CONTEMPORARY NOTES

CHAPTER 2 LESSON 1
THE GLOBAL ECONOMY
Origin of Economic Globalization

 It can be traced from history the time when

there was an economic movement in Asia,
Africa and Europe called the Silk Road, a
trade route which connects the East,
particularly China, and the West.
 This route brings us to the history of how
Philippines was discovered by the Portuguese
and Spain envoys in search of spices and
eventually led to colonization.
 At this present daytime, foreign expatriates
come to the country to manage their
company’s foreign subsidiaries. Likewise, the
Philippines send thousands of skilled workers
to the Middle East as construction workers,
seafarers, nurses, etc.
 Economic globalization refers to the Specific actors that facilitate economic globalization
expanding interdependence of world are highlighted as follows:
economies.
1. The International Economic and Financial
 The term global economy also refers to the
Organization
interconnected worldwide economic activities
2. The International Governmental Organization
that take place between multiple countries.
(IGOs)
 These economic activities can have either a
3. The Media
positive or negative impact on the countries
4. The Multilateral Development Banks
involved.
5. The Nation-States
 The International Monetary Fund (IMF) also
6. The Non-Governmental Organizations
defined Economic Globalization as a historical
(NGOs)
process, the result of human innovation and
7. The Trans-National Corporations (TNCs)
technological progress (IMF,2008)
8. The United Nations (UN) System

How does global economy work?

 A global economy is one in which goods and

services are traded across national borders.
Because the trade is among sovereign nations,
those nations may enact trade restrictions that
alter free market out comes.

The New World Economy is characterized by:

1. More options for production. No matter
what your production process, the chances
are that the same capabilities exist
elsewhere.
2. The chance to create new markets
3. Small firms can think big
4. A more level playing field
5. Networks are important
6. Culture is no constraint
CHAPTER 2: LESSON 2
MARKET INTEGRATION
 Market integration occurs when prices among
different locations or related goods follow
similar patterns over a long period of time.
 Groups of goods often move proportionally to
each other and when this relation is very clear
among different markets it is said that the
markets are integrated.
 Integrated marketing allows you to spread
your marketing messages across multiple
channels and increases the chances of it being
heard. Best of all customers engaged through
multiple channels tend to spend more than
other customers. Therefor spreading your
marketing message can increase your return on
investment.
 Global market integration did not happen
overnight. It was the result of the
establishment of a global economy that
involved the homogenization of trade and
commerce. Prior to the trends in globalization
in the 20th century, international trade of goods
and services were already practiced.
 The integration of the global market started
When big American corporations began to
emerge after the Second World War with the
rise of new conglomerates. International
Telephone and Telegraph bought Avis Rent-a
Car, Continental Banking, Sheraton Hotels,
and Hartford Fire Insurance (American
History,2018). Later, Japan and Europe
followed suit. Japanese global automobile
corporations like Toyota, Nissan, and Isuzu
took off after the giant American economies
flourished. These companies prospered as the
primary and global makers of trucks for the
Japanese military (Dower 1992). Renault
automobiles, a French multi-national
automobile manufacturer was also used to help
in the military post-war operations. The rise
off American, Japanese, and European global
corporations paved the way for the further
 Colonization and imperialism rose as the new
ways of putting order to the economic
interrelationships among countries.
 Through colonialism, equity, corporate
ownership, management subsidiaries, and
central headquarters which supply goods and
services were establish through colonialism.
TYPES OF RELATED MARKETS WHERE
MARKET INTEGRATION OCCURS
STOCK MARKET INTEGRATION
 This is a condition in which stock market 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 Pattens within the
capital. stock. and financial
 markets with those trends coming together to
exert a profound influence on the economy of
that nation is involved in the integration within
a nation.
GLOBAL CORPORATION
 A business that operates in two or more
countries. It also goes by the name
“multinational company”. Several advantages
are offered by global expansion of business
over running a strictly domestic company.
Success in different types of economies
achieved by means of multiples countries
operation while it causes also logistic and
cultural challenges. expanding revenue
opportunities and diversifying business risk
are the purposes of becoming global
corporation. Access to more customers and
capital Is obtained through a model that works
domestically well and translates foreign
markets well.

BRICS Economies
 Brazil, Russia, India, China and South Africa
(BRICS) is an acronym for the combined
economies of Brazil, Russia, India, China and
South Africa. BRIC, without South Africa,
was originally coined in 2003 by Goldman
Sachs, which speculates that by 2050 these
four economies will be the most dominant.
South Africa was added to the list on April 13,
2011 creating "BRICS"
General Agreement on Trade in Services (GATS)
 The General Agreement on Trade in Services
(GATS) is 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.
General Agreement on Tariffs and Trade (GATT)
 deals with trade in goods. The two primary
objectives of GATTS are to ensure that all
signatories are treated equitably when
accessing foreign markets; and second, to
promote progressive liberalization of trade.
CHAPTER 2: LESSON 3
THE GLOBAL INTERSTATE SYSTEM
DEFINING “INTERSTATE”
A system of unequally powerful and
competing states in which no single state is capable of
imposing control on all others. These states are in
interaction with one another in a set of shifting alliance
and wars and changes in relative power of states upsets
any temporary set of alliances, leading to restructuring
of balance of power”
DEFINING “STATE”
States are independent political communities
each of which possesses a government and assert
sovereignty in relation to a particular portion of the
earth’s surface and particular segment of human
population (Hedley Bull)”
NATION
The concept of nation emphasizes the organic
ties that hold groups of people together and inspire a
sense of loyalty and belonging – i.e., ethnicity,
language, religion, and others (Schattle, 2014).
STATE
 A legal and political entity
 Linked to a territory
 Exist with sovereignty
 Established consciously
 United by law
NATION
 A socio-cultural entity
 Linked to a group people
 May exist even w/o sovereignty
 Can be created unconsciously
 United by bond and shared history
NATION-STATE
 This refers to modern countries and their
political apparatuses rules over a single
nation.
 It is a political community that emanates
from civic society to legitimately execute
peace.
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 “Golden Straitjacket”
  There are two things that will happen if a
country is in Golden Straitjacket: the
economy grows and politics shrinks. It is a
straitjacket because it narrows the political
and economic policy choices of those in
power to relatively tight parameters
Neoliberalism
 the intensification of the influence and
dominance of capital.
 It values market exchange capable of
acting as a guide to all human action.
 It emphasizes the significance of
contractual relations in the marketplace.
 the social good will be maximized by
maximizing the reach and frequency
market transactions
Economic sovereignty
 the power or national governments to
make decisions independently of those
made by other governments.
 There are four diff. concepts of
sovereignty.
1. International legal Sovereignty
2. Westphalian Sovereignty
3. Interdependence Sovereignty
4. Domestic Sovereignty.
World’s three leading financial institutions.
1. World Bank (WB)-
o The international financial
institution that provides loans to
countries of the world for capital
projects. It was established by the
United Nations Monetary and
Financial Conference or the
Bretton Woods conference.
2. International Monetary Fund (IMF)-
o It does so in three ways: keeping
track of the global economy and
the economies of member
countries; lending to countries
with balance of payments
difficulties; and giving practical
help to member
3. World Trade Organization (WTO)-
o regulates international trades
deals with the rule of trade
between nations, ensure the trade
will flows smoothly, predictably
and freely as possible. Act as
forum in negotiation trade
agreements
European integration
 is the process of industrial, political, legal,
economic, social and cultural integration
of states wholly or partially in Europe.
European integration has primarily come
about through the European Union and its
policies
European Union (EU)
 is an international organization comprising
28 European countries and governing
common economic, social, and security
policies
Economic Integration
 can be described as a process and a means
by which a group of countries strives to
increase their level of welfare.
 It is an arrangement between different
regions that often includes the reduction or
elimination of trade barriers, and the
coordination of monetary and fiscal
policies.
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 Trade Areas (PTAs)
 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
within the geographical region or areas.
Free Trade Agreements (FTAs)
 eliminate import tariffs as well as import
quotas between signatory countries. These
agreements can be limited to a few sectors
 or can encompass all aspects of
international trade.
Custom Union
 Removal of tariff barriers between
members, together with the acceptance of
a common or unified external tariff against
non-members
Common Market (CM)
 All barriers to the mobility of people,
capital and other resources within the area
in question, as well as eliminating non-
tariff barriers to trade, such as the
regulatory treatment of product standards
are removed by CM aside from containing
the provisions of a customs union.
Economic Union
 The trading bloc that has both a common
market between members, and a common
trade policy towards non-members,
although members are free to pursue
independent macro-economic policies
Economic and Monetary Union (EMU)
 involves a single economic market, a
common trade policy, a single currency
and a common monetary policy.
Complete Economic Integration
 the final stage of economic integration in
which member states completely forego
independence of both monetary and fiscal
policies.
Political integration
 refers to the integration of components
within political systems; the integration of
political systems with economic, social,
and other human systems; and the political
processes by which social, economic, and
political systems become integrated
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.
 It is a theory of regional integration,
building on the work of Ernst B. Haas, an
American political scientist and Leon
Lindberg, also an American political
scientist.
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
Liberal Intergovernmentalism
 Application of rational institutionalism to
the field of European integration is the aim
of this theory.
Multi-level Governance (MLG)
 Writers Liesbet Hooghe and Gary Marks
defined MLG as dispersion of authority
across multiple levels of political
governance.

TRANSNATIONAL ACTIVISM IN STATES
Transnational activism
 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.
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 advantaged elites".
Global Justice Movement
 describes the loose collection of
individuals and groups often referred to as
a “movement of movements”, who
advocate fair trade rules and are negative
 to current institutions of global economics
such as the World Trade Organization
New Transnational Activism
 is as multifaceted as the internationalism.
Although globalization and global neo-
liberalism are frames around which many
activists mobilize, the protests and
organizations are not the product of a
global imaginary but of domestically
rooted activists who are the connective
tissue of the global and the local, working
as activators, brokers and advocates for
claims both domestic and international
Social Media and the State
 Social media is a computer-based
technology that facilitates the sharing of
ideas and information and the building of
virtual networks and communities.
 Four Main Purposes of the UN Charter
CHAPTER 2: LESSON 4
CONTEMPORARY GLOBAL GOVERNANCE
Global Governance or World Governance
Is a product of neo-liberal paradigm shifts in
international political and economic relations . It is a
movement towards political integration of
transnational actors aimed at negotiating responses to
problems that affect more than one state or region. It
tends to involve institutionalization. These institutions
of global governance – the United Nations, the
International Criminal Court, the World Bank, etc. –
tend to have limited or demarcated power to enforce
compliance.
The capacity of within the international
system, at any given moment to provide government-
like services and public goods in the absence of a
world government. It is a combination of informal and
formal ideas, values, rules, norms, procedures,
practices, policies, and organizations that help all
actors-state, international organization, non-
government organizations identify ,understand, and
address transboundary problems.
International Organization (IOs)
Commonly used to refer international
intergovernmental organizations on groups that are
primarily made up of member-states.
Powers of International Organization
1. Power of classification
2. Power to fix meanings
3. Power to diffuse norms
4. Because of these immense powers, IOs can be
sources of great good and great harm.
Roles and Functions of the United Nations
As an intergovernmental organization, the
United Nation is tasked to promote international co-
operation and to create and maintain international
order.
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.
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
The UN aims to save succeeding generations from
the scourge of war; to reaffirm 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
Challenges of Global Governance in the Twenty-
first Century
It is a process which allows interconnectivity
across different borders and sovereign territories.
Global governance is governing, without sovereign
authority, relationships that transcend national
frontiers. Global governance has evolved as one of the
most influencing tools for globalization which has led
to the foundation of sustainable development projects
around the globe.
 Issues that involve interwoven domestic
and foreign challenges include threats at
the beginning of the century which include
ethnic conflicts, infectious diseases, and
terrorism as well as a new generation of
global challenges including climate
change, energy security, food and water
 scarcity, international migration flows and
new technologies.
 Within states the first trajectory or path is
the depoliticization which can be observed
in the form of delegating decisions to
independent regulators and experts, central
banks, or judiciaries.
 A second trajectory is the rescaling of
economic and social relations well beyond
the territorial boundaries of nation states,
facilitated by transnational legal
arrangements that have their roots in
national law
The Role of the Nation -State in Globalization
Basic Elements of a State
1. Territory
2. People
3. Sovereign Power ( the authority of a state to
govern itself)
Nation- state role in globalization is complex.
Since nation-states are divided by physical and
economic boundaries, reduced barriers in international
commerce and communication are considered their
potential threat. Sovereignty of individual nations is
not abolished by expanded trade among countries,
instead globalization is a force that changed the way
nation-states deal with one another, particularly in the
area of international commerce.
In setting international commerce policies,
isolated states are forced to engage to one another,
while nation-state’s domestic role unchanged. Roles of
some states were diminished while others have exalted
role is due to interactions of various economic
imbalances.
Globalization’s Impact on the State
1. Poverty
2. Environmental pollution
3. Economic crisis
4. Organized crime and terrorism
Decision making processes in globalization is
complex as it takes place in various levels such as sub-
national, national, and global which lead to the growth
of a multi-layered system of governance.
UNIT 3
THE WORLD OF REGIONS
LESSON 1
GLOBAL DIVIDES:
THE NORTH AND THE SOUTH
(FOCUS : LATIN AMERICA)
Global South
Refers to the regions of Latin America, Asia,
Africa, and Oceania mostly low- income and often
politically or culturally marginalized. It may also be
called the "developing World" such as Africa, Latin
America, and the developing countries in Asia,
"developing countries," "less developed countries,"
and "less developed regions” including poorer
"southern" regions of wealthy "northern" countries
In general, Global South refers to these
countries' "interconnected histories of colonialism,
neo-imperialism, and differential economic and social
change through which large inequalities in living
standards, life expectancy, and access to resources are
maintained.
Three Primary Concepts of Global South
1. It refers to economically disadvantaged
nation-states and as a post-cold war
alternative to “Third World”.
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
LESSON 2
ASIAN REGIONALISM
Regionalism
Refers to the decentralization of political
powers or competencies from a higher towards a lower
political level.
Views of Globalization in the Asia Pacific and
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 good bringing economic
development, political progress, and social and cultural
diversity to the region
The Asia Pacific and South Asia
Refer together to the regions of East (or
Northeast) Asia, South Asia, the Pacific Islands, and
South Asia . It includes some of the world’s most
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
Globalization in the Asia Pacific and South
Asia is an external phenomenon being pushed into the
region by world powers like US and Europe.
Globalization in this context is a process that
transforms the Asia Pacific and South Asia. It can be
viewed as a force for good, bringing economic
development, political progress, and social and cultural
diversity
Asia Pacific and South Asia’s Impact on
Globalization
Asia was the central global force in the early
modern world economy. It was the site of the most
important trade routes and in some places more
advanced in technology than West such as science and
medicine.
 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.
In culture and globalization in the region, Asia
has been the source of a wide variety of cultural
phenomena that have spread outward to the West and
the rest of the world.