CONTEMPORARY WORLD

LESSON 1
INTRODUCTION TO THE STUDY OF
GLOBALIZATION
 LEARNING OUTCOMES

01
Differentiate the competing
conceptions of globalization.

At the end of the 02

chapter, the students
are expected to:
Identity, the underlying philosophies
of the varying definitions of
globalization.

03
Agree on a working definition of
globalization for the course.
A STORY: GIO, LATIF, AND THE LAKSA

• Gio - from Cebu, is a second year international

affairs student who obtained funding to join in an
international Model UN competition in Sydney,
Austrilia where he made a lot of friends and came
friends with Latif from Malaysian team.
• Upon discovering that Gio came from the
Philippines, Latif lift up and declared she was big
fan of Jericho and Kristine of Pangako Sayo.
• Gio started asking questions about Malaysia as Latif knew a lot
about the Philippines.
• Latif shared that she likes most the food in Malaysia. In Malaysia
they can find Chinese, Indian, and Malay cuisines which are
enjoyed by locals and tourists.
• The reasons of the assortment of the food was because of the
British Colonization.
• British did little change to Malaysian Society but they brought in
Chinese laborers to work in the rubber plantation and tin mines.
• They also brought Indians to help manage the bureaucracy and
serve the initial professional core of a potential middle class.
• The next day, Latif took Gio to a Malaysian Restaurant
and was surprised that Malaysian food was readily
available in Sydney – this is because of Malaysian
students studying in Sydney.
• After the meal, Gio and Latif went to a café and ordered
“flat whites”- an espresso drink which is usually served in
Australia and New Zealand. Both knew “flat whites” since
there were Australian-inspired cafes in Kuala Lumpur and
Cebu.
• After the competition, both still stay in touch through Facebook
and Instagram. They congratulated each other with their
achievements.
• Latif also sent her mother’s recipe to Gio and latter started cooking
Malaysian food.
• Gio moved to Singapore. He saw Latif posted a photo that she is
in Singapore. Gio messaged Latif, and she immediately reply
saying that she also moved to Singapore.
• And the two started seeing each other in Singapore, enjoying
different cuisines and culture.
 • There are young women recruited
in the internet as “mail-order
brides” for foreign men and end-
up as sexual and domestic servants
in foreign country.

• Some were even sold to gangs

Globalization is not affecting which run prostitute.
everyone in the same way.
• Foreign investments allowed by
the government to operate inside
the country result to force labor,
and poor people are forcibly
removed from their slums for the
construction of factory or
industrial sites.
 WHAT IS GLOBALIZATION?
A. SOCIOLOGICAL VIEWPOINT

“intensification of worldwide social relations which link

01 distant localities in such a way that local events are shaped
by events occurring many miles away and vice versa”
(Giddens 1990:64).

02
“refers both to the compression of the world and the
intensification of consciousness of the world as a
whole…”(Robertson 1992:8).
ROBERTSON
 WHAT IS GLOBALIZATION?
A. SOCIOLOGICAL VIEWPOINT

“the compression of time and space and the annihilation of

03 distance” (Harvey, 1989).

DAVID HARVEY

04 “a process of interaction and integration among the people,

companies, and governments of different nations, a
process driven by international trade and investment and
aided by information technology.”
SUNNY LEVIN INSTITUTE
 WHAT IS GLOBALIZATION?
A. SOCIOLOGICAL VIEWPOINT

“This process [globalization] has effects on the

05 environment, on culture, on political systems, on economic
development and prosperity, and on human physical well-
being in societies around the world” (Steger, 2005).

MANFRED STEGER
 WHAT IS GLOBALIZATION?
B. POLITICAL VIEWPOINT
“internationalization and multinationalization are phases
that precede globalization…
06 Globalization heralds the end of the state system as the
nucleus of human activity” (DeSousa Santos, 2002:68).
GRUPO DE LISBOA (1994)
“…the activities and developments in globalization have
taken place outside the formal structures of the nation-
state…

Globalization marks the increasing irrelevance of the

nation-state, whose status as the dominant political
organization was acknowledged by the Treaty of
Westphalia.”
 WHAT IS GLOBALIZATION?
C. ECONOMIC VIEWPOINT
Globalization is dominated by global economic activities
like:
07
1. The neoliberal regime
2. The reduction of tariffs
3. The creation of transnational corporations
4. The improvement of multilateral trade organizations
 REASONS FOR THE COMPETING DEFINITIONS OF
GLOBALIZATION

ACADEMIC CIRCLES TRADITIONAL HISTORIANS

SCHOLARS & POLITICAL SCIENTISTS
(1960s and 1970s) ECONOMISTS
(1990s)

• Globalization as a • Social Sciences ( political
phenomenon has been science, economics,
studied by the various history, sociology) and
academic disciplines philosophy used their
respective analytical tools
and methods to explain
globalization.
• They can only shed light
on certain aspects of
globalization.
• Historians are more • Political scientists focus
interested in determining
whether globalization is
really a modern
phenomenon.
• Economists look into the
changing patterns of
international trade and
commerce as well as the
unequal distribution of
wealth.
more on the impact of the
forces of globalization
such as the international
non-governmental
organizations and
international
organizations, on the
state and vice versa.
 5 CHARACTERISTICS
GLOBALIZATION

1. The expansion and intensification of social relations and consciousness across

world-time and across world-space. – Manfred Steger
2. Globalization involves the creation of new social networks and the multiplication of
existing connections.
3. Expansion, stretching and acceleration of these networks.
4. Intensification and acceleration of social exchanges and activities.
5. Globalization processes do not occur merely at an objective, material level but also
involve the subjective plane of human consciousness
LESSON
THE GLOBALIZATION OF WORLD
2 ECONOMICS
 ECONOMIC
GLOBALIZATION

• The International Monetary Fund (IMF) defines it as a historical process

representing the result of human innovation and technological progress.
• According to the IMF, the value of trade (goods and services) as a percentage of
world GDP increased from 42.1 percent in 1980 to 62.1 percent in 2007.
• Increased trade means that investments are moving all over the world at faster
speeds.
• According to the United Nations Conference on Trade and Development
(UNCTAD), the amount of foreign direct investments flowing across the world was
US$ 57 billion in 1982. By 2015, that number was $1.76 trillion.
 INTERNATIONAL
TRADING SYSTEM

SILK ROAD
– oldest known international trade route
– a network of pathways that spanned China to Middle East and Europe
– traders used the Silk Road regularly from 130 BCE when the Chinese
– Han Dynasty opened trade to the West­until 1453 BCE when the Ottoman
Empire closed it.
– the Silk Road was international, it was not truly “global” because it had no
ocean routes.
 DIMENSIONS OF ECONOMY

1. GLOBALIZATION OF TRADE OF GOODS AND SERVICES

 WTO (World Trade Organization)- ensures that trade flows as smoothly, predictably, and freely
as possible.
 China as a major supplier and exporter of manufactured goods.
 Business process outsourcing.

2. GLOBALIZATION OF FINANCIAL CAPITAL MARKET

 Seen in cross listing of shares on one or more foreign stock exchange.
 Cross-hedging and diversification of portfolio
 Round the clock trading world wide
 DIMENSIONS OF ECONOMY

3. GLOBALIZATION OF TECHNOLOGY
 Emphasizes that various transactions and interactivities that transpire instantly due to the
internet and communication technology.

4. GLOBALIZATION OF PRODUCTION
 The existence of multinational and transnational company.
 INTERNATIONAL
TRADING SYSTEM

• According to historians Dennis O. Flynn and Arturo

Giraldez, “the age of globalization began when “all important
populated continents began to exchange products continuously
both with each other directly and indirectly via other
continents and in value sufficient to generate crucial impacts
on all trading partners”

• 1571 - establishment of the galleon trade that connected

Manila in the Philippines and Acapulco in Mexico.
 INTERNATIONAL
TRADING SYSTEM

MERCANTILISM ERA
• countries primarily in Europe, competed with one another to sell more
goods as a means to boost their country’s income (called monetary
reserves).
• to defend their products from competitors who sold goods more
cheaply, imposed high tariffs, forbade colonies to trade with other
nations.
• also a system of global trade with multiple restrictions.
 INTERNATIONAL
TRADING SYSTEM

GOLD STANDARD
• a more open trade system that emerged in 1867.
• its goal was to create a common system that would allow for more efficient trade
• established a common basis for currency prices and a fixed exchange rate system – all based on
the value of gold.
• during World War I, when countries depleted their gold reserves to fund their armies, many were
forced to abandon the gold standard
• Great depression - caused by the gold standard and was the worst and longest recession ever
experienced by the Western world.
• Economic historian Barry Eichengreen argues that the recovery of the US really began when
having abandoned the gold standard.
• At the height of World War II, other major industrialized countries followed suit.
• Fiat currencies - currencies whose value is determined by their cost relative to other currencies.
 INTERNATIONAL
TRADING SYSTEM

THE BRETTON WOODS SYSTEM

• It is a system of payments based on the dollar, itself convertible as
gold” for trade. US currency was now effectively the world currency,
the standard to which every other currency was pegged.

• It was largely influenced by the ideas of British economist John

Maynard Keynes who believed that economic crises occur not when a
country does not have enough money, but when money is not being
spent and not moving.
LESSON
3 MARKET INTEGRATION
 LEARNING OUTCOMES
01
Explain the role of international
financial institutions in the creation of
global economy.
At the end of the 02
chapter, the students
are expected to:
Narrate a short history of global
market integration in the 20th century;
and

03
Infer attributes of global corporations.
 UNITED NATIONS

 After the 2nd World War, almost all countries around the world faced the
great challenge of bringing their feet back on the ground.

 As a substitute to the unsuccessful League of Nations, the UNITED

NATIONS was established on October 24, 1945.

 I was tasked to promote international cooperation and to restore

international order.
 2 TYPES OF INTERNATIONAL
FINANCIAL INSTITUTION (IFI)

1. Interngovernmental
2. Private
 INTERGOVERNMENTAL
INTERNATIONAL FINANCIAL
INSTITUTION

 WORLD BANK (WB) – its aim is to end extreme poverty and

promote shared prosperity in a sustainable way.

 5 Organizations that belong to World Bank group:

1. International Bank for Reconstruction and Development
2. International Development Association
3. International Financial Corporation
4. Multilateral Investment Guarantee Agency
5. International Center for Settlement and Investment Disputes.

 These organizations facilitate the granting of loans and financial assistance

to developing countries.
 WORLD BANK
 Helps in project lending, establishes structural reforms, provides
support and technical assistance, and helps design modern and
durable social safety nets for the benefit of both developed and
developing nations.

 It also provides international capital like foreign direct investments,

short-term capital, and long term investments.
 INTERGOVERNMENTAL
INTERNATIONAL FINANCIAL
INSTITUTION

 INTERNATIONAL MONETARY FUND – also an intergovernmental

institution, works to foster global monetary cooperation, secure
financial stability, facilitate international trade, and more.
 Helps establish institutional bodies to address and reduce poverty.
 Like the World Bank, it also grants financial assistance and loans to
developing countries.
 PRIVATE INTERNATIONAL
FINANCIAL INSTITUTIONS

 CITIGROUP – is an American multinational investment

banking and financial corporation. It is the fourth largest bank
in the united States.
 MERRIL LYNCH – is the wealth management division Bank
of America.
 Both institutions provide investments around the world. Investments can be in the
form of foreign direct investments, stocks, or financial loans.
 INTERGOVERNMENTAL
INTERNATIONAL FINANCIAL
INSTITUTION

 REGIONAL DEVELOPMENT BANKS

1. Asian Development Bank (ADB) in 1960
2. African Development Bank (AfDB) in 1964
 These two are intergovernmental financial institutions that were
created to spur social progress and economic growth in order to
address and reduce poverty.
 As Financial Institutions, ADB and AfDB are anchored on the goal
of fostering sustainable development in their respective countries.
 INTERNATIONAL FINANCIAL
INSTITUTION (IFI)

• Both intergovernmental and private financial

institutions help facilitate the functionality of a global
economy by lending money to their member states
and global corporations.
 GLOBAL MARKET
INTEGRATION

• GLOBAL MARKET INTEGRATION – it was the result of

the establishment of a global economy that involved the
homogenization of trade and commerce.
• Colonialism and Imperialism rose as the new ways of putting
order to the economic interrelationships among countries.
• The integration of global market started when big American
corporations began to emerge after the Second World War
with the rise of new conglomerates.
• INTERNATIONAL COMPANIES – are importers and
exporters with no investments outside their home
countries.
• MULTINATIONAL COMPANIES (MNSCs) – have
investments in other countries but do not have a
coordinated product offering in each country.
• GLOBAL COMPANIES – have investments and are
present in many countries. They typically market their
products and services to each individual local market.
• TRANSNATIONAL COMPANIES – are more
complex organizations that have investments in
foreign operations, have a central corporate facility
but give decision-making, research and development,
and marketing powers to each individual foreign
market.