CHAPTER 1 • Globalization simply puts it as a social
Intensification and Acceleration of human
THE CONCEPT OF GLOBALIZATION:
IS GLOBALIZATION A PHENOMENON?
GLOBALIZATION
• Refers to a multidimensional set of social
processes that create, multiply, stretch, and
intensify worldwide social
interdependencies and exchanges while at
the same fostering in people a growing
awareness of deepening connections
between the local and the distant
(McGrew, 2003).
• For Justine Rosenberg’s definition of
globalization, he argues that globalization
as a phenomenon gave rise to the
interconnectedness of human society that
replaced the sovereign state system with
multilateral system of global governance
• From the lens of Ritzer (2008), he described
this phenomenon as the spread of
worldwide practices, relations,
consciousness, and organization of social
life.
• Globalization, as a theory lies in the works of
many 19th and 20th century scholars and
intellectuals like Karl Marx, MacKinder, and
Robertson who began to introduce the
term “globality”. However, it was in the
1960’s and 1970’s when this term gained
worldwide attention.
3.
process of reshaping and remaking the
world order.
• Understanding the term globalization,
requires a critical examination of its origin,
development, and usage as part of our
understanding of social change within the
spectrum of contemporary world.
FORCES AND DRIVERS OF GLOBALIZATION
• Technology
• Economics
• Politics
• Culture
• Environment
• Individuals and Institutions
QUALITIES AND CHARACTERISTICS OF
GLOBALIZATION (HELD & MCGREW, 2002)
1. Creation and Multiplication of social
networks and cultural activities which break
the traditional norms and practices in the
political, economic, and cultural realms of
most communities.
2. Expansion and Stretching of social
operations and connections which is seen in
the financial markets and trading
operations around the globe. (Examples:
World Trade Organization, ASEAN
Economic Community, World Economic
Forum and European Union)
activities which describes the process of
world and individual connection works.
Consumer markets and consumerism
continue to rule in this postmodern aera
where the farthest have the access to
reach the central portion of global events.
4. Consciousness and Awareness. People, as
the primary actors of globalization are the
frontliners as reflected in their experiences.
The human consciousness is critical on how
they impact the growing outcomes and
markets of globalization.
IS GLOBALIZATION THE SAME AS
WESTERNIZATION?
• NO. The concept of Westernization is deeply
rooted in the Western World where often
associated with the Western culture and
values (Sairin, 2011).
• This concept is famously used in referring the
western value system and it influences
countries outside its territory and
sovereignty.
• The political, economic, and technological
prowess of United States and European
countries are best described in the idea of
Westernization.
 CHAPTER 2
COMPETING THE THEORETICAL
APPROACHES
THEORETICAL APPROACHES:
REALISM
• The realist perspective explaining
globalization focuses on the shifting
distribution of power among states (Walt,
1998 and Synder, 2004).
• They explained that the core idea of
dominating the world through the
employment of power.
• This force comes from different angles,
depending on the power availability of a
nation.
Realists argue that countries open their
economies to the world is because of two
contending reasons:
1. Financial returns of expanding markets offer
new economic opportunities to the
capitalist (origin country).
2. The continued centrality of political power
and military strength are obvious forces of
interdependence and realistic behavior of
the more and most powerful countries.
LIBERALISM
• Liberalism is a perspective in international
relations where actors and institutions
emphasize relationships and negotiations.
• Liberalists observe the importance of
interaction and communication and focus
on solving problems and conflicts affecting
them.
• This idea is very evident in countries where
democratic governance and institutions
play major roles in maintaining national
cohesiveness in managing domestic and
international affairs.
• Liberalists believe that to avoid international
conflict and problems, and negotiations
and dialogues are potential mechanisms in
confronting issues among parties.
Three Factors that describe the Transformation of
Political-Economic Structure and Development of
Global Interconnectedness:
1. Spread of Democracy and Institutions
• Democracy as a frontline of liberalism has
been utilized as a sociopolitical apparatus
in challenging political actors who act
beyond their power and control.
• The strong participatory presence of citizens
in key issues affecting the interest and
welfare of the public could be used as a
reference in balancing the interest of
stakeholders.
• Liberalists see that democracies are venues
of not using threat to intimidate and harm
other nations. Many liberals believe in the
vital function played by the rule of law as
safeguard of self-respect and social
stability.
2. Global Economic Ties
• Liberalists see economic ties and
cooperation such as market integration and
economic alliances are fitting fixtures of
globalization.
• The core belief of liberalism is that economic
alliance and integrating the domestic
economy into a regional or economic bloc
will deliver prosperity and security.
• Opening to markets to other countries is
described as an act of country’s
commitment to global consciousness and
moral understanding of multistate interests.
• Examples: European Union’s Eurozone and
Association of Southeast Asian Nations
Economic Community (AEC)
3. International Organizations
• Liberals believe that the formation of
leading regional and international
organizations like global commerce and
governance are main instruments in the
maintenance of peace and solidarity.
 • Examples: Organization of Petroleum
Exporting Countries (OPEC) and North
Atlantic Treaty Organization (NATO)
IDEALISM
• Idealists and constructivist hold the notion
that values, and norms play pivotal roles in
sustaining and reforming the process and
works of individuals, group, and nations.
• This theory emphasizes on the functions of
ideologies, frameworks, systems, and
identities in understanding globalization
and international order.
• Its core beliefs centers on the centrality of
ideas, beliefs, emotions, and collective
Three Important Technological Trends that made
values that shape the political and
Significant Changes in the Interaction of Nations
economic landscapes of the world
and People:
• Alexander Wendt and Hugh Ruggie are the
two most prominent founders of this school
of thought.
• Idealism presents the changing norms and
evolutions of individuals, groups, and states
with the goal of influencing the dynamics
and pattern of social structure.
ROLE OF IDEAS AND TECHNOLOGY IN
GLOBALIZATION
• Ideas are non-material entities of culture; it
embodies one’s perception of his social
world or environment. It defines on how
values, norms, and beliefs are used by
governments and institutions in hold and
exercising of power (Nau, 2008).
• When ideas are used well based on their
intended application, development takes
place. It could be utilized for linking and
transfer of knowledge in a transnational
community of nations, scientific, and social
innovation, and increase in the
understanding of people in their day-to-day
life.
• Ideas are necessary in this particular scene
because the definitions and concepts
constructed are used in interpreting how
people act and behave.
1. Knowledge and technology are significant
determinants of wealth and power. The
success of economy of a country requires
pool of resources like ideas and technology.
The technological advancement of a
nation is an identity of its economic power.
2. The fast pace of technological change.
From industrialization to modernization,
technology has taken a significant role in
business, government, and individuals.
3. Dispersed knowledge and technology. The
increasing trends in communication
revolution make it more possible to move
data and ideas from people to people and
country to country at faster and more
convenient way.
• Innovation as a product of technological
advancement have rendered national
borders irrelevant in international system.
INSTITUTIONS AND GLOBALIZATION
• Institutions consist norms, set of activities,
and regulate structures that provide
meaning and stability to the social behavior
of a group (Peter, 2012).
• Meyer and Rowan (1977) describe the
formation of institution as a symbolic
manifestation on the needs of society. The
actions and behavior of the group
members can change and alter the
movement of community and its people.
• A different view explained by Giddens
(1979), states that institutions will not be
recognized as institutions if they do not
shape the behavior of individuals.
• Global governance is directed by two
important institutions: political and
economic institutions. The operation of the
political and economic life of globalization
depends on how plans are implemented
and how accountable these institutions are
in their actions.
• International institutions are classified
intergovernmental organizations that are
formed by national governments. These are
 international formal organizations that set CHAPTER 3
rules and with the purpose of regulating the
flow of communication and movement of THE PRACTICE OF GLOBALIZATION
resources.
GLOBALIZATION IN HISTORICAL
EXAMPLE
PERSPECTIVES
▪ The International Monetary Fund (IMF)
• There are key events and developments in
performs globally and countries around the
the history of globalization from the time it
world depend on the common rules set by
was initially observed and describe as a
the body. Like IMF, World Trade
phenomenon up to the current era of
Organization (WTO) is an international
advancement and modernization.
institution that plays key role in the
management of global trade. Its member- • The useful checklist training the phases of
economies are bound to adhere and globalization was drawn by Holton (1998),
behave in accordance to its guidelines in Sholte (2001), and Lawson (2012).
the conduct of international trade.
FIRST PHASE (MID 18TH CENTURY – 1870S)
Development of international networks
Beginning of international fairs
International relations through treaties and
agreements in Europe
Establishment of International Committee of
the Red Cross in 1863
Significant development in communication
and transportation
Development of international competitions
First World War
SECOND PHASE (1920S – 1960S)
Establishment of League of Nations
Global effect of Cold War
Rise of Third World Countries in international
arena
Increased attention to humanitarian works
and development aid
Introduction of global icons and American
consumerism
THIRD PHASE (1960S – PRESENT)
Establishment of global communication
Increasing power and influence of
international financial institutions
Rapid rise of US and expansion of western
investments and multinational firms
End of Cold War
Increase in social movement and global civil
society
Introduction of World Wide Web and
continuous influence of telecommunications
Rise of global attention to environmental
concern and snit-globalization campaign
PHASES OF GLOBALIZATION
• For a better grasp on the historical
developments of globalization, Thomas
Friedman described the phases of
globalization into three periods
 GLOBALIZATION 1.0 (1492 – 1800) THREE DIMENSIONS OF GLOBALIZATION • It has been used as a major political unit in
international relations.
Period of Mercantilism • Anthony Giddens described the
Age of Industrialization (rise of British Economy) globalization as intensification of worldwide • Nation-states have the right to make their
Inventions: social relations. The global economic own collective objectives.
• Steam engine activity is the most obvious face of this WORLD MILITARY
• Printing press phenomenon where economic activities
• Railway system have immense effect to other global • Strengthening military power is the priority of
Development of Social Systems and operations such as governments, the first world countries as well as the
Institutions: education, and technology. developing and third world countries.
• Government
WORLD CAPITALIST ECONOMY • Budget allotted by governments to defense
• Education
and military surged hundred folds with the
• Exchange of goods within the region • Primary force of globalization. aim of delivering world-class defense
• Capitalists states are the main engines of operation and services to its people.
GLOBALIZATION 2.0 (1800 – 1950) global production and distribution of goods • US maintains the rank as the world’s most
End of World War II and services. powerful military in terms of military
Age of Pax Brittanica • Capitalists engage in transnational spending (SIPRI, 2017).
Formation of Market Integration and operation maintaining pool of resources
Institutionalizations of major economic THREE WORLDS AND WORLD ORDER
such as labor and capital.
activities in global market • The concept of First World, Second World,
• Multinational corporations are very
and Third World was a construct of the Cold
powerful in controlling domestic and
GLOBALIZATION 3.0 (1950 – 2000) War era.
foreign market.
Period of Technology and Internet • There were number of interpretations on the
NATION-STATE SYSTEM
Age of Information origin of Cold War.
• Sovereignty of states has been emphasized
Intensification of trade worldwide and • First, the conflict was cause by aggressive
development of Multinational corporations as a primary part of independence and
behavior and domestic policies of Soviet
New players and prominent economic actors: autonomy.
Union prompting other countries especially
• China • The concept of sovereignty in a globalized the US to react.
• ASEAN world is understood as the best form of
• European Union • Second, the cold war was a result of the US
asserting the existence and operation of a
• Japan economic system of expansionist-capitalism
state in order to be recognized.
• South Korea
 • Third, the war was a consequence of THIRD WORLD CHAPTER 4
security response from the two countries on
During Cold War GLOBAL ECONOMY
the power vacuum and threat of central
Europe. • Neutral and non-aligned Countries
Description ECONOMIC SYSTEMS
FIRST WORLD • Countries are described as less developed • The global economy of most countries is
and developing economy or global south. classified into there categories: market,
During Cold War command, and mixed economies.
• Most of the countries have experience
• Unites States • In countries where democracy prevails, its
colonialism from Western World.
• United Kingdom economic system is usually under freedom,
• Japan choice, and decisions of its citizens.
• Western European Countries • While countries that are under the control of
Description a single political party and authority, its
• Powerful economies having stable system could be under the practice of
governments, robust financial markets, and command economy.
advanced and modern infrastructures, low
poverty, and high standard of living
MARKET ECONOMY
• Economy under the will and interest of the
SECOND WORLD
individuals.
• Economic freedom to purchase and sell
During Cold War
products, services, and properties.
• Soviet Union
• This condition is not planned by a single
• China
person or group that has the ability to
• Estonia
manipulate or direct the economy solely.
• Lithuania
• It promotes competition among business
• Half of Germany
and firms.
• Vietnam
• Hongkong
• North Korea
• New Zealand
• Cuba
• Australia
Description
• Switzerland
• The idea of world order is associated with
role of political and military power during
Cold War. COMMAND ECONOMY
• The communist countries of the Second • A central economic planning body handles
World are found to be trapped between the entire decision making.
poverty and prosperity.
• The quality and quantity of goods and
services produced is based on the decision
of the government.
• Production quantity is dictated, consumer
behavior is directed, and market operation
is controlled by a single authority.
• Its objective is to mobilize resources for the
common good of the public and for the
interest of the nation.
• Private individuals have no say in the
economic operation.
• North Korea
• Cuba
• Russia
• China
MIXED ECONOMY
• Market-driven economies
• Combination of market and command
economies.
• Some sectors are under the directions of the
private individuals while other aspects of
the economy are left within the guidance of
the government.
• State can take over the ownership and
operation of a private company for the
purpose of maintaining the interest of the
nation.
• Philippines
• United States
• United Kingdom
• France
INTERNATIONAL TRADE
• The process and the system when goods,
commodities, services cross national
economy, and boundaries in exchange for
money or goods of another country
(Balaam and Veseth, 2008).
• Global trade has grown dramatically since
the post-cold war era because of
increasing demand of goods and services
and countries.
• This global norm reflects growing practice of
internationalizing and globalizing local
products and services.
TRADE THEORIES
1. Descriptive Theory – it deals with the natural
order and the movement of trade. It describes the
pattern of trade under the idea of laissez faire, a
French term which means “leave alone”.
It refers to the notion that individuals are best
economic agents to solve the problems through
invisible hand rather than government policies.
It also addresses the questions which product to
trade, how much product to offer and produce,
and which country to trade in the absence of
government restrictions.
2. Prescriptive Theory - it prescribes whether
government, an important economic institution,
should interfere and restrict with the movement of
goods and services.
This theory views government to have
participation in deciding which countries to alter
the amount, composition, and direction of goods.
THREE PERSPECTIVES ON INTERNATIONAL
TRADE
1. Economic Liberals
• For David Ricardo, his influential work, Law
of Comparative Advantage explains that
free trade efficiency is attainable if two
countries can produce more goods and
trade products separately. The advantage
of this theory in international trade is
deriving principle of specialization and
division of labor of Adam Smith (Nau, 2009).
Countries have different resources and
talents; they are better in performing in that
economic activity than other economic
activities.
• Economic liberals explain the importance of
free trade and the role of individual’s
preference in choosing economic activity.
It includes making decision, and choices on
comparing the costs of products to be
produced and traded, the availability of
the product, and the efficiency of
producing and buying products.
2. Mercantilists
• Mercantilism is an economic theory
emerged from about 1500-1800. This period
was the emerging eras of nation-states and
the formation of more central governments.
This system flourished due to the following
reasons:
a. Higher export than import. Governments
imposed restrictions and policies requiring
economy ant its market to produce higher export
that products and services purchased outside the
country or import. Countries used this mechanism
to support their trade objectives and strengthen
their colonial rule and possessions.
b. Export less high valued product and import
less high valued product. It prevented and
monopolized the production and manufacturing
operation of the colonies.
c. The benefits of colonial powers.
Mercantilism is adopted to increase and sustain
the colonial power and its authority to direct and
control the economic activity of the colony.
3. Structuralists
• The Modern World System (MWS) theory
developed by Immanuel Wallerstein,
explain the contact of economies between
core, semi-peripheral, and peripheral
countries in the world.
• The core states have the absolute
advantage over the other through unequal
exchange and extraction of raw materials
from the periphery and semi-periphery.
• This system as part on the structure of the
global capitalism, involves exploitation, and
transformation in some ways.
INTERNATIONAL ECONOMIC INSTITUTIONS
TRANSNATIONAL CORPORATIONS
• The role of Multinational Corporation
(MNCs) in the 21st is distinct and interesting
to investigate. The movement of ideas,
capital, investment, technology, and
people are affected by the operations of
MCNs.
• As the global economy is becoming
complex and competitive, MCNs continue
to offer innovations and new product and
services. For several years, the term MCNs
was used to refer to a firm operating in
different countries around the world.
Because of the magnitude of global
production and networks, the term
transnational corporation (TNC) became
the more acceptable name.
• This refers to business organizations and
firms that compete in regional or global
markets. It operates in countries and makes
investments in research, technology,
facilities, distribution, and production.
• TNC can control and monopolize the global
market especially if it has huge pool of
resources making it one of the most
powerful economic actors in the world.
• The number of TNCs from north and west
has business operations in the south where
cheap labor and raw material are
available.
• TNCs are very powerful economic
institutions because of their global influence
in investment and network distribution.
AND MARKET INTEGRATION
• The formation of economic integration is
designed to address and enhance the level
of competitiveness of member economies
in trade.
• Free trade is the primary consideration of
regional economic integrations.
• Free Trade Area (FTA) is a trading bloc
which involves the reduction of internal
tariffs to zero of member economies while
retaining different external tariffs. This policy
aims to promote free flow of goods and
services as well as to increase the volume of
trade within the region.
• Unfair Trade is the conduct of trade by a
business fir or government that violates and
breaks the international trade agreements
that are unjustifiable and discriminatory.
• Examples of common trade practices are
issues relating to price, labor, wages, health,
and environmental concerns that failed to
meet the regulatory standards of the body.
WORLD TRADE ORGANIZATION (WTO)
• In 1995, General Agreement on Tariffs and
Trade (GATT) of the American government
was replaced and succeeded by WTO with
151 members as of 2008 and accounts for
90% of the world’s trade. It is based in
Geneva, Switzerland and leads by a
director general selected by consensus
among its members.
• Primarily, WTO has the following main
functions:
a. Implementation of the latest GATT
agreements
b. A venue for trade negotiations
c. A dispute settlement body responsible for
resolving trade problems
d. Review and assess national and
international trade laws and policies
e. Assist members and developing economies
by providing technical assistance and training
programs
WORLD BANK
• Officially called the International Bank for
Reconstruction and Development (IBRD), or
World Bank is an international agency with
189 member-countries operating in 130
countries worldwide.
• Formed by Bretton Woods agreement in
1944 to finance the reconstruction of war-
 torn countries brought by the devastation of • European Union (EU) is a political economic under its six fundamental principles
World War II. regional organization of 28 member- (ASEAN.org).
• World Bank is composed of four associated economies in Europe. a. Mutual respect for the independence,
agencies: • Founded in 1985, European Economic sovereignty, equality, territorial integrity, and
• a. International Development Country (EEC) was formed by six countries: national identity of all nations;
Association (IDA). This agency Belgium, Germany, France, Italy, b. The right of every State to lead its national
focuses on poor and third world Luxembourg, and Netherlands. existence free from external interference,
economies in the world by providing • Since then, other European countries joined subversion or coercion;
financial assistance and load the regional bloc making it as Europe’s most c. Non-interference in the internal affairs of
program. influential and powerful body. one another;
• b. International Finance • EU is guided by its core values, considered d. Settlement of differences or disputes by
Corporation (IFC). as integral part in the way of life of its peaceful manner;
• c. Multilateral Investment citizens. e. Renunciation of the threat or use of force;
Guarantee Agency (MIGA). • It believes on the following value and
• d. International Settlement orientation: (1) Human dignity, (2) freedom, f. Effective cooperation among themselves
Centre of Investment Disputes (ISCID). (3) democracy, (4) equality, (5) rule of law,
and (6) human rights.
INTERNATIONAL MONETARY FUND (IMF)
• IMF was created as the flagship institution of ASSOCIATION OF SOUTHEAST ASIAN
Bretton Woods agreement with 189- NATIONS (ASEAN)
member countries. • The Association of Southeast Asian Nation
• IMF is responsible in supervising exchange (ASEAN) was founded on August 1967 in
rate system, providing loan programs to Bangkok Thailand with Indonesia, Malaysia,
economies experiencing balancing Philippines, Singapore, and Thailand as its
payments adjustments, and review founding fathers.
domestic economic policies. • Brunei Darussalam, Vietnam, Myanmar, and
• Its mandated to ensure the stability of the Cambodia joined the organization making
international monetary system including up today the 10 member-countries.
exchange rates and international • The ASEAN Political-Security Community,
payments. ASEAN Economic Community, and ASEAN
• It reflects on the amount owed by the Socio-Cultural Community are the three
country from another country as well as main pillars of ASEAN.
indicates the economic operation like what • As stated in the Treaty of Amity and
it produces, consumes, and buys with its Cooperation in South East Asia (TAC) of
money 2976. The ASEAN Community functions
EUROPEAN UNION
 CHAPTER 5
GLOBAL GOVERNANCE
GLOBAL GOVERNMENT AND
GOVERNANCE
• Global government is a response on the
actions of various stakeholders on finding
out pressing global problems like climate
change and issues on peace and security.
• The world has no global government and
global authority.
• There are political and economic bodies
operating worldwide but no single
organization possesses a global authority in
enforcing and compelling others to follow.
• Global governance refers to domestic
institutions and governments on how large-
scale problems and public policy issues are
being solved at a global level.
• It involves a range of actors including states,
national and regional bodies that have the
willingness and commitment to confront a
specific problem (WHO, 2015).
• It involves management, authority,
cooperation, and mechanisms that are
aimed to attain certain goals.
• This international process is bounded by
consensus and agreements where
members are expected to perform based
on the guidelines and policies
Three Existing Gaps and Issues in Global
Governance
1. Jurisdiction Gap
 The lack of global governance in taking
actions to problems affecting key sectors
arises from the absence of authority. This
involves the need to create power and
jurisdiction to governments and
international organizations that have the
commitment in confronting issues like
unemployment, human rights, peace, and
crimes.
2. Incentive Gap
 Global governance is formed with the
participation of countries that have the
interest to deal problem affecting their
sovereignty. It is an issue between the rich
and poor countries of the world because of
uneven distribution of authority and control
over decisions and policies.
3. Participation Gap
 Member-states sometimes disagree on
issues that are harmful to their interests. They
do not involve in decisions that are crucial
to the economic and political welfare of
their sovereignty.
POLITICAL SYSTEMS
 Political System means the system, or the
form of practice employed by the state.
 Udayanskar (2012) identified two
dimensions of political system.
 First, a country emphasizes the importance
of individualism as opposed to collectivism.
 Second, a system in which a country is either
democratic or totalitarian in its form of
government.
INDIVIUALISM
• it is a political system that values the
significance of individuals over collective
goals.
• freedom of the people is the primary
consideration.
• government values choices and
preferences of its people at a very personal
level.
• it is built in two elements: individual freedom
and expression are important in the sense
that individuals just like state have
sovereignty; and the pursuit of economic
interest among individuals.
COLLECTIVISM
• is a philosophy that stresses the importance
of the collective goals over individual
freedom and interests.
• the state, as the primary economic
manager views collective action as the best
strategy in establishing the welfare and
interest of the nation.
• According Plato, social stratification must
be built in order for the society and the
entire economy and the government be
managed properly and orderly.
DEMOCRACY
• Democratic institutions and governance
focus on the role individuals in political
decision making.
• the practice of direct participation in
modern societies involves representation,
where individuals periodically elect
someone who has the ability to represent
them in the government.
• in a representative democracy,
competitive elections occur where
candidates freely compete for votes
through conduct of fair and honest
election.
• elected officials are accountable for their
actions in the government and operation of
the state.
• constitutional laws are provided to
safeguard the welfare and interest of the
people.
TOTALITARIANISM
• is built on the idea that society and citizens
have no right and freedom of expression.
• totalitarian countries do not recognize the
conduct of fair and honest election, the
presence of media, and civil liberties.
• decision making of the states is exclusive
only on a single political party if not a ruler
who has full control in the political,
economic, and social affairs if its
government.
POLITICAL LAYERS AND GEOPOLITICS
 States in contemporary world are hungry for
power.
 Power is the ultimate goal to contain and
control other states and nations that do not
enjoy much power are considered as
powerless states in international arena.
 Realists define power as capabilities of a
country to control other countries like
population of its people, resources, territory,
economic, and military strengths (Chomsky,
2006; Nau, 2008).
 In international relations, geopolitics is
defined as a focus and concentration of a
country's location, environment, and
geography as the basis of its national
interests (Nau, 2008).
 United States and China have ideal
geography because of its vast land and
territory, Israel on the other hand, has
struggles when it comes to defending the
territory because it is surrounded by Islam
majority countries.
 India enjoys its huge territory but have some
challenges when it comes to territorial
security and military relationships with
neighboring countries Pakistan and China
UNILATERALISM
 The economic growth experienced by
China and other emerging economies in
the world are dependent on the American
market.
 On the political angle, American military
power is considered as the most highly
valued military force in the world with billions
of dollars annually spent by the
government. Its military presence in some
countries in Asia and Pacific, Middle East
and Africa, Europe and South America is a
remarkable manifestation of its control in
global defense operation.
 However, the global stability of power
enjoyed by the Americans can only be
sustained if it will employ the liberal values of
freedom, democracy, and human rights
(Balaam, and Veseth, 2008).
 MULTILATERALISM
 The idea of multilateralism includes three
powers in international system.
1. Bipolar - it happens if there are only two great
powers dominating the distribution of power. The
Cold War era is fitting example of bipolarity, the
global power was highly contested between US
and USSR.
2. Tri-polar or tri-polarity - exists if there are only
three states dominating the distribution if global
order. United States, Japan, and Europe were
considered as potential powers during the
Second World War. They controlled some areas
under the respective military instruments and
interests. In the area global economic power,
Japan, China, and United States are the most
favored nations identified by scholars as the three
leading economic giants of modern time.
3. Multipolar or multi-polarity - is situation when
more states are involved in the distribution of
global power. This geological condition is
described as an alignment if the powerful and
emerging powers in the world. The current
situation of the globe could be described as
Multipolar because of state actors joining the
prestige of superpowers. Europe, China, Japan,
Russia, United States, and major alliances are key
players in the distribution of power.
ISOLATIONISM
 Isolationists believe that major powers and
states exclude the use of force and military
in the international system. War and
attacking other nations are unethically
acceptable in the international political
economy. It is already enshrined in the
international law. Realist-isolationist stresses
that United States must disengage itself
using military force over other military
interests.
GLOBAL POLITICAL INSTITUTIONS
UNITED NATIONS
• The United Nations or UN is an international
organization established in 1945 with the
League of Nations as its original body.
Currently, the organization has 193-
memberr states performing various
capacities and divisions.
• As the world's most powerful binding
political organization, UN can act on the
issues confronting humanity in the 21st
century such as peace and security,
climate change, sustainable development,
human rights, disarmament, terrorism,
humanitarian and health emergencies,
gender equality, governance, food
production, and more.
• UN operates worldwide in providing aids
and support services to global problems in
countries where it is needed.
ORGANS OF UNITED NATIONS
• 1. General Assembly- this is UNs main
deliberative and decision-making body
represented by all its 193 members. The
assembly holds general debate from
September - December in its headquarters
in New York. Two thirds of vote are required
to decide range of issues like peace and
security, budget, and admission if new
members to the organization.
• 2. Security Council - it is responsible in the
maintenance of peace and security. it has
the power to impose sanctions or punish
members or other bodies for the purpose of
restoring international peace and security.
• 3. Economic and Social Council -
commonly called as ECOSOC. its main
function is to coordinate, review, and
recommend policies relating to economic,
social and environmental issues. It serves as
the main agency of UN in monitoring and
evaluating key results in sustainable
development.
• 4. International Court of Justice - ICJ is the
principal body or court of UN. Its role
includes setting legal disputes among
concerned states and provides opinions on
legal matters. This is the only UN organ that
 operates outside United States with • The economic alliances of Europe's
headquarters in the Peace Palace, powerful countries transformed the region
Netherlands. as a major hub in industrialization. Its
development transformed NATO as a
• 5. The Secretariat - it is headed by the UN
conventional military alliance and
Secretary - General who sits as its Chief
protected Europe from the threat of Soviet
Administrative Officer at the appointment
Union.
of the secretary general is done through the
recommendation of the Security Council for
a five-year term. this organ is responsible for
the day-to-day work and operation of the
UN including its peacekeeping mission and
thousands of international staff stationed in
different countries.
• 6. Trusteeship Council

NORTH ATLANTIC TREATY ORGANIZATION

• NATO was formed initially as a political
association, and not a military alliance.
Realists argue that during its proposal in
1949, the idea of collective security
arrangement was the main feature of
NATO.
• Its purpose was not directed against the
threat of Soviet Union but to strengthen
political commitment of governments in
Western Europe. However, liberalists point
out the belief that NATO was established to
back up and save the economic and
political problems of Europe from the
damages of war.
 CHAPTER 6
GLOBAL CIVIL SOCIETY AND
NON-GOVERNMENTAL
ORGANIZATION
GLOBAL CIVIL SOCIETY (GCS)
• The formation of UN was pivotal in the
recognition of civil society organizations and
NGOs.
• This era was marked by participation of NGOs in
the decision making of the body.
• GCS is a global and international network of
NGOs with the purpose of influencing
governments and organizations in various issues
and concerns. It is usually identified as
organized attempts to create and resists
change.
• NGOs have strong influences and role in
globalization. Their operations are very evident
across disciplines and industries such as
commerce and trade, media and press, human
rights, environmental groups, migration and
labor.
• Lobbying in governments, participating in
public protest, and maintaining information
campaign are some known styles of articulating
their interests and expressing their stand on a
particular issue.
CHARACTERISTICS OF NGOS
1. An NGO must be entirely independent from the
control of any government. It should have its own
authority and jurisdiction over its operation and
decisions. They design their own programs and
activities and maintain their networks without
interference from the government.
2. NGOs are not considered as political party. They
have participation in political issues like human rights
and environmental pollution but they are not classified
as an organization that is part of the bureaucratic
operation of the state.
3. NGOs perform their tasks not because of generating
income or profit. They are described as non-profit and
not-for-profit organization or entity. The existence and
operating costs of NGOs rely on the members'
contribution and practice of sponsorship from the
private sector and entities that have interest in their
causes.
ROLES OF CIVIL SOCIETY ORGANIZATIONS
The World Economic Forum (WFC) outlined the
following roles of NGOs and CSOs:
1. Watchdog
CSOs monitor the behavior of institutions in the
promotion of transparency and accountability.
2. Advocate
They initiate programs that could raise public
awareness of issues and challenges and advocating
for change.
3. Service Provider
These organizations are active in delivering
services to meet societal needs including food and
security, health and education as well as
preparedness and disaster management.
4. Expert
They bring unique knowledge and experience
to evaluate policy and strategy, and identify solutions.
5. Capacity Builder
Civil society provides services providing relevant
training, education and capacity building to
communities.
6. Incubator
CSOs act as an armory in developing solutions
that requires long playback period.
7. Representative
They give power in emphasizing rights of the
marginalized and voices of under - represented.
8. Citizenship Champion
CSOs are known in encouraging citizen
engagement and championing the rights of the
minority.
9. Solidarity Supporter
They promote the ethical, just, and humane
practices as part of promoting universal values geared
towards sustainability and balanced life of the many.
10. Definer of Standards
CSOs create and frame norms that shape and
make activities of the people and societies.
TRANSNATIONAL NONGOVERNMENTAL
ORGANIZATIONS (TNGOS)
• TNGOs are international not-for-profit
organizations that are independent and
are not controlled by governments.
• TNGOs operate as an extension of the
private life of the state transcending from
domestic to international affairs.
• TNGOs are seen very active in the domestic
affairs in countries under democracy.
Example:
Democratic states do not only recognize
the operation of NGOs but promote as well
its involvement in the acceleration and
delivery of its services.
ECONOMIC NONGOVERNMENTAL
ORGANIZATIONS
• Multinational Corporations (MNCs) and
Transnational Corporations (TNCs) are modern
versions if global commercial enterprises.
• Example:
Powerful organizations and firms like Google,
Toyota, ExxonMobil, Walmart, and Samsung
continuously generating profit at a large scale.
ENVIRONMENTAL NONGOVERNMENTAL LAW AND HUMAN RIGHTS NONGOVERNMENTAL
ORGANIZATIONS ORGANIZATIONS
• Environmental NGOs are considered as • The adoption of UN Universal Declaration of
vanguard against the abuses of capitalists Human Rights in 1948 which centers on the
and organizations that negatively affect promotion of political participation and
the environment. freedom, entitlements and access to adequate
food, shelter, clothing, and health care
• NGOs usually lobby to influence decision
provided a more pronounced obligation of the
makers, international organizations and
state to its citizens.
governments.
• They undertake serious actions like research • This adoption was followed by the resurgence
fundraising, publicity and challenging of other bodies and conventions such as
policies and legislatures that are women's and children's rights, discrimination
and abuse.
detrimental to the ecology and
environment • Under the UNs management, the organization
has the right to act issues concerning human
rights violation.
• Greenpeace and World Wildlife Fund (WWF)
Example:
are two most prominent environmental NGOs.
Activities and engagements of these • Amnesty International (AI) is one of the world's
organizations are described as assertive and most famous and active human rights NGOs
influential. They operate in almost all countries operating in different countries worldwide.
especially those that have environmental
• AI maintains its global prestige and integrity of
concerns.
not accepting money and donations from
• Greenpeace is known for its fearless stand and governments and political
expression on the neglect of the institutions in organizations/parties.
damaging oceans, shipments of toxic products,
• It is known in focusing advocacies and causes
and forest degradation in areas like Brazil.
on judicial and justice system reform, abolition
• WWF on one hand is the world's largest of death penalty, protecting the rights of
multinational conservation organization. migrants and refugees as well as protection to
human rights defenders, and promoting the
rights of marginalized communities and
indigenous peoples.

CHAPTER 7
GLOBAL DEVELOPMENT AND DIVIDE
DEVELOPMENT
• The term development us described as a
process, system, procedure. It is a state or
condition of changing and enhancing
something.
• Oxford defines development as "a process and
an event constituting a new stage in a
changing situation.
• This process requires a number of factors and
consideration in developing a part of its system
or constituent elements
• Development is a complex and
multidimensional concept occurring in an
uncertain condition.
• Bellù (2011) stresses that the development of the
other parts of the system could be detrimental
to the development of the other thus creating
structural and systemic conflicts.
• Critics of global development assert that
countries do not equally get the gains of
globalization.
• Countries that lack resources and infrastructures
are at the bottom part of the phenomenon
where the benefits are unequally distributed
worldwide. Disparity is very evident between
rich and poor countries.
• CSOs describe this situation as
maldevelopment, a condition where
developing and less developed countries suffer
on the downside effects of development and
changes.
FOUR DIMENSIONS OF DEVELOPMENT
• The Food and Agricultural Organization (FAO) of
the UN has enumerated the four dimensions
and prevailing paradigms of development.
1. Economic Development
2. Human Development
3. Sustainable Development
4. Territorial Development
ECONOMIC DEVELOPMENT
• It is focused on the qualitative aspect of
change that sometimes people failed to
determine like the increased quality of life,
social improvements and innovations.
• Sen (1999) defined it as "the expansion of
capacities that contribute to the advancement
of society through the realization if individuals',
firms', and communities' potential"
• Economic development as a transformation
requires altering some fundamental economic
structures, increasing the occupational
capacities of the population, empowering the
mobility of key economic agents
HUMAN DEVELOPMENT
• UN's Three Dimensions of Human
Development:
1. Long and healthy life
2. Knowledge
3. Decent standard of living
• Indicators:
1. Life expectancy at birth
2. Expected and mean years of schooling
3. Gross National Income (GNI)
• Human Development Index (HDI) was created
to emphasize that economic growth should be
used as criterion in assessing the development
of a particular country but the development of
the people and their capabilities.
• The report was a response to the growing
disparity between the poor and rich where
poverty has become a major challenge to
governments as part of its national policy
making.
SUSTAINABLE DEVELOPMENT
• It is the "development that meets the needs of
the present without compromising the ability of
future generations to meet their own needs."
(Bruntland Commission)
• Development is a need, and it must be
observed and practiced based on the
necessity of man and his environment.
• However, development efforts and practices
must be in accordance with the harmony of
nature without compromising the ecological
condition and future generation.
SIX DIFFERENT DEFINITIONS OF SUSTAINABLE
DEVELOPMENT (STREETEN, 1991 AND GOUTLET
2000)
1. The maintenance and replacement of capital
assets.
2. Maintaining the environmental conditions for the
benefit of the all.
3. Resiliency or the ability to adjust and cope with the
changes and crises.
4. The avoidance of internal and external debts in the
future.
5. Fiscal and political sustainability.
6. The ability to hand over the programs and projects
to the decision and control of the citizens.
TERRITORIAL DEVELOPMENT
• It focuses on the interrelationships of human
activities between rural and urban areas (Bellù,
2011)
• Social activities of man part of territorial
development include production, distribution,
and consumption of goods and services, the
balance and quality features of its norms and
practices that support the operation of man's
social affairs.
• Territorial development is composed of clusters
that linked activities and structures.
• Critical to this development is how clusters and
agencies respond to the challenges of resource
scarcity which are then interlinked to problems
like food security, space availability, and
overcrowding.
• The development process if this dimension
operates on both national and transnational
scope.
SUSTAINABLE DEVELOPMENT GOALS (SDGS)
• SDGs was established as part on the success of
the Millennium Development Goals of 2015.
• In the next 15 years, member-countries of UN,
rich and poor, developed or developing are
expected to mobilize all efforts to end the
global problem of poverty, solve inequality, and
address impacts if climate change.
• Parties involved in the global war on poverty
believe that a more active participation and
higher level of commitments are necessary to
materialize SDGs by 2030.
• This global partnership among states is not
binding however, national governments have
the ownership and authority to make and
implement national policies that are in line with
the objectives of SDGs.
• These policies are of high quality and have
accessibility to public and other concerned
bodies as a mechanism in delivering and
relevant works and outputs.
17 SUSTAINABLE DEVELOPMENT GOALS
GOAL 1: No Poverty. End poverty in all its forms
everywhere.
GOAL 2: Zero Hunger. End hunger, achieve food
security, and improved nutrition and promote
sustainable agriculture.
GOAL 3: Good Health and Well-being. Ensure healthy
lives and promote well-being for all at all ages.
GOAL 4: Quality Education. Ensure inclusive and
equitable quality education
GOAL 5: Gender Equality. Achieve gender equality
and empower all women.
GOAL 6: Clean Water and Sanitation. Ensure availability
and sustainable management of water and sanitation
for all.
GOAL 7: Affordable and Clean Energy. Ensure access
to affordable, reliable, sustainable, and modern
energy for all.
GOAL 8: Decent Work and Economic Growth. Promote
sustained, inclusive and sustainable economic growth,
full and productive employment and decent work for
all.
GOAL 9: Industry, Innovation and Infrastructure. Build
resilient infrastructure, promote inclusive and
sustainable industrialization and foster innovation.
GOAL 10: Reduced Inequality. Reduce inequality
within and among countries.
GOAL 11: Sustainable Cities and Communities. Make
cities and human settlements inclusive, safe, resilient,
and sustainable.
GOAL 12: Responsible Consumption and Production.
Ensure sustainable consumption and production
patterns.
GOAL 13: Climate Action. Take urgent action to
combat climate change and its impacts.
GOAL 14: Life Below Water. Conserve and sustainably
use the oceans, seas, and marine resources for
sustainable development.
GOAL 15: Life on Land. Protect, restore, and promote,
sustainable use of terrestrial ecosystems, sustainable
manage forests, combat desertification, and halt and
reverse land degradation and halt biodiversity loss.
GOAL 16: Peace and Justice Strong Institutions.
Promote peaceful and inclusive societies for
sustainable development, provide access to justice for
all and build effective, accountable and inclusive
institutions at all levels.
GOAL 17: Partnerships to achieve the Goal. Strengthen
the means of implementation and revitalize the Global
Partnership for Sustainable Development.
GLOBAL SOUTH
• South has a geographical connotation
described as largely equivalent, but not
identical with Third World (Pagel, Ranke, et al
2014).
• However, the term south does not refer to
countries outside United States and Europe,
Australia and New Zealand do not belong the
"South".
• It also refers to countries that are excluded if not
deprived from socioeconomic prominence like
Africa, Middle East, South America, South Asia
and countries within Pacific.
• The inequalities and global divide between rich
and poor countries part of globalization and
territorializing is also a part on the reality of
global south (Lopez, 2007).
• The idea of global south is a contemporary issue
in socioeconomic and political divide.
Countries like United States, Canada, outmost
and western part of Europe, Japan, Australia,
and New Zealand are giant economies parts of
the global north.
• These countries are described as highly
industrialized, developed, and most advanced
economies in the world. It rests on the fact that
the entire world's industrially developed
countries lie to the north of its developing
countries
• Asian countries are fond to be a combination of
emerging and developing economies except
for Singapore. Domestic and regional problems
like unstable governments, rule of law ad
environmental pollution are continuously at the
frontline of concerns in the region.
• Central Asia on the other hand consists of
countries that have experienced transitioning
governments.
• West Asian region has its unique social struggle.
The region is confined in a costly conflict
involving territorial insecurity, peace and order,
and competing extreme ideological clashes.
Thought the region is an oil-rich country but
regional issue are barriers in the development
process of West Asia.
• Natural disaster and the absence of sufficient
investment as major source of the economy,
make countries in the Pacific Islands a victims of
slow growth. Its economies are dependent with
the influx of business and commercial activities
of nearby countries in the Pacific as well as
countries in Oceania, Asia, and America.
• Countries belonging to Latin America are
trapped in turbulent economic environment.
Regional matters like unstable democratic
governance and fiscal problems are known
challenging facing countries of the region. Latin
and Caribbean countries are described as
countries that have experienced "lost
development" because of missed economic
opportunities especially in the 60s and 70s.
CAUSES OF GLOBAL DIVIDE
1. Globalization in the 1990
The economic intensification observed in the
90s fueled countries to establish boundaries. Poor
countries that can not cope with the demands of the
rich and developed countries suffer most of the
potential damage of globalization. Countries of the
global south especially under unstable governments
and weak economics failed to produce outputs as a
response to the internationalization system of
economy and government.
2. Uneven Immigration
The pattern of migration in the last three
decades saw an unprecedented rise of migrant
workers and citizens seeking greener opportunities in
other countries. People from Asia targeted Western
Europe and America as ideal point of employment.
Developed countries that are on the height of
technological development, advancement, and high
quality of social services became the man venues
accepting migrants.
3. The hegemonic nature of international economic
relations
The global problem of poverty and inequality
are outcomes of the evil practices of western
countries. These problems are associated with the
abuse of capitalists who control most of the world's
wealth. International institutions that have the power
and resources are very silent and unresponsive in this
problems experiencing countries in the global south.
Countries in the global south are trapped in the hands
of developed countries where rising financial
obligations like loam programs are continuously
punishing economies of the south.
1ST VIDEO
COVID-19: WHAT WILL HAPPEN TO THE GLOBAL
ECONOMY | THE ECONOMIST
Covid - 19 has battered the global economy
causing the worst recession since the Great
Depression of the 1930s. It will be a new economy
where many areas of the economy won't go back
to the level of output that they have thought. You
submitted your questions to Zanny Minton
Beddoes our editor in chief and Edward Carr our
deputy editor, here are their answers Will the
economic shock caused by imposing lockdowns
prove more costly than the pandemic itself?
Zanny: “If you are a poorer country that doesn't
have the capacity to provide the kind of fiscal
and monetary support on a scale that advanced
economies have done the cost is huge but
secondly I think even within the advanced world
it's interesting that countries which have not
locked down nearly as rigorously and Sweden
stands out as the country that has you know
essentially not had a formal lock down actually
has seen its economy shrink pretty much by the
same amount as Denmark right next door which
had a much tougher lock down and that's of
course partly because people behave in a way
which reduces economic output they're not
spending they're staying at home but also
because the overall kind of global economic
environment has been hit so hard but that has had
knock-on effects and then the other point that's
interesting I think as we go on in time is one it
depends on how successfully citizens think their
governments are handling things and there I point
perhaps with some concern to the case in the
United Kingdom where we are seeing a lock down
what was implemented somewhat later and now
as a result a government that is reluctant or is lifting
the lock down more slowly with the result that the
economic costs are going to be really quite high
and so the relationship between the two I think
can evolve depending on how government
handles things and is perceived to be handle
things.”
How could an economic recession shift the global
balance of power?
Edward: “It's come as a surprise to everybody how
the United States which in previous things crises like
this would have played a central role in kind of
galvanizing the world hasn't done so in fact it's
threatens to withdraw from the World Health
Organization and that I think is a big signal that
everybody else is going to have to come to terms
with that's not directly the result of a recession but
it's the result of the country's response that would
have been coordinating both medically and
economically the response to the pandemic.”
Will this be a chance for China to become the
global financial hub?
Zany: “The starting point of course is that the U.S. is
the absolutely dominant country in global finance
the dollar is the dominant currency in global
finance whether it's the kind of plumbing of the
global financial system or the currency that most
central banks hold their reserves in the question is
has always been when with that dominance be
challenged by the world's second largest
economy China but because China doesn't have
a convertible currency it's always under played in
global finance but I think in the last few years and
very recently particularly we are seeing signs that
China's prominence will accelerate one reason is
the growing tension between the US and China
that the US has increasingly been using the
financial system as a weapon by imposing
sanctions the second is actually the growth of
China's own capital markets it is developing its
financial markets but its currency is still not
convertible and so I think only when that happens
is it really going to challenge the dollar and it is
certainly possible that the aftermath of Covid will
accelerate that.”
Edward: “This kind of thing takes a long time to
happen I mean if you look at the last time this
happened in the 20th century when the dollar took
over from the pound it was quite a slow process
and you know long after Britain's decline was very
evident the pound was still a very important global
currency so these transitions take a while and you
know it's not going to happen anytime soon but
the incentives are clearly growing.”
Zanny: “And there is actually one reason that I
think why this time might be a bit faster which is
China is has done a huge amount to build up the
sort of financial technology required for a digital if
you look at the super apps within China and I paid
all of those they are much better and more
sophisticated than what is in the West and so I
think they have moved ahead in actually the sort
of financialization of the digital era in a way that
could probably be exported particularly to
developing economies and if developing
economies are increasingly going to be forced to
choose which ecosystem they're in the China the
Chinese one has some Aloha there.”
Which countries are most economically
vulnerable to the effects of Covid - 19 and why?
Edward: “First it says the economy economic
effects are determined largely by the medical
effects but then there are other things like which
particular industries are important so tourism
seems to me to be a clear category where at least
sort of one year's tourism is going to be very hard
hit and it might go on longer if the industry can't
adapt and if there isn't a vaccine so you should
look for and just where people working very close
and confined conditions some of the garment
industries where that's an important export sector
you might see that being a problem and then
others where you know industry and work requires
people to be very densely packed.”
Zanny: “I think the one thing I'd add to that is
countries that whose governments don't have the
capacity to borrow and to cushion this for their
citizens and that's particularly developing
countries heavily indebted developing countries
that have to rely on dollar borrowing for them it's
really quite hard because quite often it's the same
country that has been particularly hit because
there's no tourism or because it's a natural
resource exporter and prices have fallen and at
the same time has a heavy debt burden so if you
if you really want the kind of the ones that that are
in the toughest position I think it's emerging
economies whose exports have been hit that are
reliant on tourism and that have a very big debt
burden.”
What will the impact on the jobs market be for
those graduating in 2020?
Zanny: “That's a really good question that we've
been we've been thinking about a lot at the
Economist and we did a cover a few weeks ago
which we call the 90% economy and the
argument of that cover is that when the economy
recovered we wouldn't be going back to the old
economy it will be a new economy where many
areas of the economy won't go back to the level
of output that they had before that's why we
called it that 90% economy the other reason it's
going to be hard right now is that the
unemployment rate is high the unemployment
rate has surged and even if it's come down in the
United States a little bit it's still remarkably high so
just finding a job is much harder the trick for public
policy is going to be to make sure that the scarring
from that the shadows of that don't last then what
that means is when the unemployment rate goes
up the kind of it has long-term consequences and
it takes as a result it means that people find it
harder to get skills it's harder to sort of make a real
go of the labor market and I think we need to we
need to work hard to make sure that doesn't
happen this time.”
Edward: “I've seen one study in Britain that says
that a third of graduates have had their offers
delayed or withdrawn so there are deserts or
immediate effect the interesting thing for me is is
some of these kind of rather subtle but perhaps
important effects about what happens when
people are starting out having just left and college
and often they go into you know things like
restaurant work or bar work things that happen in
big cities and you know that's where they make
contacts where they form their own network
where they might hear about a job or find their
way into a career that they just didn't really know
they wanted well just now those opportunities
don't really exist and even if young people want
to crowd into cities it's not clear that many other
people will be crowding into cities and so there
might be as Zanny said this 90 percent economy about treatment works I mean the best protection
in which these opportunities just aren't as readily against a pandemic is a globalized system.”
available I mean some people are very lucky they
know they want to be a you know computer
programmer or bridge designer from you know
the Year dot but most of us kind of stumbled into
what we do and that stumbling is going to be a
harder.”
Has the pandemic made globalization look like a
liability?
Zanny: “I think it has in many people's eyes made
it look like a liability I don't think it is and you know
I think one of the very wrong conclusions to draw
from this would be for countries to put up the
drawbridge and to say that the only way to be
safe and resilient is to produce everything at home
and to kind of end globalization I think one of the
lessons of this pandemic is that you need to
diversify your supply chains we need to rethink
aspects of globalization but I really worry that if we
took this as a signal to say that globalization was a
bad idea and that we all need to put up the
drawbridge to a more autarkic system that the
world would be a lot worse off.”
2nd VIDEO
Edward: “Yeah it's an Aeron isn't it that the thing
about the pandemic is it requires a global COVID-19: HOW TO FIX THE ECONOMY | THE
response and no more so in finding medicines and ECONOMIST
vaccines and then distributing and manufacturing Covid-19 has brought the global economy to its knees.
them and then ensuring that the best knowledge
“The pandemic has been an enormous synchronized
global economic shock on a scale which has not been
seen since the second world war.”
By the end of 2020 the world’s GDP may be about 7.5%
lower than it would have been without the pandemic.
Globally more than 15% of young people who were in
work before covid-19 have lost their jobs. Widespread
lockdowns have turbocharged changes that were
already affecting the world economy in technology,
finance, and trade.
How governments adapt to these seismic changes will
determine? how rapidly countries’ economies can
recover?
In April this year, American unemployment was the
highest since the Depression. Back then around a
quarter of Americans were jobless, but from the bleak
Depression of the 1930s was born the “New Deal”, an
ambitious federal plan to create jobs and kickstart the
economy.
“40% of those seeking work have found it. We have a
long way to go but we are on the way.”
The crises of the 20th century forced governments to
change their policies for the better.
“It’s often been the case that after big periods of
economic upheaval you’ve had a reforging of the
relationship between the individual and the state.”
The second world war was followed by an expansion
of the welfare state in Europe, and high
unemployment and inflation of the 1970s led to Ronald
Reagan’s and Margaret Thatcher’s free-market
economics.
But in the 21st century the largest economic shocks
have not led to such a change.
“The global financial crisis People thought maybe
you’d have a rethinking of how banking worked, but in
the end, you only got incremental reform the effects of
trade with China were not adequately anticipated by
Western policymakers. They did not think about the
impact it would have on some workers who were
exposed to it and I don’t think enough thinking had
been done about the implications of big tech for the
economy and society.”
Those on the losing side of these economic shifts have
felt left behind.
“The result is: you’ve got the rise of populist politicians
like President Trump; the vote for Brexit; the rise of right-
wing, economically nationalist populism around the
world; and then among the young you have this
leftward drift. This support for politicians like Bernie
Sanders, for Jeremy Corbyn.”
The pandemic is the fourth economic shock of the 21st
century. This time, governments could choose to
respond differently:
1. SPEND FIRST, SAVE LATER
In the aftermath of the global financial crisis many
governments, especially in Europe chose to tighten
their belts rather than spend. The result was slow
economic recovery.
“You had governments which turned to fiscal austerity
to cutting spending to balance their budgets too soon
which also weakened the recovery and made it slower
than it otherwise could have been. Now we have the
pandemic an economic downturn that’s very deep.
And I think it’s important that governments don’t
repeat the mistakes of the 2010s.”
So far, spending is exactly what governments have
been doing. And to pay for that spending
governments have been borrowing a lot. To keep
borrowing costs down central banks in America,
Britain, Japan and the euro area have created new
money worth almost $4trn. That money has financed
household-income payments furloughed millions of
workers and bailed out businesses.
“At the moment, interest rates are very low, and so,
despite the fact that you have this enormous debt
that’s been run up as a result of the pandemic the
costs of servicing it are not high. So, there is no doubt
that there’s space for governments to support the
economy.”
But no one knows if—or when interest rates are going
to rise. And should that happen it’ll be the taxpayer
forced to shoulder the burden of this vast public debt.
“The balance governments have to strike is not turning
to austerity too quickly. But then once, if and when
interest rates start to rise to be aware that they are very
indebted and they need to ensure that their fiscal
policies are sustainable.”
2. EMBRACE CHANGE
The pandemic has brought about enormous changes.
Perhaps the biggest is that for many people the office
has gone from here to here. And on the whole, they
seem to prefer it. 60% of Americans who can work from
home want to continue doing it at least one day a
week after covid. And in the long term it could boost
economic growth and actually decrease inequality.
“One of the chief constraints on growth was the fact
that it was very expensive to live near cities where jobs
were increasingly congregating, especially good jobs
in places like London, Paris, San Francisco, New York,
Tokyo. So, there is clearly an opportunity if people do
shift towards working from home to ease that
constraint.”
Working remotely has been made possible thanks to a
fast and widespread adoption of technology which
existed before the pandemic but wasn’t being used to
its full potential.
“This digital push that’s now taking place as a result of
the pandemic will lead to accelerated change in the
economy. Ultimately, disruption is what drives long-
term living standards. The important thing is that
governments I think, embrace this change rather than
standing in the way and seeing it as a scary force that
must be stopped.”
Of course, not everyone will benefit from the remote-
work revolution. The urban service sector, in particular,
is expected to shrink. But voters may be more likely to
support disruption if the risks are shared more equally.
3. BUILD A SAFETY NET
When the world went into lockdown millions of
businesses found themselves unable to operate and
with no way to pay their employees. So, governments
were forced to respond in an innovative way.
“I think that’s because there was this widespread sense
that you couldn’t do anything about the fact that you
were unemployed as a result of the restaurant at which
you worked being shut. Lockdowns were a bolt from
the blue. And so, the government stood behind
everybody and replaced household incomes to an
extraordinary degree.”
In America Congress announced a stimulus package
worth $2trn which included direct cash payments to
almost every American. The British government rolled
out a £30bn job-support scheme. And in Europe’s five
largest economies more than 40m workers were
placed on government-funded, short-work schemes.
“The downside to furlough schemes is that they do
have this potential to keep people locked in zombie
jobs which aren’t coming back when the economy
recovers. But the principle, that household incomes in
some sense can be underwritten during a large
economic shock over which those households have no
control is, I think, an interesting one that could be
applied in future.
What we’re seeing this year is that governments can
move pretty fast to put money in the pockets of
households directly and the households will spend that
money. Direct cash transfers to households do work
fairly well and are not subject to quite the same level
of haggling and perhaps the same degree of waste
that you might get with other forms of fiscal stimulus.”
4. AVOID TURNING INWARD
While governments have sought to intervene
domestically internationally there has also been an
increase in protectionism when countries shield their
industries against foreign competition.
The crisis has caused panic about the fragility of global
supply chains.
“Stalled production lines across China.” *News
reporter*
“The global supply chain right now is disrupted.” *News
reporter*
“A lot of firms this year paid a lot more attention to their
supply chains. And it’s more fashionable now to think
about the robustness and resilience of those supply
chains which often means bringing them closer to
home or at least diversifying your suppliers.”
There was concern in particular around personal
protective equipment. Many countries blocked export
of PPE and similar items.
According to the IMF (International Monetary Fund),
there have been almost 120 new export restrictions this
year.
“This is coinciding with a movement towards
protectionism on a global scale, with a trade war
between America and China. And it’s clearly a risk that
coming out of the pandemic you have leaders who
are very concerned about promoting national
champions less concerned about competition rules
and really want supply chains brought home.”
Despite this shift towards protectionism there is reason
to be optimistic. Government economic response to
the virus has been swift and on a massive scale.
“I don’t think many people would have predicted that
government would act that fast and that capably.
They’ve acted much better I would say on the
economic side than they have in terms of controlling
the disease in many countries.”
As with the economic shocks of the 20th century covid-
19 presents an opportunity for a reforging of the
relationship between government and the individual.
In ways many hoped would follow the previous shocks
of the 21st century. The question is whether today’s
politics is up to the job.
3RD VIDEO
WILL COVID KILL GLOBALISATION? | THE
ECONOMIST
Covid-19 has brought disruption to the globalized
and interconnected world. The challenges of
covid have led to a dark period, both in terms of
human suffering but also the damage done to of
political and social fabric. But before the
pandemic globalization was already in retreat
now that trend looks set to accelerate.
“This is a diminished world in many ways that we're
looking at it's a world of globalization” -Virjay V.
Vaitheeswaran (US business editor – The
Economist)
WILL COVID KILL GLOBALISATION?
From smartphones to toys today's globalized
trading system has grown to rely on long and
complex supply chains but the pandemic has
played havoc with them. Clothing is one industry
that has been hit hard, worth 2.5 trillion dollars
globally it employs over 43 million people
in Asia alone.
“One of the most footloose industries when it
comes to supply chain has always been the
garment industry that's because it has a high level
of human involvement, and so, the labor cost of a
product is much higher than you might find in an
automobile for example for that reason we've
always seen companies chase the lowest cost” -
Virjay V. Vaitheeswaran (US business editor – The
Economist)
That means manufacturing mostly happens in Asia
and the global nature of the industry makes it
especially vulnerable to disruptions. Take a typical
pair of trousers sold on a high street in western
Europe, the label says made in Bangladesh, but
many of the parts come from other countries.
Chinese factories making buttons and zips shut
during the pandemic meaning the items didn't
reach their next port. Factories in Bangladesh
couldn't finish the trousers and canceled orders to
cotton suppliers in India, and lockdown hit
demand in the west as customers weren't
shopping on high streets. In America clothing sales
fell by 73.5 percent between March and April this
year. Bangladesh lost out on an estimated 3.2
billion dollars from cancelled exports in just six
months.
“We are living in such a terribly uncertain situation
right now, if we don’t have jobs, we won’t be able
to pay rent or feed ourselves.” -interviewee
And across Asia millions of low-income workers
were laid off. Goods taking long journeys from
factory to the high street have become one of the
signatures of globalization.
The roots of today's heavily globalized world were
put down at the end of the second world war. The
allied nations created a rules-based system for
international commerce and finance.
“Designed to establish the economic foundations
of peace on the bedrock of genuine international
cooperation.” -unknown
This allowed companies products science and
technology
to move across borders then in the 1990s the world
entered an era of hyper globalization becoming
more interconnected than ever before.
“a dream of money, money.” -unknown
“…China will definitely play a helpful part when
the WTO (World Trade Organization) is facing
challenges” -unknown
In this era the big new player on the scene was
China, which joined the world trade organization.
It grew to dominate global trade alongside the
United States. multinational companies thrived
expanding into China and all over the globe. From
1990 to 2008 the total trade in goods and services
increased from 39 to 61 of world GDP (Gross
Domestic Product). This great globalization boom
enabled a billion people in developing countries
to lift themselves out of poverty, and in the west
consumers enjoyed cheaper and more
accessible travel and goods.
Covid-19 struck a major blow to unfettered
globalization, but before the pandemic arrived
globalization had already taken two other big hits.
“The American financial system is rocked to its
foundation” *News reporter*

“Japanese stocks down nine percent the Hong
Kong market's down” *News reporter*
“Everywhere you look the color is red and no one
it seems can stop the bleeding” *News reporter*
The first was the 2008 financial crisis, when cross-
border investment trade bank loans and supply
chains shrank. Globalization started to slow down,
a process known as slowbalisation.”
“The global financial crisis decade ago was
perhaps an early sign of the beginnings of
slowbalisation. it wasn't recognized as such at the
time because it seemed to be a banking crisis.” -
Virjay V. Vaitheeswaran (US business editor – The
Economist)
The global economy suffered. And those who had
already lost out during the heyday of globalization
felt even poorer. Opposition to the system grew.
“And we see this kind of sentiment across western
democracies to bring the jobs back that were
stolen when the factories moved particularly to
China. Those who were left behind very cruelly by
the policies and people that supported
globalization, that is the blue-collar workers for
example, in factories in northern England or in the
Midwest of America the trump voters.” -Virjay V.
Vaitheeswaran (US business editor – The
Economist)
This desire to revive manufacturing and bring back
dignity to workers spread across the western
world. A wave of populist leaders were elected
across the globe, championing nationalist policies
attacking immigration and the existing global
economy.
“I signed two decrees banning the entry to Italian
waters of two NGOs which were carrying
hundreds of migrants” -unknown politician
“The future does not belong to globalists; the
future belongs to patriots.” – Donald Trump
Free trade went out of fashion and protectionism
was all the rage. The number of trade
interventions such as tariffs and subsidies
introduced by countries has been increasing year
on year. And while some have brought
liberalization most have been harmful to world
trade in this climate globalization suffered a
second assault.
“We can't continue to allow China to rape our
country and that's what they're doing.” -Donald
Trump
A trade war blew up between the world's two
largest economies. For years the west had
accused China of flouting WTO rules saying its
trading practices were unfair
to western companies. But president trump turned
rhetoric into policy, since the start of his presidency
tariffs on Chinese exports to the U.S. have
increased six-fold, China hit back more than
doubling its tariffs on U.S. goods. The advent of the
pandemic this year was the third big disruption to
globalization within the last 12 years slowbalisation
has sped up.
This year the IMF (International Monetary Fund)
forecasts that global GDP could fall by 4.9
percent, that is 50 times more than in 2009. The
post-covert world is likely to be a
more fractious and regionalized one.
“What we saw for 20-30 years with unfettered
global trade with unfettered global travel with
sourcing from China serving the world I think we'll
never go back to that.
What we're likely to see is a messier world and
future one with elements of globalization
continuing, but many other counter trends that
lead to either regionalization, nationalization,
localization, some form of de-globalization and so
we're going to a spiky world we're going to see
much more disruption.” -Virjay V. Vaitheeswaran
(US business editor – The Economist)
As multinationals try to navigate the challenges of
the pandemic, the talk in the boardroom is
increasingly about how to be less global and more
local.
“They have seen how vulnerable their supply
chains are to unanticipated disruption of a natural
kind, for the first time at the level of the CEO and
the board companies are discussing supply chain
risk and what to do about it and how to ensure
against it. Now they're seeing this as something
vital to the business.” -Virjay V. Vaitheeswaran (US
business editor – The Economist)
Some companies are ahead of the game. The
Spanish clothing retailer Zara is one of the most
successful in the clothing industry, and its shorter
supply chains have helped the company weather
the covid storm, while most western high street
fashion brands have offshored manufacturing to
Asia, where labor is cheaper distance equals time.
So, retailers have to bulk order six months in
advance, and in that time a lot can go out of
fashion. Zara keeps its manufacturing base closer
to home for its higher fashion lines meaning you
can take a design to the high street in a matter of
weeks, that way it doesn't stockpile inventory and
can respond quickly to consumer trends.
“That model is coming to not just to fashion but
industry after industry is going to move in that
direction in part because the on-demand
economy is allowing us to express our tastes
through social commerce. We've seen a
revolution that's driven both by fear of disruption
on one hand, but also by the opportunities
created by the internet economy.” -Virjay V.
Vaitheeswaran (US business editor – The
Economist)
The pandemic has disrupted the movement of
goods people and capital around the globe. But
even without Covid-19 another pillar of
globalization would be facing challenges. The
flow of data across borders. The great firewall of
China has kept out the likes of google and
Facebook for years. And president trump's recent
attacks on Tiktok and WeChat are deepening this
splinter net between China and the west.
“we're looking at Tiktok we may be banning
Tiktok.” -Donald Trump
“And it's not just software we confronted
untrustworthy Chinese technology and telecom
providers, we convinced many countries… many
countries, and I did this myself for the most part,
not to use Huawei.” -Donald Trump
The decoupling of Chinese and American tech
also extends to hardware.
“I think this is likely to lead to two worlds a China-
dominated world and an America-dominated
world on technology and software and ultimately
we will have less
Innovation.” -unknown
The unpicking of globalization may accelerate on
a number of fronts, irrespective of when Covid-19
is brought under control, and this could be bad
news for developing countries such as India.
The globalization boom allowed countries in
Southeast Asia to rise to middle-income status, but
the likes of India may miss out on this.
“There is a concern that we may see a leap
frogging in countries that are emerging the way
that China had a chance to put its massive
population to work in factories. there is a worry
that for developing countries that are just
emerging at that stage that the world may move
to a post-industrial economy and leave them
behind this is a genuine concern.” -Virjay V.
Vaitheeswaran (US business editor – The
Economist)
And they are not the only people who stand to
lose out from deglobalization. In rich countries like
the us and Britain those most in favor of reigning in
globalization could suffer the most.
“We're going to London to stop the Brexit betrayal
good morning” -protester
Economic nationalism will not prove to be a silver
bullet.
“It's very likely that uh policies of de-globalization
or economic nationalism that try to bring the
factories back
will discover that you can bring the factories back,
but you can't bring the jobs back. That's because
when the factories are brought back almost
always, they will be more highly automated than
they were in China.” -Virjay V. Vaitheeswaran (US
business editor – The Economist)
But even as the world becomes more de-
globalized some of the biggest winners from
globalization will endure. Big digital companies
like Netflix, Google, and Facebook will keep
getting bigger. With the pandemic accelerating
the trend towards shopping online companies
following the Amazon model of fast direct delivery
will also do well.
“The top 10 percent even in the worst sectors worst
meeting, hardest hit sectors could well emerge
with a winning business model. I think in every crisis
you find some companies that fall behind and
those that are fundamentally able to re-jig their
business models and innovate are the ones that
thrive.” -Virjay V. Vaitheeswaran (US business
editor – The Economist)

In the post-covid world, some aspects of

globalization affected by the pandemic may shift
back, such as freedom to travel. The world has
grown too integrated for a full unwinding of
globalization, covid will not kill it off it, will
deepen the cracks. However, this may not be all
bad news.

“I’m hopeful that we'll learn the right lessons that

we need to make our societies more resilient, so
that we don't resort to very simple solutions that
don't work like: shut down the supply chain, build
a wall, keep the immigrants out. we've tried those
things before, I think the broader solution is to
make interdependence work with resilience, that's
the challenge that global leaders face today.” -
Virjay V. Vaitheeswaran (US business editor – The
Economist)