Gayeta, Janine Victoria N.

October 1, 2021
4F1 Contemporary World

Position Paper: Global Integration and Its Benefits in the Philippines

Economic integration is an arrangement among nations that typically includes the reduction or
elimination of trade barriers and the coordination of monetary and fiscal policies. Economic integration
aims to reduce costs for both consumers and producers and to increase trade between the countries
involved in the agreement. Generally, economic integration reduces the cost of trade, improves the
availability of goods and services, and gains in efficiency that lead to better purchasing power. Economic
integration is sometimes referred to as regional integration as it often occurs among neighboring nations,
with that in mind, the Four Asian Tigers, which are the economies of South Korea, Taiwan, Singapore and
Hong Kong. According to Bloomenthal (2021), the Four Asian Tigers have maintained high levels of
economic growth since the 1960’s and have been ranked as one of the world’s wealthiest nations. These
countries share common characteristics which include immense focus on exports, high investment on
educated population, and high savings rates. The primary motivation for the rise of their economies was
their export policies. Singapore and Hong Kong adopted a neo-liberal trading that promotes free trade
whereas Taiwan and South Korea adopted mixed regimes that fitted their export business: they
implemented export incentives for the traded goods. These initiatives allowed the four countries to have
an average growth rate of 7.5% per year for several decades, thus, gaining their well developed statutes in
the world.
In my opinion, global economic integration will do more good than harm, especially considering
its long-term application. In the past century, the global economy has become more integrated and
intertwined as globalization and modernization become an inevitable and irreversible trend. Regional
trading, unrestricted flow of trade and investment, and technological advancements lead to the deepening
and heightening of globalization. In the Philippines, there is an evident increase in trade in goods and
labor migration as well as a greater integration in finance. Globalization (global economic integration)
paved the way for trade openness which resulted in the decline of transport costs, and improved
information and communications technology. Moreover, in terms of financial openness, the country’s total
capital flow increased from 3.1% og GDP in the 90’s to 3.4% of GDP in the 2000’s. The existence of a
globally integrated system is an evolutionary necessity. Without it, humanity would not be compatible
with the fully integrated system of nature. At the moment, we are still using them according to our
self-centered, selfish, and exploitative nature. In order to make globalization work, we need to learn how
to use it. This means building society on mutually responsible, mutually complementing cooperation and
living within the optimal parameters of natural necessities and available resources.
According to the research paper entitled "The Asian Tigers from Independence to
Industrialisation'' by Bruno Marshall Shirley, the three models for economic development led to the
successful economic growth of the aforementioned nations. These three models were the market-led
development model, the interventionalist model and the state-led model. Careful examination of the stated
models, the best model to help the Philippines be on par with the said countries or be the next asian tiger
would be the market-led development model. Generally, market-led strategies maximize the operation of
market forces while simultaneously lessens the intervention of the government in the economy. This
model states that a free market will naturally result in development of those industries that are most
efficient, described in HOS theory as specialisation in production of goods using their relatively-abundant
factor. Taiwan, Singapore, Japan, Korea–these countries did not start with high-end industries
immediately, they first started with land-reform, then focused on low-end industry, and then upgraded
their industries steadily, and then finally transitioned to high-end industry. China was able to implement a
market-based economy with over 600 million people brought out of poverty and become the key source
of growth for the global economy. According to the Embassy of Denmark (in the Philippines), the
Philippines has had one of the fastest economic growth in the region in the past years. The World Bank
stated that its economy continued its growth due to strong exports, robust domestic consumption, and
infrastructure expenditures. In the article written by Shirley (2014), the liberalization of local market and
international trade can occur in a semi sustainable economy that relies on either export of raw materials
etc. The Philippines is known for being the leading exporter of electronic products including processors,
chips, hard drives, as well as agricultural products such as coconut, pineapple, and abaca. By using the
resources the Philippines already has, the country will be able to create a strong foundation in the
development of the economy.
References:
Bloomenthal, A. (2021). Four Asian Tigers. Retrieved from:
https://www.investopedia.com/terms/f/four-asian-tigers.asp
Erez, M. Future of Globalization: More Benefit Than Harm. Retrieved from:
https://globalnetwork.io/perspectives/2017/04/future-globalization-more-benefit-harm
Ministry of Foreign Affairs of Denmark. Philippines as a promising market. Retrieved from:
https://filippinerne.um.dk/en/trade-council/philippines-as-a-promising-market
Philippine Statistics Authority. (2021). Highlights of the Philippine Export and Import Statistics January
2021 (Preliminary). Retrieved from: https://psa.gov.ph/content/highlights-philippine-
export-and-import-statistics-january-2021-preliminary
Shirley, B. (2014). The Asian Tigers from Independence to Industrialization. Retrieved from:
https://www.e-ir.info/2014/10/16/the-asian-tigers-from-independence-to-industrialisation/