Establishing The Nation PDF

Module 1.3 - Establishment of Nations Community Group of people who have something in common Remains the basis of a nation, a people who feel they share a common identity and belong together (Weber 1921/1978, 395-398) CONTEXT The Treaty of Westph...

Module 1.3 - Establishment of Nations Community Group of people who have something in common Remains the basis of a nation, a people who feel they share a common identity and belong together (Weber 1921/1978, 395-398) CONTEXT The Treaty of Westphalia (1648) Ended the 30- and 80-years wars in Europe. Instituted an international system that recognizes the sovereign states at its core. COMPONENTS OF NATION-STATES Nation (Cerney 2007: 845) ○ “A social group that is linked through a common descent, culture, language, and territorial contiguity”. COMPONENTS OF NATION-STATES State (Cerney 2007: 855) ○ “Institutional form in the wake of the demise of feudal system” ○ More centralized (than city-states). ○ Office holders are outside the socio-economic hierarchies. ○ Rules and resources are coming from taxes rather than from feudal, personal, or religious obligations. COMPONENTS OF NATION-STATES State (Cerney 2007: 855) ○ Has the ability to engage in collective action both internally (e.g. collect taxes) and externally (e.g. deal with other states, to engage in warfare, etc.) NATION-STATE What is a nation-state? ○ Integrates sub-groups that define themselves as a nation with the organizational structure of the state. NATION-STATES National Identity (Guibernau 2007: 849-53) ○ “Fluid and dynamic form of collective identity, founded upon a community’s subjective belief that the members of the community share a set of characteristics that make them different from other groups”. ○ E.g. monarchy, sports, religion. Nationalism Page | 1  ○ A doctrine or national movement that seeks to make the nation the basis of a political structure, especially a state. IMAGINED COMMUNITY Benedict Anderson (2006: 6): “Imagined political community”. The nation exists within the realm of ideas, subjectively within people’s minds as an image. CHARACTERISTICS OF IMAGINED COMMUNITY Impossibility of personal contact: ○ Must imagine who they are, what they believe, what holds them together. National Boundaries: ○ No nation imagines itself as coterminous with mankind. Sovereignty: ○ Being free. CHARACTERISTICS OF IMAGINED COMMUNITY Deep and horizontal comradeship: ○ Regardless of the actual inequality and exploitation that may prevail in each nation. IMAGINED COMMUNITY Indicators: ○ Print media (i.e. novels and newspapers) ○ Digital media (i.e. cellphones, emails, internet, blogs). ○ Allow widely dispersed populations to maintain, create, and disseminate a continuing sense of imagined community. Treaty of Westphalia By 1648,most European princes and kings were bankrupt by the expense of war. Münster and Osnabrück Holy Roman Empire ○ Catholicism ○ Lutheranism ○ Calvinism Sovereignty, territory, freedom Principles States were all free and equal. There was no temporal authority higher than the state States had ultimate authority over the conduct of their internal and external affairs. The capacity to exercise rule over a territory bestowed the right to rule - might makes right Whoever gained or seized power had authority to act as the head of the state and... Page | 2 Principles (cont’d)...enter into agreements on behalf of the people, regardless of their constitutional standing. How a state maintained its power did not reflect on the states' legitimacy in the view of the world community The activity of the a state outside of its own boundaries and the treatment of individuals who were not citizens were not expected to conform to the same standards as a state's activity within its borders or treatment of its own citizens. Principles (cont’d) Groups and other non-state actors had no right to contest territorial borders (Held 2000, 162-163). Treaty became the basis of “an association of states, each of which claimed sovereignty within its political boundaries and legitimacy based on the nation within.” Module 1.4: The Interstate System The Interstate System The Westphalian system provided stability for the nations of Europe, until it faced its first major challenge by Napoleon Bonaparte. Bonaparte believed in spreading the principles of the French Revolution – liberty, equality, and fraternity. The Interstate System Napoleonic Wars lasted from 1803-1815. Implementation of the Napoleonic Code to the rest of Europe by the French. Napoleonic Code Forbade birth privileges Encouraged freedom of religion Promoted meritocracy in government service. This system shocked the monarchies and the hereditary elites of Europe, and they mustered their armies to push back against the French emperor. Establishment of Concert of Europe Battle of Waterloo, 1815 – when Bonaparte was defeated by Anglo and Prussian armies. To prevent another war and to keep their systems of privilege, the royal powers, that in effect, restored the Westphalian system. Establishment of the Concert of Europe Concert of Europe – alliance of great powers – the United Kingdom, Austria, Russia, and Prussia. Klemens von Metternich was the architect of this “Concert of Europe.” The Metternich system lasted until WWI. Page | 3 Internationalism The Westphalian and Concert systems divided the world into separate, sovereign entities. Since the existence of this interstate system, there have been attempts to transcend it aside from the Napoleonic way. (i.e. directly challenging the system by infringing on other states’ sovereignty). Internationalism They ought to imagine other systems of governance that go beyond, but do not necessarily challenge sovereignty. Others imagine a system of heightened interaction between various sovereign states, particularly the desire for greater cooperation and unity among states and the peoples. This desire is called internationalism. Internationalism Internationalism come in different forms, but the principle may be divided into two broad categories: liberal internationalism and socialist internationalism. Internationalism Liberal internationalism ○ Immanuel Kant, 18th century German philosopher He imagined a form of global government. ○ Jeremy Bentham coined the term “international” in 1780. Advocated for the creation of international law. ○ To many, these proposals for global government and international law seemed to represent challenges to the states. Liberal Internationalism Giuseppe Mazzini, 19th century Italian patriot ○ The first thinker to reconcile nationalism with liberal internationalism. ○ Was both an advocate of the unification of the various Italian-speaking mini-states and a major critic of the Metternich system. Liberal Internationalism - Mazzini ○ Believed in a Republican government (non-hereditary) ○ For him, free, independent sates would be the basis of an equally free, cooperative international system. ○ A nationalist internationalist Woodrow Wilson Mazzini influenced the thinking of this United States president. He became one of the 20th century’s most prominent internationalist. Like Mazzini, Wilson saw nationalism as a prerequisite for internationalism. Woodrow Wilson Forwarded the principle of self-determination Page | 4  Hoped that these free nations would become democracies. One of the most notable advocate of the League of Nations. League of Nations The predecessor to the current United Nations. At the end of WWI, Wilson pushed to transform the League into a venue of conciliation and arbitration to prevent another war. For this efforts, Wilson was awarded the Nobel Peace Prize in 1919. League of Nations Unfortunately for Wilson, the United States was not able to join the organization due to strong opposition from the Senate. As evident by the presence of WWII, the League was unable to fulfill one of its core causes. League of Nations Many factors causing this mostly by the main actors behind the WWII: The Axis powers side having ultra-nationalists with the disdain for internationalism. Despite its failure, the League gave birth to some of the more task-specific international organizations that are still around today, such as WHO, ILO. Socialist Internationalism Karl Marx was one of Mazzini’s biggest critics. Different from the liberal internationalists as he did not believe in nationalism. Socialist Internationalism Believed that any true form of true internationalism should deliberately reject nationalism, which rooted problem in domestic concerns instead of global ones. Divided the world not into countries but into classes. Socialist Internationalism Marxism/Socialism/Communism After the death of Marx, his followers soon established their international organization, The Socialist International, formed in Paris in 1889. Socialist Internationalism This organization was short-lived, though they have notable achievements such as: ○ the declaration of May 1 as Labor Day and; ○ the creation of International Women’s Day in March 8. ○ It also initiated a successful campaign for an 8-hour workday. Collapse of the Socialist International The SI collapsed in WWI, as the member parties refused or were unable to join the internationalist efforts to fight the war. Many of these sister parties even ended up fighting each other. Page | 5 Collapse of the Socialist International It was a confirmation of Marx’s warning: when workers and their organizations take the side of their countries instead of each other, their long-term interests are compromised. Lenin and the Socialist Internationalism After the SI collapsed, a more radical version emerged October Russian revolution overthrowing Czar Nicholas II by Bolshevik party led by Vladimir Lenin. Led to the establishment of the Union of Soviet Socialist Republics or the USSR. Lenin and the Socialist Internationalism The Bolsheviks did not believe in elections. Exhorted the revolutionary “vanguard” parties to lead revolutions across the world using methods of terror if necessary. Called Communist parties. Communist International To encourage these socialist revolutions across the world, Lenin established the Communist International in 1919. Many of the world’s states feared the Comintern. They joined the Allied forces in WWII, placing distrust for US and UK, To appease allies, Lenin’s successor, Joseph Stalin, dissolved the Comintern in 1943. Stalin and the Communist Information Bureau After the war, however, Stalin re-established the Comintern as the Communist Information Bureau (Cominform). As colonialism was winding down, the Cold War was heating up. Decolonization pitted the United States against the USSR in a contest for the hearts, minds, and allegiance of the newly independent nations. Cold War and Nation Building The benefits for the Soviet Union and the United States ranged from locations for military based and warheads, to access to valuable raw materials and markets for manufactured goods. Cold War and Nation Building Although the World Bank and IMF are declared politically neutral, loans tended to go to countries where significant international capitalist intertest was at stake or that were nudging toward political alliance with the United States. (Thacker 1999, 46-47). Cold War Although called the “Cold” War, real wars were fought by proxy throughout the world. Communism threatened the power and access to cheap resources that the Western world enjoyed. Occasionally, democratic leaders were deposed or assassinated, elections overturned or rigged. In favor of dictators who were more friendly to the West. Page | 6 Cold War However, the atrocities through which it was accomplished, and the complicity of the superpowers and their allies implicates high-income countries in crimes against humanity, and others perpetrated against the people of many low-income countries. Cold War: Civil Wars in Asia In cases such as Korea and Vietnam, competition between the Soviet Union and the United States took the form of civil war, north (communist) against south (capitalist). Korea today still divided. South Vietnam lost its war with North Vietnam and was brought under communist rule. Cold War During the Cold War, many of the newly independent states were held together, as in the colonial period, by military support rather than shared territory and identity based on ideals or heritage. Cold War The Westphalian ideal of equality of states and of non-interference was far removed from the political realities of hegemony and forceful domination. Fall of the Soviet Union With the eventual collapse of the Soviet Union in 1991, whatever existing thoughts about communist internationalism also practically disappeared. Fall of the Soviet Union For the postwar period, however, liberal internationalism would once again become ascendant. And best evidence of this is the rise of the United Nations as the center of global governance. Fifth Wave of Nation Building Presence of conditions of instability of the global systems were firmly in place: ○ the emergence of weak states with weak economies and deep ethnical divides, ○ along with food insecurity; ○ environmental destruction; Fifth Wave of Nation Building Presence of conditions of instability of the global systems were firmly in place: (continued) ○ population overload; ○ inadequate educational, medical, or democratic infrastructure; ○ and other risks to human security Fifth Wave of Nation Building The Cold War made decolonization more difficult and forestalled development in many countries, A new fifth wave of nation building began following the dissolution of the Soviet Union, Yugoslavia, and Warsaw Pact in the 1990s. Page | 7 Conclusion Even though the nation-state form has diffused globally, political equality on the global stage, a centerpiece of the Westphalia system, has never been achieved. Module 2.1 Global Governance THE UNITED NATIONS Two major branches: The General Assembly and the Security Council. Areas of concern: ○ Military ○ Economic ○ Environment ○ Human protection THE UNITED NATIONS Both a creation and creature of the United States. Suggested by US President Franklin Delano Roosevelt. Housed in New York since 1950s. US is the largest single contributor to the UN. 0.07% of the US GDP. UNICEF (UN Children’s Fund) works for children’s rights, their survival, development and protection. UNICEF works to ensure all children, everywhere in the world, enjoy the same human rights. UNICEF focuses on ensuring children have access to education and healthcare, and making sure they are free from problems such as child labor, abuse and neglect. The Security Council is responsible for maintaining peace and tries to settle conflicts that threaten international security. All UN member states must respect and abide by its decisions. It can set up peacekeeping operations in countries. These operations protect civilians and help warring parties to resolve their differences peacefully. The Security Council has 15 members, of which five are permanent: China, France, Russia, the UK and the USA. Page | 8 WHO (World Health Organization) WHO is the authority on matters of global health and works to ensure all people are free from preventable diseases like malaria and HIV/AIDS. WHO works to strengthen healthcare systems in every country so that all citizens can stay healthy and live longer, happier lives. UNDP (UN Development Programme) They work to eliminate poverty. One of its main tasks is to coordinate global efforts to achieve the Millennium Development Goals (MDGs). The MDGs are eight targets that were agreed by world leaders in 2000. They include: halving world poverty, promoting equality between men and women, fighting diseases like HIV/AIDS, and protecting the environment. UNESCO United Nations Educational, Scientific, and Cultural Organization Focuses on areas of education, the natural and social sciences, and culture. HQ is in Paris since 1946. UNCTAD United Nations Conference on Trade ad Development. Focuses on trade and development, but its goal is to improve the position of less developed nations by allowing them to benefit more from, and function better in, the global economy. IAEA International Atomic Energy Agency Inspects nuclear facilities to ensure that they are for peaceful use, disseminates information and standards designed to help make sure that nuclear facilities do not become dangerous, and serves as the center for scientific information on the peaceful use of nuclear technology. WFP (UN World Food Programme) The largest humanitarian agency fighting hunger. It feeds over 90 million people a year, saving the lives of those affected by conflict and natural disasters. Page | 9 GLOBAL GOVERNACE Whiteman (2003: 253-72): “The decline of the nation state, along with at least some of its governance function, has given rise to three new forms of governance. GLOBAL GOVERNACE Governance without government (Rosenau and Czempiel, 1992) Various matters are managed within nation-state without involvement of state government. Locales and regions within nation-state may manage themselves. GLOBAL GOVERNACE Governance through various public policy networks Involves government by various international institutions as well as INGOS (International Non-Governmental Organizations) and private sectors of various sorts. INGOS International not-for-profit organizations performing public functions but not established or run by nation-states. E.g. Red Cross, Habitat for Humanity, Boy Scouts, IOM. INGOS Negative effects to growth: ○ As special interest groups, they may not take into consideration wider sets of issues and concerns. ○ Not democratic, keeping their agenda as secret, and not accountable to anyone. ○ Elitist group of people that seeks to impose inappropriate universal plans on local organizations and settings. ○ Pander to public opinion and posture for the media to attract attention and raise more funds. INGOS Page | 10  Negative effects to growth: ○ Distort the magnitude of certain problems to advance their cause and interests. ○ Conflicting causes like ending the logging practices vs practicing logging producing wood as sustainable resource that is preferable than fossil fuels. ○ Harvey (2006: 52): “Seem to have helped accelerate further state withdrawal from social provisions”. GLOBAL GOVERNACE Governance at the global level that is normatively mediated and moderated. Efforts that are driven by “values”, such as the Global Compact. Global compact (Soederberg, 2007): Compasses ten basic principles by which businesses around the world should voluntarily conduct their affairs. CHALLENGES OF GLOBAL GOVERNANCE Africa The UN system plays a crucial role in coordinating assistance of all kinds — to help Africa help itself. From promoting the development of democratic institutions, to the establishment of peace between warring nations, the UN is present on the ground supporting economic and social development and the promotion and protection of human rights. Ageing The world’s population is ageing: virtually every country in the world is experiencing growth in the number and proportion of older persons in their population. The number of older persons, those aged 60 years or over, has increased substantially in recent years in most countries and regions, and that growth is projected to accelerate in the coming decades. AIDS New HIV infections have fallen by 35% since 2000 (by 58% among children) and AIDS-related deaths have fallen by 42% since the peak in 2004. The global response to HIV has averted 30 million new HIV infections and nearly 8 million AIDS-related deaths since 2000. The UN family has been in the vanguard of this progress. Atomic Energy Page | 11  More than 30 countries worldwide are operating 444 nuclear reactors for electricity generation and 66 new nuclear plants are under construction. In 2014, 13 countries relied on nuclear energy to supply at least one-quarter of their total electricity. Children Every child has the right to health, education and protection, and every society has a stake in expanding children’s opportunities in life. Yet, around the world, millions of children are denied a fair chance for no reason other than the country, gender or circumstances into which they are born. Climate Change Climate change is one of the major challenges of our time. From shifting weather patterns that threaten food production, to rising sea levels that increase the risk of catastrophic flooding, the impacts of climate change are global in scope and unprecedented in scale. Decolonization The wave of decolonization, which changed the face of the planet, was born with the UN and represents the world body’s first great success. As a result of decolonization many countries became independent and joined the UN. Democracy Democracy is a universally recognized ideal and is one of the core values and principles of the United Nations. Democracy provides an environment for the protection and effective realization of human rights. Ending Poverty While global poverty rates have been cut by more than half since 2000, one in ten people in developing regions still lives on less than US$1.90 a day - the internationally agreed poverty line, and millions of others live on slightly more than this daily amount. Food About 795 million people in the world were undernourished in 2014–16. That means one in nine people do not get enough food to be healthy and lead an active life. Hunger and malnutrition are in fact the number one risk to health worldwide — greater than AIDS, malaria and tuberculosis combined. Page | 12 Gender Equality Women and girls represent half of the world’s population and, therefore, also half of its potential. Gender equality, besides being a fundamental human right, is essential to achieve peaceful societies, with full human potential and sustainable development. Health The United Nations, since its inception, has been actively involved in promoting and protecting good health worldwide. Leading that effort within the UN system is the World Health Organization (WHO), whose constitution came into force on 7 April 1948. Human Rights Promoting respect for human rights is a core purpose of the United Nations and defines its identity as an organization for people around the world. Member States have mandated the Secretary-General and the UN System to help them achieve the standards set out in the UN Charter and the Universal Declaration of Human Rights. International Law and Justice The UN continues to promote justice and international law across its three pillars of work: international peace and security, economic and social progress and development, and respect for human rights and fundamental freedoms. Challenges Migration ○ Since the earliest times, humanity has been on the move. Today, more people than ever before live in a country other than the one in which they were born. Oceans and the Law of the Sea ○ Life itself arose from the oceans. The ocean is vast, some 72 per cent of the earth's surface. Not only has the oceans always been a prime source of nourishment for the life it helped generate, but from earliest recorded history it has served for trade and commerce, adventure and discovery. Challenges Peace and Security Page | 13  ○ Saving succeeding generations from the scourge of war was the main motivation for creating the United Nations, whose founders lived through the devastation of two world wars. Population ○ In 1950, five years after the founding of the United Nations, world population was estimated at around 2.6 billion people. It reached 5 billion in 1987 and 6 in 1999. In October 2011, the global population was estimated to be 7 billion. ○ Challenges Refugees ○ The world is witnessing the highest levels of displacement on record. An unprecedented 59.5 million people around the world have been forced from home. Among them are nearly 20 million refugees, over half of whom are under the age of 18. Water ○ Fresh water sustains human life and is vital for human health. There is enough fresh water for everyone on Earth. However, due to bad economics or poor infrastructure, millions of people (most of them children) die from diseases associated with inadequate water supply, sanitation and hygiene. Module 2.2 : Global Economy Modern World System Modern World System Theory attempts to explain why modernization had such a wide-ranging and different effects on the world Immanuel Wallerstein Early Waves of Economic Globalization Silk Road into the Middle Ages Mercantile Capitalism The Colonial Wave Neo-Colonialism and Cold War Strategic Advantage Silk Road into the Middle Ages Economic systems produce and distribute the goods and services people need for survival and to improve the quality of their lives. Trade can be important for survival Trade over national borders can improve the quality of life by making goods available that are not produced domestically or are available at a lower cost/higher quality. Trade among societies is ancient. The Silk Road encompassed nearly all the world known to those who traveled it. Silk Road Societies that traded along the Silk Road were not highly interdependent economically, but cultural diffusion was high. During this period, goods flowed primarily from East to West. Page | 14  By some accounts, Asia was producing upward of three quarters of the world’s gross national product (GNP) with only about two-thirds of the population. (Frank 1998, 171, 126–127). Silk Road into the Middle Ages In the Middle Ages, trade expanded rapidly, and nations signed treaties of commerce to make trade more secure. It was the unraveling of the feudal system and growth of capitalism that propelled economic globalization. Contractual labor began to replace obligatory, forced labor. Farm workers, now working for themselves rather than the aristocracy, brought excess produce to market. Money, rather than land, became the source of wealth Expansion of Mercantile Capitalism Although many ancient and medieval traders got very rich, the advent of capitalism changed the nature of trade and the nature of globalization. The first multinational corporations were the Dutch and British East India Companies. The Dutch East India Company was the first company to issue stock. Its charter gave it a monopoly and the capacity to coin money, establish colonies, and generally do what was needed to maximize profit, including wage war. The Dutch and British East India Companies are examples of merchant capitalism. The capitalist dimension of their enterprises, aside from a few factories, was limited to trade. Mercantilism The galleon trade was part of the age of mercantilism. From 16th to 18th century, countries, primarily in Europe, competed with one another to sell more goods as a means to boost their country’s income (called monetary reserves later on). To defend their products from competitors who sold goods more cheaply, these regimes (mainly monarchies) imposed high tariffs, forbade colonies to trade with other nations, restricted trade routes, and subsidized its exports. Mercantilism was thus also a system of global trade with multiple restrictions. Gold Standard A more open trade system emerged in 1867 when, following the lead of the UK, the US, and other European nations adopted the gold standard at an international monetary conference in Paris. Broadly, its goal was to create a common system that would allow for more efficient trade and prevent the isolationism of the mercantilist era. The countries thus established a common basis for currency prices and a fixed exchange rate system – all based on the value of gold. Despite facilitating simpler trade, the gold standard was still a very restrictive system. Replaced by fiat currencies nowadays. A Prior Epoch of Globalization One important view is that a global economic system, specifically a global capitalist system, emerged in about 1896 and reached something of a peak throughout the world in 1914. Page | 15  There are some interesting analogies between the growth of the global capitalist economy during that period and today. A prior epoch of globalization During the earlier epoch global progress was spurred by such developments in transportation as the railroad and the steam ship, whereas in more recent years it is the airplane that played a central role in that development. The telegraph greatly enhanced global communications in the early twentieth century, while it is the Internet that plays that role nearly a century later. A prior epoch of globalization Global economic development, both then and now, depended on large-scale flows of capital. In addition, such development in both periods entailed large-scale immigration and even the growing importance of remittances to those who remained in the homeland More generally, global economic specialization (Smith 1776/1977) among the nations of the world became the norm, then and now. A prior epoch of globalization Furthermore, this specialization operated on the basis of the “law” of comparative advantage (Ricardo 1817/1971); that is, that nations should concentrate on what they do best. This comparison is internal – that is, a nation should concentrate on what it does best in comparison to the other things it does (or could do) and not in comparison to what other nations do. This is related to another similarity between today and a century ago and that is an emphasis on free trade and the elimination of trade barriers (e.g., tariffs). Fall of the prior epoch Jeffry Frieden sees the development of economic globalization after WWII in the context of this prior epoch of economic globalization, as well as its collapse as a result of WW I, the Depression, and WW II. Some economists argued that the Depression was largely caused by the gold standard. Autarky and isolationism Economic Globalization The International Monetary Fund (IMF) regards “economic globalization” as a historical process representing the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through the movements of goods, services, and capital across borders. Economic Globalization According to Benczes (2014) economic globalization has several interconnected dimensions, such as: ○ the globalization of trade of goods and services; ○ the globalization of financial and capital markets; ○ the globalization of technology and communication; ○ the globalization of production. Page | 16 The Globalization of Trade of Goods and Services When a country exports more than it imports, it runs a trade surplus. When a country imports more than it exports, it runs a trade deficit. The large trade deficits in the middle and the late 1980s sparked political controversy that still persist today. Foreign competition hit U.S. markets hard. Less expensive foreign goods – among them are steel, textiles, and automobiles – began driving U.S. manufacturers out of business, and thousands of jobs were lost in important industries. The Globalization of Trade of Goods and Services For hundreds of years, industries in the U.S. have petitioned governments for protection and societies have debated the pros and cons of free and open trade. For the last century and a half, the principal argument against protection has been the theory of comparative advantage. (refer to slide 14) Globalization of Financial and Capital Markets A country enjoys an absolute advantage over another country in the production of a good if it uses fewer resources to produce that good than the other country does. Trade barriers – also called obstacles to trade – take many forms. The three most common are tariffs, export subsidies, and quotas. A tariff is a tax on imports. Export subsidies is a way of payment made by the government to domestic firms to encourage exports – can also act as a barrier to trade. Globalization of Financial and Capital Markets Farm subsidies remain a part of the international landscape today. Many countries continue to appease their farmers by heavily subsidizing exports of agricultural products. The prevalence of farm subsidies in the developed world has become a major rallying point for less developed countries as they strive to compete in the global marketplace. Globalization of Financial and Capital Markets A quota is a limit on the quantity of imports. Quotas can be mandatory or voluntary, and they may be legislated or negotiated with foreign governments. Best-known voluntary quota was negotiated by the United States with the Japanese government in 1981. Many quotas limit trade around the world today. Perhaps the best-known recent case is the textile quota imposed by the European Union on import textiles from China in 2005. The Globalization of Technology and Communication Capital is not the only factor of production required to produce output; labor is equally important. To be productive, the workforce must be healthy. Page | 17  Health is not the only issue but basic literacy as well as specialized training in farm management, for example, can lead high returns to both the individual worker and the economy. The Globalization of Technology and Communication Education has grown to become the largest category of government expenditure in many developing nations. In part, technology transfer and communication have become part of manpower training in most agricultural countries. This is so because of the belief that human resources are the ultimate determinant of economic advancement. The Globalization of Production The third element is evident through the different relations and interactivities that occurs instantly due to the internet and communication technology (ICT). Finally, the fourth element, is best illustrated by the existence of multinational corporations and transnational corporations. Actors that Facilitate Economic Globalization Firstly, the nation-state still is the effective manager of the national economy despite increased threats of globalization. Boyer and Drache (1996). Secondly, some authors assert that the primary actors of economic globalization is the global corporations. Thirdly, the creation of an International Monetary System is one of the actors that facilitate economic globalization. Global Economic Integration Advantages: Typically leads to a reduction in the cost of trade, improved availability of and a wider selection of goods and services, and efficiency gains that lead to greater purchasing power. Further, employment opportunities tend to improve because trade liberalization leads to market expansion, technology sharing, and cross border investment flows. Moreover, political cooperation among countries can improve because of stronger economic ties, which can help resolve conflicts peacefully and lead to greater stability. Global Economic Integration Disadvantages: Include trade diversion and the erosion of national sovereignty. For example, trade unions can divert trade from non-members, even if it is economically detrimental for them to do so. Additionally, members of economic unions are typically required to adhere to rules on trade, monetary policy, and fiscal policy, which are established by an unelected external policy making body. Mindanao Context Mindanao has been a magnet for international trade since even before the colonial period because of its geographical location and rich natural resources. Page | 18  Before the colonialists arrived in the islands now called the Philippines, a brisk trade was going on between Moro traders, particularly from Sulu, and the Indo -Malay peninsula and China. Sulu even became known as a famous pearl market (Munap 2002). Mindanao Context This lively and profitable trade was soon cut off by the arrival of the Spaniards, who began to identify these traders as pirates and enemies of the colonial state. During the Spanish period, the pirates became smugglers. Turning Moros’ economic activities into a criminalized act, a policy that was continued by the Philippine government, caused the maritime trading activities of the Moros to decline further. Globalization of Trade and Industries in Mindanao The entry of Western commerce and trading activities actually destroyed the competitive advantage enjoyed by the Moros, accompanied as it was by changes in their political status, from sovereign sultanates to marginalized minorities. This status was strongly resented and resisted. Before the imposition of martial law in 1972, Sulu traders defied the government’s sanctions, and trading (now called smuggling) went on between Sulu and Sabah. Today, the participation of Moros in global trade is minimal and concentrated only in selected areas. Value Chain of Mindanao Products A major constraint for the agriculture sector is limited connectivity. Farmers are disconnected or misconnected with technical service providers, agro-enterprises, markets, and consumers, a problem that has multiple consequences (Table 1). Many roads are in bad condition or congested, with the result that agricultural produce is often rejected, especially perishable commodities like bananas and other fruits and vegetables. Value Chain of Mindanao Products Beyond the lack of adequate FMRs, there is the need to prioritize modernization to relieve congestion on roads accessing ports for more connectivity beyond Mindanao. Mindanao ports lack economies of scale: there are some 690 ports, yet the top four handle only 17 percent of domestic cargo and 12 percent of foreign. Many ports are owned by private companies and are closed to smaller farmers. Value Chain of Mindanao Products Customs procedures are a major bottleneck to trade facilitation, especially for agricultural products. On the Doing Business indicator for Trading Across Borders the Philippines ranked at 95 in 2016 (World Bank 2016a), 1 rank lower than to 2015. The World Bank Logistics Performance Index ranks the country at 71, down from 85 in 2014, with Customs and Border Management ranking at 78—31 points lower. Value Chain of Mindanao Products Page | 19  Lowering logistics costs would benefit Mindanao’s agriculture value chains significantly. An efficient logistics system is essential if Mindanao’s potential to become a global supplier of basic and value-added produce is to be unleashed. Value Chain of Mindanao Products Ensuring a seamless logistics network from farm to markets will entail: ○ connecting farms to towns by investing in village roads; ○ connecting towns to ports by investing in major roads; ○ promoting competition in the domestic shipping industry; ○ liberalizing cabotage; ○ modernizing the major ports; and ○ streamlining export and import procedures. Value Chain of Mindanao Products Without that, farmers must deal with higher input costs and lower prices for their produce. Because of few marketing options, their lack of bargaining power further reduces prices. Poor roads may also limit access to extension services and lower the quality of the produce that does reach markets due to multiple handling required by the need to use for a single shipment a variety of transport modes, from animal-drawn carts to truck. Value Chain of Mindanao Products Because the logistics chain is only as good as its weakest link, partial reforms will not lead to lower prices and better service. Improving connectivity from farm to market would have numerous positive effects on development. Value Chain of Mindanao Products Thus, poor connectivity reduces both the scope of farmers to diversify into higher-value perishable crops and their ability to invest in productivity or quality improvements. Without good roads, much produce is wasted because transporting it would lead to a loss. Improved connectivity also benefits rural societies more generally by facilitating the entry of social services to villages and encouraging higher school attendance. Next Lesson International Financial Institutions, Bretton Woods, Current state of economic globalization. Module 2.3 : Market Integration What is Market Integration? A situation in which separate markets of the same product is unified in one single market, and thus products and services can flow freely between countries and regions. Page | 20 Local: The Product in Manila is sold in Mindanao in similar price over the long run. Global: The Product in China is sold in Philippines in similar price over the long run. Thus, The Global Market is acting like a Local Market. Prices of related goods in different locations follow similar patters over a long period of time. Facilitated by: IFIs. Reduction of tariffs Adoption of common currency Harmonization of regulatory standards Development of infrastructure to facilitate transportation and communication When markets are highly integrated, there are fewer trade barriers and prices are similar. In case of low integration, prices among these markets fluctuate and there are several barriers in trade Market Integration Market integration allows firms to access a larger pool of customers and suppliers which can increase their profits and lead to higher levels of economic growth. Market integration can create global competition, with some industries and regions benefit more than others. For example, firms in industries that can compete internationally may thrive. But firms that are not globally competitive can suffer (can negatively affect local products). The basic question in Market Integration is, How can a product produced in one part of theworld, be bought by the other parts of the world at the same price? Through Price Signals. International trade helps the integration of markets because it allows price signals to be transmitted from one market to another. Price signals can be used to tell consumers and producers about changes in the market. The Integrated Economies The import and export of goods and services across interational boundaries made possible because of Ihtegfation. Page | 21 Goods and services that enter into a country for sale are called imporls. Goods and sorices that leave a country for sale in another country are called exports. The basic question in Market Integration is, When markets are well-integrated, prices are more stable, and household food security is improved because poor households can obtain food at more affordable prices. Well integrated markets can help avoid localized food shortages. ASEAN Market Integration and International Financial Institutions. The goal of ASEAN is to help its member- states have stable economy. Trade facilitation is at the very core of ASEAN's commitment to market integration. Facilitated by: ○ Reduction of tariffs ○ Adoption of common currency ○ Harmonization of regulatory standards ○ Development of infrastructure to facilitate ○ transportation and communication It is important to ensure that the benefitsb of integration are shared faitk and that measures are taken to adatess fhe negative impacts that gon afise for certain industries or regions. Bretton woods After the two world wars, world leaders sought to create a global economic system that would ensure a longer-lasting global peace. They believed that one of the ways to achieve this goal was to promote economic interdependence and prosperity. This was the background for a meeting in July 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire, which led to the beginning of the “Bretton Woods System” by the end of the three-week meeting Bretton woods The US and English representatives, H.D. White and J.M. Keynes set out create institutions so to prevent the recurrence of the conditions which led to World War II. They proposed the creation of Page | 22  three organizations, with each organization playing a role in the smooth functioning of global economy. These were: ○ The international Bank for Reconstruction and Development (IBRD or the World Bank) ○ The International Monetary Fund (IMF) ○ The International Trade Organization (ITO) International financial institutions In many parts of the world, International Financial Institutions (IFIs) play a major role in the social and economic development programs of nations with developing or transitional economies. This role includes advising on development projects, funding and assisting in their implementation with the following goals and objectives: ○ To reduce global poverty and improve people’s living conditions and standards. ○ To support sustainable economic social, and institutional development; and ○ To promote regional cooperation and integration ITO and gatt The International Trade Organization (ITO), which was not ratified by the US Congress and consequently did not become a reality. Further, some (protectionists in the US) found it too oriented toward free trade, while other Americans (free traders) thought it too protectionist. However, its primary function of liberalizing world trade was given to the General Agreement on Tariffs and Trade (GATT). Gatt General Agreement on Tariffs and Trade GATT was a system for the liberalization of trade that grew out of Bretton Woods and came into existence in 1947 (Hudec 1975). It operated until 1995 when it was superseded by the World Trade Organization (WTO) Difference between gatt and wto While GATT focused on trade in goods, the WTO also took on responsibility for the increasingly important trade in services. Page | 23  While GATT was simply a forum for the meeting of representatives of countries, the WTO is an independent organization. GATT was deemed more acceptable than the ITO by the US (and others) and in 1947 a number of initial trade agreements were negotiated by 23 nations. World trade organization The WTO is a multilateral organization headquartered in Geneva, Switzerland, with, as of mid-2014, 160 member nations (Krueger 2000, 2012; World Trade Organization 2013). The WTO encompasses much of what was GATT’s mandate. More recently, attention has shifted to such issues as “international trade in services, trade-related international property rights (TRIPS), and trade-related investment measures (TRIMS)” (House 2007). Trips and trims Trade-Related Aspects of International Property Rights (TRIPS): WTO agreement to protect the interests of those that create ideas. ○ Intellectual property rights (IPRs) are an increasingly important issue in the world today and as it relates to globalization (Bedirhanoglu 2012). Trade-Related Investment Measures (TRIMs): WTO agreement on trade measures governments can impose on foreign firms. Other organizations The Group of Thirty(G30) is neither a governmental nor a state-based organization (Chiang 2012b). It was founded as a nonprofit organization in 1978 with a grant from the Rockefeller Foundation The Group of 77 involves developing nations and is part of the UN. Created in 1964, the Group of 77 is a misnomer since it now numbers 133 nations. The Group of 21 - developing nations came into existence at the 2003 meetings of the WTO under the leadership of Brazil, South Africa, and India. Its major focus, at least initially, was on agricultural issues. International monetary fund The International Monetary Fund (IMF) whose primary purpose was to maintain a fixed exchange rate system known as the Bretton Woods System. Page | 24  As a result of changes in the global economy, the nature and functions of the IMF have changed since its creation in 1944. IMF By the end of the 1970s developed nations had fully recovered from WW II and ceased seeking adjustment loans; such loans were now given to developing countries with balance-of-payments problems. With a new clientele, the conditions for such loans changed and became more stringent, including the demand for structural adjustments in such nations. Structural adjustment: Conditions of economic “restructuring” imposed by organizations such as the World Bank and the IMF on borrowing nation-states. Controversies surrounding imf In the 1990s the IMF was actively involved in helping to resolve the economic crises in Latin America, Asia, and Russia. However, critics contend that IMF policies were largely responsible for creating many of these crises, especially Argentina’s 2001 financial collapse. Also in the aftermath of the East Asian Crisis. World bank The international Bank for Reconstruction and Development (IBRD or the World Bank) whose original mandate was to rebuild the war-torn economies of Europe and Asia. It has evolved into the world’s most influential lender of foreign aid to developing nations. Membership is open to all member states of the IMF and as of this writing it includes 188 nations. End of Bretton woods While many of the economic organizations discussed above remain in place and of great importance in the global economy, and many of those to be discussed below were at least inspired by Bretton Woods, it can be argued that Bretton Woods itself died on August 15, 1971 President Richard Nixon took the US off the gold standard resulting in a devaluation of the dollar and the end of the standard by which the currencies of other nations operated. Page | 25 END of Bretton Woods The oil price shocks of 1970’s forced many Americans for the first time to realize that the US economy was not independent from the rest of the world. The recessions following the oil crises of 1973 and in 1979 led both recession and inflation simultaneously. The oil price shocks set into motion events that are still present in today’s global economy. Further criticisms of the system especially with the rise of neoliberalism. Multinational corporations The rise of global corporations is a reflection of globalized market integration. The Transnational Corporations (TNCs) and Multinational Corporation (MNCs) are no longer limited to their home countries. These global corporations have common attributes. Neubauer (2014) identifies three of them; ○ an agent of desired economic development, ○ an economic prominence, ○ and a very powerful entity that can create a crisis. Critiques of the Bretton woods system The World Bank has been loaning large sums of money to countries whose economies sometimes did not need such loans. Furthermore, the Bank’s loans to “middle-income” and “high-income” economies (e.g. Greece) have far exceeded the loans given to “low-income” economies (in recent years, more than half of the IMF’s lending has gone to European countries that had rarely received IMF loans before [Ewing 2013]). Critiques of the Bretton woods system Even in terms of the funds that do go to poor countries, the World Bank is an increasingly small player in comparison to various international and private aid organizations. As a result, one professor said: “… it’s hard to see what good it [the World Bank] has done anywhere” (quoted in Weisman 2007a: C8). Thus, former US Secretary of State George Schulz says, “If it [IMF] disappeared tomorrow, I don’t think people would miss it very much” (quoted in Weisman 2007a: C8). On the other hand, there are those who argue that while things are relatively calm for the moment, the IMF will be needed during the next global financial crisis Page | 26 Critiques of Bretton woods system Joseph E. Stiglitz ○ a member of President Bill Clinton’s Council of Economic Advisors and as ○ Chief Economist at the World Bank. Joseph Stiglitz criticizes these institutions for their policy of imposing liberalization on developing countries, especially their use of a one-size-fits-all, ideological approach. Stiglitz believes that premature opening of markets under the structural adjustment programs increased the vulnerability of some countries to economic crises, and that the Great Recession was largely a matter of bad policy. The lack of transparency and the dominance of the US and Europe in the governing structure of these organizations has also been severely criticized. Critiques of the Bretton woods system Stiglitz offers a long list of some specific IMF errors and blunders: ○ 1. The privatization of state-run systems (e.g., steel mills) was often done too quickly and the new privatized businesses were often ineffective, in part because they weren’t ready to operate on their own. As a result, consumers suffered, as did workers as privatization brought with it job loss. Privatization often also went hand-in-hand with corruption (see below). Critiques 2. The push to liberalize financial and capital markets, and to reduce barriers to trade, often hurt small emerging countries (e.g. through higher unemployment) and contributed to the financial crises of the 1990s. Furthermore, resentment was generated in those countries because the pressure to liberalize them came with restrictions on finance, capital, and trade. 3. The emphasis on foreign investment often adversely affected indigenous businesses in less developed countries. Critiques 4. The IMF failed in the sequencing and pacing of the changes: “forcing liberalization before safety nets were put in place, before there was adequate regulatory framework, before the countries could withstand the adverse consequences of the sudden changes in market sentiment that are part and parcel of modern capitalism; forcing policies that led to job destruction before the essentials of job creation were in place; forcing privatization before there were adequate competition and regulatory frameworks.” (Stiglitz 2002: 73) Page | 27  5. The IMF failed to deal with a variety of issues such as job creation, land reform, improved education and health services, and helping workers adversely affected by its policies. Mindanao context This figure illustrates how farming sector in Bukidnon are being integrated in the market with the aid of contract farming that exists between the big firm, San Miguel Corporation, Inc., and the small hold cassava farmers in Mantibugao and Maramag through their respective intermediaries, the cooperative. Further, the study revealed the efficiency of contract farming in integrating small farmers to the market. Through contract farming, the farmers have better access to farm technology, cash advances to fund production expenses, opportunities to acquire knowledge through seminars and educational tours to other farm villages, and better price negotiations. Page | 28