UNIT II.
The Structures of Globalization that nation is involved in the integration within a
2. Market Integration - refers to how easily
two or more markets can trade with each other.
It occurs when prices among different locations
or related goods follow similar patterns over a
long period of time.
Example:
China produces toys at a cheaper price than the US. If
foreign trade increased between the two countries,
toys could be sold to the US more easily, making the
more available, thus reducing price.
If the demand for baby dolls within a given
geographical market were to suddenly be reduced by
50%, there is a good chance that the demand for baby
doll clothing would also decrease in proportion
within that same geographical market. Should the
baby market increase, this would usually mean that
the market for doll clothing would also increase. Both
markets would have the chance to adjust pricing in
order to deal with the new circumstances surrounding
the demand, as well as adjust other factors, such as
production.
Types of markets where market integration
occurs
Stock Market Integration - This is a condition
in which stock markets in different countries
trend together and depict same expected risk
adjusted returns. Two markets are perfectly
integrated if investors can pass from one market
to another without paying any extra costs and if
there are possibilities of arbitration which
ensures the equivalence of stock prices on both
markets.
Financial Market Integration - It is an open
market economy between countries facilitated
by a common currency and the elimination of
technical, regulatory and tax differences to
encourage free flow of capital and investment
across borders. It occurs when lending rates in
several different markets begin to move in
tandem with one another. Emergence of similar
patterns within the capital, stock, and financial
markets with those trends coming together to
exert a profound influence on the economy of
nation.
Global Integration (Global Corporation ang
nasa module) is a business that operates in two
or more countries. It is also called multinational
company, international company, transnational
corporation.
After WW II, American corporations led the
economic recovery and expansion. This period
up to the re-entry of Japanese and European
corporation to the global scene is viewed as
multinational corporations (MNCs). From the
end of WW II to the present is considered the
period of transformation of global corporation.
THE FINANCE FUNCTION IN A GLOBAL
CORPORATION
Chief financial officers (CFOs) must balance the
opportunities with the challenges of operating in
multiple environments in managing their internal
markets in building an advantage.
Three Functions that can be created by Chief
Financial Officers or CFOs:
1. Financing - A group’s tax bill can be reduced
by the CFO like borrowing in countries with
high tax rates and lending to operations in
countries with lower rates.
2. Risk Management - Global firms can offset
natural currency exposures through worldwide
operations instead of managing currency
exposures through financial markets.
3. Capital Budgeting - Getting smarter on
valuing investment opportunities CFOs can add
value.
FOREIGN DIRECT INVESTMENT (FDI) is
an investment made by a company or individual
who has a business interest in another country. It
is also a major driver of extended global
corporate development.
Methods to Establish FDIs:
1. Opening a subsidiary
2. Acquiring a controlling interest in an existing
foreign company.
3. Joint venture with another company
BRICS ECONOMIES
Brazil, Russia, India, China and South Africa
(BRICS) is an acronym for the combined
economies of the said countries.
GENERAL AGREEMENT ON TRADE IN
SERVICES (GATS)
The GATS provides a framework of
rules governing services trade, establishing a
mechanism for resolving disputes between
countries. It is also the first multilateral
agreement covering trade in services which was
negotiated during the last round of multilateral
trade negotiations, called the Uruguay Round,
and came into force in 1995.
UNIT II. The Structures of Globalization
3. The Global Interstate System
GLOBALIZATION AND THE NATION-
STATES
Globalization in the early years of the 21st
century has not displaced the state. According to
Max Weber, a state is a compulsory political
organization with a centralized government that
maintains a legitimate use of force within a
certain territory. According to Hedley Bull,
states are independent political communities
each of which possesses a government and
asserts sovereignty in relation to a particular
portion of the earth's surface and a particular
segment of the human population
Nation on the other hand is an imagined political
community as both inherently limited and
sovereign.
 It is imagined because the members of even
the smallest nation will never know most of
their fellow-members, meet them, or even
hear of them, yet in the minds of each lives
the image of their communion.
 The nation is imagined as limited because
even the largest of them, encompassing
perhaps a billion human beings, has finite, if
elastic, boundaries, beyond which lie other
nations.
 It is imagined as sovereign because the
concept was born in an age in which
Enlightenment and Revolution were
destroying the legitimacy of the divinely
ordained, hierarchical dynastic realm…
nations dream of being free, and if under
God, directly so. The gauge and emblem of
this freedom is the sovereign state.
 It is imagined as community, because
regardless of actual inequality and
exploitation that may prevail in each, the
nation is always conceived as a deep
horizontal comradeship.
THE STATE AND THE ECONOMIC
INTERDEPENDENCE
The belief that globalization imposes a forced
choice upon states either to conform to free
market principles or run the risk of being left
behind is termed into a phrase called "The
Golden Straightjacket", by Thomas Friedman,
a neoliberalism journalist and advocate, to
illustrate the forcing of states into policies that
suit the preferences of investment houses and
corporate executives (Electronic Herd) who
swiftly move away and resources into countries
favored as adaptable to the demands of
international business and withdraw even more
rapidly from countries deemed uncompetitive.
NEOLIBERALISM AND ECONOMIC
SOVEREIGNTY
Neoliberalism is the intensification of the
influence and dominance of capital. It is a
project to strengthen, restore, or in some cases,
constitute anew the power of economic elites.
Economic sovereignty is the power of national
government to make decisions independently of
those by other governments.
FOUR CONCEPTS OF SOVEREIGNTY
1. INTERNATIONAL LEGAL
SOVEREIGNTY - It refers to the acceptance of
a given state as a member of the international
community.
2. WESTPHALIAN SOVEREIGNTY - It refers
to the acceptance of a given state as a member of
the international community.
3. INTERDEPENDENCE SOVEREIGNTY - It
is the capacity and willingness to control flows
of people, goods and capital into and out of the
country.
4. DOMESTIC SOVEREIGNTY - It is the
capacity of a state to choose and implement
policies within the territory.
~~READ DAW~~
Many underdeveloped nations that resorted to foreign
assistance and interventions resulted to the
deprivation of government as regard control of their
economy due to the disorderly domestic economic
establishments. Due to this, some scholars predicted
the loss of their economic sovereignty under this
form of neo-colonialism. More importantly, some of
the world's leading economic entities, such as the
United States, the European Union and Japan, by
taking advantage of their predominant economic
status, are affecting or infringing upon other
countries' economic sovereignty. Under these
circumstances, an increasing number of scholars have
concluded that the economic dominion of individual
nations has come to an end. While countries
inevitably cede some control over their economic
sovereignty to external actors, it is the “structural
power” of sovereign states which still dictates the
terms and tenets of globalization
ECONOMIC AND POLITICAL
INTEGRATION (EUROPEAN
INTEGRATION)
European Integration is the process of
industrial, political, legal, economic, social and
cultural integration of states in Europe.
European Union (EU), is an international
organization comprising 28 European countries
and governing common economic, social, and
security policies. In the early 21st century EU
expanded into central and eastern Europe with
the following members: Austria, Belgium,
Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, The
Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden, and the
United Kingdom.
Economic Integration can be described as a
process and a means by which a group countries
strives to increase their level of welfare.
SEVEN STAGES OF ECONOMIC
INTEGRATION:
1. Preferential trading area (PTA)
2. Free trade area
3. Customs union
4. Common market
5. Economic union
6. Economic and monetary union
7. Complete economic integration
Preferential Trading Area (PTA) - happens
when there’s an agreement on reducing or
eliminating tariff (tax or duty to be paid on a
particular class of imports or exports) barriers on
selected goods imported from other members of
countries with in the geographical region or
areas. Agreement can either be bilateral
(between two countries), or multi-lateral (several
countries). Free Trade Areas (FTAs) are created
when two or more countries in a region agree to
reduce or eliminate barriers to trade on all goods common trade policy towards non-members,
coming from other members. The North Atlantic although members are free to pursue
Free Trade Agreement (NAFTA) is an example independent macro-economic policies is termed
of such a free trade area, and includes the USA, Economic Union. It requires coordinated
Canada, and Mexico. monetary and fiscal policies as well as labor
market, regional development, transportation
2. Free Trade Agreements (FTA) - or
and industrial policies. In economic union the
Preferential Trade Agreements (PTAs) eliminate
use of a common currency and a unified
import tariffs as well as import quotas between
monetary policy is considered. The best example
signatory countries. These agreements can be
of Economic union is the European Union (EU).
limited to a few sectors or can encompass all
aspects of international trade. FTAs can also Economic and Monetary Union (EMU) - As a
include formal mechanisms to resolve trade key stage towards complete integration, the
disputes. The North American Free Trade Economic and Monetary Union (EMU) involves
Agreement (NAFTA) is an example of such an a single economic market, a common trade
arrangement. policy, a single currency and a common
monetary policy. It represents a major step in the
Custom Union - Removal of tariff barriers
integration of EU economies. EMU involves the
between members, together with the acceptance
coordination of economic and fiscal policies, a
of a common or unified external tariff against
common monetary policy and a common
non-members is involved in the Custom Union.
currency, the euro. EMU is a means to provide
Single payment or duty is made by countries
stability and for stronger, more sustainable and
exporting to customs union. Goods inside the
inclusive growth across the euro area and the EU
union can move freely with no additional tariffs.
as a whole for the sake of improving the lives of
Members shared tariff revenues while a small
EU citizens.
share is retained by the country that the collects
the duty. Removing internal barriers to trade and Complete Economic Integration - is the final
requiring participating nations to harmonize stage of economic integration in which member
their external policy as well as building a free states completely forego independence of both
trade area are put up by customs union. monetary and fiscal policies. States that
participate in complete economic integration
COMMON MARKET - One major step
have no control of economic policy including
towards economic integration is Common
economic trade rules. There is full monetary
Market (CM). All barriers to the mobility of
union where regulations regarding labor and
people, capital and other resources within the
capital are shared between member states and
area in question, as well as eliminating non-tariff
this includes a single currency. There is also a
barriers to trade, such as the regulatory treatment
complete harmonization of fiscal policy which
of product standards are removed by CM aside
includes shared regulation of tax and benefit
from containing the provisions of a customs
rates involved in complete economic integration
union. The extension of free trade from just
are single economic market, a common trade
tangible goods, to include all economic
policy, a single currency, a common monetary
resources which means that all barriers are
policy, together with a single fiscal policy,
eliminated to allow the free movement of goods,
including common tax and benefit rates or the
services, capital, and labor, including removal of
complete harmonization of all policies, rates,
tariffs and reduced non-tariff barriers is the key
and economic trade rules.
feature of a common market.
Political Integration - refers to the integration
Economic Union - The trading bloc that has
of components within political systems. It brings
both a common market between members, and a
economic benefits by leading the recovery of
effectiveness in policy making.
(KAPAG NAG SEARCH ABOUT DITO SA 1-
8 AY MAY MAS MAIKLING MEANING
WHICH IS THE FOLLOWING)
A preferential trade area (also preferential
trade agreement, PTA) is a trading bloc that
gives preferential access to certain products
from the participating countries. This is done by
reducing tariffs but not by abolishing them
completely. It is the first stage of economic
integration.
A free trade area is a region in which a number
of countries have signed a free trade agreement
and maintain little or no barriers to trade in the
form of tariffs or quotas among one another.
A customs union is an agreement between two
or more neighboring countries to remove trade
barriers, reduce or abolish customs duty, and
eliminate quotas. Such unions were defined by
the General Agreement on Tariffs and Trade
(GATT) and are the third stage of economic
integration.
An economic union is an agreement between
two or more nations to allow goods, services,
money and workers to move over borders freely.
The countries may also coordinate social and
financial policies to support this common
market. The European Union (EU) is an example
of an economic union.
The Economic and Monetary Union (EMU)
represents a major step in the integration of EU
economies. Launched in 1992, EMU involves
the coordination of economic and fiscal policies,
a common monetary policy, and a common
currency, the euro.
Complete economic integration involves a
single economic market, a common trade policy,
a single currency, a common monetary policy,
together with a single fiscal policy, including
common tax and benefit rates – in short,
complete harmonization of all policies, rates,
and economic trade rules
THEORIES OF EUROPEAN INTEGRATION
NEO-FUNCTIONALISM - This theory
focuses on the supranational institutions of the
EU of which the main driving forces of
integration are interest group activity at the
European and national levels, political party
activity, and the role of governments and
supranational institutions. The European
integration is mostly seen as an upper class-
driven process- driven by national and
international political and economic upper
crusts.
INTERGOVERNMENTALISM - This theory
provides a conceptual explanation of the
European integration process. The main concept
of the Intergovernmentalism is emphasizing on
the role of national states in the European
integration; in another words it argues that
"European integration is driven by the interest
and actions of nation states". This theory was
suggested by Stanley Hoffmann. The theory
proposed the Logic of Diversity, which set limits
to the degree which the ‘spill-over’ process can
limit the freedom of action of the governments...
the logic of diversity implies that on vital issues,
losses are not compensated by gains on other
issues.
LIBERAL INTERGOVERNMENTALISM -
This a dominant political theory developed by
Andrew Moravcsik in 1993 to explain
European integration. Application of rational
institutionalism to the field of European
integration is the aim of this theory. Moravcsik
stated that 'state-society relations--the
relationship of state to the domestic and
transnational social context in which they are
embedded--have a fundamental impact on state
behavior in world politics and that the 'universal
condition of world politics is globalization.' It is
the web of globalized economic, social and
political relationships that determines the living
conditions of individual citizens, corporations
and civic groups and shapes what they want and
thus what their governments want Liberal
intergovernmentalists stated that the bargaining
power of member states is important in the
pursuit of integration, and package deals and
side payments also occur in the process of
making deals.
NEW INSTITUTIONALISM - This theory
emphasized the importance of institutions in the
process of European integration. Its three key
strands are: rational choice, sociological and
historical.
MULTI-LEVEL GOVERNANCE - This is a
new theory of European integration. Writers
Liesbet Hooghe and Gary Marks defined MLG
as dispersion of authority across multiple levels
of political governance. They stated that over the
last fifty years, authority and sovereignty has
moved away from national governments in
Europe, not just to the supranational level with
the EU, but also to subnational levels such as
regional assemblies and local authorities.
TRANSNATIONAL ACTIVISM IN STATES
Transnational Activism - can be defined as the
mobilization of collective claims by actors
located in more than one country and/or
addressing more than one national government
and/or international governmental organization
or another international actor.
A SOCIAL MOVEMENT is a type of group
action. It refers to the organizational structures
and strategies that may empower oppressed
populations to mount effective challenges and
resist the more powerful and advantages elites.
THE GLOBAL JUSTICE MOVEMENT
describes the loose connection of individuals
and groups often referred to as a "movement of
movements" who advocate fair trade rules.
THE NEW TRANSNATIONAL ACTIVISM
is a multifaced as the internationalism through
globalization and global neo-liberalism are
frames around which many activist mobilize.
SOCIAL MEDIA AND THE STATE
SOCIAL MEDIA is a computer-based
technology that facilitates the sharing of ideas.
It empowers individuals to have a voice.
Social media have changed the ways in which
knowledge is being recorded and passed on.
Feb 20. 2023
THE CONTEMPORARY GLOBAL
GOVERNANCE
- Global governance or world governance is a
product of Neo-liberal paradigm shifts in
international political and economic relations.
- Global governance is a tool to identify
solutions to problems created by Neo-liberal
organization.
- It can thus be understood as the sum of laws,
norms, policies and institutions that define,
constitute, and mediate trans-border relations
between states, cultures, citizens,
intergovernmental and non-governmental
organizations, and the market.
-Global governance is viewed is viewed as the
sum of governance processes in the absence of
world government.
TYPES OF GLOBAL GOVERNANCE:
1. WITH UNIVERSAL MEMBERSHIP
2. WITH LIMITED MEMBERSHIP
THE ROLES AND FUNCTIONS OF THE
UNITED NATIONS:
(IN MODULE READ DAW)
The United Nations (UN) in the world of politics has
the roles of preventing and managing conflicts,
regulating armaments, championing human rights and
international humanitarian law, liberating the
colonized, providing economic and technical aid in
newly liberated countries, organizing elections,
empowering women, educating children, feeding the
hungry, sheltering the disposed and displaced,
housing the refugees, tending the sick and
coordinating disaster relief and assistance. In policy
motivation, peacekeeping is the most important
feature of UN activity in peace and security.
The UN aims to save succeeding generations from
the scourge of war; tore affirm faith in fundamental
human rights; to establish conditions under which
justice and respect for the obligations arising from
treaties and other sources of international law can be
maintained; and to promote social progress and better
standards of life in larger freedom.
FOUR MAIN PURPOSES OF THE UN
CHARTER:
1. Maintaining worldwide peace and security
2. Developing relations among nations
3. Fostering cooperation between nations in
order to solve economic, social, cultural, or
humanitarian international problems.
4. Providing a forum for bringing countries
together to meet the UN's purposes and goals.
CHALLENGES OF GLOBAL
GOVERNANCE IN THE 21ST CENTURY
-issues that involve interwoven domestic and
foreign challenges
-global challenges of the new generation
The new governance challenges in the 21st
century entail multiple trajectories of change.
THE ROLE OF THE NATION-STATE IN
GLOBALIZATION
ELEMENTS OF A STATE:
1. Territory
2. People
3. Sovereignty
4. Government
GLOBALIZATION'S IMPACT ON THE
STATE
Factors which lead to the increase and
acceleration of movements of people,
information, commodities and capital:
1. lifting of trade barriers
2. liberalization of world capital markets
3. Swift technological progress
Problems afflicting the world today which are
increasingly transnational in nature:
1. Poverty
2. Environmental pollution
3. Economic crisis
4. Organized crime terrorism
Effects of greater economic and social
interdependence to national decision-making
processes:
1. It calls for a transfer of decision to the
international level
2. It requires many decisions to be transferred to
local levels of governments due to an increase in
the demand for participation
The following can be guaranteed by the states
through independent courts:
1. Respect of human rights and justice
2. Promote the national welfare
3. Protect the general interest
-THE STATE IS CENTRAL TO THE WELL-
BEING OF ITS CITIZENS AND TO THE
PROPER MANAGEMENT OF SOCIAL AND
ECONOMIC DEVELOPMENT
-GLOBALIZATION DOES NOT REDUCE
THE ROLE OF THE NATION-STATE
FEB 27. 2023
UNIT III
A World Of Regions
1. GLOBAL DIVIDES: THE NORTH AND
THE SOUTH
2. ASIAN REGIONALISM
7 Continents of the World
Biggest to smallest
1. Asia includes 50 countries, and it is the
most populated continent, the 60% of the
total population of the Earth live here
2. Africa comprises 54 countries. It is the
hottest continent and home of the world's
largest desert, the Sahara, occupying 25% of
the total area of Africa.
3. North America includes 23 countries led by
the USA as the largest economy in the world.
4. South America comprises 12 countries,
here is located the largest forest, Amazon
rainforest, which covers 30% of the south
America total area.
5. Antarctica is the coldest continent in the
world, completely covered with ice. There are
no permanent inhabitants, except of scientist
maintaining research stations in Antarctica.
6. Europe comprises of 51 countries. It is the
most developed economically continent with
the European Union as the biggest economic
and political union in the world.
7. Australia includes 14 countries. It is least
populated continent after Antarctica, only
0.2% of the total Earth population live here.
1. Global Divides: The north and the south
Global South refers to the regions of Latin
America, Asia, Africa, and Oceania. It may also
be called "developing countries". It refers to
countries' interconnected histories of colonialism
and neo-imperialism.
THREE PRIMARY CONCEPTS OF
GLOBAL SOUTH
1. It refers to economically disadvantages
nation-states and as a post-cold war alternative
to THIRD WORLD.
Third World" is a phrase frequently used to
describe a developing nation. The phrase "Third
World" arose during the Cold War to identify
countries whose views did not align with NATO
and capitalism or the Soviet Union and
communism. The First World described
countries whose views aligned with NATO and
capitalism, and the Second World referred to
countries that supported communism and the
Soviet Union.
Third World countries are largely
characterized as poor and underdeveloped. In
these countries, low levels of education, poor
infrastructure, improper sanitation and poor
access to health care mean living conditions are
seen as inferior to those in the world's more
developed nations. As a result, the terms Third
World country and developing nation have
become increasingly interchangeable in recent
decades.
2. The Global South captures a deterritorialized
geography of capitalism’s externalities and
means to account for subjugated peoples within
the borders of wealthier countries, such that
there are economic Souths in the geographic
North and Norths in the geographic South.
3. It refers to the resistant imaginary of a
transnational political subject that results from a
shared experience of subjugation under
contemporary global capitalism. In short North
has influence in South and Vice versa.
THREE PRIMARY CONCEPTS OF
GLOBAL SOUTH (additional explanation)
The development of the Global South must
begin by drawing most of the country's financial
resources for development from within rather
than becoming dependent on foreign
investments and foreign financial markets.
The Global South is not relevant for those who
live in countries traditionally associated with it
but it also signifies that the South continues to
be globalized.
NEW INTERNATIONALISM IN THE
GLOBAL SOUTH
The ills of the global south are being globalized.
Underdeveloped states of the global south are
ravaged by merciless IMF policies in the 1980’s.
The economic prescriptions of the IMF as cures
are recommended for countries in the global
south. Other countries like Greece realize the
similarity of problems in the global south that
inspirations were drawn from poorer nations.
The global south has provided model of
resistance for the world like Gandhi’s non-
violence that initially directed at colonial
authority in India is now part of global protest
culture, as well as benefits of critiques of
international financial institutions from the
experiences and writings of intellectuals and
activists from the global south. A similar
globalization of the south’s concern is arising
from the issue about global environment. Amidst
the existential threat of climate change the most
radical notions of climate justice are being
articulated in the global south. As global
problems increase, it is necessary for people in
the north to support people from the south. As a
symbol and metaphor, global south is not only
relevant for those who live in countries
traditionally associated with it. The global in
global south does not only mean that the south is
the globe but also signifies that the south
continues to be globalized. The global south
while embedded in specific geographic
imaginaries, represents emergent forms of
progressive cosmopolitanism. It is always
emergent and provisional internationalism.
2. LESSON 2-ASIAN REGIONALISM
REGIONALISM is the decentralization of
political powers or competencies from higher
towards a lower political level.
VIEW OF GLOBALIZATION IN THE ASIA
PACIFIC AND THE SOUTH ASIA
Globalization is an external phenomenon being
pushed into the region by world powers
particularly the United States and Europe. From
this perspective, globalization can be understood
as a process that transforms the Asia Pacific and
South Asia. It is a force for bringing economic
development, political progress, and social and
cultural diversity in the region.
THE ASIA PACIFIC AND SOUTH ASIA
This refers to the regions of East or Northeast
that includes some of the World's economically
developed states such as Japan, South Korea,
Singapore and Taiwan and highly impoverished
countries such as Cambodia, Laos, and Nepal. It
also includes the largest and most populous
states on the globe including China and India
and some of the world’s smallest such as the
Maldives and Bhutan.
ASIA PACIFIC AND SOUTH ASIA'S
IMPACT ON GLOBALIZATION
1. Japan embarked on procuring raw materials
like coal and iron at unprecedented economies of
scale allowing them to gain a competitive edge
in the global manufacturing market as well as
globalized shipping and procurement patterns
which other countries modeled.
2. China pursues similar pattern of development
at present and is now the world’s largest
importers of basic raw materials such as iron and
surpassed Japan, the US and Europe in steel
production. It also surpassed the World bank in
lending to developing countries. It had an
enormous impact on the availability and
consumption of goods around the world.
3. India opened-up and emphasized an export-
oriented strategy. Textiles and other low wage
sectors have been a key part of the economy
with highly successful software development
exports. It also plays a key role in global service
provisions as trends in outsourcing and off-
shoring increase.
4. India and China have also become a major
source of international migrant labor, which is
also one of the fundamental characteristics of the
era of globalization. This includes the migration
of highly skilled labor into the high-tech
industry based in Silicon Valley. India, China
and the Philippines were three of the top four
recipient states of migrant remittances.
5. The trend of the rising regional free
arrangements in the Asia Pacific and South Asia.
This kind of regionalism would mean as bulwark
to globalization or as compatible and even
pushing forward the process of global economic
integration. Regionalism can promote learning,
assuage domestic audiences to the benefits of
free trade, and form the institutional framework
to scale up from regional cooperation o global
cooperation. Regionalism can act as spring
board for globalization. One distinguishing
feature of regional institutions in Asia Pacific
and South Asia is the adoption of “Open
Regionalism” which aims to develop and
maintain cooperation with outside actors. This is
meant to resolve the tension between the rise of
regional trade agreements and the push for
global trade as embodied by World Trade
Organization (WTO), the only global
international organization dealing with the rules
of trade between nations. “Open” refers to the
principle of non-discrimination, more
specifically an openness in membership and
openness in terms of economic flows. Open
regionalism is embodied by Asia Pacific
Economic cooperation or APEC.
6. In culture and globalization in the region, the
source of a wide variety of cultural phenomena
that have spread outward to the West and the
rest of the world is the region. Examples include
“hello Kitty” created in Japan including Anime,
Pokemon, Power Rangers which become
regional and global phenomenon; the regional
and global rise of Korean popular culture called
‘K-Wave” comprising of Korean dramas, music
(K-pop) and the smash hit “Gangnam Style” of
Korean pop star PSY. Asia Pacific and South
Asia are on the receiving end of globalization.
The region serves as the source of many aspects
of globalization process which can be seen in
history, economy, political structure and culture.
THE REGION-MAKING IN SOUTHEAST
ASIA AND MIDDLE-CLASS FORMATION:
The Third Wave
Regionalization entails complex and dynamic
interactions between and among governmental
and nongovernmental actors which resulted to
hybrid East Asia. The main engines of
hybridization are explained by the successive
waves of regional economic development that is
powered by developmental states and national
and transnational capitalism that nurtured
sizeable middle-classes that share a lot in
common in terms of professional lives and their
lifestyles, in fashion, leisure, and entertainment,
in their aspirations and dreams. The middle-class
occupies different positions in their respective
societies as well as in relation to their nation
states as they constitute the expanding regional
consumer market.
The product of regional economic development
in the post war era are the middle classes in east
Asia. Regional economic development took
place within the context of the American
informal empire in “Free Asia”, with the US-
led regional security system and the triangular
trade system as its two major pillars.
Furthermore, the national states in the region
promoted it actively under democratic or
authoritarian developmentalist regimes, both of
which espoused the politics of productivity, a
politics of that transformed political issues into
problems of output and sought to neutralize class
conflict in favor of a consensus on economic
growth.
The first wave of regional economic
development took place in Japan from mid-
1950’s to the early 1970s and led to the
emergence of a middle-class by the early 1970s.
The second wave took place between the 1960s
and 1980s in South Korea, Taiwan, Hongkong
and Singapore and led to the formation of
middle-class societies in these countries by the
1980s.
TWO SALIENT POINTS IN THE HISTORY
OF EAST ASIAN MIDDLE-CLASS
FORMATION
1. Middle class formation in Southeast Asia
was driven by global and regional transnational
capitalism working in alliance with national
states while middle class in Japan, South Korea,
and Taiwan were created by developmental
states and national capitalism.
2. New urban middle classes in East Asia,
whether in Japan, South Korea, Taiwan, or
Southeast Asia, with their middle-class jobs,
education, and income, have in turn created their
own new lifestyles commensurate with their
middle-class income and status.
MIDDLE CLASEES IN THE PHILIPPINES
New urban middle classes emerged in the post
1986 Philippines. They were created through
growth in retail trade, manufacture, banking, real
estate development, and an expanding range of
specialist services such as accounting,
advertising, computing, and market research.
Fostered by government policies of
liberalization and deregulation, the development
of these new enterprises has been oriented both
toward the export and domestic markets and has
entailed increasingly diverse sources of foreign
investment and variable subcontracting,
franchise, and service relationships, with a
noticeable expansion of ties connecting the
Philippines to other countries in East and
Southeast Asia.
REGIONAL IMPLICATIONS OF MIDDLE-
CLASS FORMATION IN EAST ASIA
Complex historical forces shaped new urban
middle classes. They are product of regional
economic development, which has taken place in
waves under the U.S. informal empire over a
half century, first in Japan, then in South Korea,
Taiwan, Hongkong, and Singapore, Thailand,
Malaysia, Indonesia and Philippines, and now in
China. They are product as well for development
states. Their lifestyles have been shaped in very
complex ways by their appropriation of things
American, Japanese, Chinese, South Korean,
Islamic and other ways of life, often mediated by
the market.
The political consequences of the rise of East
Asia middle classes vary. The cultural and
political hegemony of the South Korean middle
classes is embodied by single generation, while
that of the Taiwanese middle classes manifest
itself in the political assertiveness of an ethnic
majority. Southeast Asian middle classes also
exemplify the diversity and complexity of class
formation. Thai middle classes are coherent
socially, hegemonic culturally, and ascend
politically; their counterparts in Malaysia and
Indonesia are socially divided, dependent on the
state, politically assertive eand vulnerable; and
the Philippine middle classes are socially
coherent, less dependent on the state, culturally
ascendant, but politically vacillating.
Regional Implications of Middle -Class
Formation in East Asia
Complex historical forces shaped new urban
middle classes. They are product of regional
economic development, which has taken place in
waves under the U.S. informal empire over a
half century, first in Japan, then in South Korea,
Taiwan, Hongkong, and Singapore, Thailand,
Malaysia, Indonesia and Philippines, and now
in China. They are product as well for
development states. Their lifestyles have been
shaped in very complex ways by their
appropriation of things American, Japanese,
Chinese, South Korean, Islamic and other ways
of life, often mediated by the market. The
political consequences of the rise of East Asia
middle classes vary. The cultural and political
hegemony of the South Korean middle classes is
embodied by single generation, while that of the
Taiwanese middle classes manifest itself in the
political assertiveness of an ethnic majority.
Southeast Asian middle classes also exemplify
the diversity and complexity of class formation.
Thai middle classes are coherent socially,
hegemonic culturally, and ascend politically;
their counterparts in Malaysia and Indonesia are
socially divided, dependent on the state,
politically assertive and vulnerable; and the
Philippine middle classes are socially coherent,
less dependent on the state, culturally ascendant,
but politically vacillating.