COLLEGE OF

ARTS AND SCIENCES

THE CONTEMPORARY WORLD

MODULE 1
Introduction to Globalization,
The Structures of Globalization, and A World of Regions

Modesto R. Bayanito

TABLE OF CONTENTS
MODULE 1

OVERVIEW …………………………………………………………………………. 1

Lesson 1 Definition and Nature of Globalization ……………………………. 1

Lesson 2 Ideology and Market Globalism …………………………………… 5

THE STRUCTURES OF GLOBALIZATION ……………………………………… 8

Lesson 3 Global Economy …………………………………………………….. 8

Lesson 4 Market Integration …………………………………………………... 13

Lesson 5 Global Interstate System …………………………………………… 17

Lesson 6 Global Governance …………………………………………………. 23

A WORLD OF REGIONS …………………………………………………………… 26

Lesson 7 Global Divides ……………………………………………………….. 26

Lesson 8 Asian Regionalism ………………………………………………….. 32

REFERENCES ………………………………………………………………………. 36
OVERVIEW

This subject presents the multi-dimensional phenomenon of globalization. It

introduces the contemporary world by examining the economic, political,
technological, and cultural aspects. Aside from exposing you to other countries of the
world, it also aims to inculcate ethical global citizenship.

Contents of the module are several lessons on globalization, which includes activities
and assignments. There are links provided for the video to watch, and additional
articles to read that are available online. There are lessons which are good for one-
week discussion, and some are for two weeks duration. Get ready with your
computer, cellphone, or any available useful information technology resources. Do
not procrastinate. Do the required activities and assignments promptly as there is
more to do throughout the module. You are required to attend meetings (via Zoom or
Google Meet), do the assignments, research, and projects. Answer the quizzes,
midterm and final examinations. Your final grade comprises fifty percent for your
class standing, and fifty percent for your midterm and final grades.

Lesson 1. Definition and Nature of Globalization

Learning Objectives
At the end of this lesson, you should be able to:
1. define globalization in your own words;
2. discuss how the six drivers facilitated globalization;
3. differentiate the competing conception of globalization; and, 4. identify the
underlying philosophies of the varying definitions of globalization.

Introduction
Globalization is claimed to be a new world system. There are some who said it
started when people travelled the world through voyages. Others believe that it is a
system that dates back to the 15th century. Also, there was a theory that it is as old as
the homo sapiens, when they travelled far and wide across borders. In order to give
an answer to this, it is good to present the various definitions and the characteristics
of globalization by scholars that somehow would enlighten readers on the issue of
when it started.

Globalization
Steger (2014) defines globalization as the expansion and intensification of social
relations and consciousness across world-time and world-space. Globalization
means the speedup of movements and exchanges (of human beings, goods, and
services, capital, technologies or cultural practices) all over the planet. … promotes
and increases interactions between different regions and populations around the
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globe. Another definition: Globalization is the process of interaction and integration
among people, companies, and governments worldwide. This can be interpreted as
unification of people, governments and economies. The foregoing definitions
encompass three things, social relations, time and place. It is a relationship whatever
time in any parts of the world, and wherever in the world. Anthony Giddens, The
Consequences of Modernity (Cambridge: Polity Press, 1990), (Aldama, 2018) said,
“Globalization can thus be defined as the intensification of worldwide social relations
which link distant localities in such a way that local happenings are shaped by events
occurring many miles away and vice versa.” Roland Robertson, Globalization: Social
Theory and Global Culture (London: Sage, 1992), (Aldama, 2018) “…refers both to
the compression of the world and the intensification of consciousness of the world as
a whole.”
Robert Cox’s provided the characteristics of the globalization trend which include the
“internationalizing of production, the new international division of labor, new migratory
movements from South to North, the new competitive environment that accelerates
these processes, and the internationalizing of state…making states into agencies of
the globalizing world“ (as cited in RAWOO Netherlands Development Assistance
Research Council, 2000, p.14), (Aldama, 2018). Another scholar by the name
Immanuel Wallerstein, The Modern World System: Capitalist Agriculture and the
Origins of the European World Economy in the Sixteenth Century (New York:
Academic Press, 1974), as cited in R. J. Holton, Globalization and the Nation-State
(London: Macmillan Press, 1998), stated that globalization represents the triumph of
a capitalist world economy tied together by a global division of labour,” (Aldama,
2018). The two are somewhat unanimous in terms of internationalization of labor and
its economic perspectives.

ACTIVITY

1. Name 10 household items found in your house, and indicate the country of
origin. Follow the format and example provided below:
Household Item Country of Origin

1. Wall Clock China (do not include this example)

2.

3.

4.

5.

6.

7.

8.

9.

10.
2. After completing the table, write three paragraphs simple analysis (at least 80
words), of your table of household item and the country of origin. Your first

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and second paragraphs should contain the introduction and body,
respectively. The third paragraph should be your conclusion.
3. What does your analysis reveal?
4. Share your table and analysis with at least two among your classmates? Solicit
their comments.
5. Did your classmates agree with your conclusion? Why or why not?

To bring the various perspectives together, it is imperative to know the characteristics

of globalization to have a better understanding of the subject. These are as follows:

1. breaking time and space constraints;

2. increasing mobility;
3. increasing interaction and exchange;
4. interconnecting networks across the world;
5. establishment of transnational rules; and,
6. various forms of connectivity.

Countries of the world are no longer separated by physical distance either of time.
Information and transactions can be done at any time of the day. People, resources,
goods, and services flow across nations. There is now more interaction with people
wherever they are. Also, culture spreads and transcends boundaries. Multinational
corporations are found in many countries the world over. There is a proliferation of
international government and international non-government organizations interacting
with each other. International organizations converge regularly for transactions,
policy formulation to improve world systems.
Globalization did not occur from nothing. There are drivers that helped facilitate this
process, these are:
1. reduction of barriers to international trade;
2. increased consumer demand;
3. lowered costs of shipping;
4. lowered costs of production;
5. technological advancements in communication; and,
6. technological advancement in transportation.

The removal of economic restrictions has given the way for international trade.
Countries could import and export with limited restrictions. This is due, among others,
to increased consumer demand, lower cost of production and shipping. The internet
and information technology resources, and other advanced technology in production
and transportation make it possible for faster interaction and transactions.
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Metaphors: Solid and Liquid
Solid
Before this current globalization, we use “solid” to describe that era. On the other
hand, “liquid” will be used to describe the current era. These metaphors will give us
better understanding of the characteristics of globalization and its predecessor. Prior
to globalization, there was solidity of almost everything: nation-state, people,
information, products and services. The solid things are both natural and artificial.
Natural structures like oceans and mountains are natural barriers while the Berlin
Wall, Great Wall of China, guarded borders like that between North and South Korea,
and border between Israel and West Bank, are artificial or man-made barriers.
Because of this solidity, movement of people, spread of information are restricted.
Liquid
In this era of globalization, the solid blocks tend to liquify. This liquefaction is
loosening up the barriers. People can now travel almost freely without any
restrictions. Information is available instantly everywhere in the world with the use of
the internet. Business transactions can now be done easily and globally.
Flows
Globalization flows from different directions, from east to west, north to south, and
vice-versa. In the case of products and services, they flow to many directions
because of the need for them by countries that do not have them locally.
Structure and Process
Structures are nation-states, corporations, and other forms of business and civic
organizations. Globalization is a process or combination of various processes.
Structures could influence processes, but processes could also influence the
structures. Example, the state could go with liberalization or maintain its protectionist
stance. However, because of the processes (like globalization), the state could be
influenced and join the band-wagon of free trade, liberalization, and globalization.

Assignment
1. Read three articles discussing globalization (on newspaper or magazine).
2. Summarize the article in not more than 100-word, identifying what the underlying
philosophies about their definitions of globalization.
3. Send your answer to the email address given to you by your teacher, with
“SUMMARY_UNDERLYING DEFINITION” as your subject.

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Lesson 2. Ideology and Market Globalism

Learning Objectives
After studying this lesson, you should be able to:
1. give your own definition of ideology;
2. explain the three functional levels of ideology;
3. discuss the five core claims of market globalism; and,
4. compare market globalism and imperial globalism.

Introduction
Many literatures have been written about globalization. But despite this, they failed to
include the role of ideology that somehow pushed forward its meaning and benefits
across borders. This lesson includes the definition of ideology and its functions; the
core claims of market globalism, and economic imperialism during President George
W. Bush administration in the United States of America.
Ideology
When people are talk about globalization, the technological and economic aspects of
it are center of the discussion. Ideology is often forgotten to connect with how it
penetrates the mind of stakeholders in convincing them to embrace it for its
advantages and understand its disadvantages.
Steger (2014) defined ideology as a system of widely shared ideas, patterned beliefs,
guiding norms and values, and ideals accepted as truth by some groups. This
definition brought to the fore the attributes of globalism as an ideology. It can be said
that it comes in conjunction with liberalism, which is a political and economic doctrine
that emphasizes individual autonomy, equality of opportunity, and the protection of
individual rights (primarily to life, liberty, and property), originally against the state and
later against both the state and private economic actors, including businesses (Ball).
This system has evolved with neoliberalism which according to Kenton (2020), is a
policy model—bridging politics, social studies, and economics—that seeks to transfer
control of economic factors to the private sector from the public sector.
According to Paul Ricoeur (1986) there are three functional levels of ideology
(Steger, 2014), namely:
1. Distortion. It is the production of contorted images of social reality.
2. Legitimation. The ruling authority claims legitimacy, and belief in the authority’s
legitimacy granted by its subjects.
3. Integration. This plays a mediating and integrative role. It creates, preserves,
and protects the social identity of persons and groups.

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The icons below are helpful to visualize and understand the three functions.

To an
 ideologist, the world is depicted as he/she sees it
that favors a particular ideology. It may not be the reality, but an abstract of falsehood
in a slogan to influence in believing a certain cause, belief or system. In the desire to
perpetuate in power, there is this claim of legitimacy and support of the many. The
system and beliefs will be integrated into the mainstream of society, and accepted by
the majority. What makes it political is the fact that it favors a select individuals or
groups to exercise power and authority.
Clearly, based on the preceding discussion, globalism is an ideology. It is a system
of ideas, beliefs, and guiding norms and values, embraced not only by some, but
many groups.
There are Five Core Claims of Market Globalism (Steger et al., 2014).
1. Globalization is about the Liberalization and Global Integration of Markets.
Liberalism (Ball), is a political and economic doctrine that emphasizes
individual autonomy, equality of opportunity, and the protection of individual
rights (primarily to life, liberty, and property), originally against the state and
later against both the state and private economic actors, including businesses.
Neoliberalism on the other hand, is a policy model - bridging politics, social
studies, and economics—that seeks to transfer control of economic factors to
the private sector from the public sector (Kenton, W., 2020).

The benefits of liberalism and neoliberalism, generally characterized by free

trade and liberalization, have influenced the integration of markets globally.

2. Globalization is Inevitable and Irreversible. Noneconomic factors can shape how

people do things, however slow. Economic factors can push and force people
to do things differently. Technological innovation makes transactions easier
and faster. The efficiency and effectiveness of such transactions have forced
the system to become inevitable and irreversible globalization processes.
Because of its benefits and advantages, transactions will never go back to the
old-fashioned ways of doing business.

3. Nobody is in Charge of Globalization. Globalists tend to push forward the process

and systems of globalization. However, they are not in control of how market
forces act and react to situations. The spread of trade wherever in the

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world is not controlled by any individuals, groups, or institutions. The self-
regulating market dictates in what quantity, price, and for whom the products
and services to be produced wherever they are. These products and services
spread across borders with a minimal policy intervention of the state.

4. Globalization Benefits Everyone (… in the Long Run). The question here is, is
globalization a good system? There are some industries that might be affected
or being negatively affected, but this is just in the short term. Globalization will
bring progress and prosperity to countries participating in the process.

Steger et al. (2014) quoted the heads of state and government of the world’s
seven most powerful industrialized nations joint Economic Communique at the
1996 G-7 Summit in Lyons, France:

“Economic growth and progress in today’s interdependent world is bound

up with the process of globalization: Globalization provides great
opportunities for the future, not only for our countries, but for all others too.
Its many positive aspects include an unprecedented expansion of
investment and trade; the opening up to international trade of the world’s
 most populous regions and opportunities for more developing countries to
improve their standards of living; the increasingly rapid dissemination of
information, technological innovation, and the proliferation of skilled jobs.”

5. Globalization Furthers the Spread of Democracy in the World. Free choices and
free market are the important attributes of democracy. Free market,
capitalism, and democracy are similar words that go against regulation, and
public ownership of business. Without freedom, which is synonymous to
democracy, globalization would not have gone this far. Exchange of
information, products and services would not have reached globally as it is
happening today.

Imperial Globalism
Imperialism is a policy of extending a country's power and influence through
diplomacy or military force. After the al Qaeda attack of September 11, 2001 to the
World Trade Center in Manhattan, the United States led a war on terror. Even without
the imprimatur of the United Nations, it unilaterally decided to invade Iraq. This could
be interpreted as an imperial globalism through military arsenal and military power.
After the attack of Iraq, local companies were transferred to foreign ownership, with
the promise of management effectiveness and efficiency of operations that will
contribute to Iraq’s economy through payment of both corporate and individual taxes.
There was also the US-Middle East Partnership Initiative. Arab college students were
invited to work as interns in American Corporations.
Conversely, the Al-Qaeda attacks are regarded as prominent threat to globalization.
Neo-liberal economist Robert J. Samuelson (2003) argued that previous globalization
processes had been stopped by similar cataclysmic events like the assassination of
the Austrian Archduke Franz Ferdinand in Sarajevo in 1914.

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ACTIVITY

Give three examples of imperialism that happened in the past. Explain each in not
more than 50 words what happened during that time. Send your answer to the email
address given to you by your teacher, with “3 EXAMPLES OF IMPERIALISM” as
your subject.

THE STRUCTURES OF GLOBALIZATION

Lesson 3. Global Economy

Learning Objectives

At the end of this lesson, you should be able to:

1. define economic globalization;

2. define modern world system; and,
4. identify the actors that facilitate economic globalization.
Introduction
Globalization has several aspects, the political, technical, economic, and cultural. In
other words, it is a multidimensional phenomenon. The most important dimension is
undoubtedly economic, which includes labor, trade, investment, monetary and
finance. Discussed in this lesson are economic globalization, international monetary
system, the Bretton Woods System, European Monetary Integration, International
Trade, Unilateral Trade, Multilateralism, General Agreement on Tariff and Trade
(GATT), World Trade Organization (WTO), and the integration of the developing
countries into the world economy.

Economic Globalization

Economic globalization is a historical process, the result of human innovation and

technological progress. It refers to the increasing integration of economies around
the world, particularly through the movement of goods, services, and capital across
borders. The term sometimes also refers to the movement of people (labor) and
knowledge (technology) across international borders (IMF, 2008).

Several interconnected dimensions of economic globalization are:

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1. globalization of trade of goods and services;

2. globalization of financial and capital market;
3. globalization of technology and communication; and,
4. globalization of production.

Economic globalization is distinct from internationalization. The former is an extension of

economic activities, while the latter comprises various range of activities.

International Monetary Systems

According to Istvan Benczes (2014) a regime can be thought of as all the implicit and
explicit principles, norms, rules, and decision-making procedures around which
actors’ expectations converge. International Monetary System or regime (IMS) refers
to the rules, customs, instruments, facilities, and organizations for effecting
international payments (Salvatore, 2007:764). International Monetary System
facilitates trade and investment transactions of countries. Since it involves money, it
inevitably has its political component.

The Gold Standard

In 1821, the United Kingdom had its gold mono-metallism as its form of currency.
This monetary unit is expressed in terms of gold. The standard coins possess a fixed
weight and fineness of gold. Under monometallic standard, only one metal is used as
standard money whose market value is fixed in terms of a given quantity and quality
of the metal. In 1879, European nations and the United States negotiated for a
regime and agreed to use the gold standard as the International Monetary Regime. In
1880, the gold standard was used. It was a fixed exchange rate regime with gold as
the only international reserve and defined fixed exchange rates. This regime was cut
short during the outbreak of World War 1 in 1914. Participating nations had given up
convertibility of their currencies and shy away from gold export to stop national gold
reserve from depleting. Due to its persistent huge deficit, the United Kingdom
abandoned the regime in 1931. One of the weaknesses of the system was there was
no mechanism for adjustment in case of deflationary or inflationary fluctuations.
Istvan Benczes, as cited in the SAGE Handbook of Globalization (2014),

The Bretton Woods System

The system was named after the place where the United Nations Monetary and
Financial Conference was held in Bretton Woods, New Hampshire, United State in
July 1944 (It is important to note here that even before the formal establishment of
the UN in 1945, countries had been planning and negotiating on matters of
importance to the world, using the name “United Nations”). Delegates of 44 countries
participated and agreed to have a new regime – the adjustable peg system gold
exchange standard. In the system, the US dollar was the only convertible currency.
So, the US was committed to sell and buy gold without restrictions at US$ 35 dollar
an ounce.

Alongside the new regime was the establishment of two international institutions:

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1. The International Bank for Reconstruction and Development (IBRD). This is

basically for assistance for the reconstruction of countries that were damaged
by war.
2. The Internal Monetary Fund (IMF). The IMF’s function is primarily to promote
Internal financial cooperation and strengthen international trade and to
oversee the efficient operation of the gold-exchange. It was intended to
providing assistance to countries having a balance of payments problem.

There were countries incurring deficit, and there were some with surpluses. The US,
as an international reserve currency, had difficulty reversing its consistent deficit. As
the US gold reserves continued to be in its state of scarcity, balance of payments and
trade deficit – it abandoned the gold-exchange standard in 1971.

European Monetary Integration

In 1953, the Rome Treaty established the European Economic Community (EEC). Its
aim was the creation of a common market so that goods, services, capital, and labor
could move freely. Founding members were Germany, France, Italy, Netherlands,
Belgium, and Luxembourg.

Because of the collapse of the Bretton Woods System, the European Monetary
System (EMS) was negotiated in 1979. It was not the dollar or gold that could be
used in the stabilization processes of the exchange rate. Rather, it was a systematic
adjustable peg arrangement, and the European Exchange Rate Mechanism was
created (Gros and Thygesen, 1998). Eventually, the European Economic and
Monetary Union (EMU) was established in 1999, wherein states delegated monetary
policy to the European Central Bank (ECB), whose primary goal was to maintain
price stability.

International Trade and Trade Policies

David Ricardo’s principles of comparative advantage could be one of the bases of

the acceleration of international trade. Under this principle, a country should import a
product which it cannot produce efficiently and produce products which it can do
efficiently. In international trade, the core economies (developed countries) are
always in their advantage position, while developing countries are always in their
disadvantaged position.

“Core economies have had (thus) the best of two worlds, both as consumers of
primary commodities and as producers of manufactured articles, whereas the
underdeveloped countries had the worst of both worlds, as consumers of
manufactures and as producers of raw materials.” (Singer, 1964:167). (Steger,
2014). Some argue that while international trade benefits both the developed and
developing economies, protection of the infant industry is necessary for national
interest, especially to developing countries.

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International trade produces wealth to some countries, but it also causes the deficit
to some. The imbalance of trade affects the lives of people in a country.

Unilateral and Bilateral Trade

International trade accumulates a surplus in the balance of payments by export and

restricting import. Trade policies serve the interest of a country. A good example of
this was Portugal, Spain, and England during the colonization era. They dumped
their excess products to their colonies that furthers the hardships of the colonized
countries; extract natural resources from the colony. It is worthy of mentioning that
there are two important aspects of the trade to consider agriculture and
industrialization. Between the two, the former will always be lagging behind, while the
latter will be leading and accelerating progress in a country. This fact led to massive
industrialization in Britain.

In 1860, the Cobden-Cevalier Treaty was agreed upon. This had given way for the
United Kingdom and France to have trading relations based on their comparative
advantages. It ended tariffs on wine, brandy and silk goods from France. On the
other hand, no tariff on coal, iron, and industrial goods from Britain. The success of
this treaty had encouraged other countries to follow suit. Eventually, many bilateral
agreements were made following the Most-Favored Nation (MFN) principle. It means
that if you had granted someone a special favor such as lower customs duty rate,
you have to do the same for all other members of the World Trade Organization.
Whatever trade agreement between two countries shall be extended to all
participating countries even they were not part in the actual negotiation.

Consequently, the US Reciprocal Trade Agreement Act in 1934 reinvigorated free

trade further. It allows the president to determine trade policies. Prior to this, it was
Congress that determines trade policies.

Multilateralism

Countries that were committed to lower tariffs had negotiated the General Agreement
on Tariffs and Trade (GATT), which took effect on January 1, 1948. It was a product
of a series of negotiations. The first five rounds of negotiations were solely on
lowering tariffs. Then, they went on to the other agenda, like: 1) tariffs and anti-
dumping measures, 2) tariffs, non-tariff barriers framework agreements, 3) tariffs,
non-tariff barriers, rules, services, intellectual property, dispute settlement, textiles,
agriculture, and the creation of the World Trade Organization (WTO).
The WTO was constituted on January 1, 1995. A formally established organization
with legal personality. It was an official forum for trade negotiations. Like any
organization, there was criticism of how it functions. Among these were: 1)
developing countries had little voice in the organization, 2) and the perceived
discriminatory mechanism. Likewise, Non-Governmental Organizations (NGOs), and
anti-globalization movements protested in favor of the disadvantaged and less
developed countries.

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They denounced the US economy and the selfish interest of large Multi-National
Corporations (MNCs).

Developing Countries and International Trade

Developing countries did not participate actively in multilateral trade negotiations. As

a result, they were not able to successfully integrate into the world market. However,
they continued to import substitute products. Correspondingly, developed countries
did not open for textile and agricultural products, which are developing countries’
comparative advantage.

The United Nations Conference on trade and development (UNCTAD) established in

1964 with the joint effort of the developing world, improved the latter’s standing in
international trade. Its primary aim was to promote trade and cooperation between
developing and developed nations. With the Uruguay Round (founding of the WTO),
it was agreed upon that the developed countries have to open their markets to
agriculture and textile products. On the other hand, developing countries agreed of
new regulations on intellectual property rights and services and opened up their
service markets. In spite of the agreement, developed countries continued to block
export of agricultural products that resulted to widen the imbalance of trade between
developed and developing countries. Without liberalization of agriculture, and the
willingness of developed countries to accept agricultural produce, developing
countries cannot integrate into the world economy.

Modern World System

Wallerstein's (1974) world-system analysis is a grand narrative of world historical

development from the sixteenth century to the present, with boundaries, structures,
member groups, rules of legitimation, and coherence. The world-system is dynamic
and constantly evolving, with "conflicting forces which hold it together by tension, and
tear it apart as each group seeks eternally to remold it to its advantage" (Wallerstein
1974, p. 347). He defines the world-system as a geographical division of labor. While
the basic linkage is economical, the system is reinforced by political and cultural
factors.

The modern world-system has a multi-state political structure (the interstate system)
and therefore, its division of labor is an international division of labor. In the modern
world-system, the division of labor consists of three zones according to the
prevalence of profitable industries or activities: core, semi-periphery, and periphery.
Countries tend to fall into one or another of these interdependent zones core
countries. Resources are redistributed from the underdeveloped, typically raw
materials-exporting, the poor part of the world (the periphery) to the developed,
industrialized core. The modern world-system is essentially capitalist in nature,
followed by the crisis of the feudal system and helps explain the rise of Western
Europe to world supremacy between 1450 and 1670. This theory makes possible a
comprehensive understanding of the external and internal manifestations of the
modernization process during this period. It makes possible analytically sound
comparisons between different parts of the world. (Benczes, 2014).
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ACTIVITY

1. Global free trade has done more harm than good? Yes or No.
2. Do not forget to indicate first your answer, whether it is a No or a Yes, then
justify your answer in not more than 100-word.
4. Send your answer to the email address given to you by your teacher, with “FREE
TRADE” as your subject.
5. Submit your answer within 15-minute after receiving an instruction to do the
activity. The corresponding deduction will be imposed for delayed submission.

Lesson 4. Market Integration

Learning Objectives

After completion of this lesson, you should be able to:

1. identify the role of International Financial Institutions in the creation of the

global economy;
2. narrate a short history of global market integration in the 21 st century; and, 3.
identify the attributes of the global corporation.

Introduction
Discussion of global corporation and globalization are almost always together.
Historical globalization dates back when countries went beyond their borders for
trade through shipping and navigation. During this time there was already foreign
direct investment, huge business organizations with head office and foreign branch.
Prior to World War II, modern world system emerged. Inventions and social
organizations had proliferated, and capital increased substantially. The rise of global
population was followed by the industrial revolution. Developed countries started
interaction with other countries through colonialism and imperialism. During that
period, supply and distribution chains slowly but steadily developed. After WW II,
American corporations were leading in the global market. The US emerged strong
with its production and manufacturing capabilities, but contemporary globalization
started when Japan recovered from the devastating effect of war and the reentry of
European corporations into the global markets.

What Constitutes a Global Corporation?

The contemporary global corporation is simultaneously and commonly referred to as

either a multinational corporation (MNC), a transnational corporation (TNC), an
international company (INC), or a global company (GC). TNC is an enterprise that
engages in activities that add value (manufacturing, extraction, services, marketing,
etc.) in more than one country (UNCTC, 1991). For this lesson, GC will be used for
all these types of organizations.

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Although the following types of business organizations are considered global, the
specific distinctions below are useful to delineate one from the other:
1. International companies are importers and exporters, typically without
investment outside of their home country.
2. Multinational companies have an investment in other countries but do not have
coordinated product offerings in each country. They are more focused on
adapting their products and services to each individual local market.
3. Global companies have invested in and are present in many countries. They
typically market their products and services to each individual local market.
4. Transnational companies are more complex organizations that have invested in
foreign operations and have a central corporate facility but give decision-
making, research, and development and marketing powers to each foreign
market.

Fundamental innovations that have changed the character of the global corporation:
1. the advent and impact of digitalization and instantaneous global
communications;
2. the structural transformation of global commerce from producer-driven
commodity chains to buyer-driven; and,
3. the increasing role performed through the global system by financial elements and
the emergence of the global financial firm.

The said innovations have paved that way for more interaction, production integration
of commerce and trade globally.
Geriffi emphasizes three structural periods after World War II:
1. investment-based globalization (1950-70);
2. trade-based globalization (1970-95); and,
3. digital globalization (1995 onwards).

Examples of investments are a foreign direct investment and portfolio investments.

Trade-based globalization includes not only products but also services and finance,
while digital globalization is characterized by a faster flow of information across
borders through information technology.
Foreign Direct Investment
Hedley indicates that in 1900 only European corporations were major investors. The
American firms joined only in 1930s. Citing UN data, he dates 1960 as the principal
turning point for FDI as the major driver of extended global corporate development. In
the subsequent decade until the turn of the century, FDI would triple (Hedley, 1999).
(as cited in the SAGE handbook of globalization, 2014).
FDI in the 1990s was between the developed world – primarily North America,
Europe and Japan. Periods of intense FDI changed the global corporate landscape.

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During the periods 1985-90, FDI grew at an average rate of 30 percent a year. De
Anne Julius indicates that the expansion of FDI, inter-corporate alliances and intra-
firm trade during this period reached a level at which a qualitatively different set of
linkages was created among advanced economies (Julius, 1990). It was estimated
that some 20,000 new corporate alliances were formed just in the period 1996-98
(Gilpin, 200:170)
Digitization is transforming the classic value chain of manufacturing focused on
innovation in which:
o product design and innovation are replaced with driving innovation through
digital product design;
o labour intensive manufacturing is replaced by digitizing the factory shop floor;
o supply chain management is replaced by globalizing through digital supply
chain management; and,
o marketing, sales and service is replaced by digital customization (Capgemini,
2012).

Developing economies, especially those of Brazil, India and China (BRICS have
become the most dynamic sector of global corporate growth, represented in part by
their significant FDI over three decades. These companies have also become active
in the broad pattern of global mergers and acquisitions, a primary vehicle by which
corporate concentration takes place. They were not affected during the financial
crisis of 2007. Capital inflows were coming from China and India. Examples of these
include China’s Lenovo corporation’s purchase of IBM’s PC business and India’s
investment in various historically British firms including Jaguar Land Rover
(Economist, 2011).

Table 1. Capital flows to developing countries, 2005-10 ($bn)

Type of flows 2005 2006 2007 2008 2009 2010 Total 579 930 1650 447 656 1095 FDI 332
435 571 652 507 561 Portfolio investment 154 268 394 -244 93 186 Other investment* 94 228
686 39 56 348 *Other investments include loans from commercial banks, official loans and trade credits.
Source: UNCTAD (2011). Adopted from The SAGE handbook of globalization (2014).

With 40 per cent of the world’s population, the BRICS represent a primary force in
both global production and consumption. Rising global corporations in the BRICS are
joined by emergent large companies in other developing economies throughout the
world such as Malaysia, Mexico, Russia, Turkey and Vietnam. In 2009 China become
the leading trade partner of Brazil, India and South Africa, and Tata of India became
the most active investors in sub-Saharan Africa.
State-owned corporations like those of China were considered to having unfair
competitive advantage because they used state resources. China’s state socialist
system with revised neo-capitalist form institutions lack the essential feature of

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economic efficiency. They were subsidized by the state and had strong domestic
markets.

Global Corporations from Different Countries

o Basic Element (Russia) is a world leader in alumina production o
Bharat Forge (India) is one of the world’s largest forging companies o
BYD Company (China) is the world’s largest forging companies
o CEMEX (Mexico) has developed into one of the world’s largest cement
producers
o Embraer (Brazil) has surpassed Canada’s Bombardler as the market leader in
regional jets
 o Sistema (Russia) is a conglomerate with a focus on telecommunications

Non-equity Mode of Production (NEMS)

Non-equity modes of production have become an increasingly important form of
global corporations within emerging economies. It represents an increasingly vast
network of relationships in which global production chains are assembled through
contract manufacturing, services outsourcing, contract farming, franchising, licensing
and management contracts. They are viewed as externalization for the corporation,
which gains access to benefits within global value chains without the direct
investment of comparable amounts of capital, albeit at the cost of relinquishing
control elements and at reduced profit levels. NEMS constitute a significant portion of
global corporate activity within emerging economies.

ACTIVITY

1. Watch the film: “The Corporation” directed by Mark Achbar and Jennifer Abbott.
(https://youtu.be/Y888wVY5hzw).
2. Prepare a reflection, in not more than 100 words, about the film.
3. Send your answer, not later than next meeting, to the email address given to you
by your teacher with “REFLECTION_GLOBALCORP” as your subject.

Role of International Financial Institutions

1. The Internal Monetary Fund (IMF). The IMF’s function is primarily to promote
Internal financial cooperation, strengthen international trade, and oversee the
efficient operation of the gold-exchange. It was intended to providing
assistance to countries having a balance of payments problem.

2. The World Bank is an international organization dedicated to providing financing,

advice, and research to developing nations to aid their economic

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advancement. The bank predominantly acts as an organization that attempts
to fight poverty by offering developmental assistance to middle- and low-
income countries.

The relevance of the Changing Regulatory Environment

Global corporations operate based on regulations from the structures of global
corporate trade and finances, and agreements. The GATT was the first significant
global agreement of countries on trade relations, which was followed by the general
agreement on trade in services (GATS). These are macro trade structures, which
include services (including financial services) as a trade category. A bilateral trade
agreement has also played an important regulatory framework between the two
countries.
The national and international regulatory movement of liberalization resulted in the
transformation of investment codes, trade rules, and operating rules. These are
favorable to global corporate investment and value chain development.
Corporate social responsibility (CSR) is a self-regulatory pattern of corporations.
Critique of global corporate behavior with negative results has pressure on them to
be more responsible and accountable. The non-governmental organizations (NGOs)
have pioneered governance structures, rules, norms, codes of conduct and
standards. Governments eventually adopted these rules, norms and standards and
demanded corporate social responsibility, especially in caring for the environment.
Normative Case of Global Corporations
Since the early 1970s, normative case for global corporation has been inseparable
from the broader discourses and structures surrounding globalization. In the two
decades following World War II, and in the context of global rebuilding of
manufacturing and trade capabilities, they were viewed primarily as agents of desired
economic development, and FDI was largely sought after throughout the world.
However, towards the end of the 1960s, global corporations were viewed as gaining
their economic prominence through a variety of socially destructive means. Agents of
a system that on balance was resulting in greater global wealth inequality, income
inequality, lack of effective worker protection, environmental degradation, producing
national cultures of corruption through corporate collusion, and in some instances
threatened national sovereignty.
Beyond these, within the context of the post-2007 financial crisis is the threat that
such corporate structures, operating in important ways outside the reach of effective
government control – national, regional or global – constitute an economic
concentration of wealth and power sufficient to generate a global crisis of proportions
that exceed the capacity of existing mechanisms of governance to remedy (Stiglitz,
2010).
A coordinated world economy, where corporate networks and a redistributive state
cooperate, could enhance social integration. In a liberal world economy,

Page 17
transnational corporation networks could primarily integrate production processes
and national elites (Nollert, 2005: 310). The normative case of transnational
corporations is situated within the ever-dynamic context of three complex interactive
global patterns that contain to frame globalization and its possible futures:

1. global inequality;
2. the systematic stability and viability of the global financial system; 3.
climate issues.

Each of the foregoing, in turn, is related to broader patterns of human security. The
likelihood that continued global interdependence will produce favorable outcomes for
the world will depend largely on the willingness of global corporations to embrace the
importance of these global goods and their responsibilities for them.

Lesson 5. Global Interstate System

Learning Objectives
After studying this lesson, you should be able to:
1. explain the effects of globalization on governments;
2. identify the institutions that govern International relations;’ and, 3.
differentiate internationalism from globalism.

Introduction
The world is organized through negotiations and agreements to avoid conflict,
preserve peace, and attain progress. This lesson provides the historical antecedents
of contemporary world politics. Put simply, why is the world organized the way it is? It
discusses the genesis of the nation-state, history of internationalism and partly global
governance.

Arjun Appadurai (1996: 19) argued that the nation-state as a complex modern
political form, is on its last legs, while management consultant Kenichi Ohmae (1995)
(as cited by Hans Scahttle and Mazower, Mark, 2006 in The SAGE Handbook of
Globalization, 2014) claimed that economic interdependence and global
communication had rendered the nation-state a nostalgic fiction.

States collaborate with each other for peace, economic and political purposes for
their own interest. Early years of the twenty-first century, globalization has not
displaced the state. It dispersed political and economic power beyond, for some
extent, the state’s regulatory domain.

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States hold themselves accountable to international norms and standards to gain
acceptance by the people and in the global stage. But states are usually in
subordinate position to capitalism to protect economic well-being of their populations.

Institutions that Govern International Relations

United Nations (UN). The UN, which was established right after World War II in
1945 has 51 founding members. In 2012, its membership grew to 193 states. Many
of these states emerged due to decolonization in 1950s and 1960s, and the break-up
of the Soviet Union in 1991. Palestine was recognized in November 2012 as a
nonmember observer state, the same with Vatican. Republic of China (Taiwan), lost
its UN membership and its permanent seat on the Security Council in 1971 when the
Peoples Republic of China replaced Taiwan as China’s representative on the UN.

The UN, like any organization, has its strengths and weaknesses. During the cold
war between the Soviet Union and the United States of America, the UN has not
made its presence felt. Also, it did nothing when the US invade Iraq in 2003. But it
has a significant contribution when it comes to the protection of human beings in
countries of conflict. In 2002 the International Criminal Court was established of,
prosecuting individuals accused of genocide and other crimes against humanity. It
follows the doctrine of responsibility to protect (R2P), but perceived to be applied
selectively.

World Bank. It is an international financial institution that provides loans and grants
to the governments of poorer countries for the purpose of pursuing capital projects. It
comprises two institutions: the International Bank for Reconstruction and
Development, and the International Development Association.
International Monetary Fund. A UN specialized agency, founded at the Bretton
Woods Conference in 1944 to secure international monetary cooperation, to stabilize
currency exchange rates, and to expand international liquidity.

World Trade Organization (WTO). It is the only global international organization

dealing with the rules of trade between nations. At its heart are the WTO
agreements, negotiated and signed by the bulk of the world's trading nations and
ratified in their parliaments.

Economic and Political Integration

States had formed regional partnerships for trade and economic cooperation.
Examples are the African Union, and the Association of South-East Asian Nation
(ASEAN). Other alliances for trading are the North American Free Trade Agreement
(NAFTA), the Caribbean Community (Communidad del Caribe). Europe was leading
in terms of establishing partnership with neighboring states. The European Coal and
Steel Community, European Union (EU) with 28 member states in 2013. Europe has
a single currency and monetary system among 17 member states with its
supranational European Parliament.

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Non-Governmental Organizations (NGOs)

1. Red Cross. An international humanitarian organization formally established by the

Geneva Convention of 1864. It was originally limited to providing medical care
for war casualties, but its services now include liaison between prisoners of
war and their families, relief to victims of natural disasters, etc.
2. Doctors Without Borders. A group that sends physicians and other health
workers to some of the most destitute and dangerous parts of the world and
encourages them to care for people and condemn the injustices they
encounter.
3. Oxfam. Oxfam is a global movement of people working together to end the
injustice of poverty. That means we tackle the inequality that keeps people
poor. Together, we save, protect and rebuild lives when disaster strikes. We
help people build better lives for themselves and for others.
4. Amnesty International. An independent worldwide organization is working
against human rights violations and for the release of persons imprisoned for
political or religious dissent.
5. Save the Children. The Save the Children Fund, commonly known as Save the
Children, was established in the United Kingdom in 1919 to improve children's
lives through better education, health care, and economic opportunities, as
well as providing emergency aid in natural disasters, war, and other conflicts.

The Rise of International Law and Universal Principles

Treaty of Westphalia
The Peace of Westphalia was a series of peace treaties signed between May and
October 1648 in the Westphalian cities of Osnabrück and Münster. The treaties
ended the Thirty Years’ War and the Eighty Years’ War. The Thirty Years’ War was a
series of wars in Central Europe between 1618 and 1648. Initially a war between
various Protestant and Catholic states in the fragmented Holy Roman Empire, it
developed into a conflict involving most of the great powers. The Eighty Years’ War,
or Dutch War of Independence (1568–1648), was a revolt of the Seventeen
Provinces against the political and religious hegemony of Philip II of Spain, the
sovereign of the Habsburg Netherlands. According to the Peace of Westphalia, all
parties would recognize the Peace of Augsburg of 1555; Christians of non-dominant
denominations were guaranteed the right to practice their faith; and the exclusive
sovereignty of each party over its lands, people, and agents abroad was recognized.
Multiple territorial adjustments were also decided. The Peace of Westphalia
established the precedent of peace reached by diplomatic congress and a new
system of political order in Europe based upon the concept of co-existing sovereign
states. The Westphalian principle of the recognition of another state’s sovereignty
and right to decide its own fate rests at the foundations of international law today.
The European colonization of Asia and Africa in the 19th century and two global wars
in the 20th century dramatically undermined the principles established in Westphalia.

Page 20

ACTIVITY

1. Search the “Treaty of Westphalia” on Google.

2. In not more than 100 words, write a summary of the Treaty (under the
heading “Treaty of Westphalia Summary”).
3. Write a reflection, in not more than 150 words, about the agreement (under
the heading “Reflection”).
4. Send your answer to the email to be provided by your teacher with
“TREATY OF WESTPHALIA” as your subject.

Internationalism is the doctrine that nations should cooperate because their common
interests are more important than their differences. On the other hand, globalism
refers to the network of connections that transcends distances of countries the world
over.

The North Atlantic Treaty Organization (NATO), established after WW II, is a military
alliance between the US, Canada, and 25 European-countries for collective security.
Sometimes, it intervenes to protect civilians as what it did when Britain, France and
the US taking the lead intervened in the war in Libya.
US President Barack Obama threatened Syria but received little backing at home or
abroad. Syria government promised in an agreement worked out by NATO and the
UN Security Council for the prohibition of chemical weapons and to destroy
stockpiles of chemical weapons.

State and Government

A state is a community of persons occupying a definite portion of territory, having a
government of their own to which the great body of inhabitants render obedience,
and enjoying freedom from external control. There are four essential elements of the
state. These are (a) people, (b) territory, (c) government, and (d) sovereignty. In the
Philippines, as in almost all countries, there are three government branches – the
legislative, the executive, and the judicial. The law-making power is vested in the
legislative branch; the execution or implementation of laws and policies is vested in
the executive branch, while interpretation of the laws and policies is vested in the
judicial branch. Sovereignty is independent of external control and undue interference
from other countries. Any conflicts, be it political, economic or otherwise, are settled
within the country. Dispute with other countries is settled through the international
courts and arbitration, invoking international law.
A good example of this is our territorial dispute with China on the Scarborough Shoal,
which was brought to the Permanent Court of Arbitration that decided in favor of the
Philippines. A nation is a group of people bound together by certain characteristics
such as common social origin, language, customs, and traditions, and who believe
that they are one and distinct from others. The state is a political concept, while
nation is an ethnic concept.

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Globalization gives pressure to governments to adopt global norms, reformulate
policies to conform to international agreements, and go with the global best practices
in all aspects of governance.

The Rise of Transnational Activism

Margaret Keck and Kathryn Sikkink, with their book Activists Beyond Borders, which
illustrated how transnational activism has deep roots that go back to the nineteenth-
century campaigns against slavery, against foot-binding practices in China, and for
women’s voting rights. Domestic civil society organizations join forces with
compatible advocacy groups to pressure the national governments in question.

Norwegian Nobel Committee – itself an important actor within transnational civil

society – called attention to the rising trend of internet activism by awarding the
Peace Prize to the International Campaign to Ban landmines and its coordinator,
Judy Williams, whose Vermont barn (where she had her home office) became a local
symbol for the larger dynamic of global activism.
There is the sustained global citizens campaign – what many call the Global Justice
Movement – to call for alternatives to neo-liberal economic globalization. In
November came what remains the alter-globalization movements single most
celebrated event: the meeting of the WTO in Seattle. Anti-globalization rather than for
an alternative model of globalization more alternative to human rights, participatory
democracy, local control, sustainability and cultural diversity (Cavanagh and Mander,
2004: 77-103)
In any case, the surge in the public consciousness of globalization and all its
implications led growing numbers of everyday people during this period to begin
thinking of themselves as Global citizens and to link this idea substantially with the
concepts of awareness, responsibility, participation and cross-cultural empathy
(Schattle, 2008).
The Global Justice Movement as a vehicle for citizens to interact beyond the nation-
state continued to expand and become more coherent, particularly with the entry of
the World Social Forum as a counterpoint to World Economic Forum (Steger and
Wilson, 2012).
Globalization and the State
How state and globalization influence and interact with each other:
1. Globalization coincides with states and has spurred the creation of many new
states -with many nations and ethnic, linguistic and religious communities long
submerged within existing states rising up and demanding statehood for
themselves.
2. States now operate in a world where power is dispersed horizontally (civil society
and the marketplace) and vertically (international organizations, subnational
political authorities as secession movement).
3. Globalization shapes states, and states in turn, shape globalization, and this
circular flow encompasses many elements, such as transnational capital,
 Page 22
investments, ideas, brands, art and music, film, broadcasting, sporting events,
and so forth.
4. States set the agendas and also drive the terms of cooperation that govern the
world’s leading international organizations, from the United Nations to the
World Trade Organization. State also craft and uphold the common standards
that emerge from these institutions.
5. Globalization places states into direct competition. States now compete on a
variety of fronts: economic policies that offer the most favourable`incentives for
multinational corporations to locate within their jurisdictions, tourism
campaigns that attract the world’s upwardly mobile populations and their
disposable incomes, and political systems that meet basic minimum standards
of democratic legitimacy and moral credibility.
6. Globalization has sparked competing dynamics of power diffusion and power
consolidation (Schattle, 2012). While citizen activists and civil society
organizations, aided by internet communication and social media platforms,
have clearly gained leverage in world politics, each state around the world
exerts itself to maintain, in Weberian terms, their claim to the monopoly of the
legitimate use of physical force in the enforcement of its order. We see this
with biting clarity in the rise of the national security state.

Lesson 6. Global Governance

Learning Objectives

After studying this lesson, you should be able to:

1. identify the roles and functions of the United Nations in global governance; 2.
identify the challenges of global governance in the 21 st century; and, 3. explain
the relevance of the state amid globalization.

Introduction
Goods and services are delivered from one country to another in various modes, on
land, sea and on cyberspace. Cross border activities are safe, secure, with rare
delay and disruption. International transactions are typically characterized by order,
stability and predictability. How is the world governed in the absence of world
government? How are norms, codes of conduct, regulation and compliance produced
when there is no central authority and there is no global government?

These are all possible because of global governance which is defined as, sum of
laws, norms, policies and institutions that define, constitute and mediate trans-border
relations between, cultures, citizens, intergovernmental and non-governmental
organizations and the market – the wielders and the objects of the exercise of
international public power (Rosenau, 1999: 293). As cited by Thomas G. Weiss and
Ramesh Thakur (2014). Governance is a rules-based order without government.

Page 23
The following are the actors in global governance: states, international organizations,
civil society, global corporations, and the United Nations.

The United Nations as a Global Governance Actor

The United Nations is an international organization founded in 1945 after the Second
World War by 51 countries committed to maintaining international peace and
security, developing friendly relations among nations and promoting social progress,
better living standards and human rights. The organization can take action on a wide
range of issues, and provide a forum for its 193 Member States to express their
views, through the General Assembly, the Security Council, the Economic and Social
Council and other bodies and committees.
The UN has four main purposes, these are to:

1. Keep peace throughout the world;

2. Develop friendly relations among nations;
3. Help nations work together to improve the lives of poor people, to conquer hunger,
disease and illiteracy, and to encourage respect for each other’s rights and
freedoms;
4. be a center for harmonizing the actions of nations to achieve these goals.

Role and functions of the United Nations in Global Governance

1. Managing Knowledge. It addresses a problem that goes beyond the capacity of

the state by collecting data about the nature of the problem. When

Page 24
Covid 19 emerged, the UN gathers data about the virus – its nature, its origin,
and how it spreads and affect humans.
2. Developing Norms. It helps solidify new norm of behavior, often through summit,
conferences and international panels and commissions. Such norms must be
integrated to national and domestic standards. Examples are, “safe sex” for
HIV/AIDs, “ban nuclear weapons” for weapons of mass destruction, “wearing
 of face mask” for Covid 19.
3. Formulating Recommendations. These are statement of principles and actions
that an organization is likely to take in the event of particular contingencies.
The UN is a policy actor with its ability to convene and consult stakeholders.
4. Institutionalizing Ideas. Every global problem has an institution within the UN
working on significant aspects of solutions. These institutions oversee the
implementation and monitoring of norms. The World Health Organization,
International Monetary Fund, the World Bank, Office for Disarmament Affairs,
are examples of these institutions.

ACTIVITY

1. Watch the documentary film “Weapons of Mass Destruction: Threats and Global
Responses.” After watching, write a reflection of not more than two hundred
words about the documentary film. The URL for this film is provided below:

https://link.brightcove.com/services/player/bcpid1722935254001/?bctid=3836
956077001&autoStart=false&secureConnections=true&width= 753&height=441
2. Read UN Security Council Resolution 1540 (2004). After reading, summarize the
content of the resolution in not more than 75 words. URL is:

https://www.un.org/disarmament/wmd/sc1540/

Page 25
Challenges of Global Governance in the 21st Century

14 June 2016 Challenges of Global

Governance in the 21st Century
On 13 June 2016, The Hague Institute welcomed Irina Bokova, Director-General of
UNESCO
According to Irina Bokova, Director-General of UNESCO, who spoke on June 13,
2016 at The Hague Institute on Challenges of Global Governance in the 21st
Century, “while new technologies have created new pathways to prosperity, trade
and inter-cultural dialogue, the increasing fragmentation of the international
community is a cause for concern. Climate change, poverty, violent conflict,
intolerance and extremism present direct threats to the unity and well-being of the
international community.”
She emphasized that we must learn, at the heart of our cities and communities, to
live together. She mentioned The Hague Institute’s recent report on the role of cities
in conflict prevention as a good example of how to develop innovative and
sustainable practices to foster communal harmony.
The UN conflict prevention includes addressing issues that present long-term risks of
conflict, engaging with parties that are on the brink of violence, helping to negotiate
the end to conflicts, and assisting countries to achieve reconciliation and build
resilient and inclusive societies. Activities focused on the structural causes of conflict
which aim to strengthen the institutions and social mechanisms of states and
societies. This includes work in areas such as governance, rule of law and security
sector reform, electoral assistance and gender equality.
The range of potential threats to peace and security addressed by the panel are
likely to be grouped under six broad headings:

● threats from poverty, disease, and environmental breakdown (the threats to

human security identified in the Millennium Development Goals)
● threats from conflict between states
● threats from violence and massive human rights violations within states ●
threats from terrorism
● threats from organized crime
● threats from the proliferation of weapons - particularly WMD, but also
conventional

A WORLD OF REGIONS

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Lesson 7. Global Divides

Learning Objectives

After studying this lesson, you should be able to:

1. Define global south;
2. Differentiate global south from the third world countries;
3. Analyze how a new conception of global relations emerged from the
experiences of Latin American Countries.

Introduction
Most of the countries in the global south are poor and underdeveloped. There is poor
governance marred with corruption and backwardness. They cannot fully participate
in the process of globalization. As a metaphor, the Starbucks and the Shanty are
used to represent modernity and backwardness. In both the South and the North,
Starbucks are present, Shanties are present, with little difference on images
representing poverty. Also, there seems to be a confusion on what is global south
and third world countries. The two are not one and the same, which will be discussed
in this lesson.

The Global South

The global south is not a directional designation or a point due south from a fixed
north. It is a symbolic designation when former colonial entities engaged in political
projects of decolonization and moved toward the realization of a postcolonial
international order.
Drawing lines between the global south and the global north, the developed and the
developing first, the first and the third world, has a powerful political function: it allows
critics and activists to make distinctions between the beneficiaries of uneven systems
of global power. Contemporary critics of neo-liberal globalization use the global south
as a banner to rally countries victimized by the violent economic cures of institutions
like the International Monetary Fund. Previously, cities of cold war-era power politics
deployed the term Third World or the logic of non-alignment in their rejection of
colonialism from both the USA and the USSR.
Global south is a metaphor for inequality of states. It is a product of western
imagination. The Spanish conquest of Latin America in the 16 th century produced
what is now recognized as Latin America. The monarchy of Spain conceived of the
new world as site of evangelization for the Christian faith. The conquistadores saw
non-Christian peoples as lesser beings, requiring enlightenment by a Christian
civilization.
Further, the French mission Civilisatrice held that colonization was a necessary
tool for the spread of civilization – allowed for the subjugation of vast parts of Africa
and

Page 27
Southeast Asia in the late nineteenth and early twentieth centuries. The US deployed
a similar logic upon colonizing the Philippine Islands in 1898.
Civilized discourse was not only the dominant ideology of colonialism. Its logic
shaped the birth of the international order. Thomas Friedman (2000, 2007) has been
articulating global progress in terms of a binary between embracing free trade and
being left behind by the pace of international economic and technological
developments. His metaphor of the Lexus, which signifies a fundamental, age-old
human drive for sustenance, improvements, prosperity and modernization, is
equated with global markets, financial institutions and computer with which we
pursue higher living standards today (Friedman, 2000: 32). The alternative to the
Lexus is stagnation, making injunction to globalize an imperative in the quest for
global modernity.
Prominent lawyers founded the Institute of International Law in 1873, but generally
agreed that barbaric races were outside the ambit of International law (Mazower,
2012: Chapter 3). American economist Walt W. Rostov’s modernization theory which
outlined historical progress in terms of a society’s capacity to produce and consume
material goods, became a key foreign policy concept of the Kennedy administration.
For Rostov, the US, with its special way of life, need to play an active role in
promoting the modernization of other countries as a way for them to catch up with
western powers (Ish-Shalom, 2006: 296).

Third World, Second World and First World Countries

Third World Countries

Third world countries can be defined by high poverty rates, economic instability, and
lack of basic human resources compared to the rest of the world. The term “Third
World countries” was first used during the Cold War. This term was used to describe
countries that were not aligned with the Communist Bloc or NATO or that were
neutral. This term was first used to categorize countries into three groups based on
their politics and economics.

During the Cold War, the United States, Canada, South Korea, Japan, and Western
European nations and allies were categorized as First World countries. Second
World countries included China, Cuba, the Soviet Union and their allies. Third World
countries typically had colonial pasts in Asia, Africa, Latin America and Oceania.
After the fall of the Soviet Union in the early 1990s, the terminology of the “three
worlds” has changed somewhat. Today, the term Third World is used to describe a
country that is not developed as much as other countries and faces economic, social,
political, environmental and other issues. This has led to some confusion as to how
the term was originally used. For example, there were several European countries
that were not aligned with NATO or the Communist Bloc that are quite prosperous
today.

Going by the historical definition, nations including Finland, Sweden, Ireland and
Switzerland were Third World countries. Based on the definition that is used today,
these would not be considered Third World countries. Instead, what many now
interpret “Third World” to mean encompasses economically poor and

Page 28
non-industrialized countries, as well as newly industrialized countries. The use of the
term “Third World” is being used less frequently because of the confusion about its
definition. Instead, it is being replaced with terms including least developed countries,
developing countries and the Global South. The Least Developed Countries, or
LDCs, are based on United Nations data that have the lowest socioeconomic
development and Human Development Index ratings. These countries have
weaknesses in areas including nutrition, education and literacy, have economic
vulnerabilities, and have widespread poverty.

Second World Country

The term “Second World country” is a term used during the Cold War to refer to the
industrial socialist states that were under the influence of the Soviet Union. Following
World War II, countries were categorized as First World, Second World, or Third
World countries. Second World countries were the Eastern bloc of communist-
socialist states. After the fall of the Soviet Union in the early 1990s, the terminologies
have changed somewhat. “Second World” countries are the term used to describe
former communist countries that aren’t quite in poverty but aren’t prosperous either.

Today, a more accurate measure of economic development in countries is the

Human Development Index (HDI). The Human Development Index is an index used
to rank countries and is quantified by looking at a country’s human development such
as life expectancy, education, and per capita income indicators. HDI places countries
on a scale of 0-1 and categorizes them into one of four levels of human development:
low human development (0-.55), medium human development (.55-.70), high human
development (.70-80), and very high human development (.80-1.0).

The Second World countries from the Cold War era currently range from medium
human development to very high human development in terms of HDI. For example,
Slovenia has an HDI of .896, categorizing it as very high human development. In
historical terms, Slovenia is a Second World country; however, it is considered a
“First World country” under the modern definition. Kyrgyzstan has an HDI of .672,
putting the country in the medium human development tier. This makes Kyrgyzstan a
“Second World country” by historical definition and by modern definition.
When categorizing countries as First World, Second World, or Third World, it is
important to distinguish if the country is being categorized by a historical definition or
modern definition. Human Development Index is a more accurate means of
categorizing nations based on their economic and human development.

First World Country

First World Counties have laws in place and have a high-functioning democracy.
There is little political risk within these countries. The economy of a First World
country is stable, and there is a high standard of living. These countries have
capitalist economies. In order to be classified as a First World country, several
factors are considered. The gross domestic product and the gross national product

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of the economy are evaluated. Life expectant, literacy rates and data from the
Human Development Index are also taken into consideration.

Going back to the early history of the term, countries that were aligned with the U.S.,
were member states of NATO, former British Colonies that were developed, and
neutral countries that were industrialized and developed were considered to be First
World countries. Broken down, NATO-aligned countries immediately following the
Cold War were Belgium, Canada, France, West Germany, Greece, Italy, Luxemburg,
Netherlands, Norway, Portugal, Spain, Turkey, United Kingdom and United States.

Neutral countries that were developed included Austria, Finland, Ireland, Sweden
and Switzerland. Countries that were aligned with the United States included
Australia, Israel, Japan, New Zealand and South Korea. The countries on the list of
First World generally have a per capita GDP exceeding $15,000. There is a total of
31 countries on this list as of July 2018 (World Population Review, n.d.).

The terms the North and the South, when used in a global context, are alternative
designations for “developed” and “developing” countries. Together, the North and
South constitute virtually the entire global population. As terms, the North and the
South emerged during the 1970s, probably simultaneously, and in contrast with each
other. While the countries that make up the North and the countries that comprise
the South share broadly similar economic and historical characteristics with the other
countries in their category, there is no precise definition of either term. Two
generations ago, the North could have been approximately defined as Europe and its
offshoots (such as Canada, the United States, Australia, and New Zealand), but
Japan has also, clearly, been a developed country for many years. Several other
East Asian countries, including Singapore, South Korea, and Taiwan have shifted
into the North in recent decades. While there are no recent examples of countries
that have moved in the opposite direction (i.e., to the South from the North), the
economic position of Argentina shifted from being one of the richest countries in the
world, a century ago, to its middle-ranked position today.

Precise categorization is difficult for several contemporary nations, such as Russia

and Saudi Arabia. Russia was recently admitted to the G-8 (previously the G-7),
whose other members (the United States, Canada, France, Germany, Italy, the U.K.,
and Japan) are the richest and most economically powerful nations on earth. In
contrast, Russia has a comparatively low life expectancy, which has fallen in recent
decades. It also has limited political freedom and transparency in comparison to most
countries in the G-8, and the North more generally.

The North and South have other names. No name is perfect, and neither the North
nor the South is geographically precise. Several countries in the South are entirely in
the Northern hemisphere (e.g., India, Nigeria), while Australia and New Zealand,
each in the geographic South, are part of the global North, as evidenced by their
longstanding membership of the Organisation for Economic Co-operation and
Development. Such geographic imprecision is not unique. For example, the West
(another synonym for developed countries) now includes Japan, as well as
Australasia.

The Global South includes Asia (with the exception of Japan, Hong Kong, Macau,
Singapore, South Korea and Taiwan), Central America, South America, Mexico,

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Africa, and the Middle East (with the exception of Israel). Generally, definitions of the
Global North include the United States, Canada, almost all the European countries,
Israel, Cyprus, Japan, Singapore, South Korea, Taiwan, Australia, and New Zealand.

Latin America
Latin America is generally understood to consist of the entire continent of South
America in addition to Mexico, Central America, and the islands of the Caribbean
whose inhabitants speak a Romance language. The peoples of this large area
shared the experience of conquest and colonization by the Spaniards and
Portuguese from the late 15th through the 18th century as well as movements of
independence from Spain and Portugal in the early 19th century. Even since
independence, many of the various nations have experienced similar trends, and
they have some awareness of a common heritage. However, there are also
enormous differences between them. Not only do the people live in a large number of
independent units, but the geography and climate of their countries vary immensely.
The inhabitants’ social and cultural characteristics differ according to the constitution
of the occupants before the Iberian conquest, the timing and nature of European
occupation, and their varying material endowments and economic roles.

Since the Spanish and Portuguese element looms so large in the history of the
region, it is sometimes proposed that Iberoamerica would be a better term than Latin
America. Latin seems to suggest an equal importance of the French and Italian
contributions, which is far from being the case. Nevertheless, usage has fastened on
Latin America, and it is retained here.

Please read the following important materials:

1. Latin
America.https://www.mofa.go.jp/policy/other/bluebook/1988/1988-3-3.htm

2. Schmidt, S. (2018). Latin American dependency theory.

https://globalsouthstudies.
as.virginia.edu/key-thinkers/latin-american-dependency-theory#

Anti-Globalism

There was solidarity among colonized states from the beginning of anti-colonialism
movement. Benedict Anderson (2207) has shown that resistance against Spanish
colonialism in Latin American and the Philippines benefited from the increased
interaction of political dissidents amidst an early phase of globalization in the late
nineteenth century – a globalization that allowed for the spreading of anarchist and
anti-colonial ideas.
Socialist International
Anti-colonialism, though it emphasized domestic nationalism, was also an
internationalist project of the political Left. Socialist internationalism rose to the
forefront of anti-colonialism. Socialist International – the union of socialist parties

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(Now called the social democrats) that ushered in the rise of leftwing influence in
European politics during the early twentieth century – did not prioritize the struggle of
colonized peoples in its policies.

Communist International

Communist International (Comintern) in 1919 as an alternative locus of socialist

internationalism. Lenin argued that capitalism’s strength is premised on the creation
of new markets via imperialism. He urged that communists to forge ties with national
elites and radical peasants in their fight against colonialism (Priestland 2009: 237). It
paved the way for sustained alliances between Western Communist and anti-colonial
nationalists. The international left in its various incarnations has continued to
articulate modes of solidarity with the global south.
The end of the Second World War was the highpoint of decolonization. Since the
creation of the United Nations in 1945, over 80 ex-colonies have gained
independence (United Nations, 2011) with the enshrinement of the principles of self-
determination, post-colonial nationalism could justify their causes within the ambit of
international law.
Bandung Conference
The founding moment of the non-aligned movement was the Asia-Africal Conference
held in eh Indonesian City of Bandung (also known as Bandung Conference) in 1955.
Delegates from 29 Asian and African Countries attended to forge economic and
cultural cooperation amidst fears of newly emergent forms of colonialism. Notable
participants include present-day heroes of the Third World: Sukarno, Zhou Enlai,
Gamal Abdel Nasser, and Jawaharlal Nehru. It was clear that the countries were not
just wary of first world imperialism, but also of communist colonialism. Delegates
from Pakistan, Thailand, Lebanon, Ceylon, and the Philippines objected to the
progressive policies of the USSR against Eastern European states and China’s
against Indochina and Taiwan (Espiritu, 2006: 178).

ACTIVITY

1. Group yourselves by four (4-student for each group).

2. Choose a Latin American country and find out its system of government, and the
general economic policies. Write them on PowerPoint.
3. Report (online) your findings (not more than seven minutes per group). 4.
Rubrics will be provided by your teacher.

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Lesson 8. Asian Regionalism

Learning Objectives

At the end of this lesson, you should be able to:

1. differentiate between regionalization and globalization;

2. identify the factors leading to a greater integration of the Asian Region; and,
3. analyze how different Asian state confront the challenges of globalization and
regionalization.

Introduction
Many Asian countries were victims of colonization, which taught them the value of
nationalism, and the struggle for political and economic freedom. They form alliances
as a way not only for cooperation but to somehow exclude foreign dominance from
the region. Through the years, foreign countries have been attracted by the rich
natural resources including agricultural produce. In spite of their efforts to distance
themselves from the influence of the west, westernization continues to be seen in
political, economic and cultural aspects of their lives.

Regionalism and Regionalization

A Region is a group of countries in the same geographically specified area

(Southeast Asia). Regionalization is the societal integration and the often undirected
process of social and economic interaction (grouping). On the other hand,
Regionalism is the formal process of intergovernmental collaboration between two or
more states (ASEAN).
Regionalism is the set of conscious activities carried out by states within a region to
cooperate while regionalization is a less conscious process which is the outcome of
these states policies.
 Page 33
Three Views on Asian Regionalism

An Externalist View: The Region as an Object Impacted by Globalization.

Globalization in Asia and South Asia is an external phenomenon being pushed into
the region by world powers, the United States and Europe. To some, it was a process
that brought economic development, political progress, social and cultural diversity to
the region. Others see the darker effects of globalization including its role in eco-
underdevelopment and the uprooting of local tradition and culture. Colonialism in the
region in the 1500s had deteriorating effects with deep implications for domestic
political structures in many local indigenous polities. For example:
o Portuguese invasion of Melaka in 1511
o arrival of Magellan in the Visayas region that extended Spanish colonial rule in
the archipelago
o Dutch 17th century had strengthened position in the Dutch East Indies o
British had consolidated power in South Asia, Burma, Malay Peninsula o
French took control of Indo-China in the late 19 th century

The Europeans brought new economic practices, religious beliefs, cultural values,
and political structures that changes the region drastically. In the 19 th and 20th
centuries, movements for nationalism and independence emerged in many parts of
the world including the Asia Pacific and South Asia.
The roots of national identity lie in the rise of Western industrialization and capitalism.
Benedict Anderson highlights global experiences of nationalist leaders such as Jose
Rizal in the Philippines, who came to imagine themselves as Filipino after being
influenced by life in Spain and elsewhere (Anderson, 2007).
Word War II, another way in which the region come to be at once integrated and
influenced by external forces. The rise of Japan after bombing of the Pearl Harbor
end Japan’s imperial domination if the region. These are the concerns after World
War II:
1. political stability;
2. faltering economic reform;
3. rise of Communist China; and,
4. Japan’s economic growth.

The opening up of American markets to Japanese goods had also paved the way for
Japanese market to supply equipment and goods for US armed forces and other aid
programs, eventually incorporating Japan into the multilateral economic order
including General Agreement on Tariff and Trade (Ikenberry, 2007). Japan’s
economic miracle of the 1970s with authors attributing the success to statist policies,
market policies, cultural characteristics, and International relations (Johnson,1982:

Page 34
6-16). One argument is that Japan and other East Asian States including Korea and
Taiwan were able to adapt their economic policies in line with what they understood
as and increasing globalized economic systems and benefited from export-oriented
growth policies in the 1980s and 1990s.

In developed economies like Japan, Korea, Australia, there was a non-standardized

practices characterized by temporary and part-time employment. In developing
countries such as Thailand, Indonesia, and Vietnam, employment is characterized
by:

o Increase in informal employment

o Self-employment
o Family workers
o Informal enterprise workers

Politics has been a defining characteristic of globalization in the region, the past
three decades have witnessed a substantial fall in authoritarian regimes attributable
to:

1. rising middle classes;

2. more globally connected world;
3. end of the cold war.

Generating Globalization: The Asia Pacific and South Asia as Springboard

The Asia Pacific and South Asia is seen as an agent serving as an engine for
globalization. While there was a great external impact on the region, it is also
influencing and transforming the nature of globalization. The thriving spice trade in
the region is what drew the European powers into the region and wanted to cut the
middleman. Asia was considered the central global force in the early modern era. It
was the site of the world’s most important trade routes in some places, and more
technology advanced than the west in science and medicine. The rise of Europe in
the 18th century came only after the colonial powers extracted silver from the
colonies. The reemergence of Asia today is such a restoration of its traditional
dominant position in the global economy (Frank, 1998).

Colonialism has influenced the Asia Pacific and South Asia and vice versa. Colonies
are laboratories of modernity. In the Philippines, colonial policing on the American
colony can be understood as a social experiment that transformed the Philippine
polity as well as the US national security of state. Practices such as counter-
insurgency, surveillance, and torture were developed and perfected in the colonial
Philippines (McCoy and Scarano, 2009). Medical and public health was implemented
with colonial bureaucratic practices were brought home to urban health departments
in the United States.

The case of Japan. The rise of Japan started when it embarked procurement of raw
materials from different countries allowing them to gain competitive edge. This
transformed the market and globalized shipping and procurement. China followed

Page 35
the same pattern of development. China and India have opened up and emphasized
an export-oriented strategy.
Open regionalism is embodied by Asia Pacific Economic Cooperation or APEC. It
was through this which gives rise to regional free trade arrangements. Regionalism
can push global economic integration, promote learning to be benefit of free trade
and scale up from regional cooperation and eventually to global cooperation.
In other words, regionalism can act as a springboard for globalization. Open
regionalism aims to develop and maintain cooperation with outside actors. It adheres
to the principles of non-discrimination, specifically an openness in membership and
openness in terms of economic flows (Sutton, 2007). Globalization has not been a
one-way street. Asia Pacific and South Asia is generative of many aspects of the
globalization process. This can be seen both historically and more recently and
across a broad variety of domains from the economy to political structures to culture.

The Anti-Global Impulse: Regional Alternatives to Globalization

Asia Pacific and South Asia is considered a regional alternative to Globalization. It is

also a source of resistance to globalization or to global western powers. Japan’s
colonization of the region in the 1930s and 1940s and the building of a supposed
East Asian Co-Prosperity Sphere replicated imperial relationships in East and
Southeast Asia with new masters. Originally, the East Asian Co-Prosperity Sphere
had Japan, China, and Manchukuo as members.
After World War II, Japan looked beyond Northeast Asia to South and Southeast
Asia with the following membership countries: Japan, Manchukuo, Mangjiang (outer
Mongolia), Republic of China, States of Burma, Republic of the Philippines, Empire of
Vietnam, Kingdom of Kampuchea, Kingdom of Laos, Azad Hind, Kingdom of
Thailand (Beasley, 2000). Japan’s General Tojo in the Greater East Asia Conference
in November 1943 declared that Asia had a “spiritual essence” that opposed the
materialistic civilization of the west.
Failure of the East Asian Co-Prosperity Sphere was attributed to: Japan’s loss in World
War II, and the overt racism of Japan towards its supposed co-members.

ACTIVITY

1. Read the 1990 APEC Ministerial Meeting summary of discussion available on

https://www.apec.org/Meeting-Papers/Annual-Ministerial-Meetings/1990/
1990_amm.
2. Summarize, in not more than 200 words, the discussion on 1) World and
Regional Economic Developments, 2) Global Trade Liberalization –
GATT, and 3) APEC Work Projects.

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