THE CONTEMPORARY
COUNTRY - geographical regularities.
WORLD
I. INTRODUCTION TO GLOBALIZA-
TION
GLOBALIZATION
➢ Globalization comes from the word
“globe” and means that the world is
coming
➢ altogether across countries and nations.
➢ The advancement of technology (a
process of globalization).
➢ All countries are coming all together.
➢ Interconnectedness of people, state,
nation
- state of being connected w/ each other
- complicated interconnectedness (what
happen to you might affect other
countries)
➢ Technology progress = borderless
world
➢ Able to communicate and transport due
to globalization.
STATE - a political unit/entity
4 Elements of State
o Population
o Defined territory
o Government
o Sovereignty (internal & external)
NATION - a group/community of people with
same tradition, culture, race, ethnicity, etc.
Cultural Globalization
• information, commodities, or even
images that have been produced in one
KENICHI OHMAE part of the world enter the global flow
“National borders have effectively which “flattens out” cultural
disappeared and together with them, the indifferences of nations, regions, and
economic logic that first made them useful individuals.
demarcation lines.” Analysts like him Political Globalization
• policy-making responsibilities have
speculate that globalization has blurred
been passed from national government
countries’ distinctions, creating a ‘borderless to international organizations.
world’.
IDEOLOGY - a set of beliefs, especially the II. THEORIES OF GLOBALIZATION
political beliefs on which people, parties, or
countries base their actions. THEORY
-explain and predict phenomena or relationships
DISADVANTAGES OF within a particular domain of knowledge.
GLOBALIZATION -to provide a framework for understanding and
PEOPLE interpreting observations or facts by
• people in industrialized countries tend identifying patterns, regularities, and underlying
to lose their jobs. principles.
• job opportunities rise for the poor → Explanation - A theory should provide a
country. logical and coherent explanation for
• they often remain poor and more often observed phenomena. It seeks to answer the
than that, do not have sufficient “why” by identifying underlying causes or
insurance cover. mechanisms.
ENVIRONMENT → Prediction - the ability to make predictions
• ecological problems such as climate about future events or outcomes based on
change. its principles.
• global warming. → Falsifiability - good theory is testable and
can be potentially disproven through
PHASES OF GLOBALIZATION empirical evidence. This means that a
Economic Globalization theory must be open to scrutiny and capable
• Free market = single economy of being rejected if the evidence contradicts
its predictions

THE WORLD SYSTEMS THEORY (OR
HYPERGLOBALISATIONISM)
➢ proposed by Immanuel Wallerstein in
1974.
➢ understanding the global system as a whole
with a particular focus on the dynamics of
economic and political power
➢ sees globalization as an all-encompassing
force that leads to the erosion of national
borders and the emergence of a truly global
economy and culture.
➢ hyperglobalists are chief among the
believers of globalization.
➢ legitimate process and a new age in human
history.
➢ emphasizes the dominance of global
markets and the diminishing significance of
individual nations. They also believe that
the capitalist world system is spread across
the entire globe.
Capitalism - economic system characterized by
private ownership of the means of production (such
as factories, and business) free markets, and
competition. Individuals and businesses pursue
profits and make economic decisions based on
supply and demand.
Communism -political and economic ideology
where the means of production are owned
collectively by the community or state. In a true
communist society, there is no private
ownership; and wealth and resources are shared
equally among all members.
Socialism - falls between capitalism and
communism. It features public or collective
ownership, along with government intervention
to address inequalities and provide social
services, Socialism aims to balance freedom
with social equality.
Wallerstein divides the world into three major
zones:
o CORE NATIONS - economically
developed regions with advanced
technology, industrial production, and
significant wealth. Core nations dominate
the global economic system. Capital-
intensive production of materials and goods
rather than extracting raw materials
o PERIPHERY NATIONS - comprises less
developed areas that often provide cheap
labor and raw materials to the core nations.
They are economically dependent to the
core. Focuses only on one type of economic
activity: extracting raw materials.
o SEMI-PERIPHERY NATIONS
- intermediate zone that exhibits elements
of both core and periphery characteristics.
May have growing industrial sectors but are
still economically subordinate to core
nations.
THE REGIONAL BLOC THEORY (OR
GLOBAL SKEPTICISM)
➢ Global skeptics take a critical stance
towards globalization, questioning its
overall benefits and highlighting its
negative consequences, such as inequality,
cultural homogenization, and
environmental degradation.
➢ often emphasize the limitations and
challenges of globalization and tend to see
the rise of regional blocs or regionalism as
a significant trend.
REGIONAL BLOCS, also known as regional
organizations or economic blocs. Collaborate on
various issues including economic, political, and
security matters.
→ AFRICAN UNION (AU) - seeks to
promote economic cooperation, peace and
security, and political integration among
African nations.
→ EUROPEAN UNION (EU)
→ NORTH AMERICAN FREE TRADE
AGREEMENT (NAFTA)
→ ASSOCIATION OF SOUTHEAST
ASIAN NATIONS (ASEAN) - regional
bloc comprising ten Southeast Asian
countries. It focuses on economic
cooperation, political dialogue, and
regional stability. ASEAN promotes trade
liberalization and has established the
ASEAN Economic Community (AEC) to
enhance economic integration in the region.
→ MERCOSUR - regional trade bloc in South
America that includes countries such as
Brazil, Argentina, and Uruguay. It aims to
promote economic integration through the
reduction of trade barriers and the
coordination of economic policies.
THE THIRD WAY THEORY (OR
TRANSFORMATIONALISM)
➢ globalization is a complex and dynamic
process that can lead to both positive and
negative outcomes. They emphasize the
importance of governance, policies, and
social movements in shaping the direction
and consequences of globalization
According to Anthony Giddens, a modern
sociologist, globalization is a phenomenon shaped
by “modern” capitalist forces: politics, military
power, and industrialism. These forces are the
sources of globalization dimensions or aspects of
world modernity such as the capitalist economy, the
national state system, world military order, and
international labor. If these combined forces of
world modernity were spread across all countries in
the world, the globalization process would occur.
III. MARKET INTEGRATION
MARKET - derived from the Latin word
“mercatus” which means trading or place of
transactions.
INTEGRATION - a process involving attempts to
combine separate national economies into
larger economic region.
➢ Shows company’s market relationship
MARKET INTEGRATIONS
➢ Refers to the process of creating a unified
marketplace where goods, services, and
capital flow freely between countries or
regions.
➢ A process that refers to the expansion of
firms by consolidating additional
marketing functions and activities under a
single management.
➢ Central aspect of economic globalization:
the interconnectedness of economies and
societies around the world.
Market Integration can take many forms including:
- Reduction of trade barriers such as tariffs
TARIFF- a tax imposed by one country on the
goods and services imparted from another
country
o Adoption of common currency
o Harmonization of regulatory standards
o The development of infrastructure to
facilitate transportation and
communication.
EVOLUTION OF MARKET INTEGRATION
Before, people only produced for their families, but
today, our economy demands the different sectors
to work together to produce, distribute, and
exchange products and services.
• THE AGRICULTURAL REVOLUTION
A period when people learned how to domesticate
plants and animals. This became the new
agricultural economy that led to major
developments like permanent settlements, trade
networks, and population growth.
• THE INDUSTRIAL REVOLUTION
This is the rise of the industry through new
economic tools, like steam engines, manufacturing,
and mass production.
• THE INFORMATION REVOLUTION
This is when technology reduced the role of human
labor and shifted it from a manufacturing based
economy to one that is based on service work and
the production of ideas matters more than goods.
HORIZONTAL INTEGRATION
➢ is when a business combines forces with
another company that offers similar
products or services
➢ (Ex: - Facebook Inc.’s (now Meta)
acquisition of Instagram in 2012)
ACQUISITION - refers to the process of the
company purchasing another company- gaining
control and ownership
MERGE - involves the combining force of two or
more (bigger or smaller) companies to form a new
entity
VERTICAL INTEGRATION
➢ is when the company expands either
forward or backward by acquiring or
merging with firms in an earlier or later
phase of the value chain.
There are two (2) types of Vertical Integration.
BACKWARD VERTICAL INTEGRATION
➢ is the ownership control of the products to
a point earlier in the supply chain or the
production process
 ➢ (Ex: If Coca-Cola Company acquires a
bottling company that will supply them
bottles)
FORWARD VERTICAL INTEGRATION
➢ is the ownership control of the products to
a point later in the supply chain or the
production process
➢ (Ex: Apple retail stores like PowerMac //
Walt Disney’s theme parks and Disney+
streaming service)
CONGLOMERATE INTEGRATION
➢ is the combination of industries or
businesses not directly related to each other
but may operate under a unified
management
➢ (Ex: Under San Miguel Corporation are
their San Miguel Pure Foods (food), San
Miguel Brewery (beverages), infrastructure
(San Miguel Holdings), and energy (San
Miguel Power)
IV. INTERNATIONAL ECONOMIC
ORGANIZATIONS AND FINANCIAL
INSTITUTIONS
THE BRETTON-WOODS AGREEMENT AND
SYSTEM
➢ The Bretton-Woods Agreement,
established on July 22, 1944
➢ was a landmark international agreement
that set the framework for the post-World
War II economic order.
➢ a system of fixed exchange rates, with the
U.S. dollar tied to gold, fostering stability
in international monetary relations
➢ Key participants in the Bretton-Woods
Conference included representatives from
44 Allied nations. Visionaries like John
Maynard Keynes and Harry Dexter White
played pivotal roles in shaping the
agreement.
➢ main goals of the Bretton-Woods System
were to prevent competitive devaluations,
promote economic stability, and facilitate
post-war reconstruction.
➢ Principles included pegging currencies to
gold and establishing the International
Monetary Fund (IMF) and the World Bank
➢ its fixed exchange rates became untenable,
leading to its collapse in the early 1970s.
THE GENERAL AGREEMENT ON TARIFFS
AND TRADE
➢ The General Agreement on Tariffs and
Trade (GATT) was established on October
30, 1947, as a multilateral treaty aimed at
reducing trade barriers.
➢ emerged in response to the need for a
collaborative approach to promote global
economic recovery after World War II.
➢ objectives of GATT included lowering
tariffs, preventing discriminatory trade
practices, and fostering fair competition
among nations.
➢ It sought to create a more open and
predictable international trading system
➢ culminating in the Uruguay Round, which
led to the creation of the World Trade
Organization (WTO) on January 1, 1995.
The WTO expanded its focus to cover
services, intellectual property, and dispute
resolution.
THE INTERNATIONAL MONETARY FUND
➢ The International Monetary Fund (IMF)
was founded on December 27, 1945
➢ with the aim of promoting global monetary
cooperation and stability. It was established
at the Bretton Woods Conference to
address issues of currency exchange rates
and balance of payments.
➢ primary purpose of the IMF is to provide
financial assistance to member countries
facing balance of payments problems,
helping stabilize their economies and
prevent crises.
WORLD BANK
➢ The World Bank was established on July 1,
1944.
➢ with the goal of reducing global poverty
and supporting long-term economic
development.
➢ main functions and goals of the World
Bank involve providing financial and
technical assistance to member countries
for projects that aim to improve
infrastructure, education, and healthcare.
➢ Successful World Bank projects include
initiatives that focus on poverty reduction,
sustainable development, and improving
 living standards, such as the East Asia and
Pacific Region's poverty reduction efforts.
ORGANIZATION FOR ECONOMIC
COOPERATION AND DEVELOPMENT
➢ OPEC, founded on September 14, 1960, is
a coalition of major oil-producing countries
aimed at coordinating petroleum policies to
ensure stable prices and a reliable supply.
➢ primary objective of OPEC is to manage
the production and pricing of oil to
safeguard the interests of its member
countries.
➢ OPEC influences global oil prices and
production levels by coordinating
production quotas among its members,
responding to changes in global demand
and supply.
➢ Challenges and issues associated with
OPEC's role in the global oil market include
balancing the interests of diverse member
countries, responding to geopolitical
tensions, and adapting to shifts in energy
markets, such as the rise of renewable
energy.
EUROPEAN UNION
• The European Union (EU) was established
on November 1, 1993.
• based on the Maastricht Treaty signed in
1992, aiming to foster economic and
political integration among its member
states.
• Key institutions within the EU include the
European Commission, European
Parliament, and the Council of the “Sana makapagperfrom ka nang maayos hindi
European Union. lang sa Midterm ko at sa lahat ng mga exam
• Decision-making involves complex na it-take mo. Good luck sa ‘yo! Ipasa mo
processes that balance the interests of naman ‘to!” – Sr. Borj
member states. The EU promotes economic
integration through a single market and
customs union, facilitating the free
movement of goods, services, capital, and
people among member states.
NORTH AMERICAN FREE TRADE
AGREEMENT (NAFTA)
• NAFTA was implemented on January 1,
1994.
• establishing a free trade area among the
United States, Canada, and Mexico. The
primary objectives of NAFTA were to
reduce trade barriers, promote economic
growth, and enhance cooperation between
the three North American countries
• NAFTA significantly impacted trade and
economic relations, leading to increased
cross-border investments and the
integration of supply chains. NAFTA was
replaced by the United States-Mexico-
Canada Agreement (USMCA) on July 1,
2020, which updated provisions related to
labor, environment, and digital trade,
reflecting changes in the regional economic
landscape.