MARKET INTEGRATION

International Financial Institutions

- Globalization has brought together world economies

- It is important to remember that it is not only the economy of one country but
also other economies in the world that have a significant impact on the global
market and finance

- The strength of a more powerful economy brings a greater effect on other

countries

We’ll be talking about financial institutions and economic organizations that made
countries even closer in terms of trade.

1. The Bretton Woods System

- After the two world wars, world leaders sought to create a global economic
system that would ensure a longer-lasting global peace.

- One of their ways is to set up a network of global financial institutions that

would promote economic interdependence and prosperity.

- Inaugurated in 1944. It is a set of unified rules and policies that provided the
framework necessary to create fixed international currency exchange rates.

- Influenced by John Maynard Keynes- believed that economic crises occur not
when a country does not have enough money, but when money is not being
spent and, thereby, not moving.

- When the economies slow down, the government should reinvigorate markets
with infusions of capital

2. The International Monetary Fund (IMF)

- Stemmed from the Bretton Woods System, with the role to oversee the
exchange rates
 3. The General Agreement on Tariffs and Trade (GATT)

- 1947- Shortly after Bretton Woods, other countries made their own economic
integration through GENERAL AGREEMENT ON TARIFFS AND TRADE in
1947

- The main purpose was to reduce tariffs and other hindrances to free trade

4. World Trade Organization (WTO)

- an intergovernmental organization that regulates and facilitates international

trade.

5. The World Bank

- an international financial institution that provides loans and grants to the

governments of low- and middle-income countries for the purpose of pursuing
capital projects

History of Global Market Integration

1. The Agricultural Revolution

- The time when people learned to domesticate plants and animals, and
realized that it was much more productive than the hunter-gatherer society

Effects:
- Farming led to permanent settlements
- trade network and population growth

2. The Industrial Revolution

- The 1800s-the rise of new economic tools like the steam engine,
manufacturing, and mass production

Effects:
- People began to work as wage laborers
- began to be more specialized in their skills
 - Productivity went up
- Standards of living rose up

Two economic models that sprung around the time of the industrial revolution:

Capitalism VS Socialism

Capitalism
- system in which all natural resources and means of production are privately
owned

- Emphasis on profit maximization

- Competition as the main driver of efficiency

Socialism

- Government plays a larger role in socialism

- Socialist systems follow production under collective ownership
- Emphasis on collective goals, expecting everyone to work for the common
good
- Property is mostly owned by the government and allocated to all citizens
- Putting a higher value on meeting everyone’s basic needs

3. The Information Revolution

- The age where scientific and technological advances have reduced the
role of human labor

- Labor has shifted from manufacturing goods to the production of ideas

Effects
- digitalization and computers have replaced people because of automation
- Outsourcing jobs offshore
- Decline in union membership
-

Global Corporations

- Companies that extend beyond the border of one country are called
multinational or transnational corporations (MNCs or TNCs)
- Also called global corporations
GLOBAL INTERSTATE

STATE- set of political community with its own set of rules and practices that
is more or less separated from other communities

Four Elements of State

1. People- permanent population; the permanent presence of people in a

common location

2. Territory- clear physical boundaries

3. Government- the body that regulates relations among people and other
states

4. Sovereignty- encompasses people, territory, and institutions on one hand,

while maintaining its autonomy from other states on the other hand. It
encompasses the other three elements of the state.

Difference Between State and Nation

Nation- refers to the people and culture rather than any kind of formal territorial
boundaries or instructions

It is a collective identity grounded on shared history and culture

STATE is a POLITICAL concept, while NATION is a CULTURAL concept

Example:

The Philippines as a State

- Think about the Philippines based on its government, territory, and internal
and external sovereignty.

- How is the trade between the Philippines and this particular country? How is
the country upholding its sovereignty in relation to territorial issues e.g. China
and Philippines’ dispute over the West Philippine sea?
The Philippines as a Nation

- Think about the Philiipines as a shared collective notion of democracy, history,

and collective identity.

- Even though I live in a different country, do I still uphold my value as a

Filipino? Do I still celebrate Filipino culture even if I work abroad, or even if I’m
not in the geographical territory of the Philippines?

THE EFFECTS (challenges) OF GLOBALIZATION ON

GOVERNMENTS

Government- a group of people who have the ultimate authority to act on behalf of a
state

- Each state has its own right to self-determination and that other country
should not intervene in the affairs of the state unless there are extraordinary
reasons

A. Tradtional Challenges

- Most commonly seen challenges in relation to strifes/conflicts within

and outside of a state

1. External Intervention

- Sometimes described as an invasion

Example:

- Russia, trying to claim territories in Ukraine

- Saddam Hussein of Iraq trying to take over the oil fields of Kuwait

2. Internal Political Challenges

- Conflicts that arise within the local state

 Example:

- The Taliban’s effort to control the government of Afghanistan. Taliban is

a militant ( militant- following extreme or confrontational methods for a
political cause) political movement just within Afghanistan as well.

3. Regional Organizations challenging the state autonomy

- Conflicts that arise within the regional organizations or groups to have

autonomy over the state

Example:

- In the Philippines, we have the MILF, or the Moro Islamic Liberation

Front, which seeks to have the Mindanao region as an autonomous
region from the state government

B. Challenges from National/Identity Movement

- Nations have a cultural identity that people attach to, while a state is a definite
entity due to its specific boundaries

- But different people with different identities CAN LIVE IN DIFFERENT

STATES

- Example: The ethnic group Sama-Bajau (Badjao, sea nomads, sea gypsies),
can be found not just in the Philippines but also in Malaysia, Indonesia, and
Brunei

As a challenge of a National Identity movement, here is another example:

- Great Britain (GB) and Scotland- GB had a vote in Scotland to decide whether
it was going to be an autonomous state and not be a part of GB

- GB voted against it, and Scotland is still part of GB, but it now has significant
degree of authority compared before

- Other examples of national identity movements are the existence of Al Qaeda,

and Isis
C. Challenges from Global Economics

- The global economy demands states conform to the rules of capitalism

- Here, we get to talk about Neoliberal capitalism:

Neoliberal capitalism

- Focuses on free trade and dismantles trade barriers

- Made sure that governments did not impose restrictive regulations on

corporate presence

- The laws and standards of a certain country may interfere with the capital
flow. Environmental regulations would discourage economc growth.

- Neoliberal capitalism requires a state to cooperate with its rules of free trade,
diminishing the government’s role

- Neoliberal Capitalism is seen as a threat because the state cannot

protect its own economic interest as a sovereign state

D. Challenges from Global Social Movements

- Most of the time, they are not seen as a threat but as a challenge to the state
sovereignty still

Social Movements- movements of people that are spontaneous or emerging through

the grassroots of an organization

“Grassroots”- the most basic level of an organization or social circles

- States have less control over them because they occur across countries,
across borders

Example:

Human rights movement, in the case of the death penalty. If a certain state or
country has rules about the death penalty (for example, Country A allows the death
penalty), but violates an international standard, then there is a challenge for their
state to fully implement it

Environmental Movements are also an example of Global social movements.

Movements of local areas fighting the government that protects the interests of
neo-capitalist over environmental standards. This can occur in almost all countries
around the world.

Internationalism and Globalism

Let’s revisit the idea that Globalism is an ideology based on the belief that people,
goods, and information ought to be able to cross national borders without
restrictions.

While the concept of Internationalism recognizes the boundaries of territories

and the role of the nation in globalization.
INSTITUTIONS THAT GOVERN INTERNATIONAL
RELATIONS

A. Peace Treaties and Military Alliances

Global Politics entails the relationship between countries and different government
and non-government organizations. Here are a list of organizations, and their roles in
maintaining peace, and economic growth.

1. The United Nations (UN)

- One of the leading political organizations in the world where nation-states

meet and deliberate

- Remains an independent actor in global politics

- Formed as a part of the “restructuring” of the world after WWII

- October 24, 1945- its first operations began, with 50 representative countries.
Now, it's close to 200.

- Designed to be a place where countries could come to discuss their issues

without resorting to violence and war

- Maintaining Peace and Security became their central mission after the war

Four areas of Function:

a. Military Issues
b. Economic Issues
c. Environmental Issues
d. Human Protection

The General Assembly- the main deliberative body that provides a forum for member
states to express their views and reach an agreement
Other Programs under the UN:

UNICEF ( United Nations Children’s Emergency Fund)

- Help children around the world by distributing emergency relief from famine,
poverty, and disease

UNEP ( United Nations Environment Programme)

- Tackles environmental issues such as pollution and hazardous wastes,

increasing greenhouse emissions, rising sea levels, and climate change.

International Court of Justice (ICJ)

- Also known as the World Court

- Where countries settle disputes in a court of law
- A place where criminals and rulers who have done can be put to trial for their
crimes

2. NATO (Noth Atlantic Treaty Organization)

- A defensive treaty or military alliance between the US, CANADA, and 25

European Countries. Presently, it has 30 countries

- 1949- started with 12 founding members of the Alliance:

Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the

Netherlands, Norway, Portugal, the United Kingdom, and the United States.

- Based on the idea of collective security

- Countries agreed to combine their military resources and tell the rest of the
world that if a country messed with one of its members, the other countries
will come to their defense.
3. NGOs (Non-Governmental Organizations)

- Organizations that are not tied to any country

- Allows them to operate freely around the world

- Provide emergency funds, such as food, water, medical supplies, or territories

destroyed by disaster or war

- Monitor wars and ensure that no war crimes take place

Examples:

Red Cross, or Red Crescent in Muslim countries

- Provides emergency response services

Doctors Without Borders

- free emergency healthcare in disaster areas

Oxfam

- Relief from famine and diseases

Amnesty International

- human rights services and assistance to political prisoners

Save the Children

- healthcare and education services for children

B. Global Economic Associations

1. World Trade Organization (WTO)

- Made up of 162 countries around the world

- The goal of increasing free trade

 - Countries therefore can buy and sell goods from one another without placing
taxes on imports and tariffs

- Good in nature but without criticism: Some people say that it is more about
helping large companies and corporations than it was helping people

2. NAFTA

- The North American Free Trade Agreement

- An economic treaty between the US, Canada, and Mexico, in which the three
countries trade freely without taxing each other

Critic: American autoworkers protested against NAFTA as several car

companies moved their factories to Mexico in search of cheap labor, instead of
keeping them in the US

Contemporary Global Governance

So What Is the Relevance of State in Globalism?

- The state is a major player on the global stage

- The role of the state is enduring and increasing, especially in advanced
industrial societies

Globalization was used as bases to make changes in society, but it also benefits
decision-makers (government) of each country that are hoping for changes.

The Concept of GLOBAL CITIZENSHIP

- The moral and ethical disposition that can guide the understanding of
individuals, or groups of local and global contexts, and remind them of their
responsibilities in various communities

- Global citizens bond local communities in a globalized world