Contemporary World Reviewer

 

THE CONTEMPORARY WORLD (REVIEWER)

  Managing a far – flung supply chain to get products to stores. (American Shoe

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Globalization – Globalization  – refers to the process by which

more people across large distances become connected in more and different ways.

Company)

  Rules of the global game that favor the rich North over the poor South. (Filipino

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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  – becoming distances not all people to the place”. same extent, the world is a – “Single

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.

global j ustic e advocate) advocate) THEORIES OF GLOBALIZA THEORIES GLOBA LIZATION TION (LECHNER, 2015) Theory    –  perspective 1. World System Theory  that globalization is essentially the expansion of the capitalist around the globe.   – originated in the Capitalist Ca pitalist World System  System –

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.

Globalized World Cup – Globalized Cup  – known as the World 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

NOTE: Labor, resources and trade opportunities  are notable in PERIPHERAL  AREAS .

countries).

mostly capitalist countries are positioned between the periphery and the core 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 Neoliberalism.

often

labeled

as

Semi  – periphery   – – are any industrializing,

1.3. The central purpose of the world system is capital accumulation by competing firms, which go through cycles of growth and decline.

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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

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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 (Latin tin wor d: prol etarius etarius ) collectively. (La

Pentecostal Pe ntecostal Missionary)

  Growing new tools while staying deeply involved in the home village. (Dominican

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Immigrant)

2. World Polity Theory  –  states an important component of “world society”. From this perspective, is all  –  encompassing “world polity” and its associated world culture.

  Sampling variety of new shows, some

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adopted from foreign formats. (Indian

Television viewer)

  Chance to escape rural poverty by cutting threads off designer jeans. (Chinese

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 Appar  Ap parel el Work Wo rk er)

3. World Culture Theory - agrees that world culture is indeed new and important but it is less homogenous than world polity.

 

Shrinking world

  Globalization is a result when human activities take place on a worldwide scale, which means people increasingly live in a

The five core claims of Market Globalism (Steger, 2005)

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1. Globalization is about the liberalization and global integration of m arkets.

“global village” or a “shrinking world”  

Reasons why g lobalization Reasons lobalization will not make the world homogenous (Lechn er, 2015) 2015)

1. General rules and models are interpreted in light of local circumstances.

  The vital functions of the free – market – its rationality and efficiency.   Bring about greater social integration and material progress.   Free – market capitalism –  – “ the more you let market forces rule and the more you

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open your economy to free trade your and competition, the more efficient economy will be.

2. Growing similarity provokes reactions. 3. Cultural and political differences have themselves become globally valid.

2. Globalization

is

inevitable

and

irreversible. The interdisciplinary globalization

understanding

of

3. Nobody is in charge of globalization “ self – regulating market” 

Politicall scientist 1. Politica

Political activity can also transcend national borders through global movements and Non  –  Government Organization (NGO).

4. Globaliza Globalization tion benefits benefits everyone everyone   Economic growth   Prosperity

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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.

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.

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Social Media

Privatization   –  process of transferring an

enterprise or industry from the public sector to the private sector. Public to private sectors:

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  Philippines Airlines (PAL)   Philippine Long Distance Corporation (PLDT)   Manila Electric Company (MERALCO)   Manila Waterworks and Sewerage System (MWSS)  –  “Manila Water

  A brilliant tool of communication that can be easily accessed globally and affects how people communicate with other people and even in different cultures.

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4. Historian   Globalization is not a phenomenon but the world itself took hold only recently which records shows first use in English in 1930.

Company/Services” 

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CHARACTERISTICS OF NEOLIBERALISM

  Government must limit subsidies   Make a reforms to tax law in order to expand tax base   Reduce deficit spending   Limit protectionism

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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

currency in the late 1980s.

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Open markets Removal of fixed exchange rates Back deregulation Privatization

 

Major elements of internationalist liberal (Cohn, 2005)

Economic globalization – globalization – Benezes (2014), the

increasing integration of economies around the 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 exchange rate rather than a fixed exchange rate system.

  Refers to the movement o off people and knowledge across international borders.

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What makes economi What economi c globalization dist inct from internationalization?

2. Interventionalist liberal compromise was the IMF, which would provide short  – term loans.

  the latter is about the ex extension tension of economic activities of nation states across borders while the former is

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for national nationa l 3. Compromise controls  over support controls capital flows.  

functional integration between internationally dispersed activities. Interconnected dimensions of globalization (Benezes, 2014)

economic

International Interna tional Monetary Monetary Fund Fund  –  – most

1. the globalization of trade of goods and services 2. the globalization o off financial and capital markets 3. the globa globalization lization of technology and communication 4. the globalization of production

important international organization embedded in the Bretton Woods monetary regime.   Located in Washington, DC.

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Bretton Woods Function Economist ask three questions:

  Are there sufficient reserves for liquidity

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The International Monetary System

or there financing purposes?   Is a confidence problem with the existing reserve assets?   What adjustment options do reserve –  currency countries have in dealing with their balance – of – payments deficits?

Cohn (2005) states that international system is the most central area in international economy  –  including trade, investment, and finance – all depend on the availability of money and credit.

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  Is a system that forms rules and standards for facilitating international trade among the nations in the world.

U. U.S S dollar  dol lar  –  – main source of international

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liquidity 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  –  1914)

G1O members member s (1964)

1. Belgium

Fixed rate regime in which governments announces and adhere to specific exchange rate form their currencies in relation to gold. 2. Gold exchange standard regime (1914

2. Canada 3. France 4. Germany 5. Italy 6. Japan 7. Netherlands 8. Sweden 9. United states 10. United kingdom 11. Switzerland

 

 –

1944)

Based on fixed exchange rates among currencies however, a country’s international

reserves under the 19th  century gold standard were officially held in gold.

Note: Para madaling mamemorize 3. The Bretton Woods System Regime (1944-) (during world war II)  The Bretton Woods Agreement was drafted in 1944 and is a vital piece of financial history. It held meetings at the Mount Washington Hotel in Bretton Woods, New Hampshire in US. It was ratified by an agreed number of 44 allied nations nat ions and created today’s International Monetary

Fund (IMF).

BelCF –  – Belgium, Canada, France GIN – J  –  – Germany, Italy, Netherlands, Japan SUUS –  – Sweden, U.S, UK and Switzerland

  Supply a substantial amount of financial resources   Change dollars into gold   Improve the balance of payments by reducing capital outflows.

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4. Floating Exchange rate

International Interna tional Financial Institutio n

 A regime where the currency currency price is set by the forex market based on supply and demand compared with other currencies.

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.

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  Nations were “living in sin” by 1973 

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Global actors actors in Economic Globalization Globalization 1. International Governmental Organization (IGO)

 Asian  As ian Develop Devel opmen mentt Bank B ank

Example

Refers to an entity created by treaty, involving two or more nations, to work in good faith, on issues of common interest.   Strive for peace, security and deal with economic and social questions.

of

financial

institutions

categorized as regional development bank in which has 31 off ices  around the world. (Ortigas  Avenu  Av enu e, Pasig Pasi g City Ci ty))

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2. International

Non Organization (NGO) 

 – 

Governmental

Work towards solutions that can benefit undeveloped countries that face the backlash of economic globalization. 3. Multinational Corporation (MNCs) 

Corporations which have overseas branches. One of the many changes they have brought to developing countries is increase in automation .  Auto  Au to matio mat io n    –  the use of various control

systems for operating equipment such as machinery. The effects of Economic Globalization on Developing De veloping Countries 1. Increased Increased Standard Standard of Livi ng

Gives the governments of developing nations (roads, health care, education, social services, etc.) 2. Acc ess to new markets (1971 (1971))

International Interna tional Financial Instit Instit ution s

1. 2. 3. 4. 5. 6.

World Bank (WB) Internal Monetary Fund (IMF) European Investment Bank (EIB) Islamic Development Bank (IDB) Asian Development Bank (ADB) European Bank for Reconstruction and Development (EBRD) 7. CAF  –  Development Bank of Latin  America (CAF) (CAF) 8. Inter  –  American Development Bank Group (IADB) 9. African Development Bank (AfDB) 10. Asian Insfrastructur Insfrastructure e Investment Bank (AIIB)

1. World Bank (Washing (Washing ton , D.C) D.C)

Founded in 1944, the International Bank for Reconstruction and Development – soon called the World Bank  – has expanded to a group of five closely associated development institutions.

Goals Goa ls of World Bank

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  globalization. One of the largest benefit of the   Develop new technologies and provide new products and services

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3. Widening Disparity in inco mes

Foreign companies and foreign capital creates a reduction in overall unemployment and poverty, it can also increase the wage gap between those who are educated and those who are not. 4. Decreased Decreased Emplo yment

Foreign companies into developing countries increases employment in many sectors especially for skilled workers.  Auto  Au to mat io ion n   in the manufacturing and agricultural sectors lessens the need for unskilled labor and unemployment rises ri ses in those sectors.

1. End extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3% 2. Promote shared prosperity by fostering the income growth of the bottom 40% for every country.

Five Organization Organization of World B ank 1. Internation Internation al Bank for Reconstruc Reconstruc tion and Development Developm ent (IBRD)

Lends to governments of middle  –  income and creditworthy low  –  income countries. 2. Internati onal  Asso  As so ci ati on (IDA)

De Develop velopment ment

Provides interest free loans  –  called credits and grants to governments of the poorest countries.

 

3. Internation Internation al (IFC)

Finance

currencies, continue paying for imports, and restore conditions for strong economic growth.

Corporation

Largest global developing institution focused exclusively on the private sector.   They help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets and providing advisory services to businesses and governments

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4. Multi lateral Investment Investm ent  Agenc  Ag enc y (MIGA)  – 1998

Guarantee

Promote foreign direct investment into developing countries to support economic growth, reduce poverty and improve people’s lives.

3. Capacit Capacit y Develop Development ment

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Helps member countries design and implement economic policies that foster stability and growth by strengthening their institutional capacity and skill.

Note:  IMF gets its money from its member countries.

MARKET INTEGRATION  –  term that is

used to identify a phenomenon in which markets of goods and services are somehow related to one another.   A situation in which the prices of related goods and services sold in a defined geographical location also begin to move in some sort of similar pattern to one another.   Koester (2017), a state o off affairs or a process involving attempts to combine separate national economies into larger economic regions.

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5. International Internati onal Centre Centre for Settl Settl ement of Investment Investm ent Disp utes (ICSID) (ICSID)

Provides international conciliation and arbitration disputes.

facilities for of investment

International Interna tional Monetary Monetary Fund

 An organization organization of 189 countries w working orking to foster:   global monetary cooperation,   secure financial stability,   facilitate international trade,   promote high employment and sustainable economic growth and;   reduce poverty around the world. •

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Integration  –  stimulating trade and improving divisions of the labor among countries has been

recommended by many economist.

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Note: IMF known as the Fund, was conceived at a UN Conference in Bretton Woods, New Hamps Ha mps hir e, United States , in Jul y 1944 1944.

IMF’s responsibility:

  primary purpose is to ensure the stability

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of the international monetary system International Interna tional Monetary Monetary System

the system of exchange rates and international payments that enables countries and their citizens to transact with each other. Mission of IMF 1. Surveillance

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oversees the international monetary system and monitors the economic and financial policies 189 countries. Highlights possible risk to stability and advices on needed policy adjustments

General Agreement of Tariffs and Trade (GATT) (1948)

Promoting greater acceptance of the most favored nation principle. Forms of Integration 1. Preferential Agree Agr eement ment

Involves lower trade barriers between those countries which have signed the agreement. 2. Free trade tr ade agreement agreemen t

Reduces barriers to member countries to zero.

trade

among

3. Customs Union

Represents a higher stage of economic integration than a free trade area as the member countries adopt a common external tariff. 4. Common Commo n Market

Goes beyond customs union in allowing for free movement of labor and capital within the union. 5. Economic Union

2. Lending

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Provide loans to member countries experiencing actual or potential balance of payments problem. Enable countries to rebuild their international reserves, stabilize their

The highest form of economic integration. In addition, to the conditions of a common market, member countries also agree to integrate monetary, fiscal and other policies.

 

- a unique economic and political union between 28 European countries that together cover much of the continent. The

European

5. Single European Act    –  signed on February 17, 1986  in Luxembourg and February 26, 1986  in Hague, Netherlands.   Reform the institutions in preparation for Portugal and Spain’s membership.

Integration

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Legal Basis of European Union   –  based on

the rule of law. 6. Merger Treaty    –  Brussels Treaty  –  signed on Apr il 8, 1965

  Means that every action taken by the EU is founded on treaties that have been approved voluntarily and democratically by all EU countries.

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  Streamline the European institutions.   Creates a single commission and a single council to serve the three European Communities.

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28 European Union Countries

1. Austria 2. Belgium 3. Bulgaria 4. Croatia 5. Cyprus 6. Czech Republic 7. Denmark 8. Estonia 9. Finland 10. France 11. Germany 12. Greece 13. Hungary 14. Ireland

Note: European Communities  –  EEC, Euratom and ECSC.

15. Italy 16. Latvia 17. Lithuania 18. Luxembourg 19. Malta 20. Netherlands 21. Poland 22. Portugal 23. Romania 24. Slovakia 25. Slovenia 26. Spain 27. Sweden 28. United Kingdom

European Union Flag   –  symbolizes both the European Union and more broadly, the identity and unity of Europe.

  Features of 12 gold stars on a blue background   12 gold stars  –  stand for the ideals of unity, solidarity and harmony among the peoples of Europe.

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7. Treaties of Rome  –  EEC and Euratom treaties – signed on March 25, 1957 1957.   Set up the European Economic Community  (EEC) and the •

European Atomic Community (Euratom)

Energy

8. Treaty Treaty establishi ng the European Coal Coal and Steel Steel Commu nity  –  – signed on Apr il 18, 1951.

  Create interdependence in coal and steel so that one country could no longer mobilize its armed forces.

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European Europea n Union   – – helps its member countries

with issues as trade, security and the rights of citizen.

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The benefits benefits o f Euro

1. People no longer to change money when travelling or doing business within the euro area, saving time and transaction. 2. It costs much less (or nothing at all) to make cross – border payments. 3. Consumers and businesses can compare prices more easily, which encourages businesses charging higher prices to bring them down.

Main treaties help created European Union 1. Treaty Treaty of Lisb on –  – signed on December 13, 2007.

  Make more EU more democratic, more efficient and better able to

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address global problem 2. Treaty of Nice  – – signed on February 26, 2001.

 ASEAN Integ In tegrat rat ion io n

  Reform the EU institutions   Reached 25 countries

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 ASEAN – Association pf Southeast Asian Nation. (Bangkok, Thailand)

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3. Treaty of Amsterdan    –  signed on October 2, 1997.   Reform the EU institutions in preparation for the arrival of future member countries

  Signed the document on August 8, 1967 by five leaders   Five leaders  –  Foreign Ministers of Indonesia, Malaysia, Philippines, Singapore and Thailand

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4. Treaty on European Union  –  – Masstricht Treaty – signed on Februay 7, 1992. 1992.

  Prepare

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for

European

Monetary

Union and introduce elements of a political union.

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NOTE:

  Adam Malik – Indonesia

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Narciso R. Ramos – Philippines Tun Abdul Razak – Malaysia S. Rajaratnam – Singapore Thanat Khoman – Thailand

 

  Brunei Darussalam  –  joined January 7, 1984   Vietnam – July 28, 1965   Lao PDR and Myanmar – July 23, 1997   Cambodia – April 30, 1999

4. ASEAN Integration into the globalized economy

 ASEAN  ASEA N  – – created in 1967 as a political group to

Five core principles of the ASEAN single market and and prod ucti on base

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 ASEAN must not be isolated but an integrated part of the global economy.

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strengthen the power and increase growth and development in member nations.

1. 2. 3. 4. 5.

 ASEAN  ASEA N Econo Eco nomi mi c Commu Com muni ni ty (AEC)  –  a

major milestone in the regional economic integration agenda in ASEAN offering opportunities in the form of a huge market.   In 2014, AEC is the third largest economy in Asia and the 7th largest in the world. •

 AEC Bluepr Blu eprin in t 2025  – – aimed towards achieving

the vision of having an AEC by 2025 that is highly integrated and cohesive.   Competitive, innovative and dynamic   Enhanced connectivity and sectoral cooperation   A more resilient, inclusive   People  –  oriented, people  –  centered community, integrated with the global economy

Business Process Outsourcing (BPO)  – – is a

billion dollar business in the Philippines because of less expensive operational and labor costs. Call centers provide almost type of customer relations:          

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Five Interrelated and mutually reinforcing characteristics of ASEAN Economic Community:

1. Highly integrated and cohesive economy 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

Free flow of goods Free flow of service Free flow of investment Free flow of capital Free flow o off skilled labor

Travel services Technical support Education Customer care Financial services

Global Corporation    –  is a business that operates in two or more countries. “Multinational

Company”.  Appl  Ap pl e Inc. Inc .   –  is an American technology company headquarters in California that designs, develop and sells consumer electronics and computer software.

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 “  

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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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