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113 Prepared by: Ms. YnaHayudini

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Study the following:



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What is Globalization
Importance of Globalization
Types of exam:

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 Multiple choice- 40
 Effects of Globalization to the
 True or False- 10
economy of one country
 The roles of technology and

 World)
culture in Globalization
Natures of Globalization
 Signs of Globalization
 4 Structures of Globalization
-The Global Economy
-Market Integration
-The Global Interstate System
-Contemporary Global
Governance
 Free trade, Tariff, Embargo,
Economic sanction
 State, Nation, Nation-State
 Divisions of Labor
 The World System Theory
Contemporary world

GLOBALIZATION:

Is a term used to describe the changes in societies and the world economy that are the result

of dramatically increased trade and cultural exchange. In specifically economic contexts, it

refers almost exclusively to the effects of trade, particularly trade liberalization or "free trade".

It is the interconnectedness of people and business across the world that eventually leads to

global, cultural, political, and economic integration.

Globalization is the increasing interaction of people, states, or countries through the growth of

the international flow of money, ideas, and culture. Thus, globalization is primarily focused on

economic process of integration that has social and cultural aspects.

It is the ability to move and communicate easily with others all over the world in order to

conduct business internationally.

It is the free movement of goods, services, and people across the world in a seamless and

integrated manner.

It is the liberalization of countries of their impact protocols and welcome foreign investment

into sectors that are the mainstays of its economy.

What is the role of technology in globalization?

We find that the spread of knowledge and technology across borders has intensified because of
globalization. In emerging markets, the transfer of technology has helped to boost innovation
and productivity even in the recent period of weak global productivity growth.

What is the role of culture in globalization?

Cultural identity provides the global significance of local knowledge and the sense of self,
community and nation. In terms of science, technology and economic development,
globalization reflects somewhat the theory of convergence and hegemonic control, but in
deeper sense, it promotes cultural identity.
 NATURES OF GLOBALIZATION:

1. Liberalization - It stands for the freedom of the entrepreneurs to establish any industry or

trade or business venture, within their own countries or abroad.

2. Free trade - It stands for free flow of trade relations among all the nations. Each state grants

MFN (most favored nation) status to other states and keeps its business and trade away from

excessive and hard regulatory and protective regimes.

3. Globalization of Economic Activity - Economic activities are be governed both by the

domestic market and also the world market. It stands for the process of integrating the

domestic economy with world economies.

4. Liberalization of Import-Export System - It stands for liberating the import-export activity

and securing a free flow of goods and services across border.

5. Privatization - Keeping the state away from ownership of means of production and

distribution and letting the free flow of industrial, trade and economic activity across borders.

6. Increased Collaborations - Encouraging the process of collaborations among the

entrepreneurs with a view to secure rapid modernization, development and technological

advancement.

7. Economic Reforms - Encouraging fiscal and financial reforms with a view to give strength to

free world trade, free enterprise, and market forces. Globalization accepts and advocates the

value of free world trade, freedom of access to world markets and a free flow of investments

across borders. It stands for integration and democratization of the world’s culture, economy

and infrastructure through global investments.

SIGNS OF GLOBALIZATION
1. Increase in international trade at a faster rate than the growth in the world economy
2. Increase in the international flow of capital including foreign direct investment
3. Greater trans-border data flow, using such technologies such as the internet, communication
satellites and telephones
4. Greater international cultural exchange
5. Great International Travel and Tourism

6. Greater immigration, illegal immigration

Structures of globalization

SOCIAL

A measure of how easily information and ideas pass between people in their own country and

between different countries (access to internet and social media networks

POLITICAL

The amount of political co-operation there between countries

ECONOMIC

Countries that trade with many others and few trade barriers are economically globalized

The Four Structures of GLOBALIZATION

The Global Economy

Market Integration

The Global Interstate System

Contemporary Global Governance

Global Economy

- also referred to as ‘world economy’

- refers to the international exchange of goods and services

- it may also mean as the free movement of goods, capital, services, technology and

information

- It is concerned with globalization of production, finance, markets, technology, organizational

regimes, institutions, corporations and labor.

- The free movement of goods, capital services, technology, and information.

- It refers to the increasing interdependence of world economies as a result of the growing scale

of cross-border trade of commodities and services, flow of international capital and wide and

rapid spread of technologies

Market Integration

Market integration is a state of affairs as a process involving attempts to combine national

economies into larger economic region

- ROBSON (1998)

Example: European Union and ASEAN

Market Integration is a situation in which separate markets for the same product become one

single market, for example when an import tax in one of the markets is removed: It has long

been recognized that market integration is far more efficient than firm integration.

Markets are integrated if investments with similar characteristics provide similar returns. It also

presents the expected benefits and costs of market integration. In theory, market integration

should increase financial and economic efficiency, and lead to a higher economic growth.

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.
Words that can be associated with Market Integration:

Free Trade: is when International trade (import- export) left to its natural course without tariffs
and non- tariff trade barriers such as quotas, embargoes, sanctions or other restrictions.

Tariff: taxes or duties to be paid on a particular class of imports and exports

Embargo: IMPORT BAN
Economic sanction: are commercial and financial penalties applied by one or more countries
against a targeted self-governing state, group, or individual. Economic sanctions are not
necessarily imposed because of economic circumstances—they may also be imposed for a
variety of political, military, and social issues

Following are the countries/ organizations for International Cooperation has free trade
agreement
The USMCA, which substituted the North America Free Trade Agreement (NAFTA) is a mutually
beneficial win for North American workers, farmers, ranchers, and businesses. The Agreement creates
more balanced, reciprocal trade supporting high-paying jobs for Americans and grow the North
American economy.
Mercosur, also known as the Common Market of the South, is a trade bloc agreement that

exists between the following South American countries: Argentina, Brazil, Paraguay, and

Uruguay. The trade bloc was established under the Treaty of Asuncion in March 1991.

Mercosur members agree to the free movement of goods and services between member

countries. Any change to Mercosur economic policy requires the consensus of the other

members, but countries can ask that certain products be exempt to protect local industries.

Mercosur members adhere to a number of agreements guiding currency exchange, investment,

tax issues, and educational exchanges.

The Global Interstate System (Political Dimensions of globalization)

State: It is a compulsory political organization with centralized government that maintains the

legitimate use of force within a certain territory. (Weber, 1997)

Elements of the State

Physical Bases

-Population -Territory

Political bases

-Government -Sovereignty
What is a Nation?

A nation is a territory where all the people are led by the same government. The word “nation”

can also refer to a group of people who share a history, traditions, culture and, often,

language—even if the group does not have a country of its own.

A nation state must have a shared national identity, physical borders, and a single government.

This makes it different from other forms of states, like the city-state, which did not have firm

borders, and kingdoms, which did not have a shared culture.

Places like France, Egypt, Germany, and Japan are excellent examples of nation-states. There

are some States which have two nations, such as Canada and Belgium.

Global Interstate System

The theory of the Interstate System holds that all states are defined through their relationship
to other states or through participation in the world economy, and that division between states
help to divide the world into:
-core

-periphery

-semi-periphery.

Core countries are dominant capitalist countries that exploit peripheral countries for labor and

raw materials.

Peripheral countries are dependent on core countries for capital and have underdeveloped

industry.

Semi-peripheral countries share characteristics of both core and peripheral countries.

Divisions of Labor:

Core: high income nations in the world economy. This is the manufacturing base of the planet

where resources funnel in to become the technology and wealth enjoyed by the Western World

today.

They are dominant CAPITALIST countries that exploit peripheral countries for labor and raw

materials.

Semi-periphery- are the middle-income countries, such as India and Brazil. These are

considered semi-periphery due to their closer ties to the global economic core.

Periphery- called as the low-income countries, whose natural resources or labor support the

wealthier countries, first as colonies and now by working for multinational corporations under

neo-colonialism. Peripheral countries are dependent on core countries for capital and have

underdeveloped industry.

Resources are redistributed from the underdeveloped poor part of the world-(periphery) to

developed countries (core)

The world theory stresses that the world-systems should be the basic unit of social analysis.

Thus we should not only focus on the individual states, but on the relations between their

groupings. (core, semi-periphery, and periphery)

Global Governance

Is sometimes referred to as “world governance.” Global is a movement towards political

cooperation among transnational actors, negotiating responses to problems that affect more

than one state or region.

Today, transnational problems such as violence and pandemics routinely reach across borders,

affecting us all.

Global Governance is a means to manage issues that cut across national borders - whether it is

a pandemic, a financial crisis, climate change, or a geo-economic dispute.

Global Governance may mean the process of designating laws, rules, or regulations intended

for a global scale.

The goal of global governance, roughly defined, is to provide global public goods, particularly

peace and security, justice and mediation systems for conflict, functioning markets and

unified standards for trade and industry.

What is the most important principle of global governance?

Responsible sovereignty:

This principle recognizes that policy cooperation is the best way to achieve national interests in

the global public domain. It also requires Governments and States to be fully respectful of the

sovereignty of other nations so as to fulfil agreed policy outcomes.

What are the challenges of global governance?

Ethnic conflicts, infectious diseases, climate change, food insecurity, and other pressing

threats, are increasingly threatening global security and stability, prompting doubts about the

ability of the current global governance order to respond to the challenges plaguing the 21st

century.

Differentiate GLOBALIZATION from INTERNATIONALIZATION

Globalization is more with the nations and their economies

Internationalization is more related to the individual, firm and corporations for doing up their

businesses.

Globalization is a process and internationalization is part of the same.