Lecture 5.1 - International Economy PDF

International Political Economy Contemporary World Department of Political Science AMR SOLON SAQUIDO SISON Rhodora Lynn Tababa  International Political Economy (IPE) It is a sub-field of Political Science which deals with the convergence of internati...

International Political Economy Contemporary World Department of Political Science AMR SOLON SAQUIDO SISON Rhodora Lynn Tababa  International Political Economy (IPE) It is a sub-field of Political Science which deals with the convergence of international political and economic forces Ex. Powerful nations having dominant multi-national corporations (MNCs) These MNC control global markets and they are representatives of the interests of their home nations IPE is also responsible for giving the most mainstream discussion on Globalization Economic globalization became the major basis of defining Globalization Globalization is often associated with Western liberalism Free trade, privitization, and foreign direct investments became major parts of Globalization  Global Trade and Politics Since the 1990's a more open global trade system was adopted Free Trade-reduction of barriers to trade among nations Removal of Tariffs (taxes levied on imported products) Ex. Since the Philippines joined the ASEAN Free Trade system there is an increase of Thailand and Indonesia sourced Cars (Montero, Hilux, Avanza, and Expander) But this open and liberal trading system created major problems Domestic firms are pushed out by the entry of cheaper imported products Decline of Marikina Shoe industry due to the entry of cheaper Chinese and Vietnamese shoes Free Trade favors mainly more developed nations and their MNCs  IPE and the Global System IPE can also discuss about the global world order Each economic order creates the 'powerful' and the 'weak' With the current system the international arena is organized mainly based on the Western dominated system World Trade Organization-is a product of this world system It mainly sustains free trade by its protection against tariffs One nation can use the WTO to pressure other countries to open their Markets This can change depending on the powerful economies and the crisis the occurs  Contemporary History of Global Order COLD WAR Period Nations are traditionally divided by culture, geography, religion, colonial influence and so on Since the end of WWII global division was more on economic and ideological terms FIRST WORLD-Western Nations under US-Euro leadership SECOND WORLD-Communist bloc under the control of the Soviet Union Also include CHINA, North Korea, Vietnam THIRD WORLD- Developing Nations like the Philippines but subjected to the Super Power conflict  World Division after Cold War The economic turbulence in the 80's and the political dissolution of the SOVIET system led to economic and political changes in many nations Economic ORDER became the main point of division DEVELOPED vs DEVELOPING - conflicting dichotomy Level of DEVELOPMENT became the main basis for global division SOCIO-ECONOMIC CONDITION-the basis for clasification WESTERNIZATION- buzz word for development DOMINATION of the REST by the WEST and its merry MEN  2008 and the GLOBAL DIVISION Crisis in the WEST led to the changes in Gobal Order the ECONOMIC recession in the Developing World led to the rise of the REST BRIC(S)-Jim Oneil Classified them as regional powers BRAZIL-Largest Economy in LATIN AMERICA RUSSIA-Major Economy in Eastern Europe and controls vast energy (oil and natural gas) resources outside of the Middle East INDIA- Largest Economy in South Asia CHINA-Second Largest Economy in the World and controls the global production chain SOUTH AFRICA- Major regional economic power in Africa not part of the original BRIC  the REST followed There is a shift in economic growth and activity from the West (Europe and Amercia) and Japan to the developing world. East Asian Tiger Economies (South Korea, Taiwan, SIngapore,) became the more succesful 'catch up' economies Second Tier Tiger Economies-Mainly South East Asian Economies (Thailand, Indonesia, Malaysia) became another examples of the growth in the East Next Round Players (soon to be tigers) Philippines, Vietnam, and other Hight Growth Economies in the Continent are promising cast for development  Points TIGER Economies-used to represent the fast and high growth nations mostly found in East Asia Japan started the trend then followed by South Korea, Taiwan, SIngapore, and HK. ASEAN nations followed the trend but not all succeded These economies started from the pits of poverty But with high economic growth for 2 decades these countries became major trading nations they rely on EXPORT for their development Most exports began with agriculture products and textiles then transitioned to machineries and eventually to high tech products  China-Breaking from the Ranks China greatly benefited the 2008 crisis China was able to become the main creditor of the US because of the increasing debt of America. Debt burden was gretly strained by the War on Terror campaign and the 2008 Crisis If you have access to Netflix watch THE BIG SHORT (Brad Pitt Film)- The movie explains the cause of the 2008 crisis. China's consistent economic growth has propelled the once backward nation into an economic Titan. Its economic growth is fueling its military industry  China and the Rest China's Rise as a possible super power. https://www.youtube.com/watch?v=1SBnK9XIlZE China's Military development. https://www.youtube.com/watch?v=BEEP_XkON-g&pbjreload=10 China's growth may also spell new forms of inequity Economic- Sino centric growth will undermine others like the West and other Countries that are not geared towards a more China based economic activity Military - Greater growth in the Military Spending will lead to security problems for other nations (see Philippine's claim of the Spratly's)