THE CONTEMPORARY WORLD (REVIEWER)
• Managing a far – flung supply chain to get
Globalization – refers to the process by which
more people across large distances become
connected in more and different ways.
1.1. It refers to the interaction of people and
primarily an economic process of integration
which has social and cultural aspects as well.
1.2. As people become more intricately
connected to many others across large
the world is– becoming
distances not all people to the place”.
a – “Single same extent,
1.3. It involves growing diffusion, expanding
interdependence, more transnational institution
and an emerging world culture and
consciousness.
1.4. The academic version of this is to equate
globalization with “deterritorialization ”.
Deterritorialization – is the process through
which the constraints of physical space lose
their hold on social relations.
Globalized World Cup – known as the World
Globalized
Cup is the most prestigious football
tournament in the world and also the most
widely viewed sports event in the world that
started in 1930. (From 13 countries to 200
countries).
2.1. Deterritorialization – identifies the
globalization with the process by which
capitalism expands across the globe as
powerful economic actors seek profit in global
markets and impose their rules – everywhere
2.2. a process often labeled as –
Neoliberalism.
2.a. Neoliberalism – a modified form of
liberalism tending to favor free – market
capitalism.
Globalization to different people (Lechner,
2015)
• A new opportunity to spread the faith and
convert lost souls abroad. (Korean
Pentecostal
Pentecostal Missionary)
• Growing new tools while staying deeply
involved in the home village. (Dominican
Immigrant)
• Sampling variety of new shows, some
adopted from foreign formats. (Indian
Television viewer)
• Chance to escape rural poverty by cutting
threads off designer jeans. (Chinese
Appar
Ap parel
el Work
Wo rk er)
products to stores. (American Shoe
Company)
• Rules of the global game that favor the
rich North over the poor South. (Filipino
global j ustic e advocate)
advocate)
THEORIES OF GLOBALIZA
THEORIES GLOBA LIZATION
TION (LECHNER,
2015)
1. World System Theory – perspective
that globalization is essentially the
expansion of the capitalist around the globe.
Capitalist World System – originated in the
Capitalist
16th century when the Europe established
enduring connections 3As (Asia, Africa and
Ameri
Am eri cas).
cas ).
1.1. It is considered as a single economy – a
market and a regional division of labor.
1.2. The dominant classes of this system
(CORE), were supported by the strong
states as exploited labor, resources and
trade opportunities.
NOTE: Labor, resources and trade
opportunities are notable in PERIPHERAL
AREAS .
Semi – periphery – are any industrializing,
mostly capitalist countries are positioned
between the periphery and the core
countries.
1.3. The central purpose of the world system
is capital accumulation by competing firms,
which go through cycles of growth and decline.
Karl Marx – “The Marxist Tradition”. In Marx’s
view, the dialectical nature of history is
expressed in class struggle between the owners
of the means of production, or bourgeoisie and
the workers or proletariat.
Bourgeoisie – the capitalist’s class who own
most of society’s wealth and means of
production.
Proletariat – working – class people regarded
collectively. (La
(Latin
tin wor d: prol etarius
etarius )
2. World Polity Theory – states an
important component of “world society”. From
this perspective, is all – encompassing “world
polity” and its associated world culture.
3. World Culture Theory - agrees that world
culture is indeed new and important but it is
less homogenous than world polity.
Shrinking world The five core claims of Market Globalism
(Steger, 2005)
• Globalization is a result when human
activities take place on a worldwide scale,
which means people increasingly live in a 1. Globalization is about the liberalization
“global village” or a “shrinking world” and global integration of m arkets.

• The vital functions of the free – market – its

Reasons why g lobalization
Reasons lobalization will not make the rationality and efficiency.
world homogenous (Lechn er, 2015)
2015)
• Bring about greater social integration and
1. General rules and models are interpreted material progress.
in light of local circumstances. • Free – market capitalism – “ the more you
let market forces rule and the more you
2. Growing similarity provokes reactions. open your economy
competition, to free
the more trade your
efficient and
3. Cultural and political differences have economy will be.
themselves become globally valid.
2. Globalization is inevitable and
irreversible.
The interdisciplinary understanding of
globalization 3. Nobody is in charge of globalization

1. Politica
Politicall scientist “ self – regulating market”

Political activity can also transcend national 4. Globaliza

borders through global movements and Non –
Government Organization (NGO).
2. Economist
Integration through the international trade of
markets in goods and services. It includes direct
measure just like tariffs and transport costs, etc.
(eg. OFW)
3. Sociologist
Cole (2017) states that the globalization is
ab outgoing process that involves
interconnected changes in the cultural and
social spheres.
• Involves the ever increasing integration of
these aspects between nations, regions,
communities and isolated places.
Social Media
•
A brilliant tool of communication that can be
easily accessed globally and affects how
people communicate with other people and
even in different cultures.
4. Historian
• Globalization is not a phenomenon but the
world itself took hold only recently which
records shows first use in English in 1930.
Market Globalism – an idea that reflects the
concepts of globalization. It seeks to endow
globalization with free market norms and
neoliberal meanings.
NOTE: the term “globalization” gained in
Globalization
tion benefits
benefits everyone
everyone
• Economic growth
• Prosperity
5. Globaliza
Globalization
tion furthers t he spread
spread of
democracy in the world.
Neoliberalism - proposes that human well –
being can best be advance by liberating
individual entrepreneurial freedoms and skills.
• The role of the state – to create and
preserve an institutional framework
appropriate to such practices.
Privatization – process of transferring an
enterprise or industry from the public sector to
the private sector.
Public to private sectors:
• Philippines Airlines (PAL)
• Philippine Long Distance Corporation
(PLDT)
• Manila Electric Company (MERALCO)
• Manila Waterworks and Sewerage
System (MWSS) – “Manila Water
Company/Services”
CHARACTERISTICS OF NEOLIBERALISM
• Government must limit subsidies
• Make a reforms to tax law in order to
expand tax base
• Reduce deficit spending
• Limit protectionism
•

currency in the late 1980s. •

Open markets
Removal of fixed exchange rates
• Back deregulation
• Privatization
Economic globalization – Benezes (2014), the Major elements of internationalist liberal (Cohn,
increasing integration of economies around the 2005)
worlds, particularly through the movement of
goods, services and capital across borders. 1. Poor – war gol d exchange standard
which in fact an adjustable – peg
• Refers to the movement o off people and exchange rate rather than a fixed
knowledge across international borders. exchange rate system.
What makes economi
What economi c globalization dist inct 2. Interventionalist liberal compromise
from internationalization? was the IMF, which would provide short
• the latter is about the ex
extension
tension of – term loans.
economic activities of nation states
across borders while the former is
functional integration between 3. Compromise
controls over support for national
capital flows.national
internationally dispersed activities.

Interconnected dimensions of economic International

Interna Monetary Fund – most
tional Monetary
globalization (Benezes, 2014) important international organization
1. the globalization of trade of goods and embedded in the Bretton Woods monetary
services regime.
2. the globalization o off financial and capital • Located in Washington, DC.
markets
3. the globa
globalization
lization of technology and
communication
4. the globalization of production Bretton Woods Function
Economist ask three questions:

The International Monetary System • Are there sufficient reserves for liquidity

Cohn (2005) states that international •

or there
Is financing purposes?
a confidence problem with the
system is the most central area in international existing reserve assets?
economy – including trade, investment, and • What adjustment options do reserve –
finance – all depend on the availability of money currency countries have in dealing with
and credit. their balance – of – payments deficits?
• Is a system that forms rules and U.
U.S dol lar – main source of international
S dollar
standards for facilitating international liquidity
trade among the nations in the world.
Seignorage – profit that comes to the seigneur
or sovereign power, from the issuance of
money.
THE FOUR MONETARY REGIME
1. Classical Gold Standard Regime (1870 –
G1O members
member s (1964)
1914)
1. Belgium
Fixed rate regime in which governments
announces and adhere to specific exchange 2. Canada
3. France
rate form their currencies in relation to gold.
4. Germany
5. Italy
2. Gold exchange standard regime (1914 – 6. Japan
1944) 7. Netherlands
8. Sweden
Based on fixed exchange rates among 9. United states
currencies however, a country’s international 10. United kingdom
reserves under the 19th century gold standard 11. Switzerland
were officially held in gold.
Note: Para madaling mamemorize
3. The Bretton Woods System Regime BelCF – Belgium, Canada, France
(1944-) (during world war II)
GIN – J – Germany, Italy, Netherlands, Japan
The Bretton Woods Agreement was drafted
SUUS – Sweden, U.S, UK and Switzerland
in 1944 and is a vital piece of financial history.
It held meetings at the Mount Washington Hotel • Supply a substantial amount of financial
in Bretton Woods, New Hampshire in US. It was resources
ratified by an agreed number of 44 allied nations
nat ions • Change dollars into gold
and created today’s International Monetary • Improve the balance of payments by
Fund (IMF). reducing capital outflows.
 4. Floating Exchange rate
A regime where the currency
currency price is set
by the forex market based on supply and
demand compared with other currencies.
• Nations were “living in sin” by 1973
Global actors
actors in Economic Globalization
Globalization
1. International Governmental Organization
(IGO)
International
International Financial Institutio n
Institutions that provide financial support
via grants and loans for economic and social
development activities in developing countries.
• Provide loans, grants and technical
assistance to governments
• Play a significant role in the
privatization and regulation of public
utilities and natural resources.
Asian
As ian Develop
Devel opmen
mentt Bank
B ank

Refers to an entity created by treaty, Example of financial institutions

involving two or more nations, to work in good categorized as regional development bank in
faith, on issues of common interest. which has 31 off ices around the world. (Ortigas
Avenu
Av enu e, Pasig
Pasi g City
Ci ty))
• Strive for peace, security and deal with
economic and social questions.
International
International Financial Instit
Instit ution s
2. International Non – Governmental
Organization (NGO) 1. World Bank (WB)
2. Internal Monetary Fund (IMF)
Work towards solutions that can benefit 3. European Investment Bank (EIB)
undeveloped countries that face the backlash of 4. Islamic Development Bank (IDB)
economic globalization. 5. Asian Development Bank (ADB)
6. European Bank for Reconstruction and
3. Multinational Corporation (MNCs) Development (EBRD)
7. CAF – Development Bank of Latin
Corporations which have overseas branches. America (CAF)
(CAF)
One of the many changes they have brought to 8. Inter – American Development Bank
developing countries is increase in automation . Group (IADB)
9. African Development Bank (AfDB)
Auto
Au mat io n – the use of various control
to matio 10. Asian Insfrastructur
Insfrastructure
e Investment Bank
systems for operating equipment such as (AIIB)
machinery.

The effects of Economic Globalization on

1. World Bank (Washing
(Washing ton , D.C)
D.C)
Developing
Developing Countries
Founded in 1944, the International Bank
1. Increased
Increased Standard
Standard of Livi ng
for Reconstruction and Development – soon
Gives the governments of developing called the World Bank – has expanded to a
nations (roads, health care, education, social closely associated group of five
services, etc.) development institutions.

2. Acc ess to new markets (1971

(1971))
Goals
Goals of World Bank
•

One of the largest benefit of the

globalization. 1. End extreme poverty by decreasing the
• Develop new technologies and provide percentage of people living on less than
new products and services $1.90 a day to no more than 3%
2. Promote shared prosperity by fostering
3. Widening Disparity in inco mes the income growth of the bottom 40% for
every country.
Foreign companies and foreign capital
creates a reduction in overall unemployment
and poverty, it can also increase the wage gap
Five Organization
Organization of World B ank
between those who are educated and those
who are not. 1. Internation
Internation al Bank for Reconstruc
Reconstruc tion
and Development
Developm ent (IBRD)
4. Decreased
Decreased Emplo yment Lends to governments of middle –
income and creditworthy low – income
Foreign companies into developing
countries.
countries increases employment in many
sectors especially for skilled workers. 2. Internati onal De
Develop
velopment
ment
Auto
Au to mat io
ionn in the manufacturing and Asso
As so ci ati on (IDA)
agricultural sectors lessens the need for
unskilled labor and unemployment rises
ri ses in those Provides interest free loans – called
sectors. credits and grants to governments of the
poorest countries.
 3. Internation
Internation al Finance Corporation currencies, continue paying for imports,
(IFC) and restore conditions for strong
economic growth.
Largest global developing institution focused
exclusively on the private sector. 3. Capacit
Capacit y Develop
Development
ment
• They help developing countries achieve - Helps member countries design and
sustainable growth by financing implement economic policies that foster
investment, mobilizing capital in stability and growth by strengthening
international financial markets and their institutional capacity and skill.
providing advisory services to
businesses and governments Note: IMF gets its money from its member
countries.
4. Multi lateral Investment
Investm ent Guarantee
enc y (MIGA) – 1998
Agenc
Ag
Promote foreign direct investment into MARKET INTEGRATION – term that is
developing countries to support economic used to identify a phenomenon in which
growth, reduce poverty and improve people’s markets of goods and services are somehow
lives. related to one another.
• A situation in which the prices of related
5. International
Internati onal Centre
Centre for Settl
Settl ement of goods and services sold in a defined
Investment
Investm ent Disp utes (ICSID)
(ICSID) geographical location also begin to move
in some sort of similar pattern to one
Provides international facilities for another.
conciliation and arbitration of investment • Koester (2017), a state o off affairs or a
disputes. process involving attempts to combine
separate national economies into larger
International
International Monetary
Monetary Fund economic regions.
An organization
organization of 189 countries w
working
orking
to foster: Integration – stimulating
divisions of the labor amongtrade and improving
countries has been
• global monetary cooperation, recommended by many economist.
• secure financial stability,
• facilitate international trade, General Agreement of Tariffs and Trade
• promote high employment and (GATT) (1948)
sustainable economic growth and; Promoting greater acceptance of the
• reduce poverty around the world. most favored nation principle.
Note: IMF known as the Fund, was conceived at
a UN Conference in Bretton Woods, New Forms of Integration
mps hir e, United States , in Jul y 1944
Hamps
Ha 1944.
1. Preferential Agree
Agr eement
ment
Involves lower trade barriers between
IMF’s responsibility: those countries which have signed the
agreement.
• primary purpose is to ensure the stability
of the international monetary system 2. Free trade
tr ade agreement
agreemen t
International
International Monetary
Monetary System Reduces barriers to trade among
member countries to zero.
the system of exchange rates and
international payments that enables countries 3. Customs Union
and their citizens to transact with each other.
Represents a higher stage of economic
integration than a free trade area as the
Mission of IMF member countries adopt a common external
tariff.
1. Surveillance
- oversees the international monetary 4. Common
Commo n Market
system and monitors the economic and
financial policies 189 countries. Goes beyond customs union in allowing
- Highlights possible risk to stability and for free movement of labor and capital within
advices on needed policy adjustments the union.
5. Economic Union
2. Lending
- Provide loans to member countries The highest form of economic
experiencing actual or potential balance integration. In addition, to the conditions of a
of payments problem. common market, member countries also
- Enable countries to rebuild their agree to integrate monetary, fiscal and other
international reserves, stabilize their policies.
The European Integration - a unique 5. Single European Act – signed on
economic and political union between 28 February 17, 1986 in Luxembourg and
European countries that together cover much of February 26, 1986 in Hague,
the continent. Netherlands.
• Reform the institutions in preparation
Legal Basis of European Union – based on for Portugal and Spain’s membership.
the rule of law.
6. Merger Treaty – Brussels Treaty –
• Means that every action taken by the EU signed on Apr il 8, 1965
is founded on treaties that have been
• Streamline the European institutions.
approved voluntarily and democratically
• Creates a single commission and a
by all EU countries.
single council to serve the three
European Communities.
28 European Union Countries
Note: European Communities – EEC,
1. Austria 15. Italy Euratom and ECSC.
2. Belgium 16. Latvia
3. Bulgaria 17. Lithuania
18. Luxembourg 7. Treaties of Rome – EEC and Euratom
4. Croatia
19. Malta treaties – signed on March 25, 1957
1957.
5. Cyprus
6. Czech Republic 20. Netherlands • Set up the European Economic
7. Denmark 21. Poland Community (EEC) and the
8. Estonia 22. Portugal European Atomic Energy
9. Finland 23. Romania Community (Euratom)
10. France 24. Slovakia
11. Germany 25. Slovenia 8. Treaty
Treaty establishi ng the European Coal
Coal
12. Greece 26. Spain Steel Commu nity – signed on Apr il
and Steel
13. Hungary 27. Sweden 18, 1951.
14. Ireland 28. United Kingdom • Create interdependence in coal and
steel so that one country could no
European Union Flag – symbolizes both the longer mobilize its armed forces.
European Union and more broadly, the identity
and unity of Europe. European Union – helps its member countries
European
with issues as trade, security and the rights of
• Features of 12 gold stars on a blue citizen.
background
• 12 gold stars – stand for the ideals of
unity, solidarity and harmony among the The benefits
benefits o f Euro
peoples of Europe.
1. People no longer to change money when
travelling or doing business within the
Main treaties help created European Union euro area, saving time and transaction.
2. It costs much less (or nothing at all) to
Treaty of Lisb on – signed on December
1. Treaty
make cross – border payments.
13, 2007.
3. Consumers and businesses can
• Make more EU more democratic,
compare prices more easily, which
more efficient and better able to
encourages businesses charging higher
address global problem prices to bring them down.
2. Treaty of Nice – signed on February 26,
2001.
ASEAN Integ
In tegrat
rat ion
io n
• Reform the EU institutions
• Reached 25 countries ASEAN – Association pf Southeast Asian
Nation. (Bangkok, Thailand)
3. Treaty of Amsterdan – signed on
October 2, 1997. • Signed the document on August 8,
• Reform the EU institutions in 1967 by five leaders
preparation for the arrival of future • Five leaders – Foreign Ministers of
member countries Indonesia, Malaysia, Philippines,
Singapore and Thailand
4. Treaty on European Union – Masstricht NOTE:
Treaty – signed on Februay 7, 1992.
1992.
• Prepare for European Monetary • Adam Malik – Indonesia
•
Union and introduce elements of a Narciso R. Ramos – Philippines
political union. • Tun Abdul Razak – Malaysia
• S. Rajaratnam – Singapore
• Thanat Khoman – Thailand
 • Brunei Darussalam – joined January 7, 4. ASEAN Integration into the globalized
1984 economy
• Vietnam – July 28, 1965
ASEAN must not be isolated but an
• Lao PDR and Myanmar – July 23, 1997 integrated part of the global economy.
• Cambodia – April 30, 1999
ASEAN
ASEA N – created in 1967 as a political group to Five core principles of the ASEAN single
strengthen the power and increase growth and market and
and prod ucti on base
development in member nations. 1. Free flow of goods
2. Free flow of service
ASEAN
ASEA N Econo
Eco nomi
mi c Commu ni ty (AEC) – a
Com muni 3. Free flow of investment
major milestone in the regional economic 4. Free flow of capital
integration agenda in ASEAN offering 5. Free flow o
off skilled labor
opportunities in the form of a huge market.
• In 2014, AEC is the third largest economy Business Process Outsourcing (BPO) – is a
in Asia and the 7th largest in the world. billion dollar business in the Philippines because
AEC Bluepr in t 2025 – aimed towards achieving
Blu eprin of less expensive operational and labor costs.
the vision of having an AEC by 2025 that is Call centers provide almost type of customer
highly integrated and cohesive. relations:

• Competitive, innovative and dynamic • Travel services

• Enhanced connectivity and sectoral • Technical support
cooperation • Education
• A more resilient, inclusive • Customer care
• People – oriented, people – centered • Financial services
community, integrated with the global
economy Global Corporation – is a business that
operates in two or more countries. “Multinational

Five Interrelated and mutually reinforcing

Company”.
Appl
Ap Inc . – is an American technology
pl e Inc.
characteristics of ASEAN Economic company headquarters in California that
Community: designs, develop and sells consumer
1. Highly integrated and cohesive economy electronics and computer software.
2. A Competitive, innovative and dynamic
ASEAN
3. Enhanced connectivity and sectoral
cooperation
4. A resilient, inclusive, people – oriented, and
people – centered ASEAN
5. A global ASEAN

The four pillars of the ASEAN Economic

Community

1. Single market
market and producti on base
the region as a whole must become a
single market and production base to
produce and commercialize goods and
services anywhere in ASEAN.

2. Competitive economic region

The region must emphasize on the
competitiveness of its production and
capacity for export, as well as the free
competition inside of its frontiers.
“Whatever you do, work at it with all your heart,
as working for the Lord, not for human masters.
It is the Lord Christ you are serving. “

Colossians 3:23
3:23

3. Equitable Economic Development

Development
To receive the benefits of the AEC, the
people and businesses of ASEAN must be
engaged into the integration process of the
AEC.
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