CW Reviewer

Course Code and Title: SSED 2 THE CONTEMPORARY WORLD
Lesson Number: Globalization Lesson 1 – Defining and Understanding Globalization1
Topic: Definition, classification and concepts of Globalization
Learning Objectives:
At the end of the lesson, the students should be able to:
1. Explain the definition, classification and concepts of Globalization.
2. Differentiate between the definition, classification and concepts of Globalization.
3. Manage plans in the advent of Globalization.
Pre-Assessment / Review questions:

Write your answer in a yellow pad paper with your name, section and date written in the
upper left hand side and Review Questions Module 1 on the upper right hand side.
Pre-Assessment: Match column A with column B. Write the letter only.
Column A Column B
_____ 1. History A. Is a cause, principle or system of beliefs held to with ardor
and faith
_____ 2. Globalization B. Activities that relate to influencing the actions and
policies of a government.
_____ 3. Economics C. The study of past events that relate to a particular subject,
place, organization, etc.
_____ 4. Politics D. The onset of a borderless world
_____ 5. Religion E. A science concerned with the process or system by which
Goods and services are produce, sold and bought
Lesson Presentation:
History – Changes through time of human affairs. Much has changed since time
immemorial.
- The more recent change, if not the most important change (Bauman, 2003) that has been
going on for centuries is GLOBALIZATION or the GLOBAL AGE (Albrow, 1996)
- Among the latest change is the INTERNET connectivity of the mass (social) media among
people, communities, and countries all over the globe brought about by Satellite connection
technology.
2
Course Code and Title: SSED 2 THE CONTEMPORARY WORLD
Lesson Number: Globalization Lesson 1 – Defining and Understanding Globalization
Write your answer in a yellow pad paper with your name, section and date written in the upper left
hand side and Review Questions Module 1 on the upper right hand side.
Column A Column B
and faith

3
History – Changes through time of human affairs. Much has changed since time immemorial.
- The more recent change, if not the most important change (Bauman, 2003) that has been going on for
centuries is GLOBALIZATION or the GLOBAL AGE (Albrow, 1996)
- Among the latest change is the INTERNET connectivity of the mass (social) media among people,
communities, and countries all over the globe brought about by Satellite connection technology.
- That lead to improved communication technology.
- Computers, Laptops, Cellphones, Tabs, gadgets. Yahoo, Google, Facebook, Twitter, Thumblr, Instagram
and the latest is Tik Tok.
What is Globalization?
Positive definition
- process of world shrinkage, of distances getting shorter, things moving closer (Larson, 2001)
- Pertains to increasing ease to interact on other side of the world in terms of economy, political
system, culture and social structures
- Phenomenon pertaining to progress, development and integration
Negative definition
- Some kind of colonization that is occurring through and with regression, colonialism and
destabilization (Khor, TWN)
CLASSIFICATION
1. Broad and inclusive
- means the onset of the borderless world (Ohmae, 1992), it deals with overcoming traditional
boundaries
2. Narrow and exclusive
- includes the internationalizing of production, the new international division of labor, new
migratory movements from north to south, the new competitive environment and internationalization
of the state…making states into agencies of the globalizing world (RAWOO, 2000)
GLOBALIZATION Is a transplanetary process or a set of process involving increasingly liquidity and the
growing multidirectional flows of people, objects, places and information as well as the structures they
encounter and create that are barriers to or expedite, these flows
- Globalization could bring either or both integration and / or fragmentation.
- Although things flow easily in global world, hindrances or structural blocks are also present
4
Concepts of Globalization
1. Perspective of the person defining globalization
A. Positive – means it can be a unifying force
B. Negative – as creating greater inequalities among nations
2. Globalization is the debate and debate is globalization. One became part and parcel of the other.
3. Globalization is a reality. Changing as human society develops. It has happened before, still happening
today, and expect to continue happening in the future
Metaphors of Globalization
SOLID – the social relationships and objects remained where they were created.
- Solidity also refers to barriers that prevent or make difficult the movement of things. It can be
natural or man-made.
- Man made barriers have tendency to melt over time becoming increasingly liquid.
LIQUID – are not fixed. Refers to the increasing ease of movement of people, things, information and
places in the contemporary world.
- Space and time are crucial elements of globalization.
- Changes are continuous and difficult to stop
FLOWS – movement of people, things, places, and information brought by growing “porosity” of global
limitations (Ritzer, 2015)
Activity/Evaluation/Guided Discussion:
1. Write your answers in a yellow pad paper in the upper left portion your name, section and date,
then on the upper right portion write Evaluation Discussion 1.
2. To be submitted next week
3. Questions
a. What has History proven through time? How would it affect the future?
b. How will the Metaphors of Globalization affect the decision making of an individual? The society? The
nation?
Assignment:
Instructions:
1. Read the attached reading materials

5
2. Write your answers in a yellow pad with your name, section and date in the upper left portion of
the paper, then write Assignment No. 1 in the upper right portion
3. To be submitted next week.
a. Identify and explain the good and bad effects of globalization in the society, economy and in the
government political arena.
b. With the Covid-19 pandemic widespread throughout the world, what would be your position
and role as a student today and in the next 5 years.
4. Readings:
a. pp. 7 – 15 Chapter 1, The Contemporary World by Aldama
b. Articles on world, political and economic news
1) The Good, The Bad, And The Ugly Side Of Globalization
Panos Mourdoukoutas Former Contributor Markets
https://www.forbes.com/sites/panosmourdoukoutas/2011/09/10/the-good-the-bad-and-the-ugly-side-
of-globalization/#19043d1b483f
Image via Wikipedia
Globalization, the increasing integration and interdependence of domestic and overseas markets, has
three sides: the good side, the bad side, and the ugly side.
The good side of globalization is all about the efficiencies and opportunities open markets create.
Business can communicate efficiently and effectively with their partners, suppliers, and customers and
manage better their supplies, inventories, and distribution network. Local producers can sell their
products in distant markets with the same ease and speed as in their home country. Sony Corporation
(NYSE:SNE), for instance, can sell its TV and game consoles with the same ease in New York as in Tokyo.
Likewise, Intel (NASDAQ:INTC), Apple (NASDAQ:AAPL), and Cisco (NASDAQ:CSCO) can sell their high tech
gear with the same ease in Tokyo as in New York.
The good side of globalization is also about easy credit and rising leverage, as money flows easily across
local and national boundaries, and creditors fail to distinguish between good and bad borrowers,
boosting aggregate demand; setting the world economy into a virtuous cycle of income and
employment growth; and easy credit and leverage fuel financial bubbles that feed into a euphoria that
perpetuates the virtuous cycle.
The bad side of globalization is all about the new risks and uncertainties brought about by the high
degree of integration of domestic and local markets, intensification of competition, high degree of
imitation, price and profit swings, and business and product destruction. Corporations that previously
have been enjoying the benefits of globalization, now face unstable and unpredictable demand and
6
business opportunities and their products quickly become commodities, leaving them little or no pricing
power and under constant pressure by new competitors that undermine profitability.
The bad side of globalization is also about tight credit, deleverage, and declining money flows across
local and national boundaries, as creditors tighten credit to both good and bad borrowers, depressing
aggregate demand; setting the world economy into a vicious cycle of income and employment declines;
and euphoria is succeeded by pessimism and a burst of asset bubbles, perpetuating the downward spiral
of the world economy.
The ugly side of globalization is when nations and local communities try to escape the vicious cycle of
income and employment declines through simultaneous currency devaluations; and by raising trade
barriers that in essence put an end to globalization and a beginning to trade wars, as was the case in the
1930s.
In the last quarter of the century and for the most part of the first decade of this century, the world has
seen the good side of globalization. In the last four years, the world has seen the bad side of
globalization. We do hope and pray that the world won’t see the ugly side of it.
2) What is Globalization ? Meaning and it’s Importance
by Sonia Kukreja
https://www.managementstudyhq.com/globalization-positive-negative-impacts-of-globalization.html
The world is a global village. This is a phrase you must have had thrown around during business
discussions. Those who say this are most likely referring to how small the world has become due to
globalization which has removed boundaries to trade and communication between people in different
countries.
Globalization a process where people, companies, and governments from different nations interact and
integrate through international trade and investments has effects on the environment, culture, political
systems, economic development and on the human physical well-being in societies around the world.
Through the Internet, media, planes, international business and embassies we are now more connected
to each other than ever before.
Due to globalization someone in China can easily communicate and sell their products to an individual
the US. The rise of globalization is largely attributed to major changes in the telecommunications and
transportation industries. Globalization today allows for goods to be made and sold all over the world.
Companies to establish and compete for customers in many countries for example fast food chains are
opening outlets every day around the world. Also, companies can operate where production costs are
cheapest due to globalization. And it’s not only products globalization also makes it possible to get
services from around the word e.g. via the internet a US-based company can hire an accountant in India
to do its taxes.
Globalization is not only about trade there is also the cultural aspect to it. Through it, different cultures
meet and people get to know and understand the various ways of life and accept them. Now that you
know what globalization is let’s get into its impact
7
POSITIVE IMPACTS OF GLOBALIZATION
Gives Access to a Larger Market
Through globalization countries and companies have access to a bigger consumer base. Instead of only
selling products in their country a business can expand to other regions boosting sales and in the
process making more money.
Provides Cheaper Goods for Consumers
Because of globalization a lot of companies are moving to areas where their cost of production is low
they, in turn, offer cheaper products because they are not expensive to make hence lower prices for
consumers.
Globalization Wets Countries do what They do Best
For example, a country can buy cheap steel from another country instead of making its own steel. They
can then focus their efforts on making other things they are good at like computers and export them to
the countries they import cheap steal from.
Leads to Better Economies
With many multi nation’s heading to Africa to tap the consumer base in this part of the world more jobs
are being created helping people in these countries get better wages and improve their stands of living.
This investments by these multinationals or foreign countries also help strengthen the economies of
these countries with the foreign exchange they bring in. With an increased number of investors looking
for investments opportunities around the globe, country economies will benefit wherever they invest.
Through globalization economies of different countries are becoming more connected to one another
since they depend on each other for trade.
Promotes World Peace and Unity
Globalization brings governments together so that they can tackle common goals together. For example,
due to globalization world leaders have seen the impact of pollution and have resolved to tackle climate
change together. Also, it is unlikely that a country trading a lot of products and services with another will
attack it or want to go to war with it.
Innovation
The desire to make a profit has always been a spur to expanded trade, innovation, and the
communication of ideas. The great ideas from leaders spread more easily.
Better Quality and Variety
Competition from different countries drives firms to improve their products. Consumers have better
quality products and more variety as a result.
NEGATIVE IMPACTS OF GLOBALIZATION
Causes Environmental Damage

8
Globalization has led to increased production for businesses in order to meet global demand. Increased
production means more natural resources are used and this can be used up before they are regenerated
leading to a negative impact on the environment. Also in developing countries rules and regulations on
environmental protection are not as strict as in developed countries. This has seen some multinationals
leave their countries to set up in developing countries to take advantage of this lax regulation in the
process they manufacture products that are harmful to the environment.
Causes Fluctuation of Prices
Increased competition means that businesses with the best prices win. Due to competition prices are
always fluctuating, for example, a country like the US has to reduce its prices often to compete with
prices for the same product coming from China. China’s production costs are lower than the US hence
they can have ridiculously low prices. For the US companies reducing prices will have a negative effect
on their profits which in turn may led to actions like laying off workers.
Job Insecurity
Globalization provides a double-edged sword when it comes to jobs. It creates jobs for people in
developing countries who provide cheaper manufacturing jobs. For example, many companies are
setting up in India and China because wages and manufacturing jobs are cheaper there this means less
opportunities in developed worlds. In short, globalization takes jobs from one country and provides
them to another. This can be negative or positive depending on what part of the world you are in.
3) Will Covid-19 Have a Lasting Impact on Globalization?
HARVARD BUSINESS REVIEW: GLOBALIZATION
by Steven A. Altman
May 20, 2020
https://hbr.org/2020/05/will-covid-19-have-a-lasting-impact-on-globalization
Michael H/Getty Images
As leaders wrestle to guide their organizations through the Covid-19 pandemic, decisions running the
gamut from where to sell to how to manage supply chains hinge on expectations about the future of
globalization. The pandemic has prompted a new wave of globalization obituaries, but the latest data
and forecasts imply that leaders should plan for — and shape — a world where both globalization and
anti-globalization pressures remain enduring features of the business environment.
The crisis and the necessary public health response are causing the largest and fastest decline in
international flows in modern history. Current forecasts, while inevitably rough at this stage, call for a
13-32% decline in merchandise trade, a 30-40% reduction in foreign direct investment, and a 44-80%
drop in international airline passengers in 2020[i]. These numbers imply a major rollback of
9
globalization’s recent gains, but they do not signal a fundamental collapse of international market
integration.
The volume of global goods exports in 2020 could fall to a level last seen in the mid-to-late 2000s,
according to the latest WTO forecast. That would be a tremendously painful drop, especially in the
context of today’s larger and more complex world economy. But even the most pessimistic trade
forecasts do not imply a retreat to a world of disconnected national markets. Most of the run-up in
trade integration since the end of World War II should remain intact.
If plummeting trade flows are unlikely to undo globalization, what about the even steeper decline
predicted in foreign direct investment (FDI)? Like other capital flows, FDI tends to be volatile, so a
double-digit decline is not as shocking as one might presume. FDI flows, for example, fell 38% during the
global financial crisis. Nor do shrinking FDI flows necessarily augur a real retreat from corporate
globalization. The foreign business activity of multinational firms does not always closely track FDI
trends.
The collapse of international travel, in contrast, stands out against a much steadier growth trend, and its
damage is indisputable. Tourism contributes more to global output than automotive manufacturing, and
business travel facilitates international trade and investment. As of late April 2020, every country had
imposed restrictions on international travel, and 45% of countries had partially or completely closed
their borders to foreign visitors. Airlines were flying 90% fewer seats on international flights, as
compared to 62% on domestic flights. This unprecedented collapse does, however, follow an
international travel boom. Even if international airline passengers fall by two-thirds, there would still be
more people flying abroad than there were in 2003.
What Are Globalization’s Post-Coronavirus Prospects?
Current forecasts call for international flows to start growing again as the pandemic comes under
control. Thus, 2020 is likely to be a low point for many globalization metrics. But how deep will the
plunge really be? How fast can we expect global flows to rebound? And how might future flow patterns
look different from the past? None of these questions can be answered definitively yet, but leaders can
find clues about the future and actionable implications for their companies by focusing on five key
drivers of globalization’s trajectory:
1. Start with global growth patterns, where the key lesson is that international flows tend to swing
dramatically with macroeconomic cycles. In good times, they usually grow faster than GDP, and in bad
times they shrink faster, too, as people and firms hunker down behind borders.
This time around, robust growth can only be restored once the pandemic is clearly brought under
control. But remember that globalization can also be a powerful contributor to growth and health.
Countries with higher scores on the DHL Global Connectedness Index tend to enjoy faster economic
growth. And there is some evidence that more connected countries, even after controlling statistically
for levels of economic development, are less vulnerable to infectious disease outbreaks, in part because
of their stronger health care systems.
10
This means global business leaders can go beyond just watching disease trends and economic data —
they can help tilt the balance from negative to positive feedback loops by contributing to health, growth,
and international cooperation. Companies across industries have already swung into action to
manufacture urgently needed medical supplies. Large corporations can also soften the pandemic’s
economic impact, for example, by following Unilever’s lead in paying suppliers faster and extending
support to employees, contractors, and customers. And they can support open markets, as 3M did when
it resisted a proposed block on its mask exports from the U.S. to Canada and Latin America.
2. Supply chain policies have come back to the top of the agenda, and shifting approaches have the
potential to reshape trade and FDI flows. The key globalization-related debate here is redundancy versus
reshoring. Will companies and countries seek greater safety in international diversification, or will they
try fostering domestic self-sufficiency? Economic logic almost always favors the former approach,
coupled with national stockpiles for true essentials, but politics will sometimes force the latter.
Research by NYU Stern Professor Pankaj Ghemawat highlights several characteristics of politically
sensitive industries, such as production of necessities for health or national security, sales to
government rather than private buyers, and the size of an industry’s domestic workforce.
If redundancy becomes the norm and reshoring the exception, expect just a modest long-run drag on
global trade growth, coupled with greater diversification of countries’ trade partners.
3. Superpower frictions and fragility had already destabilized the international business environment
before Covid-19, and the pandemic adds new layers of complexity. It has led to a vast expansion of state
power, while introducing pandemic control as yet another arena for ideological competition. In this
environment, where companies come from and how well their home country governments get along
will matter even more than before to decisions about where to raise capital, which markets to prioritize,
and which supply bases to cultivate.
Many have predicted that Covid-19 will hasten a fracturing of the global economy along regional lines,
with competing blocs centered on China, the United States, and perhaps Europe. But the fact that
Europe, the world’s most connected region, has struggled to mount a unified response to the pandemic
is just one reason that a resurgence of regions should not be a foregone conclusion. Most international
flows already take place within regions, and short-distance trade has not grown faster than long-
distance trade over the past few years. Be ready for the possibility of a more regionalized world, but
don’t count on it.
4. Ongoing technological shifts such as the adoption of e-commerce, videoconferencing, and robots
have all been supercharged by Covid-19. Before the pandemic, many focused on how new technologies
could reduce global flows, e.g. via manufacturers substituting robots at home for low-cost labor abroad.
But many pandemic-induced shifts could also strengthen globalization if they are not curbed by
protectionist policies. Cross-border e-commerce expands export opportunities, especially for smaller
companies. Forced experimentation with remote work, where successful, could spur more services
offshoring. And even 3D-printing sometimes leads to more rather than less trade.
Business leaders can think productively about Covid-19, technology, and globalization, by taking a
structured approach to considering both internal and external implications. Internally, think how
individual functions can harness opportunities afforded by new technologies, while managing
11
organizational change with sensitivity to the heightened stress employees and teams are facing.
Externally, think about how technological trends could potentially change a company’s standing vis-à-vis
its competitors, customers, suppliers, and so on. For most companies, technological trends should lead
to more globalization in some areas and less in others, rather than a uniform shift in one direction or the
other.
5. Public opinion about globalization may take another negative turn due to Covid-19, scaling back the
surprisingly strong support for trade and immigration reported in recent polling. More international
travel does accelerate the spread of infectious diseases, and economic stress could boost calls for trade
protectionism. While robust public health strategies do not require ongoing barriers to globalization,
nationalist politicians will point to the pandemic and failures of international coordination in the
response to fortify opposition to globalization.
Customers and employees increasingly expect corporate leaders to take a stand on social issues, making
public opinion about globalization a potential management issue. The blending of anti-globalization and
anti-capitalist movements further complicates the role of business in the public debate about
globalization. And leaders of multinational corporations face the special challenge of public and
government engagement across national divides. Focusing on facts, becoming more sensitive to
inequality, and emphasizing real economic contributions can help to support a healthier globalization
debate.
In conclusion, Covid-19 looks like a “bend but won’t break crisis” for globalization. International flows
are plummeting, but globalization — and opposition to globalization — will continue to present business
opportunities and challenges. Careful attention to the drivers of globalization’s future can help
companies navigate through and even profit from globalization’s turbulence. A volatile world of partially
connected national economies expands possibilities for global strategy even as it complicates the
management of multinational firms. Now is the time for global corporations to show their value by
harnessing the best of the world’s capabilities to end the pandemic and bolster the recovery.
[i] FDI forecast pertains to 2020/21.
________________________________________
Steven A. Altman is a senior research scholar at the NYU Stern School of Business, executive director of
NYU Stern’s Center for the Globalization of Education & Management, and an adjunct assistant
professor in NYU Stern’s Department of Management and Organizations.
________________________________________
This article is about GLOBALIZATION
GLOBALIZATION AND RESILIENCE
PRACHI MISHRA, ANTONIO SPILIMBERGO
ANALYTICAL SERIES
12
https://www.imf.org/en/Publications/fandd/issues/2022/analytical-series/Globalization-Resilience-
Mishra-Spilimbergo
Focus on the global economy
This page features the latest OECD data, recommendations and policy advice on the economic impacts
of COVID-19 and the recovery, and includes a curated collection of earlier OECD economic content.
https://www.oecd.org/coronavirus/en/themes/global-economy
Course Code and Title: GE103 THE CONTEMPORARY WORLD
Lesson Number: Globalization Lesson 1 – Defining and Understanding Globalization
Write your answer in a yellow pad paper with your name, section and date written in the upper left
hand side and Review Questions Module 1 on the upper right hand side.
Column A Column B
and faith
13
History – Changes through time of human affairs. Much has changed since time immemorial.
- The more recent change, if not the most important change (Bauman, 2003) that has been going on for
centuries is GLOBALIZATION or the GLOBAL AGE (Albrow, 1996)
- Among the latest change is the INTERNET connectivity of the mass (social) media among people,
communities, and countries all over the globe brought about by Satellite connection technology.
- That lead to improved communication technology.
- Computers, Laptops, Cellphones, Tabs, gadgets. Yahoo, Google, Facebook, Twitter, Thumblr, Instagram
and the latest is Tik Tok.
What is Globalization?
Positive definition
- process of world shrinkage, of distances getting shorter, things moving closer (Larson, 2001)
- Pertains to increasing ease to interact on other side of the world in terms of economy, political
system, culture and social structures
- Phenomenon pertaining to progress, development and integration
Negative definition
- Some kind of colonization that is occurring through and with regression, colonialism and
destabilization (Khor, TWN)
CLASSIFICATION
1. Broad and inclusive
- means the onset of the borderless world (Ohmae, 1992), it deals with overcoming traditional
boundaries
14
2. Narrow and exclusive
- includes the internationalizing of production, the new international division of labor, new
migratory movements from north to south, the new competitive environment and internationalization
of the state…making states into agencies of the globalizing world (RAWOO, 2000)
GLOBALIZATION Is a transplanetary process or a set of process involving increasingly liquidity and the
growing multidirectional flows of people, objects, places and information as well as the structures they
encounter and create that are barriers to or expedite, these flows
- Globalization could bring either or both integration and / or fragmentation.
- Although things flow easily in global world, hindrances or structural blocks are also present
Concepts of Globalization
1. Perspective of the person defining globalization
A. Positive – means it can be a unifying force
B. Negative – as creating greater inequalities among nations
2. Globalization is the debate and debate is globalization. One became part and parcel of the other.
3. Globalization is a reality. Changing as human society develops. It has happened before, still happening
today, and expect to continue happening in the future
Metaphors of Globalization
SOLID – the social relationships and objects remained where they were created.
- Solidity also refers to barriers that prevent or make difficult the movement of things. It can be
natural or man-made.
- Man made barriers have tendency to melt over time becoming increasingly liquid.
LIQUID – are not fixed. Refers to the increasing ease of movement of people, things, information and
places in the contemporary world.
- Space and time are crucial elements of globalization.
- Changes are continuous and difficult to stop
FLOWS – movement of people, things, places, and information brought by growing “porosity” of global
limitations (Ritzer, 2015)
Questions
a. What has History proven through time? How would it affect the future?
15
b. How will the Metaphors of Globalization affect the decision making of an individual? The society? The
nation?
Reinforcement:
Instructions:
1. Read and study the attached articles/materials
a. Identify and explain the good and bad effects of globalization in the society, economy and in the
government political arena.
b. With the Covid-19 pandemic widespread throughout the world, what would be your position
and role as a student today and in the next 5 years?
2. Readings:
1) The Good, The Bad, And The Ugly Side Of Globalization
Panos Mourdoukoutas Former Contributor Markets
https://www.forbes.com/sites/panosmourdoukoutas/2011/09/10/the-good-the-bad-and-the-ugly-side-
of-globalization/#19043d1b483f
Image via Wikipedia
Globalization, the increasing integration and interdependence of domestic and overseas markets, has
three sides: the good side, the bad side, and the ugly side.
The good side of globalization is all about the efficiencies and opportunities open markets create.
Business can communicate efficiently and effectively with their partners, suppliers, and customers and
manage better their supplies, inventories, and distribution network. Local producers can sell their
products in distant markets with the same ease and speed as in their home country. Sony Corporation
(NYSE:SNE), for instance, can sell its TV and game consoles with the same ease in New York as in Tokyo.
Likewise, Intel (NASDAQ:INTC), Apple (NASDAQ:AAPL), and Cisco (NASDAQ:CSCO) can sell their high tech
gear with the same ease in Tokyo as in New York.
The good side of globalization is also about easy credit and rising leverage, as money flows easily across
local and national boundaries, and creditors fail to distinguish between good and bad borrowers,
boosting aggregate demand; setting the world economy into a virtuous cycle of income and
employment growth; and easy credit and leverage fuel financial bubbles that feed into a euphoria that
perpetuates the virtuous cycle.
16
The bad side of globalization is all about the new risks and uncertainties brought about by the high
degree of integration of domestic and local markets, intensification of competition, high degree of
imitation, price and profit swings, and business and product destruction. Corporations that previously
have been enjoying the benefits of globalization, now face unstable and unpredictable demand and
business opportunities and their products quickly become commodities, leaving them little or no pricing
power and under constant pressure by new competitors that undermine profitability.
The bad side of globalization is also about tight credit, deleverage, and declining money flows across
local and national boundaries, as creditors tighten credit to both good and bad borrowers, depressing
aggregate demand; setting the world economy into a vicious cycle of income and employment declines;
and euphoria is succeeded by pessimism and a burst of asset bubbles, perpetuating the downward spiral
of the world economy.
The ugly side of globalization is when nations and local communities try to escape the vicious cycle of
income and employment declines through simultaneous currency devaluations; and by raising trade
barriers that in essence put an end to globalization and a beginning to trade wars, as was the case in the
1930s.
In the last quarter of the century and for the most part of the first decade of this century, the world has
seen the good side of globalization. In the last four years, the world has seen the bad side of
globalization. We do hope and pray that the world won’t see the ugly side of it.
2) What is Globalization ? Meaning and it’s Importance
by Sonia Kukreja
https://www.managementstudyhq.com/globalization-positive-negative-impacts-of-globalization.html
The world is a global village. This is a phrase you must have had thrown around during business
discussions. Those who say this are most likely referring to how small the world has become due to
globalization which has removed boundaries to trade and communication between people in different
countries.
Globalization a process where people, companies, and governments from different nations interact and
integrate through international trade and investments has effects on the environment, culture, political
systems, economic development and on the human physical well-being in societies around the world.
Through the Internet, media, planes, international business and embassies we are now more connected
to each other than ever before.
Due to globalization someone in China can easily communicate and sell their products to an individual
the US. The rise of globalization is largely attributed to major changes in the telecommunications and
transportation industries. Globalization today allows for goods to be made and sold all over the world.
Companies to establish and compete for customers in many countries for example fast food chains are
opening outlets every day around the world. Also, companies can operate where production costs are
cheapest due to globalization. And it’s not only products globalization also makes it possible to get
services from around the word e.g. via the internet a US-based company can hire an accountant in India
to do its taxes.
17
Globalization is not only about trade there is also the cultural aspect to it. Through it, different cultures
meet and people get to know and understand the various ways of life and accept them. Now that you
know what globalization is let’s get into its impact
POSITIVE IMPACTS OF GLOBALIZATION
Gives Access to a Larger Market
Through globalization countries and companies have access to a bigger consumer base. Instead of only
selling products in their country a business can expand to other regions boosting sales and in the
process making more money.
Provides Cheaper Goods for Consumers
Because of globalization a lot of companies are moving to areas where their cost of production is low
they, in turn, offer cheaper products because they are not expensive to make hence lower prices for
consumers.
Globalization Wets Countries do what They do Best
For example, a country can buy cheap steel from another country instead of making its own steel. They
can then focus their efforts on making other things they are good at like computers and export them to
the countries they import cheap steal from.
Leads to Better Economies
With many multi nation’s heading to Africa to tap the consumer base in this part of the world more jobs
are being created helping people in these countries get better wages and improve their stands of living.
This investments by these multinationals or foreign countries also help strengthen the economies of
these countries with the foreign exchange they bring in. With an increased number of investors looking
for investments opportunities around the globe, country economies will benefit wherever they invest.
Through globalization economies of different countries are becoming more connected to one another
since they depend on each other for trade.
Promotes World Peace and Unity
Globalization brings governments together so that they can tackle common goals together. For example,
due to globalization world leaders have seen the impact of pollution and have resolved to tackle climate
change together. Also, it is unlikely that a country trading a lot of products and services with another will
attack it or want to go to war with it.
Innovation
The desire to make a profit has always been a spur to expanded trade, innovation, and the
communication of ideas. The great ideas from leaders spread more easily.
Better Quality and Variety

18
Competition from different countries drives firms to improve their products. Consumers have better
quality products and more variety as a result.
NEGATIVE IMPACTS OF GLOBALIZATION
Causes Environmental Damage
Globalization has led to increased production for businesses in order to meet global demand. Increased
production means more natural resources are used and this can be used up before they are regenerated
leading to a negative impact on the environment. Also in developing countries rules and regulations on
environmental protection are not as strict as in developed countries. This has seen some multinationals
leave their countries to set up in developing countries to take advantage of this lax regulation in the
process they manufacture products that are harmful to the environment.
Causes Fluctuation of Prices
Increased competition means that businesses with the best prices win. Due to competition prices are
always fluctuating, for example, a country like the US has to reduce its prices often to compete with
prices for the same product coming from China. China’s production costs are lower than the US hence
they can have ridiculously low prices. For the US companies reducing prices will have a negative effect
on their profits which in turn may led to actions like laying off workers.
Job Insecurity
Globalization provides a double-edged sword when it comes to jobs. It creates jobs for people in
developing countries who provide cheaper manufacturing jobs. For example, many companies are
setting up in India and China because wages and manufacturing jobs are cheaper there this means less
opportunities in developed worlds. In short, globalization takes jobs from one country and provides
them to another. This can be negative or positive depending on what part of the world you are in.
3) Will Covid-19 Have a Lasting Impact on Globalization?
HARVARD BUSINESS REVIEW: GLOBALIZATION
by Steven A. Altman
May 20, 2020
https://hbr.org/2020/05/will-covid-19-have-a-lasting-impact-on-globalization
Michael H/Getty Images
As leaders wrestle to guide their organizations through the Covid-19 pandemic, decisions running the
gamut from where to sell to how to manage supply chains hinge on expectations about the future of
globalization. The pandemic has prompted a new wave of globalization obituaries, but the latest data
19
and forecasts imply that leaders should plan for — and shape — a world where both globalization and
anti-globalization pressures remain enduring features of the business environment.
The crisis and the necessary public health response are causing the largest and fastest decline in
international flows in modern history. Current forecasts, while inevitably rough at this stage, call for a
13-32% decline in merchandise trade, a 30-40% reduction in foreign direct investment, and a 44-80%
drop in international airline passengers in 2020[i]. These numbers imply a major rollback of
globalization’s recent gains, but they do not signal a fundamental collapse of international market
integration.
The volume of global goods exports in 2020 could fall to a level last seen in the mid-to-late 2000s,
according to the latest WTO forecast. That would be a tremendously painful drop, especially in the
context of today’s larger and more complex world economy. But even the most pessimistic trade
forecasts do not imply a retreat to a world of disconnected national markets. Most of the run-up in
trade integration since the end of World War II should remain intact.
If plummeting trade flows are unlikely to undo globalization, what about the even steeper decline
predicted in foreign direct investment (FDI)? Like other capital flows, FDI tends to be volatile, so a
double-digit decline is not as shocking as one might presume. FDI flows, for example, fell 38% during the
global financial crisis. Nor do shrinking FDI flows necessarily augur a real retreat from corporate
globalization. The foreign business activity of multinational firms does not always closely track FDI
trends.
The collapse of international travel, in contrast, stands out against a much steadier growth trend, and its
damage is indisputable. Tourism contributes more to global output than automotive manufacturing, and
business travel facilitates international trade and investment. As of late April 2020, every country had
imposed restrictions on international travel, and 45% of countries had partially or completely closed
their borders to foreign visitors. Airlines were flying 90% fewer seats on international flights, as
compared to 62% on domestic flights. This unprecedented collapse does, however, follow an
international travel boom. Even if international airline passengers fall by two-thirds, there would still be
more people flying abroad than there were in 2003.
What Are Globalization’s Post-Coronavirus Prospects?
Current forecasts call for international flows to start growing again as the pandemic comes under
control. Thus, 2020 is likely to be a low point for many globalization metrics. But how deep will the
plunge really be? How fast can we expect global flows to rebound? And how might future flow patterns
look different from the past? None of these questions can be answered definitively yet, but leaders can
find clues about the future and actionable implications for their companies by focusing on five key
drivers of globalization’s trajectory:
1. Start with global growth patterns, where the key lesson is that international flows tend to swing
dramatically with macroeconomic cycles. In good times, they usually grow faster than GDP, and in bad
times they shrink faster, too, as people and firms hunker down behind borders.
20
This time around, robust growth can only be restored once the pandemic is clearly brought under
control. But remember that globalization can also be a powerful contributor to growth and health.
Countries with higher scores on the DHL Global Connectedness Index tend to enjoy faster economic
growth. And there is some evidence that more connected countries, even after controlling statistically
for levels of economic development, are less vulnerable to infectious disease outbreaks, in part because
of their stronger health care systems.
This means global business leaders can go beyond just watching disease trends and economic data —
they can help tilt the balance from negative to positive feedback loops by contributing to health, growth,
and international cooperation. Companies across industries have already swung into action to
manufacture urgently needed medical supplies. Large corporations can also soften the pandemic’s
economic impact, for example, by following Unilever’s lead in paying suppliers faster and extending
support to employees, contractors, and customers. And they can support open markets, as 3M did when
it resisted a proposed block on its mask exports from the U.S. to Canada and Latin America.
2. Supply chain policies have come back to the top of the agenda, and shifting approaches have the
potential to reshape trade and FDI flows. The key globalization-related debate here is redundancy versus
reshoring. Will companies and countries seek greater safety in international diversification, or will they
try fostering domestic self-sufficiency? Economic logic almost always favors the former approach,
coupled with national stockpiles for true essentials, but politics will sometimes force the latter.
Research by NYU Stern Professor Pankaj Ghemawat highlights several characteristics of politically
sensitive industries, such as production of necessities for health or national security, sales to
government rather than private buyers, and the size of an industry’s domestic workforce.
If redundancy becomes the norm and reshoring the exception, expect just a modest long-run drag on
global trade growth, coupled with greater diversification of countries’ trade partners.
3. Superpower frictions and fragility had already destabilized the international business environment
before Covid-19, and the pandemic adds new layers of complexity. It has led to a vast expansion of state
power, while introducing pandemic control as yet another arena for ideological competition. In this
environment, where companies come from and how well their home country governments get along
will matter even more than before to decisions about where to raise capital, which markets to prioritize,
and which supply bases to cultivate.
Many have predicted that Covid-19 will hasten a fracturing of the global economy along regional lines,
with competing blocs centered on China, the United States, and perhaps Europe. But the fact that
Europe, the world’s most connected region, has struggled to mount a unified response to the pandemic
is just one reason that a resurgence of regions should not be a foregone conclusion. Most international
flows already take place within regions, and short-distance trade has not grown faster than long-
distance trade over the past few years. Be ready for the possibility of a more regionalized world, but
don’t count on it.
4. Ongoing technological shifts such as the adoption of e-commerce, videoconferencing, and robots
have all been supercharged by Covid-19. Before the pandemic, many focused on how new technologies
could reduce global flows, e.g. via manufacturers substituting robots at home for low-cost labor abroad.
But many pandemic-induced shifts could also strengthen globalization if they are not curbed by
21
protectionist policies. Cross-border e-commerce expands export opportunities, especially for smaller
companies. Forced experimentation with remote work, where successful, could spur more services
offshoring. And even 3D-printing sometimes leads to more rather than less trade.
Business leaders can think productively about Covid-19, technology, and globalization, by taking a
structured approach to considering both internal and external implications. Internally, think how
individual functions can harness opportunities afforded by new technologies, while managing
organizational change with sensitivity to the heightened stress employees and teams are facing.
Externally, think about how technological trends could potentially change a company’s standing vis-à-vis
its competitors, customers, suppliers, and so on. For most companies, technological trends should lead
to more globalization in some areas and less in others, rather than a uniform shift in one direction or the
other.
5. Public opinion about globalization may take another negative turn due to Covid-19, scaling back the
surprisingly strong support for trade and immigration reported in recent polling. More international
travel does accelerate the spread of infectious diseases, and economic stress could boost calls for trade
protectionism. While robust public health strategies do not require ongoing barriers to globalization,
nationalist politicians will point to the pandemic and failures of international coordination in the
response to fortify opposition to globalization.
Customers and employees increasingly expect corporate leaders to take a stand on social issues, making
public opinion about globalization a potential management issue. The blending of anti-globalization and
anti-capitalist movements further complicates the role of business in the public debate about
globalization. And leaders of multinational corporations face the special challenge of public and
government engagement across national divides. Focusing on facts, becoming more sensitive to
inequality, and emphasizing real economic contributions can help to support a healthier globalization
debate.
In conclusion, Covid-19 looks like a “bend but won’t break crisis” for globalization. International flows
are plummeting, but globalization — and opposition to globalization — will continue to present business
opportunities and challenges. Careful attention to the drivers of globalization’s future can help
companies navigate through and even profit from globalization’s turbulence. A volatile world of partially
connected national economies expands possibilities for global strategy even as it complicates the
management of multinational firms. Now is the time for global corporations to show their value by
harnessing the best of the world’s capabilities to end the pandemic and bolster the recovery.
[i] FDI forecast pertains to 2020/21.
________________________________________
Steven A. Altman is a senior research scholar at the NYU Stern School of Business, executive director of
NYU Stern’s Center for the Globalization of Education & Management, and an adjunct assistant
professor in NYU Stern’s Department of Management and Organizations.
________________________________________
This article is about GLOBALIZATION

22
GLOBALIZATION AND RESILIENCE
PRACHI MISHRA, ANTONIO SPILIMBERGO
ANALYTICAL SERIES
https://www.imf.org/en/Publications/fandd/issues/2022/analytical-series/Globalization-Resilience-
Mishra-Spilimbergo
Focus on the global economy
This page features the latest OECD data, recommendations and policy advice on the economic impacts
of COVID-19 and the recovery, and includes a curated collection of earlier OECD economic content.
https://www.oecd.org/coronavirus/en/themes/global-economy
Lesson Number: Globalization Lesson 2 – Aspects of Globalization
Topic: Globalization as a process; Dynamics of Local and Global Culture; Globalization of Religion; and
Globalization and Regionalization
1. Contrast the different aspects of Globalization.
2. Differentiate the different aspects of Globalization.
3. Present the different aspects of Globalization.
Review questions:
1) Review questions
2) Write your answer in a yellow pad paper with your name, section and date written in the upper
left hand side and Review Questions Module 2 on the upper right hand side.
23
a. What is History and how does it apply to Globalization?
b. What is Globalization?
c. Differentiate the 3 metaphors of Globalization.
A. GLOBALIZATION THEORY – as a process to increase homogeneity or heterogeneity
 HOMOGENEITY – refer to the increasing sameness in the world as cultural inputs, economic
factors, and political orientations of societies expand to create common practices, same economies and
similar forms of government.
A. CULTURE: leads to cultural imperialism – a given culture influences other cultures. Ex.
Christianity / Americanization
 Catholicism – religion from Spain dominant in the Philippines because of colonization which is
influential in forcing people to adapt to their beliefs.
 Americanization-importing or using look alike American products
B. ECONOMIC: neoliberalism, capitalism & market economy
Neoliberalism - as involving "the priority of the price mechanism, free enterprise, the system of
competition, and a strong and impartial state". To be "neoliberal" meant advocating a modern economic
policy with state intervention.
Capitalism - an economic and political system in which a country's trade and industry are controlled by
private owners for profit, rather than by the state.(Dictionary.com)
Market economy is a system where the laws of supply and those of demand direct the production and
prices of goods and services. Supply includes natural resources, capital, and labor. Demand includes
purchases by consumers, businesses, and the government. (the Balance.com)
 POLITICAL: “Mcworld” – there is a corporate control over the political process (Benjamin Barber,
American Political Scientist)
 MEDIA IMPERIALISM: global flow of media perceived as imposed on developing countries by the
west. Ex. Movies and Internet social media.
 From old media to new media. Internet as an arena of alternative media.
 Becoming less diverse and competitive
 Hacktivists: Internet activist/hackers to promote a cause
 MCDONALDIZATION: a system of organization adapted in different corporations and societies.

As such western societies are dominated by the principles of fast food restaurants in terms of rational
24
systems, such as efficiency, calculability, predictability and control which is extended to other business,
sectors and geographical areas(Ritzer, 2008).
 GROBALIZATION is the process wherein nations, corporations etc., impose themselves on

geographic areas in order to gain profits (Ritzer 2007),
 like having a McDonald’s in a meeting.
 Grobalization allows the expansion of ideas to fit the norm of the nation in order to increase
their power, influence and profits.
 Focus on a group or organization in order to grow economically or in other aspects
 a multi-national corporation like Johnson & Johnson maker of soap & shampoos adapting their
products to the population
 HETEROGENEITY
 It is the creation of various cultural practice, new economies, and political groups because of the
interaction of elements from different societies in the world.
 Results to differences in cultures in the form of Cultural hybridization which is the blending of
elements from different cultures.
 Ex. Glocalization as opposed to cultural imperialism. Glocalization is localizing or adapting a

global trend ex. K-pop while cultural imperialism is extending or imposing one’s culture to the other ex.
all western ideas or culture is good.
 GLOCALIZATION is the interpretation of the global and the local, resulting in unique outcomes in
different geographic areas. It sees the taste or tract of mind of the individual as an important asset.
 Economic commodification of culture (diverse markets) and “glocal” markets are happening
around the world
 Jihad (opposite of Mcworld): political groups that are engaged in the intensification of
nationalism that leads to greater political heterogeneity throughout the world (Ritzer, 2008)
B. DYNAMICS OF LOCAL AND GLOBAL CULTURE
Dynamics - the forces or properties which stimulate growth, development, or change within a system or
process.
Perspectives on GLOBAL CULTURAL FLOWS
 Cultural DIFFERENTIATION – cultures are essentially different and are only superficially affected
by global flows and are prone to ‘catastrophic collision’ in economic & political conflicts. EX. Western vs
Sinic / Western vs Islamic that leads to bloody confrontations
 Cultural HYBRIDIZATION – emphasizes the integration of local and global cultures which
considers Globalization as a creative process that gives rise to hybrid entities.
25
 Cultural CONVERGENCE – stresses homogeneity introduced by globalization. Cultures are

deemed radically altered by strong flows. that leads to
a. Cultural CONVERGENCE vs Cultural IMPERIALISM – when one culture

imposes itself on and tends to destroy at least parts of another culture
and
b. Cultural IMPERIALISM vs DETERRITORIALIZATION – difficult to tie culture to

a specific geographic origin
Cultural Imperialism example: American Western culture to Asian Japanese & Philippine culture.
Deterritorialization example: Korean K-pop – coming out somewhat original in adapting some western
type of culture like in hair color, dress up and actions
C. GLOBALIZATION OF RELIGION
 Globalization providing revival and resurgence of religion through internet, transportation and
media technology
 Have revived the importance of religion/faith
 Making religions more self-conscious of themselves as being “world religion”
 Represents a challenged to globalization’s hybriding effects
 Religion becoming an “anti-rationalist”(Scholyer, 2005) being against liberalism, consumerism

and rationalism (scientism and secularism)
 A Non-territorial touchstone of identity and pride – promoted by its practitioners to reach the
level of globality. Ex. Islamic Ummah
 Globalization also brought religions to a circle of competition and conflicts
 Westernization and Americanization dominance to less developed countries make religion

related cultures and identities take defensive measures to protect themselves.
 ISIS stands that globalization is rival, and an alien force different from Muslim realities because
of negative impact of western moral life.
 Challenge of Globalization to religion leads to de-hybridizing effects that leads to religious

partitioning and clashes
D, GLOBALIZATION AND REGIONALIZATION
GLOBALIZATION – purpose …
 For the increased flows of goods, services, capita, people and information across boarders
(Jacoby, 2010)
REGIONALIZATION – pushed by economic motivation

26
 REGION – a group of countries in the same geographically specified area (Mansfield, 1999) with
the process of social and economic interaction (Hurrel, 2007).
 REGIONALISM – the formal process of intergovernmental collaboration between two or more

states (Ravenhill, 2008)
 Prefer regional partners over the rest
 Respond to the states’ attempt to reduce the perceived negative effects of globalization
 A sort of counter-globalization like a “defensive reaction”
 Ex. ASEAN (1967), EU (1993), MERCOSUR (1991), NAFTA (1994)
 BUT LATER LED TO DEVELOPMENT OF “INTER-REGIONALISM”
 Became an indirect encouragement to Globalization since it is part of it and builds on it. Driving
force is to be global.
 Enhanced bargaining power against Trans National Corporations (TNC’s) and protection from
global competition
 TNC’s are non-state actors. They are influential towards regionalism which when at a
disadvantage will ask their national governments to sign similar trade agreements in order to end their
disadvantage commercial situation
Questions
1. What is the difference between Homogeneity vs Heterogeneity?
2. How will the Grocalization and Glocalization affects the decision making of an individual? The society?
The nation?
3. Does Globalization hinders or push the spread of religion?
4. How do regionalization stops the growth of globalization?
5. Discuss how the Philippines is affected by the four (4) aspects of Globalization.
Reinforcement:
Instructions:
a. Are societies in the world becoming more similar (homogenous) or more different
(heterogenous)?
27
b. Which of the aforementioned views on the history of globalization you find most appealing?
Why?
2. Readings:
Peter Sutherland, known as the 'father of globalisation', dies
https://www.weforum.org/agenda/2018/01/peter-sutherland-father-of-globalisation-dies/
Peter Sutherland, the former Irish Attorney General, European Commissioner, and "father of
globalisation" has died, age 71.
Sutherland died in Dublin on Sunday morning, having been ill for some time.
Born in Dublin in 1946, he became Ireland’s youngest Attorney General at the age of 35. He went on to
become the youngest European Union Commissioner, where he helped lay the groundwork for the
European single market.
He was also a former Director-General of the World Trade Organisation, travelling the world to hammer
out multilateral trade agreements, a role that earned him the moniker "father of globalisation".
He was active in the private sector, as a long-serving chairman of oil giant BP as well as Goldman Sachs
International. He was also a member of the Foundation Board at the World Economic Forum.
For the past 10 years, Sutherland had served as United Nations Special Representative for International
Migration, highlighting the urgent need for action to help the world’s most vulnerable people.
Tributes
Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum said: "With the
passing of Peter the World Economic Forum has lost a great friend and a personality who was absolutely
essential for building the Forum into a truly international organization with global impact."
The UN Secretary-General, António Guterres, said he was "deeply saddened" by his passing, adding that
he was "fearless and forceful in his advocacy for some of the world's most vulnerable people".
European Commission President, Jean-Claude Juncker, said he was a "giant of Irish, European, and
international public life."
The WTO said that they "mourn the passing of Peter Sutherland, who was instrumental in building the
multilateral trading system we have today."
28
Yale Global Online
The conflicts of the modern world are deeply rooted in centuries of history. Historians and social
scientists could do more to develop research across disciplinary, regional and national boundaries,
argues Peter Perdue, professor of history at Yale University. “Everyone knows that we live in a globalized
world, but the history profession stands out among academic disciplines for defining its topics of
research and ‘slots’ for new positions almost exclusively according to national boundaries.” Some
historians resist the boundaries and Perdue describes the Asia Inside Out project, a three-volume series
in production at Harvard University Press that presents original research following inter-Asian
connections over long stretches of time. The editors, including Perdue, review scholarship from
anthropology, history, geography, and literary studies covering the region from Japan to Yemen over the
past 500 years. Perdue concludes, “To contribute to a more peaceful world, historians must insist on the
persistence of links beyond the nation-state.” – YaleGlobal
History Without Borders
Asia Inside Out Project resists history’s attraction to national borders by studying shifts over five
centuries
Peter C. Perdue
Tuesday, February 24, 2015
https://yaleglobal.yale.edu/content/history-without-borders
Forgotten connections: Chinese permitted the Portuguese a leasehold in Macau in 1557 which served as
a conduit for Sino-Japanese trade, top; demonstrators in Beijing protest Japanese occupation of
Senkakus
NEW HAVEN: When Chinese Communist Party Secretary Xi Jinping met Indian Prime Minister Narendra
Modi last year, he proposed a joint project, a “Southern Silk Road” linking China with India by land
through Yunnan and Myanmar and by sea across the Indian Ocean. Many media commentators referred
to ancient Sino-India connections, from the export of Buddhism to the ancient Silk Road, to promote
cooperation on contemporary issues such as border disputes, investment and global warming. A
historical study of the links fostered by the ancient routes cannot be expected to have immediate
political effects, of course, but in an age of narrow-minded xenophobic protests any attention to a
broader view is welcome.
Certainly historians have a lot to offer even to the most shortsighted politicians about the deeper roots
of their current concerns. Historians and social scientists, however, have not done enough to develop
research across disciplinary, regional and national boundaries. As a result, political leaders and the
global public have trouble connecting historical processes with their daily lives. My discipline, history,
finds itself today in a puzzling quandary. Everyone knows that we live in a globalized world, but the
history profession stands out among academic disciplines for defining its topics of research and “slots”
29
for new positions almost exclusively according to national boundaries. Social scientists have long favored
comparative and theoretical definitions over national ones, and even literature and foreign language
departments no longer confine their canon to a single nation. East Asian literature departments include
“Sinophone” writers from as far away as Malaya, Russia and the Americas. But historians cling
tenaciously to national boundaries, even as they recognize the need to reach farther.
Historians still need, however, research based on mastery of primary sources in local languages, which is
the hallmark of historical study. No universal theory will eliminate the crucial value of grounded
ethnographic and archival research. How can scholars devoted to the local and national reach beyond
the current limits of the discipline while maintaining the foundation of their craft.
The editors and authors of the Asia Inside Out project, a three-volume series now in production at
Harvard University Press, present original research following inter-Asian connections over long stretches
of time. Based on a planning workshop at Yale, followed by conferences in Hong Kong and Doha, Qatar,
the volumes bring together scholars from anthropology, history, geography, and literary studies
covering the region from Japan to Yemen over the past 500 years.
The project views Asia not as a region with clearly defined regional and national boundaries, but as
“spaces of flows,” arenas in which multiple processes, peoples, commodities and cultural formations
interacted dynamically over long periods of time. States, empires and nations shaped the direction of
these flows, but did not contain them. The globe has been a connected unit since the linking of the
north and south American continents to Asia and Europe in the 16th century. Now researchers need
new historical and social scientific methods to grasp this totality.
In the first volume, each author selected a single year that represented a significant turning point in the
region of his or her specialty. In the second volume, each author selected a single place or region.
Volume three focuses on transnational processes and the movement of peoples. The editors anticipate
that each volume will create a new lens for creative study of the fluid interactions that have shaped the
contemporary world.
In the first volume, Heidi Walcher argues that the year 1501, which at first seems to be the conventional
date for the establishment of the Safavid dynasty in Iran, looks different when viewed as part of wider
Asian histories, including those of Central Asian and Chinese empires, Shiism, and European states.
Victor Lieberman singles out the mid-16th century as a time of critical state transformation in Burma,
Russia, Japan and India. Peter C. Perdue likewise argues that 1557, the year the Ming granted the
Portuguese a leasehold in Macau, also coincided with the expansion of trading relationships on the
northwest frontier with the Mongols and the penetration of the Chinese diaspora into Southeast Asia.
Silver flows from Latin America powered all these trade routes. Nancy Um, Charles Wheeler and Kerry
Ward examine three maritime polities from the 17th through 18th centuries: Yemen’s role in global
coffee trade, Vietnam’s religious and economic linkages to Qing China, and Indian Ocean trade viewed
from Pondicherry.
The volumes follow the story up through the 19th and early 20th centuries, as Robert Hellyer analyzes
the promotion of tea exports from Meiji Japan, Anand Yang examines the views of an Indian soldier sent
to repress the Boxer Rebellion in Beijing in 1900, and Eric Tagliacozzo surveys the apparently secure but
actually fragile structure of Dutch colonialism in 1910. Finally, contemporary ethnographic studies of
Bangalore in 1956 by Andrew Willford and of Filipino workers in Dubai in 2008 by Naomi Hosoda show
30
that current flows of people and the friction of ethnic conflict follow upon lengthy historical
developments.
The second volume includes topics such as personal connections and comparisons between Korea, China
and Japan, the settlement of the Canton delta, trade in the Gulf of Tongking, intelligence agents in
Kashmir and the Himalayas, commerce in Burma, the transformations of Chittagong, British surveillance
of Iraq’s deserts, family relations in Southern Arabia, and Chinese speakers in Soviet Central Asia. Each
of these places lies on a boundary between multiple flows of people, goods and culture. The
convergence of state power, capital investment and religious and kinship networks in these places
defines specific nodes in global systems. As in the first volume, the studies cover a long period and wide
geographical area, but what unifies them is a common interest in tracing wide-ranging networks, based
on intensive local ethnographic research and primary sources, over large scales of space and time.
Modern states have not dissolved in the beneficent bath of neoliberal consumerism, nor have ethnic
divisions withered away into homogeneous individualism. Age-old legacies of political and economic
domination and community formation still shape our modern world. Large theories and parochial
histories fail to grasp the individual and local characteristics which weave the threads of this world.
Despite Modi and Xi Jinping’s optimistic declarations of inter-Asia cooperation, China and India are now
fighting for control of the border region of Arunachal Pradesh. China’s claims to islands in the South
China Sea have generated conflict with Vietnam, the Philippines and others. China, Japan and Korea
each make irreconcilable claims to small uninhabited islands with no usable resources. What causes
these violent conflicts? Ultimately, it is misguided history. Truncated, self-serving nationalist histories,
sponsored by xenophobic states seeking popular legitimacy, have erased all the long-lasting
interconnections of the past. To contribute to a more peaceful world, historians must insist on the
persistence of links beyond the nation-state.
Although we know that the world is connected, what kind of network is it? Is it a nested hierarchy, a flat
plain, a tangled ball of string or a beautiful brocade? Only specific historical and ethnographic studies,
juxtaposed under coherent conceptual definitions, will reveal the true contours of the historical and
contemporary world. National history no longer suffices, but transnational, global, and world histories
need to extend their explorations. The Asia Inside Out project is one step in this direction.
Bibliography
Tagliacozzo, Eric, Helen F. Siu, and Peter C. Perdue, eds. Asia Inside Out: Changing Times. 3 vols.
Cambridge, MA: Harvard University Press, 2015. The editors gratefully acknowledge the support of the
Yale Council on East Studies and the Hong Kong Institute for the Humanities and Social Sciences for this
project.
Peter C. Perdue is a professor of history at Yale University.
Read an excerpt from Asia Inside Out: Changing Times.
Copyright © 2015 YaleGlobal Online and the MacMillan Center at Yale

31
History of globalization
From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/History_of_globalization
Extent of the Silk Road and Spice trade routes blocked by the Ottoman Empire in 1453 spurring
exploration
"Global history" redirects here. It is not to be confused with World history.
The historical origins of globalization are the subject of ongoing debate. Though many scholars situate
the origins of globalization in the modern era, others regard it as a phenomenon with a long history.
Some authors have argued that stretching the beginning of globalization far back in time renders the
concept wholly inoperative and useless for political analysis.[1]
Contents
• 1Archaic globalization
• 2Proto-globalization
• 3Modern globalization
• 4Aftermath of World War I: collapse of globalization
• 5Post-World War II: globalization resurgent
• 6See also
• 7References
• 8External links
Archaic globalization[edit]
Main article: Archaic globalization
Perhaps the extreme proponent of a deep historical origin for globalization was Andre Gunder Frank, an
economist associated with dependency theory. Frank argued that a form of globalization has been in
existence since the rise of trade links between Sumer and the Indus Valley Civilization in the third
millennium BC.[2] Critics of this idea contend that it rests upon an over-broad definition of globalization.
Thomas L. Friedman divides the history of globalization into three periods: Globalization 1.0 (1491–
1800), Globalization 2.0 (1800–2000) and Globalization 3.0 (2000–present). He states that Globalization
1.0 involved the globalization of countries, Globalization 2.0 involved the globalization of companies and
Globalization 3.0 involves the globalization of individuals.[3]
32
Even as early as the Prehistoric period, the roots of modern globalization could be found. Territorial
expansion by our ancestors to all five continents was a critical component in establishing globalization.
The development of agriculture furthered globalization by converting the vast majority of the world's
population into a settled lifestyle. However, globalization failed to accelerate due to lack of long-
distance interaction and technology.[4] The contemporary process of globalization likely occurred
around the middle of the 19th century as increased capital and labor mobility coupled with decreased
transport costs led to a smaller world.[5]
The 13th century world-system
An early form of globalized economics and culture, known as archaic globalization, existed during the
Hellenistic Age, when commercialized urban centers were focused around the axis of Greek culture over
a wide range that stretched from India to Spain, with such cities as Alexandria, Athens, and Antioch at its
center. Trade was widespread during that period, and it is the first time the idea of a cosmopolitan
culture (from Greek "Cosmopolis", meaning "world city") emerged. Others have perceived an early form
of globalization in the trade links between the Roman Empire, the Parthian Empire, and the Han
Dynasty. The increasing articulation of commercial links between these powers inspired the
development of the Silk Road, which started in western China, reached the boundaries of the Parthian
empire, and continued onwards towards Rome.[6]
The Islamic Golden Age was also an important early stage of globalization, when Jewish and Muslim
traders and explorers established a sustained economy across the Old World resulting in a globalization
of crops, trade, knowledge and technology. Globally significant crops such as sugar and cotton became
widely cultivated across the Muslim world in this period, while the necessity of learning Arabic and
completing the Hajj created a cosmopolitan culture.[7]
Portuguese carrack in Nagasaki, 17th-century Japanese Nanban art
Native New World crops exchanged globally: Maize, Tomato, Potato, Vanilla, Rubber, Cacao, Tobacco
The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East
and China, greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as
Marco Polo to journey successfully (and profitably) from one end of Eurasia to the other. The Pax
Mongolica of the thirteenth century had several other notable globalizing effects. It witnessed the
creation of the first international postal service, as well as the rapid transmission of epidemic diseases
such as bubonic plague across the newly unified regions of Central Asia.[8] These pre-modern phases of
global or hemispheric exchange are sometimes known as archaic globalization. Up to the sixteenth
century, however, even the largest systems of international exchange were limited to the Old World.
Proto-globalization[edit]
Main article: Proto-globalization

33
The next phase is known as proto-globalization. It was characterized by the rise of maritime European
empires, in the 16th and 17th centuries, first the Portuguese and Spanish Empires, and later the Dutch
and British Empires. In the 17th century, globalization became also a private business phenomenon
when chartered companies like British East India Company (founded in 1600), often described as the
first multinational corporation, as well as the Dutch East India Company (founded in 1602) were
established.
The Age of Discovery brought a broad change in globalization, being the first period in which Eurasia and
Africa engaged in substantial cultural, material and biologic exchange with the New World. It began in
the late 15th century, when the two Kingdoms of the Iberian Peninsula – Portugal and Castile – sent the
first exploratory voyages around the Cape of Good Hope and to the Americas, "discovered" in 1492 by
Christopher Columbus. Shortly before the turn of the 16th century, Portuguese started establishing
trading posts (factories) from Africa to Asia and Brazil, to deal with the trade of local products like slaves,
gold, spices and timber, introducing an international business center under a royal monopoly, the House
of India.[9]
Global integration continued with the European colonization of the Americas initiating the Columbian
Exchange,[10] the enormous widespread exchange of plants, animals, foods, human populations
(including slaves), communicable diseases, and culture between the Eastern and Western hemispheres.
It was one of the most significant global events concerning ecology, agriculture, and culture in history.
New crops that had come from the Americas via the European seafarers in the 16th century significantly
contributed to the world's population growth.[11]
Modern globalization[edit]
Animated map showing Colonial empires evolution from 1492 to present
19th century Great Britain becomes the first global economic superpower, because of superior
manufacturing technology and improved global communications such as steamships and railroads.
The 19th century witnessed the advent of globalization approaching its modern form. Industrialization
allowed cheap production of household items using economies of scale,[citation needed] while rapid
population growth created sustained demand for commodities. Globalization in this period was
decisively shaped by nineteenth-century imperialism. After the First and Second Opium Wars, which
opened up China to foreign trade, and the completion of the British conquest of India, the vast
populations of these regions became ready consumers of European exports. It was in this period that
areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. Meanwhile,
the conquest of parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural
resources such as rubber, diamonds and coal and helped fuel trade and investment between the
European imperial powers, their colonies, and the United States.[12]
The inhabitant of London could order by telephone, sipping his morning tea, the various products of the
whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of
racial and cultural rivalries were little more than the amusements of his daily newspaper. What an
34
extraordinary episode in the economic progress of man was that age which came to an end in August
1914.
Between the globalization in the 19th and in the 20th there are significant differences. There are two
main points on which the differences can be seen. One point is the global trade in this centuries as well
as the capital, investment and the economy.
Global Trade
The global trade in the 20th century shows a higher share of trade in merchant production, a growth of
the trade in services and the rise of production and trade by multinational firms. The production of
merchant goods in the 20th century largely decreased from the levels seen in the 19th century.
However, the amount of merchant goods that were produced for the merchandise trade grew. The
trade in services also grew more important in the 20th compared to the 19th century. The last point that
distinguishes the global trade in the 19th century compared to the global trade in the 20th century, is
the extent of multinational cooperation. In the 20th century, you can see a "quantum leap" in
multinational cooperation compared to the 19th century. Before the 20th century began, there were
just Portfolio investment, but no trade-related or production-relation Direct investment.
Commercial integration has improved since last century, barriers that inhibit trade are lower and
transport costs have decreased. Multinational trade contracts and agreements have been signed, like
the General Agreement on Tariffs and Trade (GATT), North American Free Trade Agreement (NAFTA),
the European Union (EU) has been hugely involved in eliminating tariffs between member states, and
the World Trade Organization. From 1890 and up to World War I instability in trade was a problem, but
in the post war period there has mostly been economic expansion which leads to stability. Nations have
to take care of their own products; they have to make sure that foreign goods do not suffocate their
domestic products causing unemployment and maybe social instability. Technological changes have
caused lower transporting costs; it takes just a few hours to transport goods between continents to-day,
instead of weeks or even months in the nineteenth century.
By consideration financial crisis one key difference is the monetary regime. In the 19th century it
occurred under the fixed exchange rates of the gold standard. But in the 20th century it took place in a
regime of managed flexibility. Furthermore, in the 19th century countries had developed effective
lenders of last resort, but the same was not true at the periphery and countries there suffered the
consequences. A century later there was a domestic safety net in most emerging countries so that
banking panics were changed into situations where the debts of an insolvent banking system were taken
over by the government. The recovery from banking crisis is another key difference. It has tended to
begin earlier in the recent period than in the typical crisis episode a hundred years ago. In the 19th
century there were no international rescue packages available to emerging economies. But in the recent
period such rescues were a typical component of the financial landscape all over the world.
The flows information were an important downside in 19th century. Prior to the Transatlantic cable and
the Radiotelephone, it used to take very long for information to go from one place to another. So this
means that it was very difficult to analyze the information. For instance, it was not so easy to distinguish
good and bad credits. Therefore, the information asymmetry played a very important role in
international investments. The railway bonds serve as a great example. There was also many contracting
problems. It was very difficult for companies working overseas to manage their operations in other parts
35
of the world, so this was clearly a big barrier to investment. Several macroeconomic factors such as
exchange risks and uncertain monetary policies were a big barrier for international investments as well.
The accounting standards in the U.S. were relatively underdeveloped in the 19th century. The British
investors played a very important role in transferring their accounting practices to the new emerging
markets.[13]
Aftermath of World War I: collapse of globalization[edit]
The first phase of "modern globalization" began to break down at the beginning of the 20th century,
with World War I. The European-dominated network were increasingly confronted with images and
stories of ‘others’, thus, then took it upon themselves to take the role of world's guardians of universal
law and morality. Racist and unequal practices became also part of their practices in search of materials
and resources that from other regions of the world. The increase of world trade before beginning in
1850 right before World War I broke out in 1914 were incentives for bases of direct colonial rule in the
global South. Since other European currencies were becoming quite largely circulated, the need to own
resource bases became imperative.[14] The novelist VM Yeates criticised the financial forces of
globalization as a factor in creating World War I.[15] Financial forces as a factor for creating World War 1
seem to be partly responsible. An example of this would be France's colonial rule over most of Africa
during the 20th century. Before World War I broke out, there was no specific aims for the wars in Africa
from the French, which left Africans in a “lost” state. Military potential of Africa was first to be
emphasized unlike its economic potential...at least at first. France's interest in the military potential of
French Africa took a while to be accepted. Africans in the French army were treated with feelings of
inferiority from the French. As for the economic incentive for colonial rule came in 1917 when France's
was faced with a crisis of food supply. This coming after the outbreak of the war which had left France
without the ability to support itself agriculturally since France had a shortage of fertilizers and
machinery in 1917.[16]
Post-World War II: globalization resurgent[edit]
Globalization, since World War II, is partly the result of planning by politicians to break down borders
hampering trade. Their work led to the Bretton Woods conference, an agreement by the world's leading
politicians to lay down the framework for international commerce and finance, and the founding of
several international institutions intended to oversee the processes of globalization. Globalization was
also driven by the global expansion of multinational corporations based in the United States and Europe,
and worldwide exchange of new developments in science, technology and products, with most
significant inventions of this time having their origins in the Western world according to Encyclopædia
Britannica.[17] Worldwide export of western culture went through the new mass media: film, radio and
television and recorded music. Development and growth of international transport and
telecommunication played a decisive role in modern globalization.
These institutions include the International Bank for Reconstruction and Development (the World Bank),
and the International Monetary Fund. Globalization has been facilitated by advances in technology
which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of
the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove
restrictions on free trade.
36
Since World War II, barriers to international trade have been considerably lowered through
international agreements – GATT. Particular initiatives carried out as a result of GATT and the World
Trade Organization (WTO), for which GATT is the foundation, have included:
• Promotion of free trade:
o Elimination of tariffs; creation of free trade zones with small or no tariffs
o Reduced transportation costs, especially resulting from development of containerization for

ocean shipping.
o Reduction or elimination of capital controls
o Reduction, elimination, or harmonization of subsidies for local businesses
o Creation of subsidies for global corporations
o Harmonization of intellectual property laws across the majority of states, with more restrictions
o Supranational recognition of intellectual property restrictions (e.g. patents granted by China

would be recognized in the United States)
Cultural globalization, driven by communication technology and the worldwide marketing of Western
cultural industries, was understood at first as a process of homogenization, as the global domination of
American culture at the expense of traditional diversity. However, a contrasting trend soon became
evident in the emergence of movements protesting against globalization and giving new momentum to
the defense of local uniqueness, individuality, and identity.[18]
The Uruguay Round (1986 to 1994)[19] led to a treaty to create the WTO to mediate trade disputes and
set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including
sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have
also been signed in pursuit of the goal of reducing tariffs and barriers to trade.
World exports rose from 8.5% in 1970, to 16.2% of total gross world product in 2001.[20]
In the 1990s, the growth of low cost communication networks allowed work done using a computer to
be moved to low wage locations for many job types. This included accounting, software development,
and engineering design.
In late 2000s, much of the industrialized world entered into a deep recession.[21] Some analysts say the
world is going through a period of deglobalization after years of increasing economic integration.[22]
[23] China has recently[when?] become the world's largest exporter surpassing Germany.[24]
World Economic Forum – A brief history of globalization
https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-globalization/
37
17 Jan 2019
1. Peter VanhamHead of Communications, Chairman’s Office, World Economic Forum
This article is part of the World Economic Forum Annual Meeting
When Chinese e-commerce giant Alibaba in 2018 announced it had chosen the ancient city of Xi’an as
the site for its new regional headquarters, the symbolic value wasn’t lost on the company: it had
brought globalization to its ancient birthplace, the start of the old Silk Road. It named its new offices
aptly: “Silk Road Headquarters”. The city where globalization had started more than 2,000 years ago
would also have a stake in globalization’s future.
Alibaba shouldn’t be alone in looking back. As we are entering a new, digital-driven era of globalization
– we call it “Globalization 4.0” – it is worthwhile that we do the same. When did globalization start?
What were its major phases? And where is it headed tomorrow?
This piece also caps our series on globalization. The series was written ahead of the 2019 Annual
Meeting of the World Economic Forum in Davos, which focuses on “Globalization 4.0”. In previous
pieces, we looked at some winners and losers of economic globalization, the environmental aspect of
globalization, cultural globalization and digital globalization. Now we look back at its history. So, when
did international trade start and how did it lead to globalization?
Ancient silk roads
Image: Flickr
Silk roads (1st century BC-5th century AD, and 13th-14th centuries AD)
People have been trading goods for almost as long as they’ve been around. But as of the 1st century BC,
a remarkable phenomenon occurred. For the first time in history, luxury products from China started to
appear on the other edge of the Eurasian continent – in Rome. They got there after being hauled for
thousands of miles along the Silk Road. Trade had stopped being a local or regional affair and started to
become global.
That is not to say globalization had started in earnest. Silk was mostly a luxury good, and so were the
spices that were added to the intercontinental trade between Asia and Europe. As a percentage of the
total economy, the value of these exports was tiny, and many middlemen were involved to get the
goods to their destination. But global trade links were established, and for those involved, it was a
goldmine. From purchase price to final sales price, the multiple went in the dozens.The Silk Road could
prosper in part because two great empires dominated much of the route. If trade was interrupted, it
was most often because of blockades by local enemies of Rome or China. If the Silk Road eventually
closed, as it did after several centuries, the fall of the empires had everything to do with it. And when it
reopened in Marco Polo’s late medieval time, it was because the rise of a new hegemonic empire: the
Mongols. It is a pattern we’ll see throughout the history of trade: it thrives when nations protect it, it
falls when they don’t.
38
Spice routes (7th-15th centuries)
The next chapter in trade happened thanks to Islamic merchants. As the new religion spread in all
directions from its Arabian heartland in the 7th century, so did trade. The founder of Islam, the prophet
Mohammed, was famously a merchant, as was his wife Khadija. Trade was thus in the DNA of the new
religion and its followers, and that showed. By the early 9th century, Muslim traders already dominated
Mediterranean and Indian Ocean trade; afterwards, they could be found as far east as Indonesia, which
over time became a Muslim-majority country, and as far west as Moorish Spain.
The main focus of Islamic trade in those Middle Ages were spices. Unlike silk, spices were traded mainly
by sea since ancient times. But by the medieval era they had become the true focus of international
trade. Chief among them were the cloves, nutmeg and mace from the fabled Spice islands – the Maluku
islands in Indonesia. They were extremely expensive and in high demand, also in Europe. But as with
silk, they remained a luxury product, and trade remained relatively low volume. Globalization still didn’t
take off, but the original Belt (sea route) and Road (Silk Road) of trade between East and West did now
exist.
Age of Discovery (15th-18th centuries)
Truly global trade kicked off in the Age of Discovery. It was in this era, from the end of the 15th century
onwards, that European explorers connected East and West – and accidentally discovered the Americas.
Aided by the discoveries of the so-called “Scientific Revolution” in the fields of astronomy, mechanics,
physics and shipping, the Portuguese, Spanish and later the Dutch and the English first “discovered”,
then subjugated, and finally integrated new lands in their economies.
The Age of Discovery rocked the world. The most (in)famous “discovery” is that of America by
Columbus, which all but ended pre-Colombian civilizations. But the most consequential exploration was
the circumnavigation by Magellan: it opened the door to the Spice islands, cutting out Arab and Italian
middlemen. While trade once again remained small compared to total GDP, it certainly altered people’s
lives. Potatoes, tomatoes, coffee and chocolate were introduced in Europe, and the price of spices fell
steeply.
Yet economists today still don’t truly regard this era as one of true globalization. Trade certainly started
to become global, and it had even been the main reason for starting the Age of Discovery. But the
resulting global economy was still very much siloed and lopsided. The European empires set up global
supply chains, but mostly with those colonies they owned. Moreover, their colonial model was chiefly
one of exploitation, including the shameful legacy of the slave trade. The empires thus created both a
mercantilist and a colonial economy, but not a truly globalized one.
The Industrial Revolution in Britain propelled the first wave of globalization
Image: Wikipedia
First wave of globalization (19th century-1914)
This started to change with the first wave of globalization, which roughly occurred over the century
ending in 1914. By the end of the 18th century, Great Britain had started to dominate the world both
39
geographically, through the establishment of the British Empire, and technologically, with innovations
like the steam engine, the industrial weaving machine and more. It was the era of the First Industrial
Revolution.
The “British” Industrial Revolution made for a fantastic twin engine of global trade. On the one hand,
steamships and trains could transport goods over thousands of miles, both within countries and across
countries. On the other hand, its industrialization allowed Britain to make products that were in demand
all over the world, like iron, textiles and manufactured goods. “With its advanced industrial
technologies,” the BBC recently wrote, looking back to the era, “Britain was able to attack a huge and
rapidly expanding international market.”
The resulting globalization was obvious in the numbers. For about a century, trade grew on average 3%
per year. That growth rate propelled exports from a share of 6% of global GDP in the early 19th century,
to 14% on the eve of World War I. As John Maynard Keynes, the economist, observed: “The inhabitant
of London could order by telephone, sipping his morning tea in bed, the various products of the whole
Earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep.”
And, Keynes also noted, a similar situation was also true in the world of investing. Those with the means
in New York, Paris, London or Berlin could also invest in internationally active joint stock companies. One
of those, the French Compagnie de Suez, constructed the Suez Canal, connecting the Mediterranean
with the Indian Ocean and opened yet another artery of world trade. Others built railways in India, or
managed mines in African colonies. Foreign direct investment, too, was globalizing.
While Britain was the country that benefited most from this globalization, as it had the most capital and
technology, others did too, by exporting other goods. The invention of the refrigerated cargo ship or
“reefer ship” in the 1870s, for example, allowed for countries like Argentina and Uruguay, to enter their
golden age. They started to mass export meat, from cattle grown on their vast lands. Other countries,
too, started to specialize their production in those fields in which they were most competitive.
But the first wave of globalization and industrialization also coincided with darker events, too. By the
end of the 19th century, the Khan Academy notes, “most [globalizing and industrialized] European
nations grabbed for a piece of Africa, and by 1900 the only independent country left on the continent
was Ethiopia”. In a similarly negative vein, large countries like India, China, Mexico or Japan, which were
previously powers to reckon with, were not either not able or not allowed to adapt to the industrial and
global trends. Either the Western powers put restraints on their independent development, or they
were otherwise outcompeted because of their lack of access to capital or technology. Finally, many
workers in the industrialized nations also did not benefit from globalization, their work commoditized by
industrial machinery, or their output undercut by foreign imports.
The world wars
It was a situation that was bound to end in a major crisis, and it did. In 1914, the outbreak of World War
I brought an end to just about everything the burgeoning high society of the West had gotten so used to,
including globalization. The ravage was complete. Millions of soldiers died in battle, millions of civilians
died as collateral damage, war replaced trade, destruction replaced construction, and countries closed
their borders yet again.
40
In the years between the world wars, the financial markets, which were still connected in a global web,
caused a further breakdown of the global economy and its links. The Great Depression in the US led to
the end of the boom in South America, and a run on the banks in many other parts of the world.
Another world war followed in 1939-1945. By the end of World War II, trade as a percentage of world
GDP had fallen to 5% – a level not seen in more than a hundred years.
Second and third wave of globalization
The story of globalization, however, was not over. The end of the World War II marked a new beginning
for the global economy. Under the leadership of a new hegemon, the United States of America, and
aided by the technologies of the Second Industrial Revolution, like the car and the plane, global trade
started to rise once again. At first, this happened in two separate tracks, as the Iron Curtain divided the
world into two spheres of influence. But as of 1989, when the Iron Curtain fell, globalization became a
truly global phenomenon.
In the early decades after World War II, institutions like the European Union, and other free trade
vehicles championed by the US were responsible for much of the increase in international trade. In the
Soviet Union, there was a similar increase in trade, albeit through centralized planning rather than the
free market. The effect was profound. Worldwide, trade once again rose to 1914 levels: in 1989, export
once again counted for 14% of global GDP. It was paired with a steep rise in middle-class incomes in the
West.
Then, when the wall dividing East and West fell in Germany, and the Soviet Union collapsed,
globalization became an all-conquering force. The newly created World Trade Organization (WTO)
encouraged nations all over the world to enter into free-trade agreements, and most of them did,
including many newly independent ones. In 2001, even China, which for the better part of the 20th
century had been a secluded, agrarian economy, became a member of the WTO, and started to
manufacture for the world. In this “new” world, the US set the tone and led the way, but many others
benefited in their slipstream.
At the same time, a new technology from the Third Industrial Revolution, the internet, connected
people all over the world in an even more direct way. The orders Keynes could place by phone in 1914
could now be placed over the internet. Instead of having them delivered in a few weeks, they would
arrive at one’s doorstep in a few days. What was more, the internet also allowed for a further global
integration of value chains. You could do R&D in one country, sourcing in others, production in yet
another, and distribution all over the world.
The result has been a globalization on steroids. In the 2000s, global exports reached a milestone, as they
rose to about a quarter of global GDP. Trade, the sum of imports and exports, consequentially grew to
about half of world GDP. In some countries, like Singapore, Belgium, or others, trade is worth much
more than 100% of GDP. A majority of global population has benefited from this: more people than ever
before belong to the global middle class, and hundred of millions achieved that status by participating in
the global economy.
41
Globalization 4.0
That brings us to today, when a new wave of globalization is once again upon us. In a world increasingly
dominated by two global powers, the US and China, the new frontier of globalization is the cyber world.
The digital economy, in its infancy during the third wave of globalization, is now becoming a force to
reckon with through e-commerce, digital services, 3D printing. It is further enabled by artificial
intelligence, but threatened by cross-border hacking and cyberattacks.
At the same time, a negative globalization is expanding too, through the global effect of climate change.
Pollution in one part of the world leads to extreme weather events in another. And the cutting of forests
in the few “green lungs” the world has left, like the Amazon rainforest, has a further devastating effect
on not just the world’s biodiversity, but its capacity to cope with hazardous greenhouse gas emissions.
Have you read?
• Globalization 4.0 – what it means and how it could benefit us all
• What a football shirt tells us about globalization 4.0
• Here’s what a Korean boy band can teach us about globalization 4.0
• We can make sure Globalization 4.0 leaves no one behind. This is how
But as this new wave of globalization is reaching our shores, many of the world’s people are turning
their backs on it. In the West particularly, many middle-class workers are fed up with a political and
economic system that resulted in economic inequality, social instability, and – in some countries – mass
immigration, even if it also led to economic growth and cheaper products. Protectionism, trade wars and
immigration stops are once again the order of the day in many countries.
As a percentage of GDP, global exports have stalled and even started to go in reverse slightly. As a
political ideology, “globalism”, or the idea that one should take a global perspective, is on the wane. And
internationally, the power that propelled the world to its highest level of globalization ever, the United
States, is backing away from its role as policeman and trade champion of the world.
It was in this world that Chinese president Xi Jinping addressed the topic globalization in a speech in
Davos in January 2017. “Some blame economic globalization for the chaos in the world,” he said. “It has
now become the Pandora’s box in the eyes of many.” But, he continued, “we came to the conclusion
that integration into the global economy is a historical trend. [It] is the big ocean that you cannot escape
from.” He went on the propose a more inclusive globalization, and to rally nations to join in China’s new
project for international trade, “Belt and Road”.
It was in this world, too, that Alibaba a few months later opened its Silk Road headquarters in Xi’an. It
was meant as the logistical backbone for the e-commerce giant along the new “Belt and Road”, the
Paper reported. But if the old Silk Road thrived on the exports of luxurious silk by camel and donkey, the
new Alibaba Xi’an facility would be enabling a globalization of an entirely different kind. It would double
up as a big data college for its Alibaba Cloud services.
Technological progress, like globalization, is something you can’t run away from, it seems. But it is ever
changing. So how will Globalization 4.0 evolve? We will have to answer that question in the coming
years.
42
Globalization 4.0 – what does it mean?
weforum.org/agenda/2018/11/globalization-4-what-does-it-mean-how-it-will-benefit-everyone
05 Nov 2018
1. Klaus SchwabFounder and Executive Chairman, World Economic Forum
After World War II, the international community came together to build a shared future. Now, it must
do so again. Owing to the slow and uneven recovery in the decade since the global financial crisis, a
substantial part of society has become disaffected and embittered, not only with politics and politicians,
but also with globalization and the entire economic system it underpins. In an era of widespread
insecurity and frustration, populism has become increasingly attractive as an alternative to the status
quo.
But populist discourse eludes – and often confounds – the substantive distinctions between two
concepts: globalization and globalism. Globalization is a phenomenon driven by technology and the
movement of ideas, people, and goods. Globalism is an ideology that prioritizes the neoliberal global
order over national interests. Nobody can deny that we are living in a globalized world. But whether all
of our policies should be “globalist” is highly debatable.
After all, this moment of crisis has raised important questions about our global-governance architecture.
With more and more voters demanding to “take back control” from “global forces,” the challenge is to
restore sovereignty in a world that requires cooperation. Rather than closing off economies through
protectionism and nationalist politics, we must forge a new social compact between citizens and their
leaders, so that everyone feels secure enough at home to remain open to the world at large. Failing that,
the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy.
Moreover, the challenges associated with the Fourth Industrial Revolution (4IR) are coinciding with the
rapid emergence of ecological constraints, the advent of an increasingly multipolar international order,
and rising inequality. These integrated developments are ushering in a new era of globalization.
Whether it will improve the human condition will depend on whether corporate, local, national, and
international governance can adapt in time.
Meanwhile, a new framework for global public-private cooperation has been taking shape. Public-
private cooperation is about harnessing the private sector and open markets to drive economic growth
for the public good, with environmental sustainability and social inclusiveness always in mind. But to
determine the public good, we first must identify the root causes of inequality.
For example, while open markets and increased competition certainly produce winners and losers in the
international arena, they may be having an even more pronounced effect on inequality at the national
level. Moreover, the growing divide between the precariat and the privileged is being reinforced by 4IR
business models, which often derive rents from owning capital or intellectual property.
Closing that divide requires us to recognize that we are living in a new type of innovation-driven
economy, and that new global norms, standards, policies, and conventions are needed to safeguard the
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public trust. The new economy has already disrupted and recombined countless industries, and
dislocated millions of workers. It is dematerializing production, by increasing the knowledge intensity of
value creation. It is heightening competition within domestic product, capital, and labor markets, as well
as among countries adopting different trade and investment strategies. And it is fueling distrust,
particularly of technology companies and their stewardship of our data.
The unprecedented pace of technological change means that our systems of health, transportation,
communication, production, distribution, and energy – just to name a few – will be completely
transformed. Managing that change will require not just new frameworks for national and multinational
cooperation, but also a new model of education, complete with targeted programs for teaching workers
new skills. With advances in robotics and artificial intelligence in the context of aging societies, we will
have to move from a narrative of production and consumption toward one of sharing and caring.
Globalization 4.0 has only just begun, but we are already vastly underprepared for it. Clinging to an
outdated mindset and tinkering with our existing processes and institutions will not do. Rather, we need
to redesign them from the ground up, so that we can capitalize on the new opportunities that await us,
while avoiding the kind of disruptions that we are witnessing today.
As we develop a new approach to the new economy, we must remember that we are not playing a zero-
sum game. This is not a matter of free trade or protectionism, technology or jobs, immigration or
protecting citizens, and growth or equality. Those are all false dichotomies, which we can avoid by
developing policies that favor “and” over “or,” allowing all sets of interests to be pursued in parallel.
To be sure, pessimists will argue that political conditions are standing in the way of a productive global
dialogue about Globalization 4.0 and the new economy. But realists will use the current moment to
explore the gaps in the present system, and to identify the requirements for a future approach. And
optimists will hold out hope that future-oriented stakeholders will create a community of shared
interest and, ultimately, shared purpose.
The changes that are underway today are not isolated to a particular country, industry, or issue. They
are universal, and thus require a global response. Failing to adopt a new cooperative approach would be
a tragedy for humankind. To draft a blueprint for a shared global-governance architecture, we must
avoid becoming mired in the current moment of crisis management.
Specifically, this task will require two things of the international community: wider engagement and
heightened imagination. The engagement of all stakeholders in sustained dialogue will be crucial, as will
the imagination to think systemically, and beyond one’s own short-term institutional and national
considerations.
These will be the two organizing principles of the World Economic Forum’s upcoming Annual Meeting in
Davos-Klosters, which will convene under the theme of “Globalization 4.0: Shaping a New Architecture
in the Age of the Fourth Industrial Revolution”. Ready or not, a new world is upon us.
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Lesson Number: Globalization Lesson 3 – Background of Globalization
Topic: Origins and History of Globalization; Global Demography; and Global Migration
1. Evaluate the events in the Origins and History of Globalization, Global demography and migration that
led to the Contemporary World;
2. Select the events in world history, migration and demography that led to Globalization; and
3. Organize the events in world history, migration and demography that led to Globalization.
Review questions:
1) Review questions
a. Discuss the difference between homogeneity and heterogeneity in the Globalization theory.
b. Can Globalization and Regionalization co-exist in an integrated market? Explain
Definitions
ORIGINS – The point at which something comes into existence or from which it derives or is derived.
HISTORY – A chronological record of events, as of the life or development of a people or institution,

often including an explanation of or commentary on those events.
URGES OF PEOPLE TOWARDS A BETTER LIFE
 Commerce, religion, politics and warfare can be connected to the aspects of globalization
 Can be traced to history, trade, missionary work, adventures and conquest
5 ORIGINS OF GLOBALIZATION
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After answering the question “What is globalization?”, the next question “where did it start” is not
easy to answer because different writers have different views about it. There are views that
globalization started in the 15the century when colonization started. Others would say that it started in
the 19th century at the advent of the Industrial Revolution and advances in transportation and
communication. Then there are groups who would say that true economic and social globalization
started after World War II. However, let us look at the five (5) different perspectives in the origins of
globalization.
1. HARDWIRED – due to man’s search for better than basic human needs made globalization
possible (“scientific” history would say ancestors travel from Africa and after the ice age 50,000 years
ago). (Nayan Chanda, 2007) – a pattern of behavior
2. CYCLES – for some it is a long-term cyclical process. Other global ages have appeared.
Globalization will soon disappear and appear.
3. EPOCH – also called “waves” and each has its own origin
the following are the sequential occurrence of epoch
a. Globalization of Religion (4th to 7th century)
b. European colonial conquest (late 15th century)
c. Intra-European wars (late 18th to early 19th century)
d. Heyday of European Imperialism (mid-19th to 1918)
e. Post-World War II period
f. Post-Cold War period
4. EVENTS – several points can be treated as part of globalization
a. Genghis Khan conquest of Europe in the 13th century
b. Christopher Columbus discovery of America 1498
c. Ferdinand Magellan’s world circumnavigation in 1522
d. Advances in transportation 19th Century
e. Advances in communication Telephone 1956, TV 1962 and founding of internet in 1988
f. Terrorist attack on the Twin Towers, NY City 9-11-2001
5. BROADER, MORE RECENT CHANGES – happened in the last half of 20th century
a. Emergence of the United States as the Global power after WW II
b. Emergence of Multi-National Corporations (MNC’s)
c. The demise of the Soviet Union (USSR) and end of the Cold War.
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GLOBAL DEMOGRAPHY
1. DEMOGRAPHIC TRANSITION - refers to the transition from high birth and death rates to lower
birth and death rates as a country or region develops from a pre-industrial to an industrialized economic
system. But the pace and timing of the transition varied considerably.
a. Europe – transition started in the mid or late 1700s. Death rates and fertility began to decline. High to
low fertility happened 200 years in France and 100 years in the United States.
b. In other parts of the world, like in Asia the transition began later. Madison (2001), indicates life
expectancy in India was only 24 years at the start of 20th century. While in China same life expectancy
occurred in 1929 to 1931.
c. The baby boom after the second world war during the 1950’s in the developing world was caused by
the decline of infant and child mortality rates. While the baby boom in the west resulted from rising
birth rates.
d. As per study of Shegeyuki et al. (2002), “by 1820 the life expectancy at birth of Japan and the West as
12 years greater than that of other countries. It increased by 20 years by 1900.
2. FERTILITY RATE – the ratio of live births in an area to the population of that area, expressed in
per 1000/year
a. During the 19th century, Europe and the West had increasing share in world’s population from 22% to
33%. While Asia and Oceania’s share dropped from 69% to 56.7%. This was due to the economic
stagnation and decline of India and China during that time.
b. It was projected by the United Nation that by 2150 Africa will have a 20% share in world’s population,
which is greater than the 7% in 1820 and 6% in 1900.
3. DEPENDENCY RATIO – is an age population ratio of those not in the labor force (dependents)
and those in the labor force (independents). It is to measure the pressure on the productive population.
a. Japan and West has a low dependency ratio of 0.5 going to the 1950s.
b. The developing countries like India and Philippines have higher dependency ratio than the West in the
1900. The decline in infant and child mortality and high levels of fertility made a great increase in their
dependency ration with its peak in the 1970.
c. Dependency ratios started to disappear because there is decline in global birth rate. However the
aging populations of the West and Japan will cause a rise in their dependency ratios.
GLOBAL MIGRATION
1. Refugees/Asylum seekers – are vagabonds forced to flee their homes to be on the move for
safety reasons.
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2. Tourists – visitors from other countries are on the move because they want to be and can afford
it.
3. Migrants – due to push (internal situation from home countries like political persecution,
economic depression, war and famine) and pull (external opportunities in other countries/areas
favorable immigration policies, labor shortage and similarity in culture) factors (Ritzer, 2015). The
Global factor in technology which facilitates easy access to information exert a significant influence to
migration.
4. Illegal immigrants – live in the margins of society
5. Labor migration – those who migrate to find work is driven by push factors like unemployment
in home countries; and pull factors due to available work elsewhere. (Kritz, 2008). Face many
restrictions like loss of work for own citizens; security and terrorism concern like the civil war induced of
Syrian diaspora to Europe.
6. Diaspora – migrant communities
7. Virtual Diaspora – utilize technology like internet to maintain the community network
1. Questions
a. Choose two (2) out of five (5) Origins of Globalization. Compare and contrast the theories behind that
initiated people to move towards globalization. Site historical examples.
b. Explain the relationship of Fertility rate to Dependency ratio in terms of increase/decrease in the
labor force.
Reinforcement:
Instructions:
1. Read the attached reading materials
a. What is the important change in demography that the Global Monitoring Report 2015/2016
indicated that will have an impact in the near future? Explain
b. What is the MDG and the SDG? Explain the relationship between MDG and SDG.
c. How will the covid-19 pandemic affects the planning and implementation of SDG?
2. Readings:

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World Economic Forum
How are global demographics changing?
https://www.weforum.org/agenda/2015/10/how-are-global-demographics-changing/
A generation ago, the World Development Report 1984 focused on development challenges posed by
demographic change, reflecting the world’s concerns about run-away population growth. Global
population growth rates had peaked at more than two percent a year in the late 1960s and the
incredibly high average fertility rates of that decade – almost six births per woman – provided the
momentum to keep population growth rates elevated for several decades (Fig 1). Indeed, the population
and development zeitgeist spawned works such as Ehrlich’s 1968 book “Population Bomb,” which
painted apocalyptic images of a world struggling to sustain itself under the sheer weight of its people.
The policy discussion of the WDR 1984 reflected these concerns, focusing on how to feed the growing
populations in the poorest and highest fertility countries, while also presenting a case for policies that
would reduce fertility.
Needless to say, the global population did not continue to grow at its breakneck pace and fertility rates
ended up declining precipitously, due to a range of reasons, that includes but is not restricted to
improvements in living standards, access to education and female empowerment. At the same time,
some of the most populous countries grew themselves out of poverty – as in the case of South Korea
and China – while advances in biotechnology helped countries feed themselves, as in the case of India’s
Green Revolution. The population bomb does not seem to have detonated.
Now, more than 30 years later, the forthcoming Global Monitoring Report 2015/2016: Development
Goals in an Era of Demographic Change (GMR) argues that, while the world may no longer have to fear
explosive population growth, demographic change is still one of the most pressing development issues
of the day. The report uses the latest UN population projections to show that global demographic trends
and patterns are at a turning point, with the proportion of people aged between 15 and 64 – people
most likely to be in the labor force – having reached a peak in 2012, at 65.8 percent (Fig 2). In coming
decades, this share will decline, while the share of elderly – people aged 65 and up – will rise. By 2050,
the elderly could account for 16 percent of the global population up from 5 percent in the 1960s.
The GMR also shows that these global trends and patterns vary dramatically across countries and levels
of development. Today 87 percent of the world’s poor live in countries that will still experience
burgeoning working-age population shares, and are expected to have rapid population growth. If these
countries are able to accelerate their job creation to keep pace with their growing working-age
population they have the potential to boost their growth and poverty reduction in coming years. In
contrast, a population decline is expected for many of the engines of global growth – the economies
that account for three-fourths of recent global growth. These include almost all high-income countries
and several upper-middle-income countries. The shares of people over 65 years will be rising in these
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countries, but by making investments to boost productivity, extending the years of work, and adopting
fiscally sustainable old-age support systems, they can maintain and continue to improve their incomes.
As the GMR argues, the demographic changes within countries and differences across countries present
real opportunities to boost growth and poverty reduction. In particular, freer capital flows, migration
and trade can help respond to growing demographic imbalances globally. With demography-informed
policies, countries – old and young, developing and developed – have the chance to turn the past fears
of the population bomb into development opportunities for the future.
This article is published in collaboration with The World Bank. Publication does not imply endorsement
of views by the World Economic Forum.
To keep up with the Agenda subscribe to our weekly newsletter.
Author: S. Amer Ahmed is an Economist in the World Bank’s Development Prospects Group.
Millennium Development Goals
https://www.undp.org/content/undp/en/home/sdgoverview/mdg_goals.html
In September 2000, building upon a decade of major United Nations conferences and summits, world
leaders came together at the United Nations Headquarters in New York to adopt the United Nations
Millennium Declaration.
The Declaration committed nations to a new global partnership to reduce extreme poverty, and set out
a series of eight time-bound targets - with a deadline of 2015 - that have become known as the
Millennium Development Goals (MDGs).
The final MDG Report found that the 15-year effort has produced the most successful anti-poverty
movement in history:
• Since 1990, the number of people living in extreme poverty has declined by more than half.
• The proportion of undernourished people in the developing regions has fallen by almost half.
• The primary school enrolment rate in the developing regions has reached 91 percent, and many
more girls are now in school compared to 15 years ago.
• Remarkable gains have also been made in the fight against HIV/AIDS, malaria and tuberculosis.
• The under-five mortality rate has declined by more than half, and maternal mortality is down 45
percent worldwide.
• The target of halving the proportion of people who lack access to improved sources of water
was also met.
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The concerted efforts of national governments, the international community, civil society and the
private sector have helped expand hope and opportunity for people around the world.
Yet the job is unfinished for millions of people—we need to go the last mile on ending hunger, achieving
full gender equality, improving health services and getting every child into school. Now we must shift the
world onto a sustainable path.
The global Sustainable Development Goals (SDGs), or Global Goals, will guide policy and funding for the
next 15 years, beginning with a historic pledge on 25 September 2015, to end poverty. Everywhere.
Permanently.
The 8 MDG Goals
1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development
UNDP's MDG Mandate
As the specialized agency of the United Nations focusing on Development, UNDP has a mandate of
supporting countries in their development path, and coordinating the UN System at the country level.
In this capacity, the UN Secretary General requested that UNDP be the MDG Scorekeeper (PDF), in
addition to UNDP's ongoing programmatic work in accomplishing the MDGs. The "Road map towards
the implementation of the United Nations Millennium Declaration" (PDF, Annex – para. 4) notes that
UNDP will coordinate the reporting on progress towards the Millennium Development Goals at the
country level.
As the scorekeeper, UNDP supports the implementation of the United Nations Development Group
(UNDG) Core Strategy (PDF), including :
• Coordinating and providing financial support for the preparation of MDG country monitoring
reports
• Forging closer collaboration within UN Country Teams on policy advocacy, while promoting a
strong response to national MDG priorities through United Nations Development Assistance
Frameworks (UNDAFs) and Country Programmes.
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UNDP, in collaboration with the UNDG and the Inter Agency Expert Group (IAEG) on Targets and
Indicators, has been providing technical and financial support to help countries report progress on their
national MDG targets, and developing the MDG National Report Guidelines (PDF), which are updated
every few years to reflect emerging development priorities and agendas.
MDG Country Reports
MDG country reports are one of the best instruments for obtaining nationally-generated MDG-based
evidence, and for extracting main challenges and opportunities.
To date, more than 400 nationally-owned reports have been developed and published. Data and lessons
generated in these reports helped make a strong case for the UNDG-endorsed and UNDP-field-tested
MDG Acceleration Framework (MAF), one of the key outcomes of the 2010 UN Summit (PDF).
The last round of national MDG reports will provide a collective review, and key lessons learnt, for MDG
achievement; and will help inform and shape the new 2030 Agenda for Sustainable Development.
https://www.undp.org/content/undp/en/home/sustainable-development-goals.html
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What are the Sustainable Development Goals?
The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United
Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and
ensure that all people enjoy peace and prosperity by 2030.
The 17 SDGs are integrated—that is, they recognize that action in one area will affect outcomes in
others, and that development must balance social, economic and environmental sustainability.
Through the pledge to Leave No One Behind, countries have committed to fast-track progress for those
furthest behind first. That is why the SDGs are designed to bring the world to several life-changing
‘zeros’, including zero poverty, hunger, AIDS and discrimination against women and girls.
Everyone is needed to reach these ambitious targets. The creativity, knowhow, technology and financial
resources from all of society is necessary to achieve the SDGs in every context.
SDG INTEGRATION
What is UNDP's role?
As the lead UN development agency, UNDP is well-placed to help implement the Goals through our
work in some 170 countries and territories.
We support countries in achieving the SDGs through integrated solutions. Today’s complex challenges—
from stemming the spread of disease to preventing conflict—cannot be tackled neatly in isolation. For
UNDP, this means focusing on systems, root causes and connections between challenges—not just
thematic sectors—to build solutions that respond to people’s daily realities.
Our track record working across the Goals provides us with a valuable experience and proven policy
expertise to ensure we all reach the targets set out in the SDGs by 2030. But we cannot do this alone.
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Achieving the SDGs requires the partnership of governments, private sector, civil society and citizens
alike to make sure we leave a better planet for future generations.
COVID-19 and the SDGs
https://feature.undp.org/covid-19-and-the-sdgs/?
utm_source=web&utm_medium=sdgs&utm_campaign=covid19-sdgs
How the ‘roadmap for humanity’ could be changed by a pandemic
The coronavirus pandemic has shown us a new world; one where the status quo no longer exists
Millions of people are experiencing untold misery and suffering as the virus overwhelms our bodies and
economies. Rich and poor, the pandemic has forced us to reconsider almost every aspect of how we
live.
And COVID-19’s reach is only just beginning to be felt. UNDP estimates global human development—a
combination of education, health, and living standards—could fall this year for the first time since 1990,
when measurements began.
“The world has seen many crises over the past 30 years, including the Global Financial Crisis of 2007-09.
Each has hit human development hard but, overall, development gains accrued globally year-on-year.
COVID-19, with its triple hit to health, education, and income, may change this trend.” UNDP
Administrator Achim Steiner
The 2030 Agenda
The pandemic presents both an enormous challenge and tremendous opportunities for reaching the
2030 Agenda and the Sustainable Development Goals (SDGs).
The SDGs are a roadmap for humanity. They encompass almost every aspect of human and planetary
wellbeing and, if met, will provide a stable and prosperous life for every person and ensure the health of
the planet.
This year they have received a grievous blow—one that will be far reaching for years to come.
But the pandemic also shows us the wisdom of what is already inherent in the SDGs; the challenges we
face cannot be dealt with in isolation.
Our socio-economic assessments, based on findings from more than 70 countries and five regional
reports, show that while most developing countries are in the early stages of the pandemic, they are
already dealing with its negative effects.
Good health
Even before the crisis, the world was off track to ensuring healthcare for everybody by 2030.
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Now, the impressive gains made in recent years—declining infant and maternal mortality rates, turning
the tide on HIV/AIDS and halving malaria deaths—are threatened, and we face possibly alarming
setbacks, not just from the disease itself, but the knock-on effects of breaks in vaccination campaigns.
No hunger
The number of undernourished people has dropped by almost half in the past two decades. Central and
East Asia, Latin America and the Caribbean have all made huge progress.
Still, as of 2017 there were 821 million people chronically undernourished.
COVID-19 has exposed weaknesses in global food supply chains. And it has pushed fragile countries,
such as Yemen, where, despite humanitarian assistance, 15.9 million wake up hungry every day, push
millions more into further distress.
No poverty
Rapid economic progress in India and China has lifted millions out of poverty, but as of 2015, about 736
million people still lived on less than US$1.90 a day.
Now, Oxfam estimates that the crisis could push half a billion people back into poverty.
SDG 1 is the bedrock of the goals. The crisis has made this goal more challenging, but also presents an
opportunity to completely revolutionize development.
Decent work
About 1.6 billion people work in the informal economy—that’s about half the global workforce. The
International Labour Organization reports that they are in immediate danger of having their livelihoods
destroyed.
The ILO reports that more than one in six young people have lost their jobs since the pandemic began
and those that are still at work have seen their hours reduced.
As the leader on COVID-19’s socio-economic response, UNDP will be working with private and public
partners to encourage integrated growth that truly leaves nobody behind.
Quality education
UNESCO estimates about 1.25 billion students are affected by lockdowns. UNDP estimates 86 percent of
primary school children in developing countries are not being educated.
The pandemic has re-emphasized the ‘digital divide’ and the right to internet access, particularly for
those in rural areas.
UNDP estimates that closing the digital divide would reduce by more than two-thirds the number of
children not learning because of school closures.
Strong institutions
At least 18 national elections and referendums have already been postponed. Sometimes this can lead
to increased risk of unrest. Governments, particularly in fragile contexts are under unparalleled pressure
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to deliver digital services and social protection, and to function in ways that advance social cohesion,
while upholding human rights and the rule of law.
The double helix
Scientists have warned for years that unrestricted deforestation, the illegal wildlife trade, and diseases
that cross from animals to humans would unleash an uncontrollable pandemic. That’s why investing in
green economies is crucial to restore the balance between people and planet and help countries
recover.
Like a double helix, the SDGs and the COVID-19 pandemic response are intertwined and cannot be
tackled by a piecemeal approach.
In our role as SDG Integrator we are helping countries address all the public and private challenges
connected to COVID-19.
UNDP is breaking with the past. The pandemic has given us permission to do what was once almost
unimaginable—redesign the way we work.
Aim higher,
be bolder
UNDP is uniquely qualified to work on complex problem solving, as our successful response to Iraqi
stabilization has demonstrated.
In Angola, we are helping to tackle deforestation. In Moldova, climate smart ecotourism contributes to
sustainable growth. And from Belize to Belarus we have protected more than 680 million hectares of
land and sea for the past 20 years.
The next phase of our COVID-19 response is to help decision-makers look towards 2030 and manage
uncertainty in governance, social protection, the green economy and living in the digital world as we
lead the UN’s socio-economic response.
Lesson Number: Globalization Lesson 4 – The Global Economy part 1-A

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Topic: Economic Globalization and Global Trade
Economic Globalization and Global Trade
1. Explain the relation between Economic Globalization and Global Trade;
2. Organize the relationship of the concepts between Economic Globalization and Global Trade; and
3. Prepare a table of concepts for Economic Globalization and Global Trade.
Review questions:
1) Review questions
a. How would Fertility Rate affect the Demographic Transition among countries and regions?
b. There were many Syrian families who migrated to France and Germany during the past years
due to the civil war in Syria. Discuss the positive and negative effects of this migration to the home
country and host countries.
Definitions
Global Economy – is the economy of all humans of the world, considered as the international exchange
of goods and services that is expressed in monetary units of account
Global Trade – also known as international trade, is simply the import and export of goods and services
across international boundaries.
Economic Globalization – refers to the increasing interdependence of world economies as a result of the
growing scale of cross-border trade of commodities and services, flow of international capital, and wide
and rapid spread of technologies. It reflects the continuing expansion and mutual integration of market
frontiers, and is an irreversible trend for the economic development in the whole world at the turn of
the millennium. (United Nations as cited in Shangquan, 2000)
Sustainable Development – is the idea that human societies must live and meet their needs without
compromising the ability of future generations to meet their own needs. The “official” definition of
sustainable development was developed for the first time in the Brundtland Report in 1987. Specifically,
sustainable development is a way of organizing society so that it can exist in the long term. This means
taking into account both the imperatives present and those of the future, such as the preservation of
the environment and natural resources or social and economic equity. (You Matter
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https://youmatter.world/en/definition/definitions-sustainable-development-sustainability/
#:~:text=Sustainable%20development%20is%20the%20idea,the%20Brundtland%20Report%20in
%201987.)
MDG – Millenium Development Goals adapted September, 2000 for the eradication of extreme poverty
by 2015
SDG – Sustainable Development Goals a universal call to action to end poverty, protect the planet and
ensure that all people enjoy peace and prosperity by 2030.
Fair Trade – as defined by the Fair Trade Association is the “concern for the social, economic, and
environmental well-being of marginalized small producers” (Downie, 2007, pp. C1-C5)
Introduction
 Extreme poverty the serious problem around the globe.
 The United Nations (UN) adapted the 8 MDGs for the eradication of poverty and hunger
 Extreme poverty or absolute poverty according to UN (2015) is a condition characterized by

severe deprivation of basic human needs including food, safe drinking water, sanitation facilities, health,
shelter, education and information. UN defines it as living on less than $1.25 a day.
 The UN (2015) reported that 836 million people still live in extreme poverty down from 19
billion in year 2000.
 World Bank (WB) predicted that by 2030 the number of people living in extreme poverty could
drop to less than 400 million with the assumption that everything keeps on improving. But lately,
climate change pose a threat to these improvements in worldwide poverty.
 People who were lifted out of extreme poverty are still poor with same serious problems like
disease, lack of water, income inequality and lack of electricity.
 Even with the UN policies of access to education, humanitarian aid and other programs of
International Organization, extreme poverty is still prevalent.
 Extreme poverty cannot be solved only by direct aid but by national economic growth through
the contribution of economic globalization. The developing economies experienced growth in the
interconnection of world economies and free trade.
Economic Globalization
Two (2) types of economies as part of economic globalization:
1. Protectionism – a policy of systematic government intervention in foreign trade with the objective of
encouraging domestic production. This encouragement involves giving preferential treatment to
domestic producers and discriminating against foreign competitors (McAllese, 2007 as cited in Ritzer,
2015 p. 1169).
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 Comes in the forms of import quotas or limits and tariffs in the form of duties and taxes
 Example a car cost of $10,000 in Japan will be slapped by a $5,000 tariff will now cost $15,000 in
the importing country.
 Prevalent in the mercantilist era of 16th to 17th century up to the 19th century Industrial
Revolution (Chorev, 2007)
 It was the peak of protectionism in the Great Depression of 1929
 Even today countries like China, Japan, and the United States are in an economic battle using
protectionism as a weapon.
2. Free Trade or Trade Liberalization – international trade left to its natural course without tariffs,
quotas, or other restrictions.
 There has been a shift of world economic policy from protectionism to trade liberalization after
lesson learned from World War II.
 It was realized that more goods and services move around the world with Free Trade
Agreements together with the technological advances in transportation and communication.
 From daily wearables, agricultural products to innovations and ideas.
Effects of Economic Globalization
 Mobile phones are the single most transformative technology in the developing world according
to economist Jeffrey Sachs.
 Phones give access to banking and payment systems; and education and information. Farmers
get information and gets the best price for the crops produced.
 Cell phone towers installation is a lot cheaper than thousand kilometers telephone lines
installations.
 Leapfrogging – as called by economist when countries can jump to more efficient and cost
effective technologies that were not available in the past.
 New opportunities were created by International Trade for businessmen to sell their products,
labor and services in a global market place.
 Developing countries gain more in the global economy at the expense of other nations.
Developing countries thrives in exports while other countries became an import economy like India,
Japan and South Korea became exporter of industrial goods while the south east Asian nations are
importers of their goods.
 Fair Trade lessens inequities in the global world.
• It aims for a more moral and equitable global economic system
• Protection of workers and producers
• Equitable prices for agricultural products

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• Use of environment friendly and sustainable production methods
• Creation of relationship between agricultural producers of the south and consumers in the
North
• Engage in safe working environment
• Fair Trade products are coffee, bananas, cotton, wine, tea and chocolate
• An example of Fair Trade, in 2006, Starbucks and Dunkin donuts spent 42% greater in the
preceding year for certified products. While coffee growers in Brazil gain by at least 4 cents in contract
price of $1.29 / lb of coffee beans compared to the current market price of $1.25.
1. Questions
a. Do you think the Philippines is harmed by the transfer of economic activities here by other countries
like the business process outsourcing (BPO) or call centers?
b. In what ways do international organizations help our country’s economy? Cite examples of specific
help of International Organizations.
c. Are rich countries with giant economic chain threaten the status of less developed countries in the
global market?
Reinforcement:
Instructions:
a. New Yorkers are making the most of their time in environment friendly business in composting.
How would you fair as college students to make your time maximized on environment friendly activities
in your neighborhood in this time fo pandemic?
b. Uganda has been struck by crisis like civil war and poverty. What will be the positive and
negative effects of converting forest ecosystem into sugar cane production in terms of environment
preservation, food security and sustainable development?
2. Readings:

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Composting Has Been Scrapped. These New Yorkers Picked Up the Slack.
People like Vivian Lin, who quit her job at an architecture firm to start a composting business, have
helped fill the void after the city suspended curbside organic waste collection.
Vivian Lin, left, who in May started a composting service called Groundcycle, picked up compost in
Brooklyn on a recent Sunday.Credit...Stephanie Keith for The New York Times
By Amelia Nierenberg
• Published Aug. 9, 2020Updated Aug. 10, 2020
https://www.nytimes.com/2020/08/09/nyregion/nyc-compost-recycling.html
In the months since New York City scrapped the bulk of its voluntary composting program, Vivian Lin has
reoriented her life.
In May, when budget cuts caused by the coronavirus pandemic led to the suspension of the program,
Ms. Lin created a private composting service almost overnight. Her idea was simple: For a small fee,
New Yorkers could give her their kitchen scraps and yard waste to recycle. Additionally, for a few extra
dollars she would provide them with produce from local farmers.
The first few weeks of the program were hectic, as she filled friends’ cars with pungent buckets of
rotting food. Eventually, she swapped the cars for U-Haul vans, but still could barely keep up with
demand. Two months in, Ms. Lin, 25, quit her job at an architecture firm to pursue the project, called
Groundcycle, full time.
Offering fresh produce is a way to get people interested in recycling organic matter, she said on a recent
Sunday, the smell of compost wafting through the vans.
Ms. Lin provides local produce to New Yorkers in exchange for their food scraps and other organic
waste.Credit...Stephanie Keith for The New York Times
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New York’s organics collection was once hailed as a triumph in a city looking to declare itself a climate
leader. Just days before the coronavirus shuttered the city, the Council speaker, Corey Johnson, had
proposed a mandatory expansion of the brown bin program, even as several critics raised concerns
about the cost.
But in a post-outbreak effort to shore up the already-wheezing budget, the city’s Department of
Sanitation weathered a $106 million cut, $24.5 million of which funded organics recycling. After pressure
from climate advocates, officials provided the department with $2.86 million to reinstate some
composting services. But residential pickup and collection at some GrowNYC farmers’ markets will likely
remain paused until at least next summer.
“It’s purely a budgetary consideration,” said Bridget Anderson, the Sanitation Department’s deputy
commissioner for recycling and sustainability. “Sanitation’s budget has been restricted to the core, core
services of what we provide.”
A small army of community-based composters have stepped up to fill the void. In Astoria, Queens, and
Greenpoint, Brooklyn, for example, residents are volunteering time at homespun drop-off sites.
Fred Wolf, spreading sawdust over the organic waste in the back of his truck, delivers the compost to a
farm upstate.Credit...Stephanie Keith for The New York Times
Some small-scale collectors, known as “microhaulers,” like Ms. Lin, take compost to Fred Wolf, an
educator and ecological designer. Each Sunday, he parks his pickup truck outside of Nature Based, his
nursery and design company in Brooklyn’s Gowanus neighborhood. Then on Mondays, he spends the
day driving upstate and back, to deliver the compost to McEnroe Organic Farm.
Believed in the importance of his work, he was still not able to cover his travel expenses, much less
make a profit.
“This is not what I want to be doing on a Monday,” Mr. Wolf said, standing on top of a mound of
compost as Ms. Lin passed buckets up to him at the end of her Sunday route. “I want the city to be doing
this.”
Ms. Lin, though, might have hit upon a financially stable solution. She is offering her clients fresh
produce from local farms. Compost collection alone is $12 a week. If she is also bringing produce, she
charges a $15 fee and the cost of the produce — either $30 for a small selection or $50 for a large
amount.
Ms. Lin, shown working alongside Meghan Lin, her sister-in-law, uses U-Haul vans to carry buckets of
compost across Brooklyn.Credit...Stephanie Keith for The New York Times
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A native New Yorker accustomed to using public transportation, she does not have a driver’s license and
relies on friends to ferry her across Brooklyn. At each address, she weighs buckets of compost with a
hand-held luggage scale. Then, she emails her clients information on how many metric tons of
greenhouse gas emissions they saved, translating that amount into car miles.
ADVERTISEMENT
In the United States, food waste generates the same amount of greenhouse gas emissions as 37 million
cars, according to the Natural Resources Defense Council. That accounts for both the energy used in
agriculture to grow unused food, as well as the methane that is released when the food rots in landfills.
“It’s a more tangible way to fight the climate crisis,” Ms. Lin said about composting.
Still, Groundcycle is not a citywide solution. Composting habits are hard won, and many climate experts
worry that a yearlong gap in organics collection could do yearslong damage to the environment.
The recycling program was significantly reduced in 2002, as part of citywide budget cuts following the
September 11, 2001 attacks. The program did not fully return until 2004. It took years for participation
levels to rebound.
“It’s more than losing momentum,” said Michael B. Gerrard, a law professor and the director of the
Sabin Center for Climate Change Law at Columbia University. “It’s moving backward. It makes it much
harder to start the car again.”
In New York City, organic waste accounts for about 34 percent of refuse, and food waste is the largest
portion of the municipal waste stream, according to the city’s 2017 Waste Characterization Study.
Ms. Lin called composting a “tangible way to fight the climate crisis.”Credit...Stephanie Keith for The
New York Times
Before the pandemic, Kathryn Garcia, the sanitation commissioner, estimated that the city sent up to
4,000 tons a day of organic waste to landfills and other disposal sites — much of which could have been
composted. That number is now significantly lower.
“Composting should not be thought of like the after-school clarinet program,” said Eric Goldstein, New
York City environment director of the Natural Resources Defense Council. “Composting needs to be seen
as an essential sanitation service, just like collecting the rubbish, sweeping the streets or removing the
snow.”
But even before the pandemic, the program had stalled, despite Mayor Bill de Blasio’s “Zero Waste”
initiative, which aimed for a 90 percent reduction in landfill use by 2030.
A shame for the world': Uganda's fragile forest ecosystem destroyed for sugar
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Conservationists say clearance of Bugomo reserve for plantation is blow to biodiversity and country’s
reputation on wildlife
Global development is supported by
Samuel Okiror in Kampala
Thu 18 Jun 2020 07.15 BSTLast modified on Fri 19 Jun 2020 12.49 BST
https://www.theguardian.com/global-development/2020/jun/18/a-shame-for-the-world-ugandas-
fragile-forest-ecosystem-destroyed-for-sugar
Bugoma reserve is being deforested to pave way for sugarcane. Photograph: Handout
Conservationists have branded a decision by the Ugandan high court to allow swathes of forest to be
cleared for a sugarcane plantation “an unforgivable shame for all people”.
Work to clear 900 hectares (2,223 acres) of Bugoma Forest Reserve, in Hoima, began last month after
the court ruled that the land, leased by Hoima Sugar Company Ltd, lay outside the protected area of the
forest. The court ordered the National Forestry Authority (NFA), which manages it, to vacate the land
and remove the military officers who had been guarding it. The NFA has appealed the decision.
The land was leased to Hoima Sugar, which has a 70% shareholding in Kinyara Sugar Works in
neighbouring Masindi district, in 2016 for 99 years by Solomon Iguru Gafabusa, king of the ancient
kingdom of Bunyoro-Kitara. He said the leased area was ancestral land and not part of the protected
forest.
Rajasekaran Ramadoss, agriculture manager at Hoima Sugar Company, said the proposed sugarcane
plantation would “improve the standard of living of those people” in the area.
In the environmental and social impact assessment report submitted with its application for a sugar
plantation, the company said it would also build schools and a hospital, develop an ecotourism project
that comprised an eco-lodge, walking trails and a campsite, and replant the degraded area.
But Costantino Tessarin, chairperson of Association for the Conservation of Bugoma Forest, said:
“Whether the land falls inside the boundaries of the gazetted reserve or not … is a merely sterile
exercise for primary school students.
“Because the reality is that we are talking about [an] ecosystem of international importance that cannot
be discussed in parts and pieces,” he said. The decision to go ahead with clearing the forest was “an
unforgivable shame for all people of common sense, not only in Uganda but in the world”.
Conservation groups and forestry experts have long warned that destroying even just a part of the
forest’s diversity would lead to a loss of fauna and flora, and affect the water levels of the River Nile.
“We consider this plan not only detrimental to the Ugandan government plans to develop and invest in
tourism in Bugoma Forest, but to the overall fragile and rich ecosystem [which] will simply be irreparably
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compromised,” said Tessarin, who is also director of Uganda Jungle Lodges and owner of Bugoma Jungle
Lodge.
Onesmus Mugyenyi, coordinator of the Forest Governance Learning Group, an informal alliance of 10
African and Asian states that advocate for the protection of forests, said investors in ecotourism and
conservation “have much to complain about and need the protection of their investment”.
“Moreover, the development of ecotourism activities will have a broader impact on the livelihood of the
people in the area.”
The reserve, which covers 41,144 hectares, is the largest remaining block of natural tropical forest along
the Albertine Rift Valley and adjacent to Budongo Forest and Semuliki National Park. It plays an
enormous role in preserving wildlife migratory corridors.
It is home to 23 species of animals, including an estimated 550 highly endangered chimpanzees,

Ugandan mangabeys (an endemic primate), 225 species of birds and 260 species of trees.
According to the survey by the ministry of tourism and antiquities in 2019, Bugoma, which lies about
250km north-west of the capital, Kampala, is due to have its status upgraded from a reserve to a
national park, which would put it under the management of the Uganda Wildlife Authority.
Sugarcane is not suitable as a buffer zone around protected rainforest, campaigners say. Photograph:
Majority World/REX
“Sugarcane is not only environmentally unfriendly in general, but in particular when it becomes the
buffer zone of a tropical rainforest,” said Tessarin.
He said sugarcane was not the best crop to use as a buffer zone around a protected area because it
doesn’t mix well with wildlife. “There are crops and landscapes which are more appropriate in buffer
zones areas where there are chimpanzees and … almost 10 species of primates, plus other wildlife,” he
said.
Forest have shrunk from 24% of Uganda’s total land area in 1990 to 9% in 2015, because of land
disputes and deforestation, according to State of Uganda’s Forestry report.
“To throw away Bugoma would be to throw away rain, biodiversity,” said Cathy Watson, head of
programme development at World Agroforestry. “It would also be to throw away Uganda’s reputation
on the climate, forest and wildlife front.”
Conservationists have launched a social media campaign, “Save Bugoma Forest”, and are petitioning
President Yoweri Museveni to intervene.
“It is necessary that the government of Uganda and the national institutions intervene to resolve a
matter that cannot be just a legal battle in court and cannot be only about boundaries of proposed land
titles,” said Tessarin.
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Lesson Number: Globalization Lesson 5 – The Global Economy Part 1-B
Topic: Global Sustainable Development
Global Sustainable Development
1. Criticize the programs made by the United Nations and individual countries in Global Sustainable
Development;
2. Organize the results of the effectiveness of the programs in Global Sustainable Development; and
3. Select the programs in Global Sustainable Development that will be effective in the Philippine
situation.
Review questions:
1) Review questions
a. Distinguish Economic Globalization with Global Trade.
b. What is Fair Trade? How does an agricultural producing country benefit from it?
Definitions
Sustainability – the degree to which the earth’s resources can be used for our needs, even in the future.
Sustainable Development – the development of the world today by using the earth’s resources and the
preservation of such sources for the future
Efficiency – the quickest possible way of producing large amounts of a particular product during the
Industrial Revolution
Neoliberalism or neo-liberalism is the 20th-century resurgence of 19th-century ideas associated with

economic liberalism and free market capitalism.
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• It is a policy model that encompasses both politics and economics and seeks to transfer the
control of economic factors from the public sector to the private sector. Many neoliberalism policies
enhance the workings of free market capitalism and attempt to place limits on government spending,
government regulation, and public ownership. (Government deregulation policies)
• The policies of neoliberalism typically supports fiscal austerity, deregulation, free trade,
privatization, and a reduction in government spending in social programs.
• Neoliberalism is often associated with the economic policies of Margaret Thatcher in the United
Kingdom and Ronald Reagan in the United States.
• There are many criticisms of neoliberalism, including its tendency to endanger democracy,
workers’ rights, and sovereign nations’ right to self-determination.
Carbon neutral – making no net release of carbon dioxide to the atmosphere, especially through
offsetting emissions by planting trees.
Geoengineering – the deliberate large-scale manipulation of an environmental process that affects the
earth's climate, in an attempt to counteract the effects of global warming.
Food Security – delivering sufficient food to the entire world population
Economic Globalization and Sustainable Development
Introduction
• Positive Effects of Global Trade – continuous consumption of the world’s natural resources such
as water and crude oil enable humanity to discover and innovate many things
• Utilize energy, discover new technologies, and make advancements in transportation and
communication
• Negative Effects of Global Trade – lack of sustainability and development put the environment
at a disadvantage
• Ex. Climate change accelerated and global inequality was not eradicated
• Development has to be ensured in today’s world and as well as for the future generations
• Sustainable Development seeks to form and initiate programs in the middle path between
economic growth and sustainable environment (Borghesi and Vercelli, 2008)
• The relationship between globalization and sustainability is multi-dimensional – it involves

economic, political and technological aspects
• Development is beneficial at one hand but entails cost on the other
Effects of Economic Globalization
 Environmental Degradation
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• Economic development was speed up by the Industrial Revolution.
• Industrial Revolution induced the cycle of efficiency
• First there is efficiency in producing a particular product
• This process made buying of goods easier for the people
• Then there is increased in demand
• It will result to an increased efficiency
• Increased efficiency will harm the environment in many ways
• Carbon emissions from factories harm the earth’s atmosphere
• As waste is thrown in to the sea results to destruction of coral reefs and multi-diversity
• Deforestation, pollution and climate change will not adjust for the world even when increases in
living standards lead people to demand more consumer goods like cars, meat and smartphones.
• Impact of Free Trade in the Environment
• Debate of neoliberals vs environmentalists over the impact of free trade on the environment.
• Environmentalists argue that environmental issues should be given priority over economic
issues (Antonio, 2007).
• Free Trade causes expansion of manufacturing which leads to environmental damage.
• Neoliberals sees environmentalists as serious impediments to trade.
• Yearley (2007) indicates in the ecological modernization theory sees globalization as a process
that can both protect and enhance the environment
• Arguments on Environmental programs
• Climate change solutions faces strong resistance on the part of governments and corporations
• Failure of the Kyoto Protocol aimed at reducing global carbon emissions due to non-ratification
of United States which is one of the biggest pollutant producer.
• However, the trust is built up in corporate policies dealing with environmental problems.
• Measures to address environmental problems
• Implementing policies such as the carbon tax and carbon neutrality measures
• Alternative to fossil fuels like ethanol produce lower emissions. However it has its own set of
problems like increase in price of corn and extraction including transport contribute significantly to total
emissions
• Technological fixes does not deal with the causes of global warming but tries to fix it effects like
geoengineering.
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• Experience indicates that a global view of the problem is required and not focusing on specific
regions, like Europe overlooks impacts in other regions
 Food Security
• The demand for food will be 60% greater than it is today and the challenge of food security
requires the world to feed 9 billion people by 2050 (Breene, 2016)
• A priority of all countries
• Includes sustainability of society such as population growth, climate change, water scarcity and
agriculture.
• Case of India regarding food security problems
• India is the biggest producer of fruits and vegetables in the world with 47% of its workforce is in
agriculture which accounts for 18% of the economy’s output
• Still 194 million are undernourished according to Food and Agriculture Organization (FAO) of the
United Nations.
• It is estimated that 15.2% of India is too malnourished to lead a normal life
• A third of the malnourished children live in India
 The challenges to food security can be traced to the environmental problems like
• destruction of natural habitats in deforestation;
• industrial fishing cause destruction of marine life, biodiverstiy and ecosystems; and
• rapid decline of usable farmland
• consumption of “virtual water” - is the water embodied in the production of food and fiber and
non-food commodities, including energy. For example, it requires about 1300 tons (cubic meters) of
water to produce a ton of wheat and 16000 tons (cubic meters) of water to produce a ton of beef.
• Pollution through toxic chemicals has had a long-term impact on the environment.
• The global flow of dangerous debris with electronic waste often dumped in developing countries
 Results are:
• Decline in the availability of fresh water supply because of soil degradation or desertification.
• A previously public good became a private commodity.
• The poorest area of the world experience a disproportionate share of water related problems.
• Lead to creation of “climate refugees, people who are forced to migrate due to lack of access to
water or due to flooding (Ritzer, 2015)
• Use of Persistent Organic Pollutants (POPs) led to industrial pollution

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• Greenhouse effect – gases that trap sunlight and heat in the atmosphere leads to global
warming and melting of glacial ice can cause substantial flooding, reduction of alkalinity destruction of
ecosystems
• Global warming poses a threat to the global supply of food and human health
• Intensified ecological problems due to population growth and increase consumption
 Models and Agenda to address the issue of global food security
• The United Nations seventeen (17) Sustainable Development Goals has set ending hunger,
achieving food security, improved nutrition and promoting sustainable agriculture for the year 2030.
• The World Economic Forum (2010) addressed the issue through the New Vision for agriculture
(NVA) in 2009 wherein public-private partnerships were established.
 It has mobilized over 10billion that reached smallholder farmers.
 The Forum’s initiatives were launched to establish cooperation and encourage exchange of
knowledge among farmers, government, civil society, and the private sector in both regional and
national levels (Breen, 2016)
1. Questions
a. Make a research of technological fixes used in geoengineering to solve the effects of greenhouse
effect. Explain the use of geoengineering in global warming.
b. Identify two (2) sustainable development projects being done in the Philippines and expound on the
extent of its implementation.
c. Recommend two (2) sustainable development projects and explain how it can be accomplish in the
Philippines.
Reinforcement:
Instructions:
a. Explain the statement “ Future food security is also made more challenging because depletion
is accompanied by competition”. What are its implications on personal, industrial and agricultural
consumptions?
b. Explain the factors that affects the relationship between water pricing, productivity and
contamination.
c. Discuss how would global trade affects agricultural productivity, the consumer and health.
What are the possible solutions to its effects to be able to move forward in a sustainable development?
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4. Readings:
Water International –
Virtual water: its implications on agriculture and trade
Chittaranjan Ray,David McInnes & Matthew Sanderson
Pages 717-730 | Received 25 Apr 2018, Accepted 21 Aug 2018, Published online: 15 Oct 2018
https://www.tandfonline.com/doi/full/10.1080/02508060.2018.1515564
Water is the basis of life. And, unlike various forms of energy generation, water cannot simply be
created where it is needed. Freshwater is remarkably scarce, comprising just 2.5% of the global water
supply. Although this water at an annual level may be judged as sufficient for human use, spatio-
temporal variations in the availability of freshwater over the globe is a challenge. Growing populations
and rising levels of affluence mean increased competition for water, raising vital questions of equity,
access, and social justice at the global scale. Water is thus a lens through which to examine an array of
vital issues facing humanity and the planet: human and animal health; food production; environmental
management; resource consumption; climate change adaptation and mitigation; economic
development, trade and competitiveness; and ethics and consumer trust – to name but a few.
Figure 1. Water footprint categories based on consumption.
Figure 2. Water is a lens to examine key issues facing agriculture, people, and the planet.
The articles here, arising from a workshop supported by the OECD Co-operative Research Programme:
Biological Resources Management for Sustainable Agricultural Systems, on virtual water, agriculture,
and trade at the University of Nebraska-Lincoln in September 2016, consider questions of gaps in
knowledge, why sustainability matters, and the policy implications of virtual water trade.
What we don’t know can hurt us
A pervasive theme throughout the articles herein, and the workshop that initiated them, is the general
lack of knowledge of the use of water in producing and consuming food. For instance:
• Consumers are generally unaware, when they purchase imported goods, that they are
effectively outsourcing water depletion in the form of crop or food demands in another country or
region. This can be described as ‘off-shoring environmental burdens’ (Hess and Sutcliffe, this issue).
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• Agricultural regions suffering from droughts invite public scrutiny about producers’ water
practices (e.g. irrigation) particularly when consumers in nearby cities are subjected to water advisories
or supply cutbacks. More broadly, managing water issues is about maintaining consumer trust among
citizens who are often far-removed from the source and use of that water (at the farm/ranch level).
• The lack of good data, computing tools, and interpretation techniques (in the context of future
climatic scenarios and impact on water supply) is a major issue in terms of how water is managed now
and in the future. For example, not all irrigation wells in the High Plains/Ogallala Aquifer (HPOA) are
metered to provide data on pumpage. Even when adequate data are available, improved water
footprint calculation methods are required to properly understand and manage stressed water
resources.
• As water stresses increase, we need better transparency of policies that incentivize or

determine water use in agriculture. Water is not generally priced in terms of its cost of depletion.
Various subsidies hide the true cost of water which causes market-distorting behaviors with negative
environmental effects.
• Also unclear is whether food producers and the food system in general (i.e., processors and
retailers) fully understand the long-term implications of unsustainable water use from aquifers. Put
another way, market signals may not be incentivizing the right water use practices. That said, food
supply chains are becoming far more focused on sustainable sourcing, and demonstrating that to
consumers. This shift could be a game-changer to make current practices to be more sustainable.
Understanding virtual water and the water footprint
Virtual water is the amount of water ‘embedded’ in a product (Allan, 2011). As agricultural products are
sold and traded, the water that is used to produce them (natural rainfall or irrigation) is also essentially
traded. Identifying the amount of virtual water embedded in a product has implications for water
management, practice, and policy. For instance, with irrigation, many arid regions around the world are
major producers of our food and feed, and an important source of agricultural exports. Yet, increasing
climate stress and competition for scarce water in these regions raise significant questions for
stakeholders in an integrated, globalizing food system: Where should food be produced? How best to
use limited water resources? What information should be available to consumers to assist them in
making more informed decisions?
The ‘water footprint’ (Hoekstra & Chapagain, 2008; Hoekstra & Mekonnen, 2012) has been developed
as a tool, especially by the Water Footprint Network, to measure virtual water use over the entire supply
chain from production to delivery to the consumer, and including pollution produced in the process. It
refers to the amount of fresh water it takes to produce a product (whether a food or material good), to
bring it to the consumer, and in dealing with the pollution created by the product over the supply chain.
Vanham’s article here describes two methodologies to conduct water footprint assessments – one
developed within the Integrated Water Resources Management (IWRM) framework, and one associated
with work in the Life Cycle Analysis framework. The author shows that there are non-trivial differences
between the methodologies, but also complementarities.
The water footprint is typically divided into three sub-categories: blue, green, and grey (see Figure 1).
Blue water refers to the consumption of surface and ground waters (by irrigation) along the supply chain
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of a product or from growing a crop to bringing it to market. Green water relates to the consumption of
rainwater (before it becomes runoff). This includes the moisture available to plants from soil and
intercepted moisture in the plant canopy or on soil surfaces. The term ‘consumption’ used in blue and
green waters refers to incorporation into the product, evaporation from soil or transpiration from
plants, deep percolation to ground water, or movement of surface water from one catchment to
another. Grey water is the amount of fresh water that will be required to assimilate the pollutant loads
to meet water quality criteria as set by local regulations (i.e., dilution requirements for pollution).
There is often disagreement over the procedures adopted for water footprint calculations. For example,
the water footprint of a kilogram of wheat or kilogram of beef often represents an average when
expressed as a global number. Averages can conceal important qualitative differences among areas of
production, and these figures can often vary from place to place. When it comes to distinguishing blue
water (often the more costly component) from green water, discrepancies in methods can be important.
For example, the water footprint of a kilogram of beef can have different blue or green water footprints
if the cattle are raised in a ranch versus in a confined animal feeding operation (CAFO). The animal feed
for the CAFO cattle may be produced using blue water or green water, or some combination. For cattle
raised on rangelands or ranches, a major part of the animal’s diet comes from natural grass, which is
dependent on green water. In the mid-western USA beef cattle production system in the rangelands,
some grain is used to fatten the animal before selling into the market, but this method of cattle
production would have a lower blue water footprint compared to fully grain-fed beef in these areas. In
many parts of the world, the beef cattle raised in the range land or ranches are sold directly in the
market rather than fattening them in CAFOs. In such cases, the total water footprint may be high due to
low feed to product conversion ratio (i.e., more grass is needed for the same mass of beef than corn or
other feed). When considering meat from swine or chicken, most feeding and raising of these animals
occurs in CAFOs. Producing animal protein has a definable water footprint at a given location and the
blue and green water component will vary. In short, making clear comparisons and understanding the
trade-offs of water use is not always clear, can make public dialogues confusing and contentious, and
can provide variabilities in understanding environmental impacts. Thus, while it can be useful for
decision-making, using the water footprint is not without difficulties. For instance, Wichelns (this issue)
argues that water footprint ratios have limitation because they do not consider the conditions in which
crops are grown. Going forward, it will be important to clearly understand the advantages and the
limitations of water footprint, and virtual water measures, especially if they are used to inform policy
and practice.
How we grow, process, trade and consume our food is intimately linked to how we use and manage
water. Below, we elaborate on insights emerging from the articles in this issue.
Perspectives on blue water
Many of the contributions here focus on one of the most productive growing regions on Earth, the
American Great Plains, but we have included a number of insightful international cases. Combined, this
offered a lens (see Figure 2) to explore a variety of major issues about water used in modern agriculture
and the global food system – a number of which are elaborated upon below.
Food production and food security

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In the HPOA region of the American Midwest, large-scale production of corn, soybean, wheat, cotton,
and sorghum rely heavily on locally available groundwater (Martson, Konar, Cai, & Troy, 2015).
However, in many parts of the region, irrigation pumping exceeds the recharge rates (Scanlon et al.,
2012), resulting in groundwater depletion. In southern part of the HPOA (particularly in Texas,
Oklahoma, and western Kansas), groundwater depletion has been so severe that existing irrigation
systems are unable to fully irrigate fields. As Konar et al. show, other large aquifers such as the Central
Valley and the Mississippi Embayment are also experiencing significant overdraft and long-term
sustainability concerns. Their paper raises vital questions about temporal and spatial trade-offs. Clearly,
consumption and production today comes at the expense of future use. This is apparent for the HPOA,
which is essentially nonrenewable in its southern and central regions owing to minimal recharge and
high evaporation rates. Tracing virtual water through trade flows can reveal where – or who – is
consuming the water embedded in the agricultural products. These analyses are raising important, and
difficult, questions for policy in an increasingly inter-connected global food system.
One key issue is about global accountability. While considerable attention is devoted to the smooth
functioning of global supply chains, which results in a relatively reliable and safe food supply for
consumers, less consideration appears to be given to deciding what institutions and capacity are needed
to properly manage, or govern, water consumption at requisite scales. Improving transparency of water
allocation and management practices may help address this challenge.
Future food security is also made more challenging because depletion is accompanied by competition
for, and increased scrutiny of, the water resource (World Water Assessment Programme [WWAP],
2012). Agriculture competes for water with other economic interests. Oil exploration and processing rely
on ground water from the HPOA in Southwest Kansas, West Texas, New Mexico and Oklahoma.
Competition for water creates a contentious debate over who should have access to it. The situation
also puts a greater spotlight on big users of water, including farming practices. For instance, in the Great
Plains of the US, many farmers have been producing consecutive corn crops over the last decade or so, a
more intensively irrigated and fertilized commodity than other common crops produced in the region.
Producers respond to customer demand signals for their crops and to government signals (subsidies).
The push to increase yields is prompting more interest in sustainability practices, such as how nitrogen
fertilizer is used and managed (which can affect water quality) and in prompting watershed-wide
analyses of irrigation practices.
These issues will likely become even more important in the context of a changing climate. The article by
Lu et al., for example, finds that in Nebraska, irrigated crops are less sensitive to changing climate than
dryland crops, but irrigated crops have lower water productivity. Among their findings, they suggest that
expanding irrigated winter wheat acreages could maintain high yields while conserving more water.
Similarly, the article by West and Baxter reports that the legume lucerne (alfalfa, Medicago sativa) could
be introduced to lower the water footprint of the stocker phase of beef production in the U.S. High
Plains. Informed choices about crop mixes and rotations are crucial for improving the sustainability of
agri-food systems in changing climates.
The case has also been made for expanding irrigation investment in certain regions. As Xie et al. argue in
this volume, irrigation may help address Sub-Saharan Africa’s food security and nutrition situation and
reduce food import dependency. Small-scale irrigation could substantially benefit the production of
vegetables and groundnuts. Such activity has a multiplier effect, such as on providing employment and
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trade opportunities. However, the UN Sustainable Development Goals (SDGs) offer guidance here.
Finding the optimum pathway to eliminate hunger and malnutrition (Goal 2) must include ensuring
sustainable water withdrawals (Goal 6) and pursuing sustainable use of natural resources that takes into
account the situation in developing countries (Goal 12).
Environmental sustainability
The environmental sustainability of water used in agriculture is complex. Understanding impacts on

primary aquifers is paramount. As sources of irrigation water, aquifers can become stressed when
human demand (pumpage) outstrips natural recharge rates and captures water that would otherwise
feed surface flows (Bredehoeft, 2002; Gleeson, Wada, Bierkens, & van Beek, 2012). Few argue that
aquifers can be practically restored to the original (pre-pumping) state unless agriculture is completely
or significantly curtailed – the politics of which are not feasible. In such situations, the focus shifts to
how to do ‘no more harm.’ This largely reflects the situation in HPOA today, although the magnitude of
the problem varies across the region (i.e., north to south). For example, the southern region of the
HPOA (western Kansas, and the panhandle regions of Oklahoma and Texas) has seen significant declines
in water levels compared to the pre-development era (Haacker, Kendall, & Hyndman, 2016). Some areas
have seen water levels lowered more than 150 feet (45 metres) and other areas are no longer irrigable
(McGuire, 2014). At this rate of consumption, and with current cropping systems in place, even more of
the southern and central parts of the HPOA are expected to face questions about the longevity of the
aquifer for irrigated crop production.
It is apparent that good data are required so that modeling and analytics can help us respond to the
challenges of water trade. As Butler et al.’s paper shows, water use and water level data can be used to
increase the effectiveness of forecasting models. Kansas data, in this sense, are rare in the detail they
provide analysts, but when such data are available, the insights are exceedingly useful for understanding
that policies needed to extend the useful life of the resource. Butler et al. find that ‘practically feasible
pumping reductions’ of 10–20% would have large impacts on rates of water decline, and that slightly
larger reductions (20–30%) could even lead to near-stable water levels. Yet, there remains much room
for improvement in the area of water data collection and availability. For example, while flow meters
are required in western Kansas, many irrigation wells in the HPOA are not yet metered to provide data
on pumping, which is a more direct and reliable measurement of the volume of groundwater extracted.
The absence of complete data on water consumption is a clear challenge for scientists’ capacity to
model and assess impacts. In the context of future climate change scenarios, an increase in the
temperature in the summer growing season is likely to enhance evapotranspiration, which will increase
the demand for irrigation. Changing climates and the persistence of droughts (such as the 2012 drought
in the Great Plains region) puts increasing pressure on the aquifer. While the U.S. Geological Survey has
also had a monitoring program for HPOA water levels since the mid-1980s, the need for good data and
better water footprint calculation methods becomes more important as this resource becomes more
stressed.
Water pricing
Pricing water is directly relevant to the economics of sustainability. It is controversial. Politicians, citizens
and the agri-food sector need to confront trade-offs associated with the reliance on government
subsidies to produce feed, food, fiber and fuel from agricultural crops. Subsidies may be well-
intentioned but they can hide the true cost of water and encourage unsustainable agricultural practices.
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In Nebraska, for example, price supports and subsidies for corn have changed crop rotations as
producers seek consecutive high yields. What seemed at one time like an endless bounty of
groundwater, combined with relatively inexpensive energy to pump it, has created significant
momentum to continuously grow the crops that show the greatest short-term profit. In the U.S., federal
government subsidies, including the corn ethanol subsidy, support this practice.
While farmers are generally motivated for cost reasons to reduce nitrogen fertilization use and to
maintain healthy soils, consecutive cropping of corn over the past decades in this region has led to
significant input of nitrogen fertilizers (Exner, Hirsh, & Spalding, 2014; Juntakut, Snow, Haacker, & Ray,
submitted). This has led to high nitrate levels in groundwater which has impacted many communities,
challenging them in providing water that meets health standards for human consumption. Fertilizer
impacts also vary with soil type. In the Midwestern corn belt, sandy soils tend to facilitate groundwater
contamination. There are also other complications with high nitrates in groundwater. Green and
Anapalli provide distributions of water percolation and nitrate leaching based on irrigation variability
and projected climate change. Groundwater nitrate contamination can also increase the risk of further
contamination from naturally-occurring toxins. Denitrification can enhance the mobilization of uranium
naturally present in the subsurface (Nolan & Weber, 2015). Notwithstanding the fact that agriculture is
not the only source of water contamination, local communities are still left with the task of ensuring
drinking water quality and adequacy for its citizens. Grand Island and McCook are among the Nebraska
communities that have installed treatment plants for uranium.
In essence, citizens pay for water three times. As Vanham describes, taxpayers pay for the farm subsidy
that encourages corn production; consumers pay a hidden price when purchasing food (as water has
some cost of food production or processing as an input cost); and residents pay for any
municipal/regional cleanup or rehabilitation cost of the groundwater from production practices. While
there is widespread pressure by cities to require the farmers or farmers associations to pay for cost of
treating water contaminated with nitrate or pesticides, there is no precedence in the United States to
pay for this cost. In a recent court case in Iowa, the City of Des Moines filed a lawsuit against counties
upstream from its storage reservoir that provides water to its residents. The claim in the lawsuit was to
recover cost of treatment; however, this lawsuit was thrown out by the Iowa Supreme Court, which
ruled that it was a legislative matter, not a judicial matter.1 There are many small towns in Nebraska,
Iowa, Illinois and other Midwestern states where the farmers indirectly pay for cost of treatment
because they live in those towns, and the town increases the cost of supplied water and raises property
taxes to pay for shortfalls in state and federal funding of treatment plants.
Water pricing can be used to manage water as a scarce resource and achieve improved productivity.
Engaging producers on the economics of water is a matter of self-interest and societal benefit – and
should be seen as such. Water productivity is a measure of the amount of water used per unit of
agricultural product: the higher the water use relative to yield, the lower the efficiency. However, a crop
simulation model has shown that farmers tend to apply more irrigation water than what is needed (Carr,
Yang, & Ray, 2016). Use of variable rate irrigation to reduce overwatering in different soil types, and
installation of variable drive pumps to reduce energy demand (generated from electricity, diesel or
natural gas), are a few of the features available to reduce overwatering. The ultimate objective – which
is in the best interests of farmers and society – is more sustainable water use: less blue water used per
unit of production. Widely adopting this key measure of efficiency appears to be an essential farm
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management and sustainability tool. However, additional economic analysis is warranted, including how
to promote its widespread adoption.
Ownership
Water ownership is central to addressing sustainability. In Chile, for example, Alvarez describes how
water law fails to promote sustainable water use by allocating water rights according to basin water
supply rather than crop irrigation demand. Alvarez’s research is a reminder that how we manage water
is, essentially, a governance issue. In the U.S. context, water rights and ownership vary significantly
among the states. This invites different sustainability options, including the role government can play
depending on state or individual rights of water. For example, Peck (2007) states that Nebraska uses a
hybrid approach to managing the ground water rights, which includes the ‘Reasonable Use Doctrine’ and
the ‘Correlative Rights Doctrine.’ The right to use comes from the ownership of land overlying the water.
If the site is within a groundwater management area, a permit is needed. All well owners are required to
register their wells. Statutes also regulate the location of wells with respect to rivers/streams or other
wells and the reasonable use clause is employed where the owner cannot use more than a reasonable
quantity and it must be shared among others. On the other hand, Texas employs the ‘Rule of Capture,’
which allows landowners to extract all the water beneath the land and do whatever they want with it.
As the landowner is not liable to the neighbor, this has spurred severe aquifer drawdown. However,
local regulations are slowly becoming more stringent across the Central and Southern HPOA. In the case
of Texas, there are eleven ground water conservation districts (GCDs) in the HPOA region of Texas and
each still recognizes landowners as groundwater owners. However, GCDs are required to work with the
Texas Water Development Board to enumerate ‘desired future conditions,’ and to submit a water plan
to meet those conditions. These water plans are evaluated using a groundwater model (Deeds &
Jigmond, 2015). While restrictions primarily affect cities and their ability to use state funding for new
water supply infrastructure, agricultural management is increasingly involved in conservation measures.
In 2015, the High Plains Underground Water Conservation District No. 1 implemented metering
requirements for irrigation wells, and set a maximum irrigation limit of 18 inches (450 mm) per year for
double cropping.
Policy implications
While the workshop was not intended to catalogue every issue relating to water, the dialogue
uncovered several pertinent policy issues.
Global trade and agricultural subsidies
Some 70% of the world’s fresh water from rivers, lakes, and aquifers (blue water) is used to produce the
food for humanity. A great deal of this water is exported in the form of virtual water (Hoekstra &
Mekonnen, 2012). Of critical importance is the extent to which this volume of trade has
disproportionate negative impacts on the world’s water resources. Hess and Sutcliffe’s article raises this
issue in the context of the United Kingdom’s reliance on other countries, such as Spain, to supply many
of its fruits and vegetables (a matter that could equally apply to many other countries). As a semi-arid
country, Spain is facing severe water stress so its food exports are, effectively, allowing Britain and other
nations to ‘off-shore’ their environmental burdens.
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This situation is sustained in part because of the existence of government subsidies. To discuss trade and
ecosystem impacts, one must consider the role that agricultural subsidies play in encouraging global
agricultural production and groundwater depletion, water quality deterioration and biodiversity
impacts. However, subsidies have not drawn a great deal of attention or concern for their impact on the
environment; there has not been a World Trade Organization challenge yet against a country based on
how it subsidizes water for on-farm use (see Garrido, 2017).
Subsidies exist in many forms. Across the OECD, subsidies (total producer support) have been calculated
to be nearly US$240 billion (2014 data) (Canadian Agri-Food Policy Institute [CAPI], 2017). Not all
subsidies are necessarily bad; it is the unintended consequences and degree of this impact that is the
issue. For instance, while subsidized pricing for fertilizer in India has helped poor farmers in that country,
highly subsidized and basically free power use to pump water has not helped the agricultural sector of
India. Over-pumping has caused severe groundwater depletion in many areas, particularly the state of
Punjab. In 2002, agricultural pumping accounted for more than 31% of total power use in India (Centre
for Monitoring Indian Economy [CMIE], 2002).
The issue is difficult to comprehend given that reporting on subsidies has been changing. The 2014 US
Farm Bill abolished direct payment based on land ownership, and instead farmers can get subsidies for
insurance and for other needs (Polzkill et al., 2017). However, the impact of subsidy practices still masks
understanding environmental impacts. The World Trade Organization reporting system, for instance,
tends to under-report certain practices that encourage unsustainable practices, including excessive
drawdown of aquifers worldwide (Canadian Agri-Food Policy Institute [CAPI], 2017). As demand for food
rises and pressure to use water increases, the lack of transparency of these forms of subsidy will only
challenge policy-makers further about clearly understanding the causes and effects of their decisions.
Meanwhile, the depletion of natural capital will largely continue.
Supply chain risk and resilience
Global processors and retailers depend on reliable supply chains to ensure consumers have safe, reliable
and quality products from which to choose every day. These companies are monitoring a variety of
supply chain risks, including dependable supply of literally thousands of ingredients and products.
Climate change and extreme weather challenges global producers and suppliers, including, as noted
earlier, the sourcing of fresh produce from arid growing areas that are highly vulnerable to droughts.
Increasingly, these large companies expect producers and supply chains to conform to new sustainability
protocols. The action is motivated by demonstrating ‘corporate social responsibility’ and good corporate
governance. Security of supply chains and minimizing reputational risk (i.e., the risk of being accused of
not sourcing sustainably) are powerful motivators to change unsustainable practices.
Producers, input suppliers, and processors are also creating bottom-up initiatives to improve crop
resilience and sustainability, such as sustainable soy. There are a myriad of initiatives, such as
McDonald’s Restaurants’ participation in a global sustainable beef roundtable that also includes
ranchers and many others. Often, major environmental groups are part of these efforts, such as the
World Wildlife Fund. A new dynamic is occurring that is linking responsible sourcing with environmental,
health, ethical and other objectives. A full assessment is required to discern how these initiatives have
implications for groundwater depletion, but the point is that many major supply chains are being
responsive to environmental risks.
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Technology adoption is also vital to respond to the water challenge and improve sustainability.
Technology is key to precision agriculture (and ‘precision irrigation’), which will help to ensure that
plants get the required nutrients and water at the right time and in the right amount. A global effort is
underway to improve fertilizer use (known as the 4R program for ‘right source, right rate, right time, and
right place’), which is helping to achieve this positive outcome. Farmers are generally motivated to
improve their practices as they want to ensure yield and quality, such as using soil moisture sensors to
irrigate their fields (and to maximize the ratio of transpiration to evaporation), but the technology is yet
to be adopted by all farmers.
What is largely missing is full cost-accounting of the environmental footprint of food production, or at
least its widespread adoption within traditional supply chains. As the world population is expected to
reach 10 billion by 2050, the need for food is expected to double. The way in which the food system
accounts for the impact of food production will become increasingly salient. Moreover, a global effort is
underway to promote a new approach, such as with the UN’s Sustainable Development Goals. One of its
17 major goals speaks to sustainable production and consumption. Other goals include addressing water
use, agricultural production and the environment. At the time of the workshop, the SDGs were not given
much consideration since this UN initiative had recently come into being (in early 2016). However, going
forward, the SDGs are expected to have increasing relevance for consumers, companies, investors, and
governments and are worthy to understand for their implications on managing agri-food system
sustainability.
Consumers, health and trust
A major issue facing the sector as a whole is maintaining consumer trust. Mistrust of food production
can result in calls for government regulation, shift dietary preferences, invite bad publicity and
undermine corporate reputations – and with social media, criticism can be devastating. The move to
healthy diets is based on the belief that animal agriculture contributes to environmental degradation
(Tilman & Clark, 2014). The Meatless Monday campaign (a global advocacy effort) calls for consumers to
reduce meat consumption and improve the health of people and the planet. The water footprint of
meat production is much higher than the water footprints for vegetable-based meals (Mekonnen &
Hoekstra, 2012). This rationale is used by advocates, consumers, and the media to affirm their position
in favor of healthier diets, for the planet and for individuals. The underlying issue is that consumer food
choices are increasingly based on expectations of what is good for the environment. A water footprint
assessment can provide additional insights into the consumptive effects of diets, food loss, and food
waste implicated in producing those diets. For example, Mekonnen and Fulton’s article shows that
shifting to vegan and vegetarian diets would provide larger reductions in the consumptive water
footprint than simply shifting to more healthy diets in the U.S. But, lowering rates of food loss and food
waste would decrease the consumptive water footprint in the U.S. even more.
Maintaining rural/agriculture livelihoods is important for all countries. However, most consumers live in
urban or peri-urban areas and demands from these populations for sustainable food productions are
becoming more pronounced, particularly in wealthier countries. Urban consumers are disconnected
from the farm or ranch but still have certain expectations about how their food needs to be produced
(e.g., hormone-free, GMO-free, organic, shade-grown, etc.). It is true that such expectations create new
marketing opportunities and product innovation opportunities for food suppliers, but there will continue
to be a tension in the system to respond to food wants from an increasingly urban consumer population.
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The agri-food sector generally responds to these issues with the call for more consumer education.
Certainly, better information is needed. However, most consumers will not likely spend much time
considering the distinctions between blue and green waters. While most consumers make food choices
based on price, taste and quality, consumers are starting to make value decisions based on
sustainability, in many cases as a result of advocacy from environmental non-profit groups. This explains
why food retailers provide sustainably-sourced seafood and processors certify themselves as protecting
ecosystems. Local food is also preferred in part because consumers feel that the carbon footprint is less
than food produced from afar, since the energy inputs for transportation are among the most visible
and easily grasped components of the food production system.
Understanding sustainability footprints is complex. Lee et al. describe in this volume the usefulness of
the water footprint for rice products and the food-energy-water nexus in Korea. But there are trade-offs
in the food-energy-water nexus, especially given rapid urbanization, as Taniguchi et al. discuss in the
Asia-Pacific region. Another example is to consider the feed needed for beef cattle production in
Nebraska. If the feed is sourced from local cooperatives using Nebraska groundwater for corn irrigation,
then the water footprint per kilo of beef is expected to be lower compared to the footprint of the feed
corn that is transported from Texas, Oklahoma, or southwestern Kansas, where the evapotranspiration
demand is high and more water is used to produce similar amount of feed corn. This is a calculation that
consumers would obviously want experts to determine. If it is important to consumers, they would just
want to trust the verification of any such claims. Often consumers do not trust self-appointed experts
because the people with the greatest stake in the water footprint are the ‘experts’ hired by food
companies, and they tend to find a far lower water footprint than independent analyses (Nestle, 2015).
As sustainability issues intensify, the agri-food sector and regulators will need to decide what are the
best certification and verification protocols to deploy in order to maintain societal and customer trust.
The level and transparency of that bar can only be expected to rise.
Going forward
Irrigation water will continue to be vitally important for agricultural production, the food supply, trade,
and for the economic viability of communities. In the case of groundwater resources of the HPOA, can
depletion rates continue for shorter term benefits at the expense of long-term sustainability? The
answer to agricultural water management problems is made difficult by how we price the extraction of
this precious resource, how we incentivize its draw-down and protect it through agricultural practices,
and how we price our food and make it visible or not to the final consumer. Surface water diversions
often affect resources that cross political boundaries, such as the Republican and Colorado rivers and
the Aral Sea in central Asia. The issue has geopolitical and ethical ramifications for the developed and
developing world alike. Wealthier economies import many foods from water-stressed regions. In Africa,
countries are leasing large tracts of land to produce food on a contract basis for export. Consumers get
the benefit of this production, but at the local cost of water depletion, the diminishing resource for
current agriculture and the impacts on water quality from excessive or cumulative nutrient-loading or
increased salinity of drinking water. This is a legacy we are seeing unfold today and leaving to future
generations tomorrow.
The necessary counter-balance could be a combination of technology and transparency of policies and
practices, made possible with better data and analytics, plus significant shifts in attitudes. We may be
able to better manage aquifers and the food supply chains that depend on them. But this demands an
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integrated approach for food systems and communities. Documenting the unforeseen consequences of
current practices is a vital step to transforming how we produce our food. The global food system is
adopting, certifying and branding a host of sustainably-sourced commodities and foods, from
sustainable palm oil and soy to reduce the incidence of rainforest deforestation, to sustainable beef and
seafood to protect the food supply and the environment. To effect real change, we may have no choice
but to put ‘sustainably-sourced aquifers’ on this list as well.
Lesson Number: Globalization Lesson 6 – The Global Economy Part 2-A
Topic: Economic Globalization, Poverty, and Inequality
1. Appraise the Economic Globalization events that led to poverty, inequality and global divide;
2. Organize the results of Economic Globalization that led to poverty, inequality and global divide; and
3. Select the programs in Economic Globalization that will be effective in solving poverty and inequality
in the Philippine situation.
Review questions:
1) Review questions
a. Explain how the neoliberals made measures to address the environmental problems.
b. Are the UN’s Sustainable Development Goals and World Economic Forum’s New Vision for
Agriculture enough to maintain world food security? Discuss the implications
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Definitions
Multiplier Effect – means an increase in one economic activity can lead to an increase in other economic
activities. Example is investment leads to business means more jobs and more income.
Wealth – wealth refers to the net worth of a country. That is the assets of a nation (natural, physical and
human) less the liabilities.
Wealth Inequality – speaks about (unequal) distribution of assets. However, there is no widely
recognized monetary measure that sums up these assets (Economist, 2012)
Income – is the new earnings that is constantly being added to the pile of a country’s wealth
Income Inequality – means that new earnings are (unequally) distributed. It values the flow of goods
and services, not a stock of assets (Economist, 2012)
Gross Domestic Product GDP – measures the total output of a country
Gross National Income GNI - measures GDP per capita or GDP/total population
Global City – also called a power city, world city, alpha city or world center, is a city which is a primary
node in the global economic network. It is important to the operation of the global system of finance
and trade. (Wikipedia)
Introduction
 Economic globalization has helped millions of people get out of extreme poverty but the
challenge of the future is to lift up the poor while at the same time keep the planet livable.
 Earning the biggest profit margin push companies trying to outmaneuver their competitors
which resulted to economic and trade globalization.
• Companies are searching worldwide for the cheapest materials, labor, and countries with
weakest regulations (pro-business)
• The process creates winners:
 Corporations and stockholders earn more profits
 Consumers get their products at a cheaper price
 Jobs and additional income for GNP for the host countries
 Some jobs pay above average wages in the developing countries because of the exchange rate
and standard of living factors
 Example are the Business Process Outsourcing BPOs in the Philippines. Call center agents get
above average salaries here but is only a fraction of the true wage in the developed countries.
• The process also creates losers:
 High wageworkers losing their jobs as operations are shifted outside the country of origin
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 Low wage foreign workers in hazardous working conditions
 Investments creates multiplier effect
• Bangladesh thrives in the apparel and sweatshops business alone for the European market. It is
what keeps their economy afloat even with subsisting wages only. (Krugman, as cited in the New York
times, 2013)
 Opponents of economic globalization called the outsourcing of jobs as exploitation and

oppression, a form of economic colonialism that puts profits before welfare of the people.
• The root of the problems is that foreign companies do not have to follow their own rules they
do in the developed countries.
• Conditions in the developing countries:
 No minimum wage laws
 No regulations on safe working conditions and environment protection
 Anti-child labor laws are not strictly enforced
• A few developing countries calls for protectionist policies like higher tariffs, limitations on
outsourcing and demand for higher wages.
 Instances where workers would not be mistreated in the absence of regulations:
• First, The International community promotes public awareness to exert pressure to take steps to
protect workers like the US issue an annual list of goods produced by child labor or force labor. Any
company will be confounded by the public officials and the media if they are buying from that list.
• Second, pro-globalization insist on the multiplier effect as developing economies grow, there
more opportunities for workers which leads to more competition for labor and higher wages.
 Participation in the economy by the poor in extreme poverty through micro credit
• Micro credit started in Bangladesh in 2006 by Professor Muhammad Yunus who won him a
Nobel Peace Prize.
• The borrowers who are mostly female, often used the money to fund plans or small business
that could raise their income
• It spread to developing countries with private lenders, governments, and nonprofit

organizations joined to loan billions of dollars to the world’s most disadvantaged.
• Participation means doing business in their own terms and conditions that turns their creativity
into sustainable income.
 The way people have emerged from extreme poverty in the last 25 years have jobs, wages and
working conditions that would be unaccepted in the developed countries.
 Economist says that it is still a work in progress that is very hard to achieve.
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Global Income Inequality
 Global income inequality is synonymous with global economic inequality. Nations are divided
between north and south, developed and less developed, and core and the periphery.
 Gross Domestic Product GDP is usually used to measure income in global economic inequality
 Global wealth is estimated to be about 3.5 trillion dollars and is not distributed equally as
reported by Global Wealth Report 2016 by Credit Suisse Research Institute
 While the bottom half collectively own less than 1 percent of total wealth, the wealthiest top 10
percent own 89 percent of all global assets (Credit Suisse, 2016)
 The US and Japan were able to increase their wealth while the UK suffered a decline due to
currency depreciation.
 Causes of Global Income Inequality
• “Economic Big Bang” theory made by the Industrial Revolution as written by Milanovic (2011) an
economist who specializes in global inequality.
 The explosion of industry and modern technology created the economic gap wherein nations
are developed-rich and others are developing-poor
 Back in 1820 Great Britain and Netherlands are only 3x richer than India and China, but today
(Millanovic, 2011) the ratio is 100:1
• Economic Globalization and International Trade are the forces responsible in the present global
income inequality.
 Only improved living standards for billions (of people) while concentrating billions (of dollars)
among the few (OECD)
 The poor are doing a little better and the rich are becoming richer
• Access to technology complemented skilled workers but replaced many unskilled workers.
 Skill based technological change gave educated and more skilled workers to thrived by receiving
higher wages while unskilled workers fall behind.
 Manufacturing jobs that require low skills are moved overseas
 Result is widening gap between the rich and the poor and between high skilled and unskilled
workers
The Third World and Global South
Origins of Global Stratifications
 First World or Third World countries

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• Began in the Cold War 1947-1991 (after WW2 until the fall of communist Russia) in three
distinct economic and political blocs called First World, Second World and the Third World (Tomlinson,
2003)
• Western capitalist countries (US and European western bloc) were labeled as the First World
while the Soviet Union and its allies (European eastern bloc) were labeled as the Second World.
Everyone else are grouped into the Third World who are non-aligned countries neither to the US or to
the Soviet Union.
• After the cold war ended, the Second World category ended with it while the term First World
and Third World remained
• The First World became synonymous with the rich industrialized countries while the Third World
was identified with impoverished states.
 Use of Gross National Product GDP and Gross National Income GNI
• Use of the terms First World and Third World are outdated and inaccurate. The more than 100
countries which belong to the Third World have different level of economic stability. Some are lumping,
relatively poor and some are not.
• Nowadays, GDP and GNI are used by social scientists to sort countries based on their specific
levels of economic productivity.
 Use of Global North and Global South
• Reuveny & Thompson, 2007, made a new and simpler classification.
• Points largely to racial inequality between the Black or colored and the White
• Whites are dominant in the North while Blacks or colored are primarily in the South “have
always possessed a racial character” (Winant, 2001)
• The wealthy Global North are First World countries like US, Canada, western Europe and
developed parts of Asia
• The poor Global South are Third World countries which includes Asia (with the exception of
Japan, Hong Kong, Macau, Singapore, South Korea and Taiwan), Central America, South America,
Mexico, Africa, and the Middle East (with the exception of Israel). (Wikimedia.org)
 They are located south of 30 degrees north latitude
 They share common economic and political problems and issues
 A way for countries in the South to make a stand about common issues, problems and even
causes in order to have equality all throughout the world.
• The differences Global North and Global South are shaped by south to north migration and
globalization.
Global Flows
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 The movement of goods and services, finance, and people
 Creating new degrees of connectedness among economies—and playing an ever-larger role in

determining the fate of nations, companies, and individuals.
 To be unconnected is to fall behind.
 A common thread in economic growth for centuries, since the days of the Silk Road, through the
mercantilist and colonial periods and the Industrial Revolution.
The Global City
 An urban centre that enjoys significant competitive advantages and that serves as a hub within a
globalized economic system. (Britannica.com)
 Three urban centers of New York, London, and Tokyo as economic centers that exert control
over the world’s political economy. (Sassen, 1991)
 Effects of Globalization which gave rise to rural-urban differentiation
• Altered North-South relations in Agriculture due to the rise of global agribusiness and factory
farms.
 South produces non-traditional products for export and become dependent on industrialized
food exports from the North.
 Led to the replacement of staple diet as well as the displacement of local farmers.
• The relations of social production are also altered due to commercial agriculture which replaces
local provisioning.
 Rural economies are exposed to low prices of agricultural products which led to mass migration
of agricultural workers to urban cities for work.
 Pros and Cons of urban centers or global cities
• Major beneficiaries of globalization
• Most severely affected by distinct political problems
 They have to deal locally with loaded internal political problems and global problems. Ex. New
York city as an international transport hub in east of America suffered a great blow due to covid-19
pandemic in the rise of deaths and confirmed cases in local population and globally suffering a
downward trend in stocks, financial and commercial exchange operations.
1. Questions
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a. Describe the pros and cons of economic globalization in its effect on corporations, labor, agriculture,
and society.
b. Explain the three origins of global stratifications
c. Make 3 arguments on the impact of urbanization and the rise of global city on the agricultural sector
Reinforcement:
Instructions:
a. Comment on the World Bank Chief article on extreme poverty terms of global stratifications
and global flows.
b. Read the article on the Corona Virus and discuss the effect of the Covid-19 pandemic with
regards to its effect in globalization, communication and global health.
c. Base on the 3rd article about “Interconnected” and other studies, propose a local economic
program that may maximize the global flows trend in the coming years to uplift the poor.
4. Readings:
World Bank chief warns extreme poverty could surge by 100 mn
https://ph.news.yahoo.com/world-bank-chief-warns-extreme-210546661.html
Heather SCOTT
AFP News21 August 2020
World Bank President David Malpass said the global pandemic makes it urgent to reduce the debt of the
poorest nations
More
The coronavirus pandemic may have driven as many as 100 million people back into extreme poverty,
World Bank President David Malpass warned Thursday.
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The Washington-based development lender previously estimated that 60 million people would fall into
extreme poverty due to COVID-19, but the new estimate puts the deterioration at 70 to 100 million, and
he said "that number could go higher" if the pandemic worsens or drags on.
The situation makes it "imperative" that creditors reduce the amount of debt held by poor countries at
risk, going beyond the commitment to suspend debt payments, Malpass said in an interview with AFP.
Even so, more countries will be obliged to restructure their debt.
"The debt vulnerabilities are high, and the imperative of getting light at the end of the tunnel so that
new investors can come in is substantial," Malpass said.
Advanced economies in the Group of 20 already have committed to suspending debt payments from the
poorest nations through the end of the year, and there is growing support for extending that
moratorium into next year amid a pandemic that's killed nearly 800,000 people and sickened more than
25 million worldwide.
But Malpass said that will not be enough, since the economic downturn means those countries, which
already are struggling to provide a safety net for their citizens, will not be in a better position to deal
with the payments.
- Recession or depression? -
The amount of debt reduction needed will depend on the situation in each country, he said, but the
policy "makes a lot of sense."
"So I think the awareness of this will be gradually, more and more apparent" especially "for the
countries with the highest vulnerability to the debt situation."
The World Bank has committed to deploying $160 billion in funding to 100 countries through June 2021
in an effort to addresses the immediate emergency, and about $21 billion had been released through
the end of June.
But even so, extreme poverty, defined as earning less than $1.90 a day, continues to rise.
Malpass said the deterioration is due to a combination of the destruction of jobs during the pandemic as
well as supply issues that make access to food more difficult.
"All of this contributes to pushing people back into extreme poverty the longer the economic crisis
persists."
Newly-installed World Bank Chief Economist Carmen Reinhart has called the economic crisis a
"pandemic depression," but Malpass was less concerned with terminology.
"We can start calling it a depression. Our focus is on how do we help countries be resilient in working
out on the other side."
- More debt transparency -

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Malpass said he has been "frustrated" by the slow progress among private creditors in providing
comparable debt suspension terms for poor countries.
While the Institute for International Finance has set up a framework to waive debt service payments, as
of mid-July member banks had not received any applications.
Having a clear view of the size of each country's debt and the collateral involved also are key to being
able to help the debtor nations, Malpass said.
China is a major creditor in many of these countries, and the government has been "participating in the
transparency process," but he said more needs to be done to understand the terms of loans in nations
like Angola, where there are liens on the country's oil output.
Governments in advanced economies so far have been "generous" in their support of developing
nations, even while they take on heavy spending programs in their own countries, Malpass said.
"But the bigger problem is that their economies are weak," Malpass said of the wealthy nations.
"The most important thing the advanced economies do for the developing countries is supply markets...
start growing, and start reopening markets."
hs/cs
Five ways coronavirus is deepening global inequality
Kunal Sen, Professor and Director, World Institute for Development Economics Research (UNU-WIDER),
United Nations University
The Conversation•August 18, 2020
https://news.yahoo.com/five-ways-coronavirus-deepening-global-104920580.html
Informal workers have no protection from the pandemic. PradeepGaurs / Shutterstock.com
Before coronavirus, inequality was already increasing in many parts of the developing world. But the
pandemic is going to greatly heighten existing economic and social inequalities. Here are five of the main
ways inequality is heightening around the world.
1. Jobs
The pandemic has increased inequality between workers. Lockdown policies enacted by many
governments to suppress the spread of the virus have particularly hurt the working poor in developing
countries. For these workers, who depend on a daily wage and casual work, the inability to travel to
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their places of work has led to a significant loss of earnings, with no protection and high levels of
insecurity about the future of their livelihoods.
Consider a street vendor selling vegetables in the streets of Delhi. As the pandemic hit India and the
government issued stay at home orders, the street vendor suddenly found herself out of a living. In
contrast, for the professionals who are able to work from home, the pandemic has had a more limited
effect on their earnings.
The vast majority of workers in developing countries are in informal jobs, without access to the types of
support that workers in rich countries get from their governments, such as furloughing schemes. While
many developing countries have increased the scale of social protection measures in response to the
pandemic, this is clearly not enough. Nor do these measures reach the majority of the poor.
2. Digital divide
The pandemic is contributing to an acceleration in technological change, helping certain businesses stay
open digitally and enabling many people work from home who were previously unable to. Those
countries whose citizens have access to the internet and are well educated will gain from the move to
online technologies such as Zoom for virtual meetings.
So for workers in Singapore and Taiwan, the shift to online technologies will be a boon. But countries
that are still lagging in the digital race, including many in Sub-Saharan Africa, will fall further behind.
Working from home is not an option for many. Shutterstock.com
3. Gender gap
While both men and women must stay at home due to lockdown policies, women are more likely to
take care of children and domestic chores, leading to an unequal distribution of household duties within
the family. Women across the world are much more likely to hold jobs in retail and hospitality where
remote working is less possible, and which are particularly hit by lockdown-induced job losses.
The closure of schools and day nurseries may force women to withdraw from employment. In times of
economic stress, girls are often the first to be withdrawn from school (or to miss classes) as they
substitute for working mothers. With many schools closing during the pandemic, girls are at a greater
risk of not returning once they reopen. This effect on their education will, in turn, lead to worse long-
term employment and earnings prospects.
4. Rising protectionism
Coronavirus has hit at a time of weak levels of international cooperation. A major example of this is the
ongoing trade war between the US and China, as well as numerous statements by the US president
Donald Trump that have undermined important international bodies like the World Trade Organization
and World Health Organization (WHO).
The wider trend towards economic nationalism, with countries like the US and UK pulling out of major
trade blocs, will be accentuated by the pandemic. Greater protectionism in developed countries shuts
developing countries out of their richer markets, leaving limited opportunities to gain from world trade.
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Globalisation was the great driver of the growth in incomes in East Asia and especially China in recent
decades. But protectionism will limit its capacity to reduce the wide disparities in incomes between the
rich and the poor in the post-pandemic world.
5. Access to the vaccine
Access to the COVID-19 vaccine, once it is developed, will determine the scale and speed of recovery
from the pandemic. This is likely to differ across rich and poor countries, further accentuating inequality.
The WHO has warned of vaccine nationalism where the distribution of vaccines is mostly given to
citizens of rich countries, which are pouring billions of dollars into this research.
We have already witnessed huge fights to procure the necessary personal protection equipment for
healthcare workers on the front line of the pandemic. Low income countries will bear heavy costs, both
human and economic, if the advanced economies reserve essential medical supplies for their own
citizens and if they cut, rather than expand, aid and other concessional financial support.
Whether the pandemic’s effect on inequality will be felt for many years to come will depend on whether
governments in developing countries take concerted action – both in the immediate future, in providing
large scale income support programmes for the working poor, and in the long term, in educating their
workers to prepare for a more digitally advanced world and building the infrastructure for it. It will also
depend on how the international community can act in a unified way to provide much needed debt
relief and finance for low income countries.
This article is republished from The Conversation under a Creative Commons license. Read the original
article.
The Conversation
Kunal Sen does not work for, consult, own shares in or receive funding from any company or
organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their
academic appointment.
Our goal is to create a safe and engaging place for users to connect over interests and passions. In order
to improve our community experience, we are temporarily suspending article commenting.
INTERCONNECTED: THE GLOBAL FLOWS OF
GOODS, SERVICES, MONEY, PEOPLE AND DATA
https://content.pncmc.com/live/pnc/corporate/pncideas/articles/CIB_ENT_PDF_1015-0136-198919-
Global_Flows_Sept_Articles_final.pdf
Some experts claim that globalization’s golden era ended with the worldwide financial crisis. But others
contend that globalization is evolving into version 2.0: the acceleration of the global flows of goods,
services, money, people and data across borders, increasing the interconnectivity of the global
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economy. The major factors driving cross-border flows are greater economic prosperity and the
continued advancement of Internet connectivity and digital technologies. In 2012, the flows of goods,
services and money reached $26 trillion or 36% of global gross domestic product (GDP), and it is
expected that global flows could triple by 2025. McKinsey Global Institute estimates that 1.8 billion
people will become part of the consumer class by 2025, almost entirely from emerging market
countries. Flow rate data supports the contention that the world is becoming more interconnected.
Flow rates have increased:
• Seven-fold for data and communications since 2008
• Ten-fold for goods since 1980
• Three-fold for services since 2001
• 1.5 times for capital since 2002
• 1.3 times for people between 2002–2014 and accelerating even faster as crises drive refugees and
immigrants into new regions
A BUMPY RIDE FOR GLOBAL TRADE
Recent worldwide sluggish economic growth has tempered enthusiasm for global connectivity. As an
after-effect of the global recession, world trade is expected to increase only 3.3% in 2015 and 4.0% in
2016, still below the annual average growth of 5.1% since 1990. Prolonged sluggish growth in GDP,
especially in the high-income countries, has been cited as the main reason for this slow recovery in
trade.
Some experts believe that this slowdown is part of the progression to the digital age as a new economic
model for global flows emerges. In major world economies, technological advancements have reached a
point of structural change and are beginning to transform global trade patterns. What’s significant about
this shift is that entry into global trade is now easily accessible to nearly all companies, entrepreneurs
and individuals in any part of the world.
GO WITH THE FLOWS
Overall, however, globalization has been good for countries and their economies. Researchers at
McKinsey & Company estimate that as much as 25% of global GDP growth results from global flows.
They also found that a 1% increase in a country’s level of globalization — measured by the flows of
goods, services, data, finance and people, relative to their GDP or population — results in a 10 to 15
basis point increase in GDP.
Developed countries are generally more connected and have higher flow intensities compared to less-
connected countries. Germany leads the way as the world’s most connected country, followed by Hong
Kong, the United States, Singapore, the United Kingdom, the Netherlands, France and Canada. However,
emerging economies — particularly Brazil, China and India — are rapidly gaining momentum both as
exporters and importers of global goods trade, and their participation is broadening and deepening
global networks.8 Emerging countries have been quick to adopt digital technologies, sometimes leap-
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frogging more established technology. Digitization has transformed the telecommunications, computing,
financial services, retail and media sectors. Forrester Research predicts that the number of smartphone
subscribers will reach 3.5 billion by 2019, covering 59% of the world’s population.
The relatively low cost of cell and smartphone equipment and data plans has been a critical factor
supporting the dynamic growth in social media, mobile apps and mCommerce, and the purchase of
goods and services through mobile devices.
Data traverses the world at an accelerating rate, with Internet traffic growing 18-fold between 2005 and
2012.10 In this new era of interconnectedness, the ability of global flows to harness the power of
technology and increase economic prosperity cannot be ignored.
Lesson Number: Globalization Lesson 7 – The Global Economy Part 2-B
Topic: Theories of Global Stratification
1. Formulate an idea of a World Economic System from different theories of Global Stratification;
2. Compare the different global stratification theories towards the Modern World System; and
3. Combine the ideas of the different theories of global stratification to develop an idea of a World
Economic System.
Review questions:
1) Review questions
a. Expound on the influence of Global Flows on the Global South

93
b. How will the gaps between the urban and rural communities around the world are affected by
globalization?
c. Make-up a situation that would explain the multiplier effect of an economic activity in
globalization.
Definitions
Global stratification compares the wealth, economic stability, status, and power of countries across the
world. It highlights worldwide patterns of social inequality.
Dependency theory attempts to explain the present underdeveloped state of many nations in the world
by examining the patterns of interactions among nations and by arguing that inequality among nations is
an intrinsic part of those interactions. (Vincent Ferraro, 2008)
https://www.mtholyoke.edu/acad/intrel/depend.htm
Core nations – industrialized countries who receive the majority of the world’s wealth.
Peripheral nations – countries that are less developed and receive unequal distribution of the world’s
wealth.
Global Stratification Theories – explained why some parts of the world develop economically faster than
others.
Theory No. 1 – Modernization Theory
 Global stratification is influenced by technological and cultural differences between nations.

Brought about by two worldwide historical events:
• Columbian Exchange – named after Christopher Columbus discovery of America in the 15th
century (October 10, 1492) caused the spread of goods, technology, education and diseases between
America and Europe.
Positive effect for the Europeans:
 The exchange benefitted the Europeans with agricultural imports like potatoes and tomatoes
which contributed to population growth
 Provided opportunities for trade growth
 Strengthen the power of the merchant class
Negative effect for native Americans
 Diseases brought from Europe ravaged the population.
 About 20% - 50% died from small pox, measles, influenza, etc. in different Indian tribes about
150 years after Columbus first trip.
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 The beliefs and behavior of the Spanish conquistadors and of the Aztecs, adversaries in a clash
of cultures that resulted in the near extermination of Mesoamerica's Indian population (Conquest of
America, Todorov T., 1999)
• Industrial Revolution (IR) – First IR in the 18th and 19th century where mechanical production
with the help of steam power allowed for replacement of human labor with machines to increase
productivity.
 IR initially benefitted the wealthy in western countries
 Later the standards of living in these countries saw massive improvements but not after these
countries went through labor, health and social problems.
 The Industrial Revolution began in England in the late 18th century, and spread during the 19th
century to Belgium, Germany, Northern France, the United States, and Japan. (historyhaven.com)
 IR enhanced and/or led to colonization of other countries.
 Countries that did not industrialize lag behind.
 Modernization theory move on the idea that growth could be attained by anyone depending on
the willingness to adopt new technologies and new social systems that often accompany them.
 Modernization theory present that differences in acceptance of change between traditional

family systems and production methods vs technological advancement is the biggest barrier to an
affluent society.
 The sociologist Max Weber propose the idea of progress oriented way of life of the Protestant
work ethics as a sign of personal virtue led to the success of IR in Europe.
 The philosophical idea of individualism replacing communalism is the breeding ground for
modernization.
Walt Rostow’s Four (4) Stages of Modernization in the West
1st – Traditional Stage:
 Examples are Feudal Europe or early Chinese dynasties with production mostly food being done
in societies that are structured around small local communities done in family setting with limited
resources and technology which creates a strict social hierarchy.
 The production methods were passed on to different generations.
2nd – Take-off Stage:
 When people begin to move beyond doing things traditionally.
 Development of individual talents led to innovations to produce things beyond the necessities
which created new markets for trade.
 Takes hold of more individualism with material wealth as a sign of social status.
3rd – Drive to Technological Maturity:

95
 More diverse job opportunities resulted in technological growth of the earlier periods.
 Led to population growth with reductions in absolute poverty levels.
 Countries in this stage pushed for social and economic changes like public basic education and
moving from monarchial to democratic political systems.
4th – High Mass Consumption:
 The economy of the country is large enough to produce more about wants than needs.
 Social support system in the form of basic necessities are accessible by the population
guaranteed by the governments.
Arguments for Modernization Theory
 Capital investments in better technology will raise production, consumption, wealth and overall
social condition.
 Rich countries can help growing countries through export of technology and machines in
agriculture, information technology and extend foreign trade.
Critics of Modernization Theory
 Just a new name for the idea that a country would develop through capitalism.
 A lot of countries still lag behind even after technology has improved around the world.
 Economies of industrialized countries like the United States and United Kingdom grew to global
strength took advantage of the period when there were no laws against slavery, natural resource
depletion or massive pollution.
 Supporters of Rostow’s theory are called Eurocentric putting emphasis on economic growth and
progress putting aside the effects of environmental damage of industrialization and exploitation of
cheap, child or free labor.
 Modernization theory put the blame to the victims – the poor countries – for not willing to
accept changes. Putting fault on their cultural values and traditions rather than acknowledging that
outside forces might be holding back those countries.
Theory No. 2 – Dependency Theory and the Latin American Experience
Dependency Theory was initially developed by Hans Singer and Raul Prebisch in the 1950’s and has
made some improvements since then. In this view, Global Stratification starts with colonialism.
 Beginning in the 15th century, Europeans claiming lands by exploration throughout America,
Africa and Asia. Early on, the British Empire colonized about one-fourth of the world. When the United
States rose to power from just a former British colony influenced and colonized North America, Haiti,
Puerto Rico, Guam, Philippines, Hawaii, parts of Panama and Cuba.
 Both natural and human resources were exploited in the rise of colonialism.
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 US and European countries took control of land and raw materials to funnel wealth back to the
West.
 Slave trade followed a triangular route from Africa to Caribbean colonies to America and
Europe.
 Slaves were to produce cotton and tobacco which were sent back to Europe.
 Guns and factory made goods were sent to Africa in exchange for slaves.
 Focus on exploitation of natural resources were made when slave trade died down in the mid-
19th century.
 Colonization continued from 1870’s when only 10% of Africa was western controlled. By 1940,
only Ethiopia and Liberia were not under foreign control.
 Most colonies were granted independence by 1960’s. With Hong Kong, the last British colony in
Asia to be granted independence in 1997.
Development of Dependency Theory
A. Arguments in the pursuit of Dependency Theory
 Sanchez, 2014, a Latin American scholar was critical of the argument by the West that the
reasons why many countries are not developing after World War 2 because those countries did not
follow the right economic policies or due to totalitarian and corrupt governments.
 Sanchez was also intrigued by the South (Latin) America’s underdevelopment.
 Dependency as defined by Cardoso and Felato, 1979, is the development of the nation-states of
the South contributed to decline in their independence and to an increase in economic development of
the countries of the North.
 Toye, 2003, argues that liberal trade causes greater impoverishment, not economic
improvement to less developed countries.
 Trade protectionism through import substitution is the key to self-sustaining path to

development, not liberal trade or export.
 Poor countries have been wronged by richer nations. Those riches came at the expense of other
countries being poor due to colonialism.
 “Even after de-colonization, there are still important ties between the developed and less
developed counties, which mainly consist in the exploitation of peripheral natural resources and
workforce by the center” (Anton, 2006)
 Dependency describes the extent of economic and political development of poor countries as
influenced by an attachment favoring the developed countries.
 There is still the possibility of the nature of dependent countries can change in the future with
the increase participation of businesses, technocrats, military and the middle class in the local economic
and political interests in the industrialized world.
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B. Cycle of Dependency Theory
 According to dependency theory, underdevelopment is mainly caused by the peripheral position

of affected countries in the world economy. Typically, underdeveloped countries offer cheap labour and
raw materials on the world market. These resources are sold to advanced economies, which have the
means to transform them into finished goods. Underdeveloped countries end up purchasing the finished
products at high prices, depleting the capital they might otherwise devote to upgrading their own
productive capacity. The result is a vicious cycle that perpetuates the division of the world economy
between a rich core and a poor periphery.(https://www.britannica.com/topic/dependency-theory)
C. The two (2) main sub-theories of Dependency Theory
1. North American Neo-Marxist approach
 Andre Gunder Frank (1971) argues that developing nations have failed to develop not because
of ‘internal barriers to development’ as modernization theorists argue, but because the developed West
has systematically underdeveloped them, keeping them in a state of dependency (hence ‘dependency
theory’.)
 Writing in the late 1960s, Frank argued that the developed nations had a vested interest in
keeping poor countries in a state of underdevelopment so they could continue to benefit from their
economic weakness – desperate countries are prepared to sell raw materials for a cheaper price, and
the workers will work for less than people in more economically powerful countries. According to Frank,
developed nations actually fear the development of poorer countries because their development
threatens the dominance and prosperity of the West.
https://revisesociology.com/2015/10/17/dependency-theory/
2. Structuralist Approach
 Structuralism is a general theory of culture and methodology that implies that elements of
human culture must be understood by way of their relationship to a broader system.
https://en.wikipedia.org/wiki/Structuralism
 In the contemporary world, structuralism states the economic and political system of a country
can function in connection with the world productive structure.
 The Core or rich countries as buyer of raw materials and the peripheral or poor countries as
buyer of finish products at a higher price.
 Poor countries too much reliance on exports of primary commodities (raw materials)
 Raw materials are affected by fluctuating prices in the short run and downward trend of value in
the long run
 To negate the negative effects of exports of primary commodities through:
 Diversification of exports and accelerate industrialization by import substitution.
 Imposition of high tariffs to reduce dependence on imports which only develops the North or US
and Canada.
98
D. The Modern World-System Model – The capitalist world economy as called by American
sociologist Immanuel Wallerstein
 Higher income nations in the West are the “core” countries as the manufacturing base of the
world where technology and wealth are focused.
 Middle Income countries are the “semi-periphery” is generally industrialized. They contribute to
the manufacturing and exportation of a variety of goods. They are marked by above average land mass,
as exemplified by Argentina, China, India, Brazil, Mexico, Indonesia, and Iran.(Wikipedia.org)
 Low income countries are the “periphery” whose natural resources and labor support the
wealthier countries first as colonies and still under neocolonialism. Economically dependent to
wealthier countries.
 Core, semi-periphery and periphery nations tend to support each other in terms of trade
Flow of High Value Finished Goods
Flow of cheap labor and low value raw materials/products
Figure 1: Diagram of World Modern System Model
 Unequal trade patters results to periphery countries owing debt to core countries which make
them hard to invest in their own development.
 In dependency theory there is no lack of global wealth, it is not only distributed well.
Figure 2: A world map of countries by trading status, late 20th century, using the world system
differentiation into core countries (blue), semi-periphery countries (purple) and periphery countries
(red). Based on the list in Dunn, Kawana, Brewer (2000).Source: Wikepedia.org
Critics of Dependency Theory

99
 The world economy is not a zero sum game, that is, as one country gets richer the other country
gets poorer
 The economy of other countries will improve with the spread of technological growth and
innovations from richer countries
 Although colonialism left its footprints, it is not all to blame for the economic differences today.
A poor country like Ethiopia was never colonized and has little contact with richer nations. Singapore
and Sri Lanka are examples of countries who are former colonies but now have thriving economies.
 Foreign investments do not hurt poorer countries opposing the prediction of the Dependency
Theory.
 Proponents of Dependency Theory is wanting by blaming the capitalist market system as the
sole cause of stratification. They disregarded how culture and political regimes affected poverty-stricken
countries.
 Supporters of Dependency Theory subscribing for global socialism which push poor countries to
end all association with rich nations do not accept the ideas of interdependency of modern world
economy which makes their statements not applicable for solutions to the problem of global poverty.
Continuing discussions in Economic Globalization
 There are rising trade among countries, however, the trade agreements like the North American
Free Trade Agreements (NAFTA) had rose to a dispute between positive gains in free trade against the
high jobless rate in the countries involve.
 Inquiries on how to go about global stratification is not yet over. Yet there are positive
developments with the expansion of world trade in the 3x increase in the standards of living among the
poorest countries as evidenced by 50% decrease in people living in poverty threshold of $25/day since
1981 from 52% to 22%.
1. Questions
a. In what stage of Rostow’s Modernization theory is the Philippines in now? Discuss with concrete
evidences in your answer.
b. Would there be hope for South East Asian Countries to belong to semi-peripheral going to core
countries in terms of global trade? Support your answer with research evidences.
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Reinforcement:
Instructions:
a. Explain how Global stratification came about in the 21st century.
b. Discuss the situation of Inequality in the world and devise a plan that would decreased
inequality by at least 50%.
4. Readings:
b. Articles on world, political and economic / globalization news
a. Global Stratification and Inequality
1. Last updated
Aug 17, 2020
• Contributed by OpenStax
• Social Sciences at OpenStax CNX
• Published by OpenStax
https://socialsci.libretexts.org/Bookshelves/Sociology/Book%3A_Introductory_Sociology_(OpenStax)/
09%3A_Social_Stratification_in_the_United_States/9.04%3A_Global_Stratification_and_Inequality
Global stratification compares the wealth, economic stability, status, and power of countries across the
world. Global stratification highlights worldwide patterns of social inequality. In the early years of
civilization, hunter-gatherer and agrarian societies lived off the earth and rarely interacted with other
societies. When explorers began traveling, societies began trading goods, as well as ideas and customs.
101
A family lives in this grass hut in Ethiopia. Another family lives in a single-wide trailer in the trailer park in
the United States. Both families are considered poor, or lower class. With such differences in global
stratification, what constitutes poverty? (Photo (a) courtesy of Canned Muffins/flickr; Photo (b) courtesy
of Herb Neufeld/flickr)
In the nineteenth century, the Industrial Revolution created unprecedented wealth in Western Europe
and North America. Due to mechanical inventions and new means of production, people began working
in factories—not only men, but women and children as well. By the late nineteenth and early twentieth
centuries, industrial technology had gradually raised the standard of living for many people in the United
States and Europe.
The Industrial Revolution also saw the rise of vast inequalities between countries that were
industrialized and those that were not. As some nations embraced technology and saw increased wealth
and goods, others maintained their ways; as the gap widened, the nonindustrialized nations fell further
behind. Some social researchers, such as Walt Rostow, suggest that the disparity also resulted from
power differences. Applying a conflict theory perspective, he asserts that industrializing nations took
advantage of the resources of traditional nations. As industrialized nations became rich, other nations
became poor (Rostow 1960).
Sociologists studying global stratification analyze economic comparisons between nations. Income,
purchasing power, and wealth are used to calculate global stratification. Global stratification also
compares the quality of life that a country’s population can have.
Poverty levels have been shown to vary greatly. The poor in wealthy countries like the United States or
Europe are much better off than the poor in less-industrialized countries such as Mali or India. In 2002,
the UN implemented the Millennium Project, an attempt to cut poverty worldwide by the year 2015. To
reach the project’s goal, planners in 2006 estimated that industrialized nations must set aside 0.7
percent of their gross national income—the total value of the nation’s good and service, plus or minus
income received from and sent to other nations—to aid in developing countries (Landler and Sanger,
2009; Millennium Project 2006).
Models of Global Stratification
Luxury vacation resorts can contribute to a poorer country’s economy. This one, in Jamaica, attracts
middle and upper-middle class people from wealthier nations. The resort is a source of income and
provides jobs for local people. Just outside its borders, however, are poverty-stricken neighborhoods.
(Photo courtesy of gailf548/flickr)
Various models of global stratification all have one thing in common: they rank countries according to
their relative economic status, or gross national product (GNP). Traditional models, now considered
outdated, used labels to describe the stratification of the different areas of the world. Simply put, they
were named “first world, “second world,” and “third world.” First and second world described
industrialized nations, while third world referred to “undeveloped” countries (Henslin 2004). When
researching existing historical sources, you may still encounter these terms, and even today people still
refer to some nations as the “third world.”
102
Another model separates countries into two groups: more developed and less developed. More-
developed nations have higher wealth, such as Canada, Japan, and Australia. Less-developed nations
have less wealth to distribute among higher populations, including many countries in central Africa,
South America, and some island nations.
Yet another system of global classification defines countries based on the per capita gross domestic
product (GDP), a country’s average national wealth per person. The GDP is calculated (usually annually)
one of two ways: by totaling either the income of all citizens or the value of all goods and services
produced in the country during the year. It also includes government spending. Because the GDP
indicates a country’s productivity and performance, comparing GDP rates helps establish a country’s
economic health in relation to other countries.
The figures also establish a country’s standard of living. According to this analysis, a GDP standard of a
middle-income nation represents a global average. In low-income countries, most people are poor
relative to people in other countries. Citizens have little access to amenities such as electricity,
plumbing, and clean water. People in low-income countries are not guaranteed education, and many are
illiterate. The life expectancy of citizens is lower than in high-income countries.
THE BIG PICTURE: CALCULATING GLOBAL STRATIFICATION
A few organizations take on the job of comparing the wealth of nations. The Population Reference
Bureau (PRB) is one of them. Besides a focus on population data, the PRB publishes an annual report
that measures the relative economic well-being of all the world’s countries. It’s called the Gross National
Income (GNI) and Purchasing Power Parity (PPP).
The GNI measures the current value of goods and services produced by a country. The PPP measures the
relative power a country has to purchase those same goods and services. So, GNI refers to productive
output and PPP refers to buying power. The total figure is divided by the number of residents living in a
country to establish the average income of a resident of that country.
Because costs of goods and services vary from one country to the next, the GNI PPP converts figures into
a relative international unit. Calculating GNI PPP figures helps researchers accurately compare countries’
standard of living. They allow the United Nations and Population Reference Bureau to compare and rank
the wealth of all countries and consider international stratification issues (nationsonline.org).
b. It’s an Unequal World. It Doesn’t Have to Be.
By EDUARDO PORTER KARL RUSSELL DEC. 14, 2017
https://www.nytimes.com/interactive/2017/12/14/business/world-inequality.html
Global inequality, after widening for decades, has stabilized. The share of the world’s income captured
by the top 1 percent has shrunk since its peak on the eve of the financial crisis. The bottom half of the
population is reaping its biggest share of the global pie since Ronald Reagan was elected president of the
United States.
103
But here’s the bad news: The respite probably won’t last. Despite rapid strides among developing
economies like China and India, which have been closing the income gap with the world’s richer nations,
growing inequality within almost every country will drive a further concentration of income around the
globe.
Examining the “World Inequality Report” — published Thursday by the creators of the World Wealth
and Income Database, who include the economists Thomas Piketty and Emmanuel Saez — it is tempting
to see the rising concentration of incomes as some sort of unstoppable force of nature, an economic
inevitability driven by globalization and technology. The report finds that the richest 1 percent of
humanity reaped 27 percent of the world’s income between 1980 and 2016. The bottom 50 percent, by
contrast, got only 12 percent.
Nowhere has the distribution of the pie become more equitable. In China, 15 percent of the income
growth since 1980 flowed to the richest 1 percent of Chinese while 13 percent flowed to the bottom
half. Even in egalitarian, social-democratic Europe, 1-percenters got 18 percent of the growth in the
period. The bottom half got 14 percent. And among the more unequal regions of the world — the
United States, say, or Russia — income disparities are reaching levels not before seen in modern history:
The bottom half of Americans captured only 3 percent of total growth since 1980. The income of the
bottom half of Russians actually shrank.
Diverging Patterns
And yet, a careful examination of the data suggests there is nothing inevitable about untrammelled
inequality. Take China and India, developing countries of billion-plus populations playing catch-up to pull
themselves out of poverty. Incomes have become much more concentrated in both. But China’s
economic strategy has delivered much more growth at a lower cost in terms of economic disparity.
Comparing Europe with the United States and Canada offers similar contrasts.
Policy, it turns out, matters. More aggressive redistribution through taxes and transfers has spared
Europe from the acute disparities that Americans have grown used to. Unequal access to education is
helping reproduce inequality in the United States down the generations. On the other end of the
spectrum of development, China’s strategy based on low-skill manufacturing for export, and
underpinned by aggressive investment in infrastructure, has proven more effective at raising living
standards for the bottom half of the population than India’s more inward-looking strategy, which has
limited the benefits of globalization to the well-educated elite.
Where is global inequality going? Policy choices — about taxes and education, employment rules and
finance regulations — will play a big role in shaping how countries around the world distribute the spoils
of growth in the future. But the most powerful force driving the distribution of income on a worldwide
104
scale will be raw economic growth: if economic catch-up by developing nations shrinks the income gap
between rich and poor countries faster than inequality increases inside each country, the global
disparity of income will narrow.
How World Income Grows
The question is, how fast can developing countries grow in the future? The answer, unfortunately, is not
fast enough. If China’s furious economic growth over the last couple of decades was not enough to bring
about a more equitable distribution of income on a global scale, it seems hard to imagine the kind of
economic miracle that could shrink the worldwide income gap.
China’s economic miracle was an unprecedented feat: in one generation, an unproductive communist
nation of farmers transformed itself into a manufacturing export colossus, a giant of capitalism. Since
1980, its share of the world’s income has grown to 19 percent from 3 percent. Its income per person has
grown almost 15 times as fast as that of the United States and Canada, and almost 19 times as fast as
that of the European Union — to 90 percent of the world average, from 15 percent. Once at the bottom
of the world’s income distribution, Chinese are now much more broadly represented across the
spectrum of the world’s income.
China’s rising income was pretty much the only force pushing for a more equitable share of the spoils of
growth, holding world inequality down even as the incomes of the world’s biggest earners surged ahead
and workers in the industrialized world mostly got stuck. And yet it wasn’t enough.
As China has become richer and its growth has slowed, its impact on how the world’s income pie is
sliced is likely to be mixed: Once the income of the average Chinese exceeds the world average, China's
fast growth will start adding to inequality, rather than mitigating it. And it seems implausible that India
and sub-Saharan Africa, today at the bottom of the world’s income distribution, will experience anything
in the coming three decades like what China experienced in the last three.
The Future of Inequality
Will poor countries make sufficient progress relative to their rich peers to bring more balance to the
distribution of global income? Or will rising inequality within countries dominate? It depends on three
forces: countries’ economic and population growth, as well as the evolution of inequality within them.
The World Inequality Report takes a shot at projecting these forces, drawing from economic forecasts by
the Organization for Economic Cooperation and Development, population projections from the United
Nations and the evolution of inequality in each country over 36 years. If you care about equity, it doesn’t
look good.
105
If the evolution of income inequality in every country remains on the same path it has been since 1980,
the plateau in global inequality since 2000 will prove to be but a temporary blip: by 2050, the bottom
half of the world’s population will draw only 9 percent of the world’s income, a percentage point less
than today. One-percenters at the top, by contrast, will reap 24 percent of the global income pie, up
from 21 percent in 2016.
But again, policy matters. Say countries decide to push vigorously back against inequality — as
vigorously as the European Union pushed in the 36 years after 1980. In that case, the world’s income
gap would even shrink a little: by 2050, the bottom half would get 13 percent of the pie; the share of the
top 1 percent would shrink to 19 percent of the world’s income.
What we probably don’t want the world to do is follow the trajectory of inequality in the United States.
If it were to do that, by 2050 the few at the top of the pyramid would be drawing 28 percent of global
income. The bottom half would get only about 6 percent.
Graphics data source: World Wealth and Income Database (http://wid.world/)
Lesson Number: Globalization Lesson 8 – Market Integration
Topic: Role of Gross Domestic Product GDP, Factors of Production and Economic Systems in Global
Market Integration.
1. Determine the importance of in the level of GDP with Production theory and Economic Systems in
Global Market Integration;
2. Organize the connection of GDP, Production Theory and Economic Systems in the development of
Global Market Integration; and
3. Simplify the application of GDP, Production Theory and Economic Systems in Global Market
Integration.
106
Review questions:
1) Review questions
a. What is the role of the Philippines in the Modern World System? What are the advantages and
disadvantages of being part of such?
b. Discuss the effect of the Philippines colonial history in the Modern World System.
c. Is there a way for the Philippine economy to stand side by side with giant economies like Japan
and South Korea in terms of economic trade?
Definitions
Market Integration - a situation in which separate markets for the same product become one single
market, for example when an import tax in one of the markets is removed.
https://dictionary.cambridge.org/us/dictionary/english/market-integration
Economic integration is an arrangement among nations that typically includes the reduction or
elimination of trade barriers and the coordination of monetary and fiscal policies. Economic integration
aims to reduce costs for both consumers and producers and to increase trade between the countries
involved in the agreement.
Economic integration is sometimes referred to as regional integration as it often occurs among

neighboring nations.
https://www.investopedia.com/terms/e/economic-integration.asp
Economy is the large set of inter-related production and consumption activities that aid in determining
how scarce resources are allocated. (www.investopedia.com)
Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a
country during a specific period. (www.investopedia.com)
Factors of production are the inputs needed for the creation of a good or service. The factors of
production include land, labor, entrepreneurship, and capital.(www.investopedia.com)
Economic System is a means by which societies or governments organize and distribute available
resources, services, and goods across a geographic region or country. Economic systems regulate factors
of production, including capital, labor, physical resources, and entrepreneurs. An economic system
encompasses many institutions, agencies, and other entities.
https://corporatefinanceinstitute.com/resources/knowledge/economics/economic-system/
Economic Sector - A division of a country's population based upon the economic area in which that
population is employed. Many economists recognize the following five economic sectors; the primary
107
sector which includes agriculture, mining and other natural resource industries; the secondary sector
covering manufacturing, engineering and construction; a tertiary sector for the service industries, the
quaternary sector for intellectual activities involving education and research and the quinary sector
reserved for high level decision makers in government and industry.
Read more: http://www.businessdictionary.com/definition/economic-sector.html
The Economy
 It is the social institution that has one of the biggest impact on the society.
 The economy in terms of numbers are seen and valued in GDP, unemployment, inflation, stock
markets and others.
 However, highest consideration must be addressed to the people living in the economy not only
in terms of numerical values but also in social and economic equity.
 As such these people in the economy devised and planned economic systems applicable in the
production, consumption and trade of goods in the society.
 These economic systems formed through economic and social revolutions configured the way
people live their lives.
Economic Systems
 1. Traditional economic system
The traditional economic system is based on goods, services, and work, all of which follow certain
established trends. It relies a lot on people, and there is very little division of labor or specialization. In
essence, the traditional economy is very basic and the most ancient of the four types. Lacks the
potential to generate a surplus.
 2. Command economic system
In a command system, there is a dominant, centralized authority – usually the government – that
controls a significant portion of the economic structure. Also known as a planned system, the command
economic system is common in communist societies since production decisions are the preserve of the
government. Command economies are rigid as they cannot quickly adopt to changes.
 3. Market economic system
Market economic systems are based on the concept of free markets. In other words, there is very little
government interference. The government exercises little control over resources, and it does not
interfere with important segments of the economy. Instead, regulation comes from the people and the
relationship between supply and demand. Growth is higher under the market economic system.
 4. Mixed system
Mixed systems combine the characteristics of the market and command economic systems. For this
reason, mixed systems are also known as dual systems.
108
Many countries in the West follow a mixed system. Most industries are private, while the rest,
comprised primarily of public services, are under the control of the government. Mixed systems are the
norm globally. Practically speaking, mixed economies face the challenge of finding the right balance
between free markets and government control. Governments tend to exert much more control than is
necessary
https://corporatefinanceinstitute.com/resources/knowledge/economics/economic-system/
Role of GDP
 GDP estimates are used to determine the economic performance of a whole country, and to
make international comparisons. Businesses can also use GDP as a guide to decide how best to expand
or contract their production and other business activities. And investors even watch GDP since it
provides a framework for investment decision-making. For example, the United States had a GDP of
about $19.4 trillion in 2017.
 GDP is not a complete measure of economic activity. Since it only represents the final output or
value-added at each stage of production, it fails to account for the total output or total sales along the
entire production process. One of the biggest drawbacks of using GDP is that it tells us little about our
overall or individual economic welfare.
https://www.intelligenteconomist.com/gross-domestic-product-gdp/
Continuing Discussion on Market Integration
 Market Integration is an integral part of Economic Integration.
 Different products of countries are put into place in a single (regional) market as exemplified by
the European Union (EU).
 Conditions for Market Integration
 Similar existing economic systems such as the mixed system among EU member countries.
 Free trade among member countries
 Allowing labor migration between member countries
 Investments are allowed anywhere among member countries
 Social benefits are comparable among member countries
109
1. Questions
a. What is Real GDP? Nominal GDP? How does it affects the per capita income of an individual?
b. The Philippines is said to under a Mixed Economic System. How would you balance government
control and market economic system in times of pandemic situation?
c. Comment on the following:
a) The exercise of Government control in the non-renewal of broadcasting franchise of ABS-CBN
Reinforcement:
Instructions:
a. Comment on the issue of increasing number of Philippine Off-shore Gaming Operators POGO
and Chinese workers entering the countries’ economy using Economic and Market Integration ideas.
2. Readings:
b. Articles on world, political and economic / globalization news
Economic Integration Explained
https://www.investopedia.com/terms/e/economic-integration.asp#:~:text=Economic%20integration
%20can%20reduce%20the,%2C%20and%20cross%2Dborder%20investment.
When regional economies agree on integration, trade barriers fall and economic and political
coordination increases.
Specialists in this area define seven stages of economic integration: a preferential trading area, a free
trade area, a customs union, a common market, an economic union, an economic and monetary union,
and complete economic integration. The final stage represents a total harmonization of fiscal policy and
a complete monetary union.
KEY TAKEAWAYS
• Economic integration, or regional integration, is an agreement among nations to reduce or

eliminate trade barriers and agree on fiscal policies.
• The European Union, for example, represents a complete economic integration.

110
• Strict nationalists may oppose economic integration due to concerns over a loss of sovereignty.
Advantages of Economic Integration
The advantages of economic integration fall into three categories: trade benefits, employment, and
political cooperation.
More specifically, economic integration typically leads to a reduction in the cost of trade, improved
availability of goods and services and a wider selection of them, and gains in efficiency that lead to
greater purchasing power.
Economic integration can reduce the costs of trade, improve the availability of goods and services, and
increase consumer purchasing power in member nations.
Employment opportunities tend to improve because trade liberalization leads to market expansion,
technology sharing, and cross-border investment.
Political cooperation among countries also can improve because of stronger economic ties, which
provide an incentive to resolve conflicts peacefully and lead to greater stability.
The Costs of Economic Integration
Despite the benefits, economic integration has costs. These fall into two categories:
• Diversion of trade. That is, trade can be diverted from nonmembers to members, even if it is
economically detrimental for the member state.
• Erosion of national sovereignty. Members of economic unions typically are required to adhere
to rules on trade, monetary policy, and fiscal policies established by an unelected external policymaking
body.
Because economists and policymakers believe economic integration leads to significant benefits, many
institutions attempt to measure the degree of economic integration across countries and regions. The
methodology for measuring economic integration typically involves multiple economic indicators
including trade in goods and services, cross-border capital flows, labor migration, and others. Assessing
economic integration also includes measures of institutional conformity, such as membership in trade
unions and the strength of institutions that protect consumer and investor rights.
Real-World Example of Economic Integration
The European Union (EU) was created in 1993 and included 28 member states in 2019. Since 2002, 19 of
those nations have adopted the euro as a shared currency.1 According to the International Monetary
Fund (IMF), the EU accounted for 16.04% of the world's gross domestic product.2
The United Kingdom voted in 2016 to leave the EU. In January 2020 British lawmakers and the European
Parliament voted to accept the United Kingdom's withdrawal. The goal is to finalize the exit by January
2021.3
Related Terms
111
European Economic and Monetary Union (EMU) Definition
The European Economic and Monetary Union (EMU) refers to all of the countries that have adopted a
free trade and monetary agreement in the Eurozone.
European Community (EC)
The European Community (EC) was formed in 1957 by six European countries with the goal of providing
economic stability and preventing future wars.
Currency Union Definition
A currency union is where more than one country or area shares an officially currency.
Brexit Definition
Brexit refers to Britain's leaving the European Union, which was slated to happen at the end of October,
but has been delayed again.

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Course Code and Title: SSED 2 THE CONTEMPORARY WORLD

Lesson Number: Globalization Lesson 1 – Defining and Understanding Globalization1

Topic: Definition, classification and concepts of Globalization

Pre-Assessment / Review questions:

Course Code and Title: SSED 2 THE CONTEMPORARY WORLD

Lesson Number: Globalization Lesson 1 – Defining and Understanding Globalization

Topic: Definition, classification and concepts of Globalization

At the end of the lesson, the students should be able to:

1. Explain the definition, classification and concepts of Globalization.

2. Differentiate between the definition, classification and concepts of Globalization.

3. Manage plans in the advent of Globalization.

Pre-Assessment / Review questions:

Pre-Assessment: Match column A with column B. Write the letter only.

_____ 1. History A. Is a cause, principle or system of beliefs held to with ardor

_____ 2. Globalization B. Activities that relate to influencing the actions and

place, organization, etc.

_____ 4. Politics D. The onset of a borderless world

_____ 5. Religion E. A science concerned with the process or system by which

Goods and services are produce, sold and bought

- That lead to improved communication technology.

- Phenomenon pertaining to progress, development and integration

1. Broad and inclusive

2. Narrow and exclusive

- Globalization could bring either or both integration and / or fragmentation.

1. Perspective of the person defining globalization

A. Positive – means it can be a unifying force

B. Negative – as creating greater inequalities among nations

- Space and time are crucial elements of globalization.

- Changes are continuous and difficult to stop

2. To be submitted next week

1. Read the attached reading materials

3. To be submitted next week.

a. pp. 7 – 15 Chapter 1, The Contemporary World by Aldama

b. Articles on world, political and economic news

1) The Good, The Bad, And The Ugly Side Of Globalization

Panos Mourdoukoutas Former Contributor Markets

Image via Wikipedia

2) What is Globalization ? Meaning and it’s Importance

POSITIVE IMPACTS OF GLOBALIZATION

Gives Access to a Larger Market

Provides Cheaper Goods for Consumers

Globalization Wets Countries do what They do Best

Leads to Better Economies

Promotes World Peace and Unity

Better Quality and Variety

NEGATIVE IMPACTS OF GLOBALIZATION

Causes Environmental Damage

Causes Fluctuation of Prices

3) Will Covid-19 Have a Lasting Impact on Globalization?

HARVARD BUSINESS REVIEW: GLOBALIZATION

May 20, 2020

Michael H/Getty Images

What Are Globalization’s Post-Coronavirus Prospects?

[i] FDI forecast pertains to 2020/21.

This article is about GLOBALIZATION

GLOBALIZATION AND RESILIENCE

PRACHI MISHRA, ANTONIO SPILIMBERGO

Focus on the global economy

Course Code and Title: GE103 THE CONTEMPORARY WORLD

Lesson Number: Globalization Lesson 1 – Defining and Understanding Globalization

Topic: Definition, classification and concepts of Globalization

At the end of the lesson, the students should be able to:

1. Explain the definition, classification and concepts of Globalization.