Globalization Reviewer PDF

**CHAPTER 1 - GLOBALIZATION** **Globalization** is the process in which people, ideas and goods spread throughout the world, spurring more interaction and integration between the world\'s cultures, governments and economies. - is a process of **interaction and integration** among the people,...

**CHAPTER 1 - GLOBALIZATION** **Globalization** is the process in which people, ideas and goods spread throughout the world, spurring more interaction and integration between the world\'s cultures, governments and economies. - is a process of **interaction and integration** among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. - is about growing **worldwide connectivity.** - is the process of **integration of economies** across the world through cross-border flow of factors product and information. - is an **expansion, and intensification of social relations** and consciousness across world time and world space. It is about growing worldwide connectivity according to **Steger.** - is considered a **multi-dimensional process.** **Technology** - one principal driver of globalization. **Attributes, Qualities or Characteristics of Globalization** 1\. It involves both the creation of new social networks and the multiplication of existing connections that cut across traditional, political, economic, cultural, and geographical boundaries. 2\. Globalization is reflected in the expansion and the stretching of social relations, activities, and connections 3\. Globalization involves the intensification and acceleration of social exchanges and activities 4\. Globalization processes do not occur merely or an objective, material level but they also involve the subjective plane of human consciousness. **Historical Periods of Globalization** - **The Prehistoric Period (10000 BCE-3500 BCE)** - earliest phase of globalization, contacts among hunters and gatherers. - **The Pre-modern Period (3500 BCE- 1500 CE)** In this period the invention of writing and the wheel were great social and technological boosts that moved globalization to a new level. - **The Early Modern Period (1500-1750) -** It achieved a universal form of morality and law. - **The Modern Period (1750-1970) -** Innovations in transportation and communication technology. - **The Contemporary Period (from 1970 to present)** The creation, expansion, and acceleration of worldwide interdependencies occurred in a dramatic way and it was a kind of leap in the history of globalization. 1. **Economic Dimension** This refers to the extensive development of economic relations across the globe as a result of technology. 2. **Political Dimension** This refers to an enlargement and strengthening of political interrelations across the globe. 3. **Cultural Dimension** This refers to the increase in the amount of cultural flows across the globe. 4. **Religious Dimension** It is the most important defining element of any civilization as contrasted with race, language, or way of life. 5. **Ideological Dimensions** It is often used to legitimize certain political interests or to defend dominant power structures. **Religion** is a personal or institutionalized set of attitudes, beliefs, and practices relating to or manifesting faithful devotion to an acknowledged ultimate reality or deity. **Globalism** is an ideology that gives the concept of neo-liberal values and meanings to globalization. **Ideology** is a system of widely shared ideas, beliefs, norms and values among a group of people. **Cultural interconnections** are at the foundations of contemporary globalization. **CHAPTER 2 - THE GLOBAL ECONOMY** **Origin of Economic Globalization** It can be traced from history the time when there was an economic movement in Asia, Africa and Europe called the **Silk Road**, a trade route which connects the East, particularly China, and the West. This route brings us to the history of how Philippines was discovered by the Portuguese and Spain envoys in search of spices and eventually led to **colonization**. At this present day time, foreign expatriates come to the country to manage their company's foreign subsidiaries. Likewise, the Philippines send thousands of skilled workers to the Middle East as construction workers, seafarers, nurses ,etc. **Economic globalization** refers to the expanding interdependence of world economies. - The term **global economy** also refers to the interconnected worldwide economic activities that take place between multiple countries. - The **International Monetary Fund (IMF)** also defined Economic Globalization as a **historical process,** the result of human innovation and technological progress (IMF,2008) - **traded across national borders** **The New World Economy is characterized by:** 1. More options for production. No matter what your production process, the chances are that the same capabilities exist elsewhere. 2. The chance to create new markets 3. Small firms can think big 4. A more level playing field 5. Networks are important 6. Culture is no constraint **Specific actors that facilitate economic globalization are highlighted as follows:** 1. The International Economic and Financial Organization 2. The International Governmental Organization (IGOs) 3. The Media 4. The Multilateral Development Banks 5. The Nation-States 6. The Non-Governmental Organizations (NGOs) 7. The Trans-National Corporations (TNCs) 8. The United Nations (UN) System **Brodie (2006)** called the government as the **"midwives of globalization."** **CHAPTER 2: LESSON 2 - MARKET INTEGRATION** **Market integration** occurs when prices among different locations or related goods follow similar patterns over a long period of time. **Integrated marketing** allows you to spread your marketing messages across multiple channels and increases the chances of it being heard. **Global market integration** was the result of the establishment of a global economy that involved the **homogenization of trade and commerce.** **Colonization and imperialism** rose as the new ways of putting order to the economic interrelationships among countries. **Types of Related Markets where Market Integration Occurs** **Stock Market Integration** - This is a condition in which stock markets in different countries trend together and depict same expected risk adjusted returns. **Financial Market Integration** - It is an open market economy between countries facilitated by a common currency and the elimination of technical, regulatory and tax differences to encourage free flow of capital and investment across borders. **Global Corporation** is a business that operates in two or more countries. It also goes by the name **\"multinational company\".** **The Finance Function in a Global Corporation** **Chief financial officers (CFOs)** must balance the opportunities with the challenges of operating in multiple environments in managing their internal markets in building an advantage. 1\. **Financing** - A group\'s tax bill can be reduced by the CFO liko borrowing in countries with high tax rates and lending to operations in countries with lower rates. 2\. **Risk Management** - Global firms can offset natural currency exposures through worldwide operations instead of managing currency exposures through financial markets. 3\. **Capital budgeting** - Getting smarter on valuing investment opportunities CFOs can add value. **Foreign Direct Investment (FDI)** was of corporate origin. It is a major driver of extended global corporate development. It is an investment made by a company or individual in one country in business interests in another country. **BRICS Economies** - Brazil, Russia, India, China and South Africa (BRICS) is an acronym for the combined economies of **Brazil, Russia, India, China and South Africa**. BRIC, without South Africa, was originally coined in 2003 by **Goldman Sachs**, which speculates that by 2050 these four economies will be the most dominant. South Africa was added to the list on **April 13, 2011** creating \"BRICS\" **General Agreement on Trade in Services (GATS)** - is the **first multilateral agreement** covering trade in services which was negotiated during the last round of multilateral trade negotiations, called the **Uruguay Round**, and came into force in **1995**. **General Agreement on Tariffs and Trade (GATT)** - **deals with trade in goods**. The two primary objectives of GATTS are **to ensure that all signatories are treated equitably** when accessing foreign markets; and second, **to promote progressive liberalization of trade.** - A legal and political entity - Linked to a territory - Exist with sovereignty - Established consciously - United by law - A socio-cultural entity - Linked to a group people - May exist even w/o sovereignty - Can be created unconsciously - United by bond and shared history - This refers to modern countries and their political apparatuses rules over a single nation. - It is a political community that emanates from civic society to legitimately execute peace. The belief that globalization imposes a forced choice upon states either to conform to free market principles or run the risk of being left behind is termed into a phrase called **"Golden Straitjacket"** **There are two things that will happen if a country is in Golden Straitjacket**: the economy grows and politics shrinks. It is a straitjacket because it narrows the political and economic policy choices of those in power to relatively tight parameters **Neoliberalism** - the intensification of the influence and dominance of capital. - It values market exchange capable of acting as a guide to all human action. - It emphasizes the significance of contractual relations in the marketplace. - the social good will be maximized by maximizing the reach and frequency of market transactions **Economic Sovereignty** The power or national governments to make decisions independently of those made by other governments. There are four diff. concepts of sovereignty. 1. International legal Sovereignty, 2. Westphalian Sovereignty, 3. Interdependence Sovereignty and 4. Domestic Sovereignty. **World's Three Leading Financial Institutions** 1. **World Bank (WB)-** The international financial institution that provides loans to countries of the world for capital projects. 2. **International Monetary Fund (IMF)-** It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to member 3. **World Trade Organization (WTO)-**regulates international trades deals with the rule of trade between nations, ensure the trade will flows smoothly, predictably and freely as possible. Act as forum in negotiation trade agreements **European integration -** Is the process of industrial, political, legal, economic, social and cultural integration of states wholly or partially in Europe. **European Union (EU) -** Is an international organization comprising 28 European countries and governing common economic, social, and security policies **Economic Integration** - can be described as a process and a means by which a group of countries strives to increase their level of welfare. - It is an arrangement between different regions that often includes the reduction or elimination of trade barriers, and the coordination of monetary and fiscal policies. **Seven Stages of Economic Integration** **Preferential Trade Areas (PTAs) -** Happens when there's an agreement on reducing or eliminating tariff (tax or duty to be paid on a particular class of imports or exports) **Free Trade Agreements (FTAs) -**Eliminate import tariffs as well as import quotas between signatory countries. **Custom Union -** Removal of tariff barriers between members, together with the acceptance of a common or unified external tariff against non-members **Common Market (CM) -** All barriers to the mobility of people, capital and other resources within the area in question, as well as eliminating non-tariff barriers to trade, such as the regulatory treatment of product standards are removed by CM aside from containing the provisions of a customs union. **Economic Union -** The trading bloc that has both a common market between members, and a common trade policy towards non-members. **Economic and Monetary Union (EMU) -** Involves a single economic market, a common trade policy, a single currency and a common monetary policy. **Complete Economic Integration -** The final stage of economic integration in which member states completely forego independence of both monetary and fiscal policies. **Theories of European Integration** **Neo-functionalism** - This theory focuses on the supranational institutions of the EU of which the main driving forces of integration are interest group activity at the European and national levels, political party activity, and the role of governments and supranational institutions. - It is a theory of regional integration, building on the work of Ernst B. Haas, an American political scientist and Leon Lindberg, also an American political scientist. **Intergovernmentalism** - This theory provides a conceptual explanation of the European integration process. **Liberal Intergovernmentalism -** Application of rational institutionalism to the field of European integration is the aim of this theory. **Multi-level Governance (MLG) -** Writers defined MLG as dispersion of authority across multiple levels of political governance. (Liesbet Hooghe and Gary Marks ) **Transnational Activism -** Defined as the mobilization of collective claims by actors located in more than one country and/or addressing more than one national government and/or international governmental organization or another international actor. **Social Movement -** Is a type of group action. It refers to the organizational structures and strategies that may empower oppressed populations to mount effective challenges and resist the more powerful and advantaged elites\". **Global Justice Movement -** Describes the loose collection of individuals and groups often referred to as a "movement of movements", who advocate fair trade rules and are negative to current institutions of global economics such as the World Trade Organization **New Transnational Activism -** Is as multifaceted as the internationalism. Although globalization and global neo-liberalism are frames around which many activists mobilize. **Social media** is a computer-based technology that facilitates the sharing of ideas and information and the building of virtual networks and communities. **CHAPTER 2 -- LESSON 4: CONTEMPORARY GLOBAL GOVERNANCE** **CONTEMPORARY GLOBAL GOVERNANCE -** Is a product of neo-liberal paradigm shifts in international political and economic relations **International Organization (IOs) -** Commonly used to refer international intergovernmental organizations on groups that are primarily made up of member-states. **Powers of International Organization** 1. Power of classification 2. Power to fix meanings 3. Power to diffuse norms 4. Because of these immense powers, IOs can be sources of great good and great harm. **United Nation** is tasked to promote international co-operation and to create and maintain international order. **Four Main Purposes of the UN Charter** 1\. Maintaining worldwide peace and security 2\. Developing relations among nations 3\. Fostering cooperation between nations in order to solve economic, social, cultural, or humanitarian international problems 4\. Providing a forum for bringing countries together to meet the UN\'s purposes and goals **The Role of the Nation -State in Globalization** **Basic Elements of a State** **1.** Territory **2.** People **3.** Sovereign Power ( the authority of a state to govern itself) **Globalization's Impact on the State** **1.** Poverty **2.** Environmental pollution **3.** Economic crisis **4.** Organized crime and terrorism **GLOBAL SOUTH** In general, Global South refers to these countries\' \"interconnected histories of c of colonialism, neo-imperialism, and differential economic and social change through which large inequalities in living standards, life expectancy, and access to resources are maintained. **NORTH** - Less Population - High Wealth - High Standard of Living High Industrial Development Industry **SOUTH** - HighPopulation - Low Wealth - Low Standard of Living - Low Industrial - Development - Agricultural **First World** developed, capitalist and industrial countries. \- North America \- Western Europe \- Japan \- Australia **Second World** former Communist-Socialist Russia Eastern Europe Turk States China **Third World** Developing Countries \- Africa \- Asia \- Latin America **REGIONALISM** Refers to the decentralization of political powers or competencies from a higher towards a lower political level. **JAPAN** Japan embarked on procuring raw materials like coal and iron at unprecedented economies of scale allowing them to gain a competitive edge in the global manufacturing market as well as globalized shipping and procurement patterns which other countries modeled. **INDIA** India opened -up and emphasized an export- oriented strategy. Textiles and other low wage sectors have been a key part of the economy with highly successful software development exports. **CHINA** China pursues similar pattern of development at present and is now the world\'s largest importers of basic raw materials such as iron and surpassed Japan, the US and Europe in steel production.