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and massive dislocation, environmental CHAPTER 2
degradation and violations of human rights.
Lesson 1: The Global Economy
Lesson 2: Theorization of Globalization
Economy
IMPERIALISM - basic foundation which should be given
primary importance and it also influences
● various methods employed by one country the condition of the society as well as the
to gain control (sometimes through politics
territorial conquest) of another country (or - worldwide economic status of one
geographic area) and then to exercise country clearly shows that economic
control, especially political, economic, mobility is considered major factor in
and territorial, over that country (or competing in the global arena
geographic area), and perhaps many other - rich become more richer and the poor
countries become poorer.
COLONIALISM
The Galleon trade
- which was implemented by the
● involves settlers as well as much more
Spaniards in the Philippines
formal mechanisms of political control
than those of imperialism.
The silk road
- which was introduced by China as
DECOLONIZATION
the oldest international trade route
where goods transported to the
● the process of revealing and dismantling
other side of the globe.
colonialist power in all its forms. This
includes dismantling the hidden aspects of
Bretton Woods System (1944)
those institutional and cultural forces that
● This was an attempt to create
had maintained the colonialist power and
institutional structures which
that remain even after political
would foster international economic
independence is achieved
cooperation and encourage the
free flow of capital around the
NEOLIBERALISM
world.
● favoring free trade, free circulation of ● The US dollar was adopted as the
capital, and freedom to invest anywhere standard; almost a “global currency”
have encouraged the growth of a complex in order to establish stable
international system of economic international exchange rates.
interdependence that transcends national ● British, French, German
borders
Global economic
structures
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people; making international finance one of
and Tariffs (GATT) of trade by the reduction
of tariff barriers the primary features of a global economy.
World Trade concern for the reduction - Global investment: This refers to an
Organization (WTO) of non - tariff barriers investment strategy that is not constrained
by geographical boundaries. Global
Economic Globalization investment mainly takes place via foreign
● trading and investing between countries direct investment (FDI).
● Trade is a driving force behind international
relations and trade impacts nearly every Why is the global economy important?
aspect of society - The growth and resilience shown by
emerging markets is a good sign for the
Global value world economy
● chains follow the creation of value through - Microeconomics: It refers to the study of
different stages, from the creation of a the behavior of households, individuals, and
product, to its disposal after use firms with respect to the allocation of
resources and decision making. In simpler
Outsourcing terms, this branch of economics studies
● an important global flow. Offshore how people make decisions, what
outsourcing involves contracting work to factors affect their decisions, and how
companies located in other countries. Apart these decisions affect the price, demand,
from the economic domain, this process is and supply of goods in the market.
also prevalent in the health care and military
domains How does the global economy work?
- transactions
Global Economy - International transactions taking place
● Interconnection of worldwide economic between top economies in the world help in
activities the continuance of the global economy
● multiple countries - includes the exchange of a variety of
● positive or negative impact on the countries products (from fruits, and foods, to natural
involved oil and weapons)
- number of benefits:
CHARACTERISTICS COMPRISING GLOBAL - providing a foundation for
ECONOMY worldwide economic growth,
(international economy set to grow
- International trade: International trade is by 4%)
considered to be an impact of globalization. - encouraging competitiveness
It refers to the exchange of goods and between countries
services between different countries, and it - raising productivity and efficiency
has also helped countries to specialize in across countries
products which they have a comparative - helping in development of
advantage in. underdeveloped countries by
allowing them to import capital
- International finance: Money can be goods(machinery and industrial raw
transferred at a faster rate between materials) and export primary
countries compared to goods, services, and goods (natural resources and raw
materials)
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What are the benefits of global economy? providing the IGO with an international
● Free trade: Free trade is an excellent personality.
method for countries to exchange goods - World Trade Organization
and services. It also allows countries to - World Health Organization
specialize in the production of those goods - Asian Development Bank
in which they have a comparative
advantage. 2. Supranational Organization
● Movement of labor: Increased migration of ● extend beyond the borders of three or more
the labor force is advantageous for the states that seek to promote economic,
recipient country as well as for the workers. political, or cultural unity between members.
If a country is going through a phase of high - United Nations
unemployment, workers can look for jobs in - International Labor Organization
other countries. This also helps in reducing - European Union
geographical inequality.
● Increased economies of scale: The 3. International Non–Governmental
specialization of goods production in most Organizations
countries has led to advantageous ● extends the concept of a non-governmental
economic factors such as lower average organization to an international scope .
costs and lower prices for customers. NGOs are independent of governments and
● Increased investment: Due to the can be seen as two types, advocacy NGOs,
presence of global economy, it has become which aim to influence governments with a
easier for countries to attract short-term and specific goal and operational NGOs, which
long-term investment. Investments in provide services.
developing countries go a long way in - Amnesty International
improving their economies. - International Committee of the Red
Cross
FACTORS affecting Global Economy - International Chamber of Commerce
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distinguished from a foreign portfolio 2. Market integration help to reduce market
investment by a notion of direct control. failure
4. Trade liberalization is the removal or 3. Differences in the prices in integrated
reduction of restrictions or barriers on the market should be equal if they are well
free exchange of goods between nations. integrated.
These barriers include tariffs, such as duties
and surcharges, and nontariff barriers, such A. International Financial Institutions
as licensing rules and quotas. Economists - Bretton Woods Agreement that currencies
often view the easing or eradication of these were pegged to the price of gold and the US
restrictions as steps to promote free trade. dollar was seen as a reserve currency
5. Regional integration is the process by which linked to gold standard. Bretton
which two or more nation-states agree to Woods had its most powerful effects on
co-operate and work closely together to global trade, the global monetary order, and
achieve peace, stability and wealth. Usually global investment
integration involves one or more written - under the Bretton Woods System the
agreements that describe the areas of central banks of countries other than the
cooperation in detail, as well as some United States were given the task of
coordinating bodies representing the maintaining fixed exchange rates between
countries involved. their currencies and dollar which they did
this by intervening in foreign exchange
Lesson 2: Market Integration markets
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- according to Benedict Anderson, is an
“imagined community” and does not go
Advantages Disadvantages
beyond a given “official boundary”. It is
Investment of Foreign Least concern for inherently limited and sovereign. It has
Capital Priorities of Host boundaries, meaning not anyone can be a
Coutries Filipino
- this refers to a large group of people who
Generation of Adverse Effect on
Employment Domestic Enterprises share common characteristics such as
language, traditions, and ethnicity.
Use of Advanced Change in Culture
Technology State
- refers to a country and its government
Growth of Ancillary
Units where a community of persons more or less
numerous occupying a definite territory
Increase in exports and completely free of external control and
inflow of foreign possessing an organized government to
exchange which the great body of inhabitants render
Healthy Competition habitual obedience.
Interstate system
Lesson 3: Global Interstate System - a system of competing and allying states.
Wherein, Treaty of Westphalia is a set of
● origin of the modern nation-state is traced to agreements signed in 1648 to end the
the Treaty of Westphalia which led to the Thirty Years’ War between the major
notion that nation-states are autonomous continental powers of Europe. It was
● fusion of the cultural concept of a nation and designed to avert wars in the future by
the structure of the state; to the idea of the recognizing that the treaty signers exercise
nation-state complete control over their domestic affairs
and swear not to meddle in each other’s
ATTRIBUTES of Global System affairs and provide stability for the nations of
Europe
● countries or states are independent and
govern themselves; PRINCIPLES of Interstate system
● these countries interact with each other
through diplomacy; Nationalism
● international organizations facilitate these - a doctrine and/or a political movement that
interactions (i.e. UN); seeks to make the nation the basis of a
● international organizations also take on lives political structure especially a state. It is a
of their own. sense of national consciousness that
generally exalts one’s own nation above
Nation-state others, and focuses on the promotion of
- relatively modern phenomenon in the interests.
human history whereby it composed of two
non-interchangeable terms: nation and Internationalism
state. - desire for greater cooperation and unity
among states and people. In a more
Nation comprehensive definition, it is a political
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principle that places the interests of the from providing public goods like water,
entire world above those of individual health care, agricultural products, and
nations and argues for cooperation among education. At the same time, the dominant
nations for common good. This can be corporations in the global economy are
divided into two broad categories: liberal using their wealth to gain power by
internationalism and socialist influencing political and social institutions.
internationalism.
B. Institutions Governing International
A. Effects of Globalization on Government Relations
United Nations was created for many reasons: B. Challenges of Global Governance in the 21st
● There should be peace and security in the Century
world after the Second World War
● Countries should be friendly to each other 5 Global Governance Gaps
● Countries should help each other solve - knowledge
problems - normative
● Human rights should be respected - policy
everywhere in the world. - institutional
- compliance
MAIN ORGANS OF THE UN
● Knowledge is a valuable core asset which
1. The General Assembly is both intangible and concrete, a general
2. The Security Council
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and specific source . It is a knowledge that Global North
makes cooperation among member states - established democracy, wealth,
● Normative role of the UN which has been technological advancement, political
fundamental since the creation of the stability, aging population growth, and
organization. Member-states are committed dominance of world trade and politics. This
to review and reform their norms and include the United States, Canada, almost
standards. There should be a balance of all the European countries, Israel, Cyprus,
norm setting and norm implementation.. Japan, Singapore, South Korea, Australia,
Once the norm is being identified, norn and New Zealand.
could be set to address issues.
● Global governance must be challenge to Global South
comply with the gaps to implement policies - less–developed countries of the world
effectively or enforce penalties to those who - term “Global South” emerged in the 1950s
violated it. Such violation could be a great - not as economically sound and politically
threat to one state to another which will stable as their global North counterparts
pose a danger to the peace and security. and tend to be characterized by turmoil,
war, conflict, poverty, anarchy and tyranny
CHAPTER 3 - mainly agrarian economies in Sub-Saharan
Africa, Latin America and the Caribbean,
Lesson 1: Global Divides Pacific Islands, and the developing
countries in Asia, including the Middle East.
North-South Divide It is home to the BRIC countries: Brazil,
- is the socio-economic and political division India and China, which, along with
that exist between the wealthy developed Indonesia and Mexico, are the largest
countries “the North”, and and the poorer Southern states in terms of land area and
developing countries (least developed population.
countries) or “the South”
- North is mostly correlated with the Western Global North Global South
world and the First World, along with much
of the Second World, while the South ✓Comprised of ✓Accounts for the
largely corresponds with the Third World only one quarter three-quarters (75%) of the
(25%) global population BUT only
and Eastern world.
of the total global accounts a fifth (20%) of
population the globally earned income
A. North and South ✓ Richer and more ✓Poor and less developed
● division between rich and poor countries economically region
which most of the developed countries developed region ✓ Relatively low GDP and
located at Northern Hemisphere and the ✓ Accounts for the high population
over 90% of all ✓Only 5% of country’s
most of the developing countries is in the
manufacturing population has enough
Southern Hemisphere industries food and shelter
● considered as a socio-political division ✓ About 95% of ✓ Source of raw materials
which created a development gap among the population have and labor for the “North”
nationstates enough basic ✓ The economies of most
● is a socio-economic and political division of needs and have countries in the South rely
Earth popularized in the late 20th century access on imports from the North
to functioning and have low technological
and early 21st century
education systems penetration
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Lesson 2: Asian Regionalism
B. Global South vs. The Third World
- They divided the world into three (3) ASEAN
categories that embodies 3 types of - first major regional player to emerge and
countries along the globe: the First World, has been at the center of regional
Second World, and the Third World. developments including APEC, ARF,
ASEAN Plus Three and the East Asian
Third World Summit as East Asian regionalism has
- underdeveloped or developing countries evolved over time ASEAN’s pivotal regional
- were well on their way to becoming rich and role has also been accepted by China and
“developed” Japan in good part because they need the
- Third World was the non-aligned World, ASEAN members as followers if they ever
distinct from the First (capitalist) and want to be considered global leaders
Second (socialist/communist) Worlds
- became a quick-and-easy referent for the Asian Regionalism
“Poor World” because it has been - make Asian economies grown richer but
under-developed by the Rich or “First also they become closer together
World”, through processes of globalization - product of economic interaction, not political
and capitalist expansion planning. As a result of successful, outward
oriented growth strategies
The “Three Worlds Theory”
● made no longer sense when in 1989-1991 A. Regionalization vs. Globalization
● the Second World ceased to exist as the - reemerged during the 1980s and
Soviet Union collapsed heightened after the end of the Cold War in
● The “Global North” mostly covers the First the 1990s. At first, these two processes are
World, with much of the Second World. contradicting since globalization, by
While “Global South” covers the countries definition is global while regionalization is
from the Third World naturally regional
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- removing economic barriers was the
Advancement technology is has driven
principal thrust of most agreements to rarely available great
promote regionalism, a ‘community’ in one advances in
connotes shared values and joint responses country or technology
to security threats. region