consume and use—foods, clothing, and gadgets—are
part of our way of life. Globalization allows for a worldwide exchange of these
commodities and exposure to different cultures as well. This activity will allow
the students to Investigate the origin and spread of the products and services
sold in our country. They will also be able to know the countries involved in
the production, distribution, and consumption of the products being sold and
consumed in the country. The following are the steps to accomplish this activity:
1. Divide the class into seven groups. Each group will be assigned to any
‘one of the following products being sold in the Philippines. The group
shall choose a specific foreign brand of the product assigned to them.
a. coffee
b. sportscar
laptop
4. hamburger
e. wristwatch
f shoes
2. ist down the main ingredients or raw materials in manufacturing the
chosen product. Identify the corresponding country from which each
ingredient or raw material came from.
3. Identify the countries involved in the manufacturing of the chosen
product. Indicate the corresponding service the country does for the
product (e.g., Costa Rica - planting of coffee beans).
4. Aside from the Philipines, lst other countries in which the product is
being sold.
5. Cite the kinds of technology that made the creation of the product
possible. Consider communications and transportation.
6, Writeone to three statements about the creation of the product, Share
your staterent with your groupmates and indicate whether you agree
or disagree with thelr statements.
Chapter 2: The Global Economy [5
me
Scanned with CamScannersystems and better access to education and information. In some places, mobile
phones help farmers get information and get the best price for the crops they
are producing, Instaling cellphone towers is also a lot cheaper than running
thousands of kilometers of telephone lines, Economists call this leapfrogging,
the idea that countries can skip straight to more efficient and cost-effective
technologies that were not available in the past. International trade has also.
created new opportunities for people to sell their products and labor in a global
marketplace.
Globalization made some countries, especially the developing ones, to
gain more in the global economy at the expense of other nations, There are
various ways, however, the country can make trade easier with other countries
while lessening the inequities in the global world. One of them is “air trade”
(Scholls and Opal, 2005) Fir trad) as defined by the International Fir Trade
Assocation, is the “concem TOF the social, economic, and environmental well:
more moral and equitable global economic system. Specifically, it is concerned
with protection of workers and producers, establishment of more just prices,
engagement in environmentally sound practices and sustainable production,
creation of relationships between producers in the South and consumers in
the North, and promotion of safe working environment. Products like coffee,
bananas, cotton, wine, tea, and chocolate have been exchanged in light of fair
trede.
A concrete example of the growth of fair trade is the case of American
Coffee chains such as Starbucks and Dunkin’ Donuts. in 2006, there are $2.2 billion