CONTEMPORARY REVIEWER

GEC 3 The Contemporary World access to data or information. This further promoted
the development of an information society.
Lesson 1
Views about Globalization
Understanding Globalization
Some authors highlight the positive economic impacts
Globalization – is a process of expanding various
of globalization such as on the level of employment and
sociocultural and socio-ecological process from national
balance of trade. On the other hand, some highlight the
to international and transcultural level.
negative impact of globalization, specifically the
Global Connected Index (GCI) – is a measurement of inequity among countries and between the rich and the
flows and interconnections of the country to the global poor. Some argues that through globalization and
players through exchanges in trade, capital, people and exponential growth, theoretically, could reduce poverty,
information. it does not benefit all nations.

Introduction Lesson 2

Globalization has been critical discourse in the Interrogating Globalization

international arena. There is an increasing number of
Development paradigms – an idea of prescribed path to
books written about globalization since the end of the
attain development through certain set of activities,
1980s. There are numerous definitions of globalization,
according to a defined vision.
and one definition tends to focus on the economic side
of globalization. Introduction

Extent of Globalization Globalization has been responsible for remarkable

changes in the 20th century. In understanding it as a
Globalization has brought many benefits to businesses,
subject, one must examine what kind of changes are
individuals and whole countries, but the recent backlash
created and the underlying processes behind these
has called these into question. Amid growing tensions, it
changes. Furthermore, the pursuit of globalization
is vital to distinguish between perception and reality.
operates on several assumptions that need to be
Research reveals that we both over- and underestimate
evaluated.
the extent of globalization. Getting the facts right can
help business and policymakers identify key challenges As a complex change, it permeates people’s daily
and spot opportunities. realities as well as the lives of communities and
countries. A deeper analysis is needed to assess
Socioeconomic Changes in Globalization
whether the process and impacts of globalization are
Scholte (2005) identifies macro-structural changes in consistent with development that is sustainable, just
globalized society such as product and services and equitable for the people and the planet.
integration through commodity value chains, emerging
Economic, Cultural, and Political Globalization
institutional arrangements, pluralistic identity, and
growth of supra-territorial relations. Also, he identifies Globalization is mainly conceptualized as intensified
Four key shifts in society: transference or exchange of things across existing
boundaries. However, globalization is primarily an
 Growth of trans- and supra-territorial
economic process, the drive towards integration of
connectivity.
economies throughout the world. This is achieved
 The shift from capitalism to hyper-capitalism
through trading and financial flows across countries’
focused on product.
borders.
 A move from nationalism towards identifying
pluralism and hybridity. Globalization and its accompanying processes point to a
 From rationalism toward knowledge reflexivity. paradigm about development. Globalization is built on
the belief that development can be achieved through
Factors Driving Globalization
rapid economic growth, made possible because of
Different sources and factors drove globalization. One economic integration. As a growth oriented model of
of the factors that drive globalization is the reduction of development, it looks into GDP an indicator of success.
trade barriers. In 1947, richer countries banded
Flows in the Age of Globalization
together to reduce taxes on imports or tariffs under the
General Agreement Tariffs and Trade (GATT) which was Trading
later transformed to the World Trade Organization
International trading, or the economic
(WTO) in 1994. Husain (2011) also identified modern
exchanges and deals between countries, is enable by
technology developments as a key driver of
international fiscal payments where private banks and
globalization that facilitated faster communication and
central banks of particular nations play impotant roles
 CONTEMPORARY REVIEWER

Global trading concerns importation and  It will be difficult for poor countries to catch up
exportation. because they are caught in unequal exchanges
and under development.
Capital Movement
Institutions and Actors Shaping Economic Globalization
One manifestation of capital movement is
foreign investments. Foreign investment can be World Bank
categorized as commercial loans, official flows or
 Facilitate investments of capital for member
foreign direct investment.
countires
Movement of People  Fund large-scale projects by providing loans for
member countries
People can migrate to other countries in search
 Implement the Structural Adjustment Policies
of better employment opportunities. In the Philippines,
(SAPs) for countries borrowing from the World
the number of Overseas Filipino Workers during the
bank.
period of April to September 2018 was estimated at 2.3
million. International Monetary Fund (IMF)

Cultural Globalization  Provide short-term emergency loans.

 Help bring enormous flow of foreign money
Refers to the increasing “contact between
through loans and speculative investment.
people and their cultures - their ideas, their values, and
their ways of life”. This significant change is getting World Trade Organization (WTO)
deeply entrenched in contemporary society. It is also
 Create rules for global trade and investment
linked to globalization of lifestyle such as music, media,
 Aim to reduce tariffs
fashion, food, as well as globalization of knowledge,
 Create agreements for member countries
science and technology.
regarding multilateral policies that push
Political Globalization governments to relax regulations on
environment, food safety, and product quality
It is the enlargement of the international
 Encourage countries to deregulate economies
political system and its establishments, where inter-
regional dealings, including trade, are managed. The World Bank, IMF and the WTO aim to make sure
that quicker and easier movement of products, capital,
Conventional politics usually happens within
and trading between countries is achieved by
national political spheres. In political globalization on
implementing international policies, reform, and
the other hand, political decision-making can transcend
agreements. One obejective of global financial and
the boundaries of nations.
trading institutions is to enforce common trading and
Assumptions behind the Pursuit Globalization financial flows standards and policies to all countries.
Another common goal is to “deregulate” firms.
As a paradigm of development, globalization
operates on certain assumptions about a desirable Positive Effects of Globalization
economy and development. However, these
 Increased Income
assumption must be tested in the real world. Some
 More Employment
critiques regarding the unreliability of these
 Less Poverty
assumptions are summarized:
The Effects of Global Trading on the Philippine Local
Rapid economic growth will lead to development.
Economy
 Economic growth is only one aspect of
Because of enhance global trading, cheap
development.
imported vegetables flood the local market. Local
Trading will bring prosperity. consumers and businesses find it cheaper to buy
imported agricultural products that locally produced
 Trading benefits some more than others. goods. Local producers are unable to compete with the
Poor countries will benefit from barrowed funds. modern and highly-supported vegetables production
from developed countries such as China, Australia, New
 Borrowing of poor countries are copled with Zealand and the Netherlands.
conditions, which make countries compromise
spending for social services and welfare.

Poor countries need to catch up with rich countries by

implementing economic policies towards economic
integration.
 CONTEMPORARY REVIEWER

Lesson 3 and promotes economic interdependencies

among different countries.
The Global Economy
 It is important to note that economic
Definition of Terms globalization goes beyond internationalization.
Economic globalization involves the integration
 Economic globalization: is the expansion of of functions and processes of economic
national economies, the global market driven by activities (Dicken, 2004).
modern technologies and institutional set ups  Economic globalization is driven by the
that promote faster and easier flow of goods "growing scale of cross-border trade of
and capital. it helps people buy and sell things commodities and services" (Shangquan, 2000).
from different countries Critical to economic globalization is global
 Global economy: denotes that the economies economic integration. Economic integration
of various countries are more interconnected means that separate production operations are
from extraction, production, distribution, functionally related to each other and form a
consumption, to disposal of goods and services. unified product or service. Economic
 Internal financial institutions: are global globalization refers to the increasing economic
financial institutions that support a country’s interconnections among countries, driven by
economic growth support to governments and neoliberal principles that emphasize market
now other private sectors. forces with minimal government intervention
 International Monetary Fund: is an (Steger, 2010; Al-Rodhan et al., 2006;
international organization with 183 member Shangquan, 2000). Gills and Thompson (2006)
countries that promotes international monetary argue that globalization has been ongoing since
cooperation and exchange stability to foster human migration began. While early trade
economic growth and high employment and to focused on high-value commodities like spices
provide short-term financial assistance to and gold, modern globalization is distinguished
countries to help ease balance of payments by its scale, economic system restructuring, and
adjustments. the dominant influence of the private sector
 Global civil society: is a system of (Shangquan, 2000).
nongovernment institutions that operate across
geographical borders and organize and mobilize Who are the Actors that Facilitate Economic
for a common issue or cause. These groups are Globalization?
not controlled by governments or businesses
Globalization has opened the doors for other non-state
but focus on making the world a better place.
authority and actors in driving economic globalization.
 Global Corporation: is an enterprise that
engages in activities which add value in more  International Economic Organizations
than one country.  International Monetary Fund (IMF)
 World system: is based on the theory of  World Bank
Wallerstein (1974) that recognizes that social  Organization for Economic Cooperation and
and economic change is not only endogenous to Development
a country, but is affected by its interaction to  (OECD)
exogenous institutions. it explain how the world  Regional Organizations: Association of
is divided into three groups: Southeast Asian
 Economic integration: is a process of combining  Nations (ASEAN), North American Free
or increasing the interconnectivity of national Trade Agreement
economies to the regional or global economies.  (NAFTA)
It helps nations grow by increasing trade,  Multinational Companies (MNCs)
investment, and cooperation.  Dutch and British East India
 Muscovy Company
Economic Globalization
 Royal African Company
 As discussed in the earlier section, central to  Hudson Bay Company
the discussionbabout globalization is its  Central Banks
economic dimension. The phenomenon of  Global Civil Society
economic globalization includes greater  Transnational Advocacy Networks (TAN)
integration of economic activities, products, and
International Monetary Fund (IMF)
systems across the world. As Szentes (2003)
argues, globalization in economic terms extends  An international organization of 183 member
economic projects and relations transnationally countries.
 CONTEMPORARY REVIEWER

 Promote international monetary cooperation  Governments adjust national policies to align

and exchange stability; to foster economic with global realities
growth and high employment; and to provide  Example: Montreal Protocol (1987)
short-term financial assistance to countries to  International treaty to phase out ozone-
help ease balance of payments adjustments. depleting substances
 46 countries signed, showing global cooperation
International Financial Institutions (IFIs)
 NASA projects ozone levels to return to 1980
 The generic name given to all financial levels by 2032 (Watts, 2018)
institutions operating on an international level  Global treaties help address borderless
 Includes development banks and monetary environmental and political challenges
authorities
Effects of Globalization on Governments (Negative
Transnational Corporations Impact)

 Enterprise that engages in activities which add  Local governments attract global investors for
value (manufacturing, extraction, services, economic growth
marketing, etc.) in more than one country.  Leads to industrialization but also negative
consequences:
Lesson 4  Displacement of farmers and conversion of
The Global Interstate System agricultural land
 Global corporations demand lower taxes and
Definition of Terms wages
Global Interstate System:  Conflict between economic performance and
local well-being
 Institutional arrangement of governance  Governments are heavily influenced by
 Addresses regional or globalized issues beyond corporate entities.
a nation state’s scope (Chase-Dunn, 1981)
To Sum It All Up!
Internationalism:
 Globalization reshapes governance and policy-
 Emphasizes diversity and celebrates making
multiculturalism  The Global Interstate System plays a crucial role
 Globalism focuses on the economic aspect of in managing international relations
exchanges between countries and societies.  Governments must balance economic growth
and local sustainability
Introduction to Globalization and the State System
 Internationalism vs. Globalism: A key debate in
 Globalization leads to increased flow of capital, understanding globalization
goods, services, and people
INSTITUTIONS THAT GOVERN GLOBALIZATION
 Modernization in transport, communication,
and financial systems contributes to THE ROLE OF STATE AND NON-STATE ACTORS
interconnectedness
 Traditional state systems are limited in IN GLOBAL GOVERNANCE
addressing globalized issues INTRODUCTION
 Internationalist thinkers emphasize cooperation
over state sovereignty  globalization governance
 The system of institutions, rules, norms, and
The Interstate System (Chase-Dunn’s Definition) procedures that enable international
 A system of unequal and competing states cooperation on issues that cross national
 No single state can impose full control over borders.
others KEY GLOBAL INSTITUTIONS
 Shifting alliances and conflicts affect global
balance of power •United Nations (UN)
 An interstate system governs globalization •Regional Commissions
(Chase-Dunn, 1981)
•World Bank (WB)

UNITED NATIONS (UN)

Effects of Globalization on Governments (Positive
Impact) • 192 member
 CONTEMPORARY REVIEWER

• Addresses peace, security, human rights, and - is a process by which economies are becoming more
development. interdependent and interconnected in terms of
commodity flows including externalities and spillover of
• Works with state and non-state actors.
impacts (Genschel and Jacktenfuchs, 2017).
REGIONAL COMMISSIONS
International financial institution or IFIs
• Groups of officials developing policies for
-are institution that provides support through loans or
economic and social progress.
grants and technical advices to promote a country's
EXAMPLE economic and social development. (Bhargava, 2006).

• Economic Commission for Africa (ECA) Corporation

• Economic Commission for Europe (ECE) -are private institution that produce or manufacture
goods, products, and services for a more expanded
• Economic Commission for Latin America and market usually at the reach of regions or the world.
the Caribbean (ECLAC) Transnational corporations (TNCs) have a more complex
The World Bank( WB) setting where each foreign subsidiary is given some
freedom to develop its own product lines and marketing
 Establish in 944 at the Bretton Woods compared to multinational corporations (MNCs), which
Conference have more of a home or country base taking care of the
 Provides loans for development projects. R&D and marketing, and focus more on exporting their
Key Branches products and services (Iwan,2007).

 International Bank for Reconstruction and INTRODUCTION

Development (BIRD) Check out the proliferation of call centers and business
 International Development Association ( IDA) processing outsourcing (BPO) companies in the
 International Finance Corporation ( IFC) Philippines.
OTHER MAJOR INTERNATIONAL ORGANIZATIONS Most of these companies cater to international
 International Monetary Fund (IMF): Monitors consumers based in US, Australia, New Zealand, and
global economy, provides loans. Europe. According to Philippine Statistics Authority
 World Trade Organization (WTO): Regulates (2018), the Philippines has 851 BPΟ companies, more
global trade. than half of which are call centers (429). The Philippines
 World Health Organization (WHO): Conducts is the call center capital of the world, accounting to 18
global health research. percent of the global market share, US$24.4 B and 7.5
 ILO: Labor standards and worker rights. percent revenue increase in the first quarter of 2018
 FAO: Food security and agriculture. (Sea Limited, n.d.).
 UNESCO: Promotes peace through education HORIZONTAL INTEGRATION
and science.
Happens when a firm gains control of other firms
SPECIALIZED INTERNATIONAL ORGANIZATIONS performing similar marketing functions at the same
 ICAO: Regulates air transport. level in the marketing sequence. For instance, Disney
 IMO: Oversees shipping regulations. bought Pixar, which is also in the entertainment media,
 ITU: Develops communication standards. for $7.4 billion (La Monica, 2006). In the Philippines, an
 WIPO: Intellectual property rights. example of a local market integration is when Landbank
of the Philippines acquired the Philippine Postal Savings
CONCLUSION Bank, for the latter to focus on overseas Filipino worker
clients (ABS-CBN News, 2017).
 Global governance involves international
organizations & non-state actors. VERTICAL INTEGRATION
 Institutions like UN, IMF, WTO, and World Bank
play crucial roles. Happens when one company owns the operations and
 Collaboration is key to solving global challenges. products from one stage to the other along the supply
chain. For example, an iron mining company operates
the steel manufacturing firm. Another instance is when
McDonald's owns the land where its supplies are
MARKET INTEGRATION
located to avoid cost of lease.
DEFINITION OF TERMS
INTERNATIONAL FINANCIAL INSTITUTIONS AND THEIR
Market Integration ROLE IN THE GLOBAL ECONOMY
 CONTEMPORARY REVIEWER

International Financial Institutions (IFIs) are entities that financing has been transformed into grants
provide support through loans, grants, and technical from loans which may strain IFIs’ financial
advice to promote economic and social development in stability (World Economic Forum, 2006).
countries (Bhargava, 2006).
"A SUMMARIZED HISTORY OF THE GLOBAL ECONOMY"
Examples of global and regional IFIs include:
Early Capitalism (16th–18th Century)
 International Monetary Fund (IMF)
 The modern capitalist economy began, but
 Multilateral Development Banks (MDBs) like there were few global economic rules.
the World Bank, African Development Bank
First Wave of Globalization (Before 1914)
(ADB), Inter-American Development Bank, and
European Bank for Reconstruction and  Trade, capital, and migration expanded rapidly.
Development.
 International agreements (like the International
SIGNIFICANCE OF IFIS: Telegraph Union and Universal Postal Union)
helped connect economies
 Purpose: Unlike private institutions, IFIs aim to
foster economic and social progress rather than Post-World War II Growth (Mid-1900s – 1990s)
profit (Buiter & Lankes, 2014).
 The global economy was rebuilt, and
 Functions: Provide loans, technical assistance, multinational corporations (MNCs) spread
and policy based lending: They focus on worldwide.
macroeconomic stability, infrastructure
development, sectoral reforms, and safety net  Political changes, like the fall of the Berlin Wall,
creation. Also work with the private sector for encouraged free trade.
investment and policy reforms to promote Challenges to Globalization (1994–1995 Mexico Crisis
private sector expansion. (International Finance & Early 2000s)
Corporation, 2011).
 Economic crises showed the risks of
CHALLENGES AND ISSUES: globalization.
 Legitimacy: Critics argue that IFIs lack legitimacy  The rise of Asia and digital technology shifted
because major policy decisions and leadership economic power.
come from developed nations, favoring their
interests such as heads of the IMF have always Third Wave of Globalization (Late 1990s – Present)
been European, an American for world Bank,  The Internet, China’s entry into global trade,
and a European for EDRD, thus a clamor for IFIs and the WTO changed the economy.
to select leaders based on merits and not on
national origin. (Bhargava, 2006).  However, financial crises, political instability,
and terrorism created economic problems.
 Effectiveness: Some development projects, like
large-scale land use construction (dam Future Predictions (Fourth Industrial Revolution)
construction), have displaced indigenous
 Experts predict slower growth, more political
communities in some areas like Philippines’
challenges, and shifting global power.
case, raising questions about the ethical
implications (Rivers Watch East and Southeast  To fix this, countries need economic reforms,
Asia, 2003). Social safeguard to ensure human cooperation, and better policies
rights, community and environment well-being
CORPORATIONS
need to be instituted. (Bhargava, 2006).
 Are private institutions that produce or
 Conditionalities: Loans come with terms like
manufacture goods, products, and services for a
privatization, trade liberation, subsidy
more expanded market usually at the reach of
elimination, and limits to public investments are
regions or the world.
agued by the critics that these conditionalities
impose Western free-market policies on TNC AND MNC
developing countries which could be ill-timed
 Transnational corporations (TNCs) have a more
inappropriate, or undesired by receiving
complex setting where eách foreign subsidiary
countries. (Dreher, 2009).
is given some freedom to develop its own
 Financial Capacity and Sustainability: Middle- product lines and marketing compared to
income countries hesitate to borrow due to multinational corporations (MNCs), which have
high transactional costs. Some concessional
 CONTEMPORARY REVIEWER

more of a home or country base taking care of like services and public goods in the absence of
the R&D and marketing, and focus more on a world government.
exporting their products and services (Iwan,  is the combination of informal and formal
2007). ideas, values, rules, norms, procedures,
practices, policies, and organizations that help
GLOBAL CORPORATIONS
all actors-states, IGOs, civil society and NGOs,
 The number of global corporations from TNCs, and individuals— identify, understand,
emerging market economies listed in the and address transboundary problems.
Fortune Global 500 rose from 47 firms in 2005  a set of questions that enable us to work out
to 95 in 2010 (Neubauer, 2014) how the world is, was, and could be governed,
 The capital flows have now started to change and how changes in grand and not-so-grand
from the dominant North-NoPth/Ma North- patterns of governance occurred, are occurring,
South to South-South and South-North capital and ought to occur
flows, most of the South-North coming from
THE UNCERTAINTY OF THE SOVEREIGN TERRITORIAL
China and India (Rajan, 2010).
STATE OR NATION-STATE
TYPES OF MODERN GLOBAL CORPORATIONS (IWAN,
Since the end of the Cold War, the world is heading
2007)
toward a less centralized form of governance.
 IMPORTERS - Businesses or individuals that
As the U.S. struggles with setbacks in Iraq and
purchase goods or services from other countries
Afghanistan, emerging powers like China, Russia, and
and bring them into their own country for sale
Brazil are forming regional alliances, leading to a
or use
multipolar and anti-hegemonic order.
 EXPORTERS - Businesses or individuals that sell
This marks as the beginning of "the post-American
goods or services produced in their own country
world", signals the U.S.'s retreat while other nations
to buyer in other countries
gain economic and political influence. (Zakaria, 2008)
 GROSS DISCONNECT- implies a major gap or
However, after centuries of being the standard for
difference in perspectives, ideas, or
governance, the nation-state is now facing uncertainty.
experiences.

 Global Problems- (climate change, the

proliferation of weapons of mass destruction, a review, the notion of "nation-state" has the following
terrorism, mass atrocities, financial volatilities, elements:
cyber threats, transnational crime, and
a.Continuous and broken territory (preferred)
pandemics
b. Sovereign territor
GLOBAL MARKET INTEGRATION HISTORY
THE RISE OF NON-STATE ACTORS
 IFI - International Financial Institutions.
International organizations in the public and private
 Improved transport, communication, and
sectors are set with higher objectives and goals to
technology, along with supportive policies and
participate in global governance and improving lives.
IFI funding, accelerated global market
This rise also created a new landscape and new
integration.
architectures of global governance wherein multi-
 MNCs and TNCs boosted global and national sector partnerships are present, such as transnational
economies but faced criticism for negative businesses. Further, the loose structures of these
social and environmental consequences. IFIs organizations allow more efficient courses of action
and corporations implemented reforms to than the bureaucracies of nations or states can attain.
improve operations, transparency, and
social/environmental responsibility.
The proliferation of actors that are legitimately
representing stakeholders and contributing concretely
to contemporary global problem-solving means that
we have come a long way from the state-centric model
GLOBAL GOVERNANCE (WEISS,2013)
of traditional international relations. The proliferation
 is the capacity within the international system, of non-state actors has ushered in an age of global
at any given moment, to provide government- partnerships between private and public bodies on
specific issues
 CONTEMPORARY REVIEWER

(Weiss, 2013).

THE UNITED NATION

One important example of a non-state actor, an

international government organization (IGO) playing a
vital role in. the world’s affair, is the United Nations
(UN). The United Nations is an IGO designed to make
the enforcement of international law, security, human
rights, economic development, and social progress
easier for countries around the world.

The UN today is divided into five branches:

1. The UN General Assembly

2. The UN Security Council

3. The International Court of Justice

4. The Economic and Social Council

5. The Secretariat

THE UN GENERAL ASSEMBLY

The main decision-making and representative body is

the assembly, which upholds UN principles through its
policies and recommendations. It includes all member
states and is led by a president elected by them.

THE UN SECURITY COUNCIL

This body can authorize military deployment, mandate

cease-fires, and enforce penalties for non-compliance. It
consists of five permanent members and ten rotating
members.

THE INTERNATIONAL COURT OF JUSTICE

This body settles legal disputes between states under

international law and provides advisory opinions on
legal questions for UN organs and agencies.

THE ECONOMIC AND SOCIAL COUNCIL

assists the UN General Assembly in promoting economic

and social development, as well as cooperation of
member states.

THE SECRETARIAT

headed by the Secretary-General, provides studies,

information, and other-dates when needed by other UN
branches for their meeting.