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The Contemporary World Attributes, Qualities or Characteristics of Globalization UNIT I: Globalization Concepts, Globalization has four Meanings, Features, and Dimensions characteristics or qualitie...

The Contemporary World Attributes, Qualities or Characteristics of Globalization UNIT I: Globalization Concepts, Globalization has four Meanings, Features, and Dimensions characteristics or qualities. These are: 1. It involves both the creation of new social Globalization is the process in which networks and the multiplication of existing people, ideas and goods spread throughout connections that cut across traditional, the world, spurring political, economic, cultural, and more interaction and integration between geographical boundaries. the world sculptures, governments and 2. Globalization is reflected in the expansion economies. and the stretching of social relations, Globalization is a process of interaction and activities, and connections. integration among the people, companies, 3. Globalization involves the intensification and governments of different nations, a and acceleration of social exchanges and process driven by international trade and activities. investment and aided by information 4. Globalization processes do not occur Technology. merely or an objective, material level but they also involve the subjective plane of One principal driver of globalization is human consciousness. Without erasing technology. Economic life is dramatically local and national attachments, the transformed by advancement in information compression of the world into a single place technology. All sorts of individual economic has increasingly made global the frame of actors like consumers,investors, and reference for human thought and action. businesses which are valuable new tools for identifying and pursuing economic Historical Periods of Globalization opportunities, including faster and more 1. The Prehistoric Period (10000 informed analyses of economic trends BCE-3500 BCE) around the world, easy transfers of assets, In this earliest phase of globalization, and collaboration with far-flung partners are contacts among hunters and gatherers–who provided by information technologies. were spread around the world – were geographically limited. In this period due to Globalization is an expansion, and absence of advanced forms of intensification of social relations and technology, globalization was severely consciousness across world time and limited. world space. It is about growing 2. The Pre-modern Period (3500 BCE- worldwide connectivity according to 1500 CE) Steger. In this period the invention of writing and the wheel were great social and technological Globalization is considered a boosts that moved globalization to a new multidimensional process involving level. The invention of wheel in addition to economic, political, technological, roads made the transportation of cultural, religious and ecological people and goods more efficient. dimensions. Ontheother hand writing facilitated the spread of ideas and inventions. 3. The Early Modern Period (1500-1750) ∙ Trading Systems It is the period between the Enlightenment The result of these powerful forces resulted and the Renaissance. In this period, in the wide gap between therichand the European Enlightenment project tried to poor countries. Major Sources of Economic achieve a universal form of morality and Growth across Countries: law. This with the emergence of European 1. Property rights metropolitan centers and unlimited material 2. Regulatory institutions accumulation which led to the capitalist 3. Institutions for macro-economics world system helped to strengthen 4. Stabilization globalization. 5. Institutions for social influence 4. The Modern Period (1750-1970) 7. Institutions for conflict management Innovations in transportation and communication technology, population 2. Political Dimension explosion, and increase in migration led to This refers to an enlargement and more cultural exchanges and transformation strengthening of political interrelations of traditional social patterns. Process of across the globe. industrialization also accelerated. Political Issues that Surface in this 5. The Contemporary Period (from 1970 to Dimension present) 1. The principle of state sovereignty. The creation, expansion, and acceleration 2. Increasing impact of various of worldwide interdependencies occurred in intergovernmental organizations. a dramatic way and it was a kind of leap in 3. Future shapes of regional the history of globalization. and global governance. Dimensions of Globalization 3. Cultural Dimension There are six dimensions in globalization. This refers to the increase in the amount of These include: economic, political, cultural flows across the globe. Cultural technological, cultural, religious and interconnections are at the foundations of ecological dimensions. contemporary globalization. 1. Economic Dimension 4. Religious Dimension This refers to the extensive development of Religion is a personal or institutionalized set economic relations across the globe as a of attitudes, beliefs, and practices relating to result of technology and the enormous flow or manifesting faithful devotion to an of capital that has stimulated trade in both acknowledged ultimate reality or deity. It is sources and goods. the most important defining element of any ∙ Major players in the current century’s civilization as contrasted with race, global economic order language, or way of life. 1. Huge international corporations (General Motors, Walmart, Mitsubishi) ∙ International Economic Institutions (IMF, World Bank, TheWorldTrade Organization) Roman Catholic Teaching of of justice can be realized and the common Globalization good identified and defended. There are eight (8) principles that summarize the Roman Catholic Teachings: 5. Ideological Dimensions 1. Commitment to universal human rights. Ideology is a system of widely shared ideas, 2. Commitment to the social nature of the beliefs, norms and values among group of human person people. It is often used to legitimize certain 3. Commitment to the common good political interests or to defend dominant 4. Solidarity (The principle of Solidarity power structures. Ideology connects affirms that membership in the human human actions with some generalized family means that all bear responsibility for claims. one another.) 5. Preferential option of the poor (In the Major Ideological Claims of Advocates of Theology of the Incarnation- Christ God Globalism Became poor for us so as to enrich us by 1. Globalization is about the his poverty. The poor are susceptible to the liberalization and global integration of effects of environmental irresponsibility markets. The problem with this claim is that because they live in countries where cheap liberalization and integration of markets building materials and cheap labor are happen through political project of readily available. They regularly work in engineering free markets by interference of farming, fishing, and forestry, areas which centralized state power, and it is in suffer environmental damage). contrast to the neoliberal ideal of limited role 6. Subsidiary (The Catholic Church teaches of governments. that decisions should be made at the lowest 2. Globalization is inevitable and level in order to achieve the common good. irreversible. Globalists believe that spread 7. Justice of market forces driven by technological 8. Integral Humanism- is concerned with innovations is inevitable in globalization. whole person Justice is divided in three (3) Neoliberals use this claimtoconvincepeople categories: to adopt the natural discipline of the market 1. Commutative justice if they want to prosper, which implies the This aims at fulfilling the terms of elimination of government controls over the contracts and other promises on both market. personal and social level. 3. Nobody is in charge of globalization. 2. Distributive justice This claim seeks to depoliticize the public This ensures a basic equity in how debate on globalization and neutralizing anti both the burden and the goods of society -globalist movements. are distributed and that ensures that every 4. Globalization benefits everyone. person enjoys a basically equal moral and Globalists talk about the benefits of market legal standing apart from differences in liberalization such a rising global living wealth, privilege, talent and achievements standards, economic efficiency, individual 3. Social justice freedom, and technological progress. But This refers to the creation of the the reality is that the opportunities of conditions in which the first two categories globalization are spread unequally and power and wealth are concentrated among a specific group of people, regions and management such as corporatization, corporations. decentralization, and privatization. 5. Globalization furthers the spread of democracy in the world. For the globalists democracy and free markets are synonymous. The neoliberal explanation of Dimensions of Economic Globalization globalization is ideological because it is 1. The globalization of trade of goods and politically motivated and contributes to the services. construction of particular meanings of 2. The globalization of financial and capital globalization which stabilize existing power markets. relations. Globalism tries to create collective 3. The globalization of technology and meaning and shape people’s identities. communication. 4. The globalization of production. UNIT II: THE STRUCTURES OF GLOBALIZATION Difference between Economic Globalization from Internationalization 1.The Global Economy Economic globalization is a functional 2. Market Integration integration between internationally 3.The Global Interstate System dispersed activities which means that it is a 4. Contemporary Global Governance qualitative transformation rather than quantitative change while THE GLOBAL ECONOMY internationalization is an extension of Economic globalization refers to the economic activities between internationally increasing interdependence of world dispersed activities. economies as a result of the growing scale of cross-border trade of commodities and Origin of Economic Globalization services, flow of international capital and Economic globalization is a process that wide and rapid spread of technologies. It creates an organic system of the world reflects the continuing expansion and economy.In the 16th century world system mutual integration of market frontiers, and is analysts identify the origin of modernity and irreversible trend for the economic globalization through long distance trade in development in the whole world at the turn the 16th century. This best known example of the millennium. of archaic globalization is the Silk Road, which started in western China, reached the Two Major Driving Forces for Economic boundaries of the Parthian empire, and Globalization continued onwards towardsRome (26). It 1. The rapid growing of information in all also connected Asia, Africa, and Europe. types of productive activities. In the 17th and 18th century global 2. Marketization (A restructuring process economy exists only in trade and exchange that enables state enterprises operate as rather than production as the world export to market-oriented firms by changing the legal World GDP did not reached 1 to 2 percent. environment in which they operate and can In the 19th century the advent of be achieved through reduction of state globalization approaching its modernform subsidies, organizational, restructuring of witnessed. A short period before World War create a stabilized international currency I is referred to as golden of globalization system and ensure a monetary stability for characterized by relative peace, free trade, all the nations. financial and economic stability. Growth in international exchange of goods accelerated European Monetary Integration in the second quarter of the 19th century. European monetary integration refers to a Global economy in the 19th and 20 30-year long process that began at the end th centuries grew by an average of of the 1960s as a form of monetary nearly 4 percent per annum, which is cooperation intended to reduce the roughly twice as high as growth in the excessive influence of the US dollar on national incomes of the developed domestic exchange rates, and led, through economies since the late 19th century. various attempts, to the creation of a Monetary Union and a common currency. International Monetary Systems and ThisUnion brings many benefits to Member Gold Standard States. International monetary system (IMS) The European Monetary System (EMS) refers to a system that forms rules and on the other hand is a 1979 arrangement standards for facilitating international trade between several among the nations. It helps in allocating the European countries which links their capital and investment from one nation to currencies an attempt to stabilize the another. It is the global network of the exchange rate. This system was government and financial institutions that succeededbytheEuropean Economic and determine the exchange rate of different Monetary Union (EMU), an institution of the currencies for international trade. EuropeanUnion (EU), which established a common currency Evolution of the International Monetary called the euro. System The European Financial Stability In 1870 to 1914, with the help of gold and Mechanism (EFSM) is a permanent fund silver, trade was carried without any created by the European Union institutional support. Monetary system (EU) to provide emergency assistance to during that time was decentralized while member states within the Union. It raises market based and money played a minor money through the financial markets, andis role in international trade in contrast to gold. guaranteed by the European Commission. Gold Standard is a system of backing a Fund raised through the markets, use the country’s currency with its gold reserves. budget of the European Union as collateral. Such currencies are freely convertible into gold at a fixed price, and the country settled International Trade and Trade Policies all its international trade transactions in International trade is the exchange of Gold. In 1944, 730 representatives of 44 goods, services and capital across national nations met at Bretton Woods, borders. It is a multi-million dollar activity, NewHampshire, United States central to the Gross DomesticProduct to create a new international monetary (GDP) of many countries, and it is the system called Bretton Woods system, the only way for many countries to acquire aim of which is to resources. Trade policies on the other hand refer to negotiations are considered while bilateral the regulations and agreement of foreign trade policy is being formulated. countries. Trade policies on the other hand refer to the regulations and agreement of foreign International Trade Policy countries This defines the international trade policy under their charter liketheInternational Tariffs economic organizations, such as These are taxes or duties paid for a Organization for EconomicCo-operation and particular class of imports or exports. Development (OECD), World Trade Imposing taxes on imported and exported Organization (WTO) andInternational goods is a right of every country. Heavy Monetary Fund (IMF).The best interests of tariffs on imported goods are levied by both developed and developing nations are some nations for the protection their local upheld by the policies. industries. The prices of imported goods in local markets in flated due to high imported Trade Policy and International Economy taxes to ensure demand of local products. In most developed countries where open market economy prevails, the international Trade barriers economic organizations support free trade Theses are measures that governments or policies. In the case of developing nations public authorities introduced make imported partially-shielded trade practices are goods or services less competitive than preferred to protect their local trade locally produced goods and services. industries. Safety The World Trade Organization (WTO) This ensures that imported products in the The World Trade Organization (WTO) deals country are of high quality. Inspection with the global rules of trade between regulations laid down by public officials nations with the main function of ensuring ensure the safety and quality standards of that trade flows smoothly, predictably and imported products. freely. Types of Trade Policies Global Economy Outsourcing Outsourcing is an activity that requires National Trade Policy search for a partner and relation-specific This safeguards the best interest of its trade investments that are governed by and citizens. incomplete contracts and the extent of international outsourcing depends on the Bilateral Trade Policy thickness of the domestic and foreign To regulate the trade and business relations market for input suppliers, the relative cost between two nations, this policy is formed. of searching in each market, the relative Under the trade agreement the national cost of customizing inputs and the nature of trade policies of both the nations and their the contracting environment in each country. Possible Determinants of the Location of Financial Market Integration Outsourcing It is an open market economy between 1. Size of the country can affect the countries facilitated by a common currency “thickness” of its markets. and the elimination of technical, regulatory 2. The technology for search affects the and tax differences encourage free flow of cost and likelihood of finding a suitable capital and investment across borders. partner. 3. The technology for specializing Global Corporation components determines the willingness of a A global corporation is a business that partner to undertake the needed investment operates in two or more countries. It also in a prototype. goes by the name "multinational company". 4. The contracting environments can Several advantages are offered by global impinge on a firm’s ability to induce partner expansion of business over running a to invest in the relationship. strictly domestic company. Historical Periods of Global Corporation THE STRUCTURES OF GLOBALIZATION An approach to the study of globalization 1.The Global Economy that locates the phenomenon itself in early 2. Market Integration patterns of trade and exchange is known as 3.The Global Interstate System historical globalization. 4. Contemporary Global Governance The Finance Function in a Global MARKET INTEGRATION Corporation Market integration refers to how easily two As corporations go global, capital markets or more markets can trade with each other. open up within them, giving companies a It occurs when prices among different powerful mechanism for arbitrage across locations or related goods follow similar national financial markets. patterns over a long period of time. Groups of prices often move proportionally each These three functions can be created by other and when this relation is very clear CFOs through exploiting their internal among different markets it is said that the capital markets: markets are integrated. 1. Financing Types of Related Markets where Market A group’s tax bill can be reduced by the Integration Occurs CFO like borrowing countries with high tax rates and lending to operations in countries Stock Market Integration with lower rates. This is a condition in which stock markets in 2. Risk Management different countries trend together and depict Global firms can offset natural currency same expected risk adjusted returns. exposures through worldwide operations instead of managing currency exposures through financial markets. 3. Capital budgeting maintains a monopoly of the legitimate use Getting smarter on valuing investment of force within a certain territory. opportunities CFOs can addvalue. The State and the Economic Foreign Direct Investment Interdependence Foreign Direct Investment (FDI) was of The rising momentum of global free-market corporate origin. It is a major driver of capitalism in the final decades of the20 th extended global corporate development. century, the accompanying rise in transnational enterprises, and the resulting BRICS Economies disparities between easy flows of money Brazil, Russia, India, China and South and commodities across international Africa (BRICS) is an acronym for the borders and the legal barriers and logistical combined economies of Brazil, Russia, hurdles that keep most workers tied to their India, China and South Africa. BRIC, home communities are associated with without South Africa, was originally coined globalization. in 2003 by Goldman Sachs, which speculates that by2050 these four Neoliberalism and Economic economies will be the most dominant. South Sovereignty Africa was added to the list on April 13, Neoliberalism is the intensification of the 2011 creating "BRICS.” influence and dominance of capital. It is the elevation of capitalism as a mode of General Agreement on Trade in Services production into an ethic, a set of political (GATS) imperatives, and a cultural logic. It is a The General Agreement on Trade in project to strengthen, restore, or, in some Services (GATS) is the first multilateral cases, constitute anew the power of agreement covering trade in services which economic elites. was negotiated during the last round of multilateral trade negotiations, called the Economic sovereignty on the other hand Uruguay Round, and came into force 1995. is the power or national governments to make decisions independently of those THE STRUCTURES OF GLOBALIZATION made by other governments. 1.The Global Economy 2. Market Integration There are four different concepts of 3.The Global Interstate System sovereignty. These include: 4. Contemporary Global Governance International Legal Sovereignty THE GLOBAL INTERSTATE SYSTEM It refers to the acceptance of a given state as a member of the international Globalization and the Nation- States community. Globalization in the early years of the 21 st Westphalian Sovereignty century has not displaced state. Max It is based on the principle that one Weber, a German social theorist define sovereign state should not interfere in state as a compulsory political organization domestic arrangements of another. with a centralized government that Interdependence Sovereignty 6. Eonomic and monetary union It is the capacity and willingness to control 7. Complete economic integration flows of people, goods and capital into and out of the country. Preferential Trade Areas (PTAs) happens when there’s an agreement on reducing or Domestic Sovereignty eliminating tariff (tax or duty to be paid on a It is the capacity of a state to choose and particular class of imports or exports) implement policies within the territory. barriers on selected goods imported from other members of countries within the Economic and Political Integration geographical region or areas. (European Integration) European integration is the process of Free Trade Agreements (FTAs) or industrial, political, legal, economic, social Preferential Trade Agreements and cultural integration of states wholly or (PTAs)eliminate import tariffs as well as partially in Europe. European Integration import quotas between signatory countries. has primarily come about through the These Agreements can be limited to a few European Union and its policies. sectors or can encompass all aspects of international trade. European Union (EU), is an international organization comprising European Removal of tariff barriers between Countries and governing common members, together with the acceptance of a economic, social, and security policies. In common or unified external tariff against The Early 21st century EU expanded into non-members is involved in the Custom central and eastern Europe with the Union. following members: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, One major step towards economic Denmark, Estonia, Finland, France, integration is Common Market (CM). Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the As a key stage towards complete Netherlands, Poland, Portugal, Romania, integration, the Economic and Slovakia, Slovenia, Spain, Sweden, and the MonetaryUnion (EMU) involves a single United Kingdom. economic market, a common trade policy, a single currency and a common monetary Economic integration can be described as policy. a process and a means by which group of countries strives to increase their level of Complete Economic Integration is the welfare. final stage of economic integration which member states completely forgo Seven Stages of Economic Integration independence of both monetary and fiscal 1. Preferential trading area (PTA) policies. States that participate in complete 2. Free trade area economic integration have no control of 3. Customs union economic policy including economic trade 4. Common market rules. 5. Economic union Political integration refers to the Multi-level Governance (MLG) integration of components within political This is a new theory of European systems; the integration of political systems integration. Writers Liesbet Hooghe and with economic, social, and other human Gary Marks defined MLG as dispersion of systems; and the political processes by authority across multiple levels of political which social, economic, and political governance. systems become integrated. Transnational Activism in States Theories of European Integration Transnational activism can be defined as the mobilization of collective claims by Neo-functionalism actors located in more than one country This theory focuses on the supranational and/or addressing more than one national institutions of the EU of which the main government and/or international driving forces of integration are interest governmental organization or another group activity at the European and national international actor. levels, political party activity, and the role of governments and supranational institutions. A social movement is a type of group action. It refers to the organizational structures and strategies that may empower Intergovernmentalism oppressed populations to mount effective This theory provides a conceptual challenges and resist the more powerful and explanation of the European integration advantaged elites. process. The main concept of the Intergovernmentalism is emphasizing on the The global justice movement describes role of national states in the European the loose collection of individuals and integration; in another words it argues that groups often referred to as a “movement of "European integration is driven by the movements”, who advocate fair trade rules interest and actions of nation states". and are negative to current institutions of global economics such as the World Trade Liberal Intergovernmentalism Organization. This a dominant political theory developed by Andrew Moravsik in 1993 to explain The new transnational activism is as European integration. Application of rational multifaceted as the internationalism. institutionalism to the field of European integration is the aim of this theory. Social Media and the State Social media is a computer-based New Institutionalism technology that facilitates the sharing of This theory emphasized the importance of ideas and information and the building of institutions in the process of European virtual networks and communities. integration. Its three key strands are: rational choice, sociological and historical. THE STRUCTURES OF GLOBALIZATION states, cultures, citizens, intergovernmental 1.The Global Economy and nongovernmental organizations, and 2. Market Integration the market. 3.The Global Interstate System 4. Contemporary Global Governance The Role of the Nation -State in Globalization Basic Elements of a State The Contemporary Global Governance 1. Territory Global governance or world governance 2. People is a product of neo-liberal paradigm shifts in 3. Sovereign Power international political and economic relations. Globalization’s Impact on the State The Roles and Functions of the United Factors which lead to the increase and Nations As an intergovernmental acceleration of movement of people, organization, the United Nation is tasked to information, commodities and capital. promote international co-operation and to 1. Lifting of trade barriers create and maintain international order. It is 2. Liberalization of world capital markets the largest, most familiar, most 3. Swift technological progress (information internationally represented and most technology, transportation and powerful intergovernmental organization in communication). the world. Problems afflicting the world today which Four Main Purposes of the UN Charter are increasingly transnational in nature (114)- a written grant by a country's those that cannot be solved at the national legislative or sovereign power, by which an level or State to State negotiations. institution such as a company, college, or 1. Poverty city is created and its rights and privileges 2. Environmental pollution defined. 3. Economic crisis 1. Maintaining worldwide peace and security 4. Organized crime and terrorism 2. Developing relations among nations 3. Fostering cooperation between nations in Effects of greater economic and social order to solve economic, social, cultural, or interdependence to national decision- humanitarian international problems making processes. 4. Providing a forum for bringing countries 1. It calls for a transfer of decisions to the together to meet the UN's purposes and international level goals. 2. It requires many decisions to be transferred to local levels of government Challenges of Global Governance in the due to an increase in the demand for Twenty-first Century participation. Global governance can be understood as the sum of laws, norms, policies, and institutions that define, constitute, and mediate trans-border relations between The following can be guaranteed only by the policies in the 1980’s. The economic States through independent courts: prescriptions of the IMF as cures are 1. Respect of human rights and justice recommended for countries in the global 2. Promote the national welfare south. 3. Protect the general interest Asian Regionalism UNIT III: THE WORLD OF RELIGIONS Regionalism refers to the decentralization 1. Global Divides: The North and of political powers or competencies from a the South (focus: Latin America) higher towards a lower political level. More 2. Asian Regionalism specifically, it distinguishes between top-down from bottom up regionalism where Global Divides: The North and the South top - down regionalism describes the (focus: Latin America) decentralization of competencies or the Global South refers to the regions of Latin establishment of regional institutions by the America, Asia, Africa, and Oceania mostly state while bottom -up includes all patterns low- income and often politically or culturally of endeavors toward political marginalized. It may also be called the decentralization from within the particular "developing World" such as Africa, Latin region. America, and the developing countries in Asia, "developing countries," "less Views of Globalization in the Asia Pacific developed countries," and "less developed and South Asia regions” including poorer "southern" Globalization is an external phenomenon regions of wealthy "northern" countries. being pushed into the region by world powers particularly the United States and Three Primary Concepts of Global South Europe. 1. It refers to economically disadvantaged nation-states and as a post-cold war The Asia Pacific and South Asia refer alternative to “Third World”. together to the regions of East (or 2. The Global South captures a Northeast) Asia, South Asia, the Pacific deterritorialized geography of capitalism’s Islands, and South Asia. It includes some of externalities and means to account for the world’s most economically developed subjugated peoples within the borders of states such as Japan, South Korea, wealthier countries, such that there are Singapore, and Taiwan, and highly economic Souths in the geographic North impoverished countries such as Cambodia, and Norths in the geographic South. Laos, and Nepal. 3. It refers to the resistant imaginary of a transnational political subject that results Asia Pacific and South Asia’s Impact on from a shared experience of subjugation Globalization under contemporary global. Asia was the central global force in the early modern world economy. It was the site of New Internationalism in the Global South the most important trade routes and in some The ills of the global south are being places more advanced in technology than globalized. Underdeveloped states of the West such as science and medicine. global south are ravaged by merciless IMF The Region-Making in Southeast Asia and Middle-Class Formation: The Third Wave Regionalization entails complex and dynamic interactions between and among governmental and nongovernmental actors which resulted to hybrid East Asia. Two salient points in the history of east Asian middle-class formation. 1. Middle class formation in Southeast Asia was driven by global and regional transnational capitalism working in alliance with national states while middle class in Japan, South Korea, and Taiwan were created by developmental states and national capitalism. 2. New urban middle classes in East Asia, whether in Japan, South Korea, Taiwan, or Southeast Asia, with their middle-class jobs, education, and income, have in turn created their own new lifestyles commensurate with their middle-class income and status. Middle Classes in The Philippines New urban middle classes emerged in the post 1986 Philippines. They were created through growth in retail trade, manufacture, banking, real estate development, and an expanding range of specialist services such as accounting, advertising, computing, and market research. Regional Implications of Middle -Class Formation in East Asia Complex historical forces shaped new urban middle classes. They are product of regional economic development, which has taken place in waves under the U.S. informal empire over a half century, first in Japan, then in South Korea, Taiwan, Hongkong, and Singapore, Thailand, Malaysia, Indonesia and Philippines, and now in China.