Module on GEC3- Contemporary World

The Structures of Globalization

Module 2: THE STRUCTURES OF GLOBALIZATION

This module exposes the learners to economic and political arenas of the of the
economic globalization. The Global Economy and Market Integration the discussion
focuses on the process of making the world economy an integral and an element of a
whole. It also covers the position of international financial institutions and global
corporations in the global market integration. The Global Interstate System and
Contemporary Global Governance, the discussion tackles the political side of capitalism
as the states-survival is dependent on the operations of the institutions and
international partnerships which are associated with the capital-accumulation
process.

Topics:

The Global Economy and Market Integration

The Global Interstate System and Contemporary Global Governance

Learning Outcomes:

1. Articulate a stance on global economic integration

2. Explain the role of international financial institutions in the creation of global
economy
3. Narrate a short story of global market integration in the twentieth century
4. Identify the attributes of global corporations
5. Explain the effects of globalization on governments
6. Identify the institutions that govern the international relations
7. Differentiate internationalism to globalism

Time Frame:

Week 4- 5
Week 6- Preliminary Examination

Learning Content:

Words to Go By:

Market Integration -process of economic transformation within a region, bloc

or group of countries, aimed at pegging one price for the
same product, thereby directly or indirectly merging
previously separate markets or economic communities into
one single market or economic community
Global Corporation -a company that operates in a number of countries, in
contrast with companies that operate only in one or few
countries.
Lender of last -a financial institution that offers loans to countries,
resort banks, or other financial institutions in times of crisis or
that are in some sort of financial difficulty and hence
considered highly risky to be served by typical lenders.

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Overview:

The current wave of globalization is most of the time focused on the economic
dimensions. Mostly of the people’s activities around the globe are engaged in buying or
selling, imports and exports, producing products and making profits, travelling,
migrating; even the infrastructure developments and government policies are all
guided and influenced by economic factors. These economic activities are what brings
us to today’s wider and speeded integration into the global economy which no one can
escape from. But as this new wave of globalization is reaching our shores, many of
the world’s people are turning their backs on it. Many are fed up with the political and
economic system that resulted in economic inequality, social instability and in some
countries- mass immigration, even if it leads to economic growth and cheaper
products.

The World Economic Forum held in 2019 presented that in 2000s, global
exports reached a milestone, as they rose to about a quarter of global GDP. Trade, the
sum of imports and exports, consequentially grew to about half of the world GDP. In
some countries, like Singapore, Belgium, or others, trade is worth much more than
100% of GDP. Majority of global population has benefited from this: more people than
ever before belong to the global middle class, and hundreds of millions achieved that
status by participating in the global economy.

On the other hand, negative impacts of the current set up of globalization is

expanding too, through the global effect of environmental degradation and climate
change.

The following are some of the quotable quotes on economic globalization by some of the
prominent individuals.

“No generation has had the opportunity, as we now have, to build a global economy that leaves
no-one behind. It is a wonderful opportunity, but also a profound responsibility.” - Former U.S.
President Bill Clinton

The whole of the global economy is based on supplying the cravings of two percent of the
world's population.” - Bill Bryson, Best-selling Author

"I think there's a lot of merit in an international economy and global markets, but they're not
sufficient because markets don't look after social needs." - George Soros, Chairman, Soros
Fund Management

“Henry Ford was right. A prosperous economy requires that workers be able to buy the
products that they produce. This is as true in a global economy as a national one.” - John J.
Sweeney, Former President of the AFL-CIO

THE GLOBAL ECONOMY AND MARKET INTEGRATION

The global economy refers the exchange of goods and services integrated into a
huge single global market. It is virtually a world without borders, inhabited by
marketing individuals and/or companies who have joined the geographical world with
the intent of conducting research and development and making sales.

International trade permits countries to specialize in the resources they have.

Countries benefit by producing goods and services they can provide most cheaply and

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by buying the goods and services other countries can provide most cheaply.
International trade makes it possible for more goods to be produced and for more
human wants to be satisfied than if every country tries by itself to produce everything
it needs.

The global economy comprises several characteristics, such as:

 Globalization: Globalization describes a process by which national and regional

economies, societies, and cultures have become integrated through the global
network of trade, communication, immigration, and transportation. These
developments led to the advent of the global economy. Due to the global
economy and globalization, domestic economies have become cohesive, leading
to an improvement in their performances.

 International trade/ Free Trade: International trade is an impact of

globalization. It refers to the exchange of goods and services between different
countries, and it has also helped countries to specialize in products which they
have a comparative advantage in. This is an economic theory that refers to an
economy's ability to produce goods and services at a lower opportunity cost
than its trade partners.

 International finance: Money can be transferred at a faster rate

between countries compared to goods, services, and people; making
international finance one of the primary features of a global economy.
International finance consists of topics like currency exchange rates and
monetary policy.
 Global investment: This refers to an investment strategy that is not
constrained by geographical boundaries. Global investment mainly takes place
via foreign direct investment (FDI).

Moreover, the global economy’s operation is shaped and influenced by

governments, global or multi- national corporations (MNCs) and global institutions.

The government functions as the leading policymakers and implementers of the

globalization. Some of the basic economic functions of the government is to protect the
state private property and maintaining law and order / national defense, raising taxes,
providing public services not provided in a free market (e.g. health care, education,
street lighting), limit market failure through the regulation of markets, e.g. regulations
on environment/labor markets/monopoly, macro-economic management, e.g. use of
fiscal and monetary policy to control business cycle – recession and inflation and
reducing inequality/poverty.

1. Protection of private property / national security. If a country has a problem with

crime, then it will discourage investment and the quality of life. The role of the
government is to ensure basic law and order, through ensuring the rule of law.
This involves protecting the rights to private property. In a free market, there is
an incentive to free ride on the provision of law and order, therefore it tends to
be under-provided. A government can pay for policing through general taxation.
A similar function of the government is to provide for national defense – paying
for an army. It is military spending which often was the primary cause of the
first taxes. Kings raising taxes to pay for his army. Policing and courts are an
example of a public good – which usually require government provision.

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2. Raising taxes. To provide public goods and public services, the government
needs to raise tax. They can do this in a variety of ways – taxes on goods
(customs duties), taxes on income, taxes on people (poll tax) and tax on
property and land. The government must consider the best way of raising taxes.
A good tax is efficient (doesn’t distort economic activity); easy to collect (hard to
avoid); fair (may involve taking a higher proportion of high earners). If the
government run a budget deficit, they will need to raise the shortfall through
borrowing and selling government bonds.

3. Providing public services. Public goods tend to be not provided in a free market
because of the free rider problem. Therefore, these goods and services need to
be provided by the government. Examples of public goods include street
lighting, roads and law and order. There are also public services which are
provided piecemeal in a free market, like education and health care. However,
the government may feel that these merit goods are important for equality and
improving labor productivity. Therefore, most governments provide some form
of state provided education and health care.

4. Regulation of markets. Adam Smith in ‘Wealth of Nations‘ noted that in a free

market, firms were often able to create monopoly power. This enables them to
charge excessive prices to consumers. The government may need to regulate
monopoly power, e.g. prohibiting mergers or setting price limits in natural
monopolies (industries like tap water and railways).
Also, firms may develop monopsony power, where they are able to pay low
wages and provide poor working conditions for workers. In this case, the
government may need certain regulations on labor markets, such as minimum
wages, minimum age of working and provide basic levels of health and safety.

5. Macroeconomic management. Capitalist economies can be subject to economic

cycles – economic booms and recession. Recessions can lead to lost output and
higher unemployment. In this case, the government may use fiscal policy to
influence aggregate demand. The government may also use monetary policy,
though, in recent years, many governments have delegated monetary policy to
an independent Central Bank. In addition to trying to solve recessions, the
government will also try to avoid inflation. This can involve higher taxes and
higher interest rates.

6. Reducing inequality/poverty. In a capitalist economy, we may see a growth in

inequality and poverty. This can be due to inherited wealth and opportunity. It
can also be due to monopoly power. The government may feel the need to
ensure everyone has an equal opportunity, for example providing education so
even those from poor family have the opportunity to get qualifications. It may
also involve redistributing income from high earners to low-income earners, e.g.
progressive taxes such as higher rate of income tax and providing means-tested
benefits such as income support/housing benefit and state pension.

ROLE OF GLOBAL INSTITUTIONS IN THE ECONOMIC GLOBALIZATION

The Global Institutions are partly managed and funded by the governments and
their representative’s functions. They aim to provide a level playing field for all the
countries and develop economic cooperation. These institutions also help in solving
the currency issues among countries related to stabilizing the exchange rates. There

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are four major international economic institutions, namely, WTO, WB, IMF, and
UNCTAD.

World Trade Organization (WTO)

WTO was formed in 1995 to replace the General Agreement on Tariffs and Trade
(GATT), which was started in 1948. GATT was replaced by WTO to form as a global
international organization dealing with the rules of international trade among
countries.

The main objective of WTO is to help the global organizations to conduct their
businesses. WTO, headquartered at Geneva, Switzerland, consists of 153 members
and represents more than 97% of world’s trade.

The main objectives of WTO are as follows:

a. Raising the standard of living of people, promoting full employment, expanding
production and trade, and utilizing the world’s resources optimally
b. Ensuring that developing and less developed countries have better share of growth
in the world trade
c. Introducing sustainable development in which balanced growth of trade and
environment goes together

The main functions of WTO are as follows:

a. Setting the framework for trade policies
b. Reviewing the trade policies of different countries
c. Providing technical cooperation to less developed and developing countries
d. Setting a forum for addressing trade-related disputes among different countries
e. Reducing the barriers to international trade
f. Facilitating the implementation, administration, and operation of agreements
g. Setting a negotiation forum for multilateral trade agreements
h. Cooperating with the international institutions, such as IMF and World Bank for
making global economic policies
i. Ensuring the transparency of trade policies
j. Conducting economic research and analysis

WTO has the following advantages:

(a) Promoting peace within nations
Leads to less trade disputes. WTO helps in creating international cooperation, peace,
and prosperity among nations.

(b) Handling the disputes constructively

Helps in lesser trade conflicts. When the international trade expands, the chances of
disputes also increase. WTO helps in reducing these trade disputes and tensions
among nations.

(c) Helping consumers by providing choices:

Implies that by promoting international trade, WTO helps consumers in gaining access
to many products.

(d) Encouraging good governance:

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Accelerates the growth of a country. The rules formulated by WTO encourage good
governance and discourage the unwise policies that lead to corruption in a country.

(e) Stimulating economic growth:

Leads to more jobs and increase in income. The policies of WTO focus on reducing
trade barriers among nations to increase the quantum of import and export.
World Bank (WB)
The World Bank was established in July 1944 at the Breton Woods Conference
which was pursuing three goals: facilitate reconstruction, which led to the creation of
International Bank for Reconstruction and Development (IBRD),
ensure financial and monetary stability, which led to the creation of IMF
restore and expand trade, it started with the GATT and it is only in 1995 that the WTO
was created.

The IBRD initial mission was to rebuild Europe after World War II. Its first loan
was extended in May 1947, to France for an amount of $250 million to finance post-
war reconstruction. It was one of the largest loans in real terms made by the Bank in
its first 50 years of operation. Many developed nations who are now donors, were also
borrowers, such as Austria, Belgium, Denmark, Japan, Italy etc. Belgium received four
loans between '49 -'57, the last three for the development of Congo.

Today, the World Bank Group is one of the world's largest sources of
development assistance. In fiscal year 2006, it provided about $23.6 billion in loans to
developing countries and it works in more than 100 developing economies. Today’s
primary focus is helping the poorest people and the poorest countries. World Bank
Group is a close association of five institutions: the IBRD, IDA, IFC, MIGA and ICSID.

The first institution created in 1944 is the IBRD. It has 184 member countries.
Almost all UN members are members of the World Bank with two exceptions: Cuba
and North Korea. It provides loans and guarantees at market rates that remain
nevertheless lower than those of commercial banks because IBRD has AAA bond
rating which enables it to borrow in capital markets at low cost and, therefore, to offer
its clients good borrowing terms. The bank earns enough income to ensure its
financial strength and sustain its development activities and to support other
institutions like IDA.

The second institution is the IDA, the International Development Association,

which was created in 1960. It is the largest source of concessional financial assistance
for the poorest countries. It gives loans without charging interest. It is financed by its
own resources and by donor governments, including some emerging countries. Donors
meet every three years to replenish IDA. Given the increased level of its operations,
IDA needs fresh contributions on a regular basis.

The third institution is the IFC, International Finance Corporation, established

in 1956. IBRD and IDA are lending to sovereign governments or with government
guarantees. In the late fifties, it was felt that this was not sufficient to ensure the
development of the private sector. IFC was therefore created. It requires no
government guarantees. It promotes sustainable private sector investment in
developing countries to reduce poverty.

The fourth institution is MIGA, Multilateral Investment Guarantee Agency,

established in 1988. It helps encourage foreign investment in developing countries by
providing guarantees to foreign investors against losses caused by non-commercial
risks, such as expropriation, currency inconvertibility and transfer restriction, breach

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of contract, war, and civil disturbance. It provides advisory services to help countries
attract and retain foreign investment. It works in close cooperation with IFC.

The fifth institution is the ICSID, International Centre for Settlement of

Investment Disputes, created in 1966. It helps in mediating, conciliating disputes
between foreign investors and host countries. It conducts research and published
activities in the areas of arbitration law and foreign investment law.

The Role of World Bank in the Global Development

1. The changing Bank: priorities and approach

2. The overarching goal in poverty reduction
3. Good governance and fight against corruption
4. Debt relief
5. Inclusion of the poor
6. Stabilizing assistance

International Monetary Fund (IMF)

IMF, established in 1945, consists of 187 member countries. It works to secure

financial stability, develop global monetary cooperation, facilitate international trade,
and reduce poverty and maintain sustainable economic growth around the world. Its
headquarters are in Washington, D.C., United States.

The objectives of IMF are as follows:

a. Helping in increasing employment and real income of people
b. Solving the international monetary problems that distort the economic development
of different nations
c. Maintaining stability in the international exchange rates
d. Strengthening the economic integrity of the nations
e. Providing funds to the member nations as and when required
f. Monitoring the financial and economic policies of member nations
g. Assisting low developed countries in effectively managing their economies
WTO and IMF have total 150 common members. Thus, they both work together where
the central focus of WTO is on the international trade and of IMF is on the
international monetary and financial system. These organizations together ensure a
sound system of global trade and financial stability in the world.

United Nations Conference on Trade and Development (UNCTAD)

UNCTAD, established in 1964, is the principal organ of United Nations General
Assembly. It provides a forum where the developing countries can discuss the
problems related to economic development. UNCTAD is headquartered in Geneva,
Switzerland and has 193 member countries.

The conference of these member countries is held after every four years.
UNCTAD was created because the existing institutions, such as GATT, IMF, and World
Bank were not concerned with the problem of developing countries. UNCTAD’s main
objective is to formulate the policies related to areas of development, such as trade,
finance, transport, and technology.

The main objectives of UNCTAD are as follows:

a. Eliminating trade barriers that act as constraints for developing countries
b. Promoting international trade for speeding up the economic development

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c. Formulating principles and policies related to international trade

d. Negotiating the multinational trade agreements
e. Providing technical assistance to developing countries especially low developed
countries
It is important to note that UNCTAD is a strategic partner of WTO. Both the
organizations ensure that international trade helps the low developed and developing
countries in accelerating their pace of growth. On 16 th April 2003, WTO and UNCTAD
also signed a Memorandum of Understanding (MoU), which identifies the fields for
cooperation to facilitate the joint activities between them.

ROLE OF THE GLOBAL CORPORATIONS IN THE GLOBAL ECONOMY

The Global Corporation and Multinational Corporations are large firms which are
incorporated in one country which own, control, or manage production and
distribution facilities in several countries. Therefore, these multinational corporations
are also known as transnational corporations. They transact business in many
countries and often operate in diversified business activities. The movements of foreign
capital take place through the medium of these multinational corporations. In this
sense, the multinational corporations are important source of foreign direct investment
(FDI). Besides, it is through multinational. The efficiencies of the multinational
corporations in production and distribution of goods and services arise from
internalizing certain activities rather than contracting them out to other firms.
Managing a firm involves which production and distribution activities it will perform
and which activities it will contract out to other firms and individuals. In addition, a
big firm may decide to set up and operate business units in other countries and/ or
set up production units in developing countries to benefit from advantages of location.
For examples, it has been found that giant American and European firms set up
production units to explore and refine oil in Middle East countries because oil is found
there. Similarly, to take advantages of lower labor costs, and not strict environmental
standards.

Alternative Methods of Foreign Investment by Multinational Companies:

To increase their profitability many giant firms find it necessary to go in for
horizontal and vertical integration. For this purpose, they find it profitable to set up
their production or distribution units outside their home country. The firms that sell
abroad the products produced in the home country or the products produced abroad
to sell in the home country must decide how to manage and control their assets in
other countries. In this regard, multinational firms must choose which mode of control
over their assets they should adopt.

There are four main modes of foreign investment:

1. Agreement with Local Firms for Sale of MNCs Products: A multinational firm can
enter into an agreement with local firms for exporting the product produced by it in
the home country to them for sale in their countries. In this case, a multinational firm
allows the foreign firms to sell its product in the foreign markets and control all
aspects of sale operations.

2. Setting Up of Subsidiaries: The second mode for investment abroad by a

multinational firm is to set up a wholly owned subsidiary to operate in the foreign
country. In this case, a multinational firm has complete control over its business
operations ranging from the production of its product or service to its sale to the
ultimate use or consumers. A subsidiary of a multinational corporation in a particular
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country is set up under the Companies Act of that country. Such subsidiary firm
benefits from the managerial skills, financial resources, and international reputation
of their parent company. However, it enjoys some independence from the parent
company.

3. Branches of Multinational Corporation: Instead of establishing its subsidiaries,

multinational corporations can set up their branches in other countries. Being
branches they are not legally independent business unit but are linked with their
parent company.

4. Foreign Collaboration or Joint Ventures: The multinational corporations set up joint

ventures with foreign firms to either produce its product jointly with local companies
of foreign countries for sale of the product in the foreign markets. A multinational firm
may set up its business operation in collaboration with foreign.

THE GLOBAL INTERSTATE SYSTEM AND CONTEMPORARY GLOBAL

GOVERNANCE (Regional Economic Integration)

The Global economic institutions, such as WTO, IMF, WB, and UNCTAD aim at
promoting economic cooperation worldwide. A similar effort is made regionally through
regional economic integration that is an agreement between the countries to
expand trade with mutual benefits. Regional economic integration involves removing
trade barriers and coordinating the trade policies of the countries.

It occurs because of various reasons, which are mentioned as follows:

(a) Shared culture:

Involves similarity in language, religion, norms, and traditions of the countries that
prompt them to trade with each other. This commonality facilitates the smooth flow of
communication among countries. Same language of the countries helps the
organizations to understand the complexities of the targeted markets.

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(b) History of political and economic dominance:

Affects the integration among the countries. For instance, the rule of Britishers has
introduced the English language in India that later became a widely used language.
Thus, former colonial power facilitates the shared culture and language. It is easy for
organizations to target the markets if culture and language is similar.

(c) Regional closeness:

Helps in maintaining strong economic relationships among the countries. The
countries with same border have access to effective and direct transportation that
increases the probability of trade between them.

Regional economic integration is done through various agreements.

These agreements are called as trade blocs

The discussion of these agreements is given as follows:

(a) Customs Union:

Allows the trade of goods and services among the member countries without
any custom duties and tariffs. In customs union, a group of countries forms common
trade policies that decide the common tariff for trading goods and services from rest of
the world and ensures no tariff for participating countries.

In customs union, the import duties and regulations are same for all the
member countries. It can be said that customs union is a free trade zone with a
common tariff for rest of the world.

(b) Free Trade: 

It is wherein international trade (the importation and exportation) left to its
natural course without tariffs and non-
tariff trade barriers such as quotas, embargoes, sanctions, or other restrictions.
 Tariffs - taxes or duties to be paid on a class of imports or exports
 Embargo - a government-instituted prevention of exports to a certain country.
 Official ban on trade or other commercial activity- The United States has
imposed several long-running embargoes on the other countries including
Cuba, North Korea and Iran.
 Economic sanctions - commercial and financial penalties applied by one or
more countries against targeted country, group, or individual.

Free Trade Areas – are group of countries within which tariffs and non-tariff trade
barriers between the members are generally abolished but with no common trade
policy towards non-members. Both in the sense of geography and price, it is the
foundation of these trading agreements. However, tariffs are not necessarily
completely abolished for all products. Free trade areas-imposed exclusivity among its
members since the world is not entirely a free trade economy.

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World’s Free Trade Areas

North American Free Trade Agreement (NAFTA)

Free trade between the three member nations, Canada, the US and Mexico.
Effective on January 1, 1994 -Although tariffs were not fully abolished until 2008 by
2014 total trilateral merchandise trade exceeded US$1.12 trillion
trade with Canada and Mexico supports more than 140,000 small and medium size
businesses and over 3 million jobs in the US.
Gains in Canada are reportedly even higher, with 4.7 million new jobs added since 19
93. Canada is also the largest exporter of goods to the US

Association of Southeast Asian Nations Free Trade Area (AFTA)

The original members were Brunei, Indonesia, Malaysia, Philippines, Singapore 
andThailand. Four countries have subsequently joined: Vietnam, Laos, Myanmar, and
Cambodia. The AFTA was signed in January 1992 in Singapore.
The bloc has largely removed all export and import duties on items traded between th
e nations.

It has also entered into agreements with a number of other nations, including 
China, eliminating tariffs on around 90% of imported goods. The AFTA
nations had a combined GDP of US$2.3 trillion in 2012, and they are home to 600
million people.

Southern Common Market (MERCOSUR)

COMESA utlimately aims to remove all barriers to intra-regional trade, starting 
with
preferential tariffs and working towards a tariff-free common market and economic
union in both within Africa and globally.

Not Free Trade Areas yet Union and Partnership Agreements

European Union (EU

It
is a single market, which is like a free trade area in that it has no tariffs, quotas, or
taxes on trade.
The 28 member countries of the EU Austria, Italy, Belgium, Latvia, Bulgaria, Lithuan
ia, Croatia, Luxembourg, Cyprus, Malta, Czech Republic, Netherlands,
Denmark, Poland,Estonia, Portugal, Finland, Romania, France, Slovakia, Germany, S
lovenia, Greece, Spain, Hungary, Sweden, Ireland, United Kingdom. The European
Union's GDP was estimated to be €14.8 trillion or $17.1 trillion (nominal) in 2016.

European Economic Community (EEC) or Common Market
In 1957, the Treaty of Rome established the ECC.
However, it was not until 1986 that the Single European Act wassigned. This treaty fo
rmed the basis of the single market as we know it, as it aimed to establish the free
flow of trade across EU borders. By 1993 this process was largely complete.

Trans-Pacific Partnership (TPP)

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru,
Singapore and Vietnam have just signed the trade pact formerly known as the Trans-
Pacific
Partnership
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 In the absence of the US, it has been renamed the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP)
 Signed February 04, 2016
 The deal covers a market of nearly 500 million people, despite the US pullout.
The Transatlantic Trade and Investment Partnership
 The Transatlantic Trade and Investment Partnership is a deal currently being negoti
ated
between the EU and the US.
 It would cover 45% of global GDP.
 Center for Economic Policy Research
has estimated that the deal would be worth $134
billion a year for the EU and $107 billion for the US – although opponents have dispu
ted
these figures.

(c) Common Market:

Refers to an agreement where countries join together to eliminate the trade
barriers. The unique feature of common markets is that they allow free movement of
goods, labor, and capital among the countries. Common markets are formed to
eliminate the physical and fiscal barriers, where physical barriers include borders and
fiscal barriers include taxes. These barriers hamper the freedom of movement of the
labor and capital within the nations.

The formation of common markets helps in increasing employment

opportunities and gross domestic product of the participating nations. In a common
market, the organizations benefit from economies of scale, lower costs, and high
profitability, whereas consumers benefit from increased choice of products and low
prices.

The aims and objectives of the common market are as follows:

a. Attaining sustainable development of the participating nations
b. Promoting mutual development in all fields of economic activities
c. Adopting policies and programs for raising the standard of living of the
residents and fostering closer relations among participating nations
d. Facilitating cooperation among participating nations to maintain peace,
security,
and stability
e. Strengthening the relations between the countries and the rest of the world.

Despite the positive declarations of these global interstate partnership from

goals, benefits, advantages and promise of helping the poor countries develop, Stiglitz,
former WB Chief economist, acknowledges that globalization has its “discontents”
because we have no world government accountable to the people of every country, to
oversee the globalization process. Instead we have a system that might be called global
governance without global government. Indeed, only bureaucrats, diplomats, big
businessmen, and economist are admitted into the “boardrooms” of the global
institutions and/ or organizations. Common folk affected by trade policies- from
farmers to workers to indigenous people to migrants- are relegated, at times allowed to
protest globalization near the center of power but most of the times ignored. As Noah
Smith exposed what he calls “dark side of globalization”.

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The Structures of Globalization

Guide Questions for Discussions:

1. Why is globalization said to be a choir of different voices?

2. What sectors shape and influence the global economy’s operation? How do they
interact with each other?
3. How did the world transition from the gold standard to the Bretton Woods
system? What was its immediate impact?
4. According to Wallerstein’s world system analysis, to what group does the
Philippine belong? Is his analysis reflective of current Philippine conditions?
Explain.
5. Can a core country become peripheral, and vice versa? Explain.
6. Why do critics of capitalist globalization argue that regulation, rather than
deregulation, is needed?

Learning Task 4: Writing a Position Paper

1. Research any current foreign or local government economic program/ project.
Introduce and provide its background. Discuss the government, global
institutions [and global corporations] role in the project development, and the
pros and cons on the country’s economy.
2. Write a Position Paper supporting or contesting the purported benefits of the
project/ program towards economic globalization.
3. Save your work in a document file.
4. Date of submission, TBA

References:

Primary Source:

San Juan, David Michael M. Journeys Through Our Contemporary World.

Quezon City: Vibal Group, Inc., 2018.

Electronic References:

https://www.economicsonline.co.uk/Global_economics/Introduction_to_the_global_ec
onomy.html

https://www.edology.com/blog/accounting-finance/how-does-global-economy-work/

https://www.economicshelp.org/

https://www.economicsdiscussion.net/economic-development/mncs/role-of-mncs-in-
developing-countries-.

https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-
labor/economics-terms-and-concepts/global-economy

http://www.egmontinstitute.be/content/uploads/2014/01/The-role-of-the-World-
Bank-in-global-development.htm

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The Structures of Globalization

http://www.egmontinstitute.be/content/uploads/2014/01/The-role-of-the-World-
Bank-in-global-development.htm

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