Module 2

in
GE 5 The Contemporary World

Table of Contents
Introduction 2
Objectives 2
Discussions 2
Summary 4
References 4

Mr. Rainville R. Balase

College of Arts and Communication
University of Eastern Philippines

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 Unit II

The Structures of Globalization

Introduction
The discussions in this second module will focus on the economic dimension
of the contemporary world vis-à-vis globalization. We have learned in our previous
module that globalization is an interconnected process of the political, sociocultural,
technological, and economic events worldwide. At this point, it is interesting to find
out how globalization plays important role in a country’s economy, in particular, and
in the world economy, in general.

Objectives
At the end of the learning sessions, the students will be able to:
a. describe economic globalization;
b. identify the actors that facilitate economic globalization;
c. define the world system; and
d. articulate a stance on global economic integration.

Economic Globalization
In today’s world, no nation exists in economic isolation. All aspects of nation’s
economy – its industries, service sectors, levels of income and employment, and
living standards – are more likely to the economies of its trading partners. This
linkage takes the form of international movements of goods and services, labor,
business enterprise, investment funds, and technology.
According to the United Nations (as cited by Aldama, 2018), “economic
globalization is the increasing interdependence of world economies as a result of
growing scale of cross-border trade of commodities and services, flow of
international capital, and wide and rapid spread of technologies. It reflects the
continuing expansion and mutual integration of market frontiers, and is an
irreversible trend for economic development in the whole world at the turn of the
millennium.”
Advances in communication and transportation technology, combined with
free-market ideology, have given goods, services, and capital unprecedented
mobility.

Global Actors
A global actor refers to any social structure which is able to act, influence and
engage in the global or international system. These actors help facilitate the
economic globalization.
International Economic and Financial Organizations/Institutions, provide
the structure and funding for many unilateral and multilateral development projects.
Such organizations deal with the major economic and political issues facing
domestic societies and the international community as a whole. The typical
examples of these are the International Monetary Fund (IMF) and the World Bank.
International Governmental Organizations (IGOs), have international
membership, scope and presence. Their primary members consist of sovereign
states. These organizations bring member states together to cooperate on a

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particular theme or issues that have global impacts and implications such as human
rights, trade, development, poverty, gender or migration.
Media, serve as outlets or tools used to store and deliver information or data
in various forms such as, but not limited to, print media, publishing the new media,
photography, cinema, broadcasting (radio and television), and advertising.
Multilateral Development Banks are international financial institutions
owned by countries. These institutions provide loans, grants, guarantee, private
equity and technical assistance to public and private sector projects in developing
countries. In addition to the World Bank Group, there are four regional multilateral
development banks: the Inter-American Development Bank, the African
Development Bank, the Asian Development Bank, and the European Bank for
Reconstruction and Development.
International Non/Non-Governmental Organizations (INGOs/NGOs),
perform a variety of services and humanitarian functions. Some are organized
around specific issues such as human rights, environment, gender, or health. In
other terms, these are also defined as “civil society organizations”.
Transnational Corporations/Companies (TNCs) exert a great deal of power
in the globalized world economy. Many corporations are richer and more powerful
that the state (country) that seeks to regulate them. Through mergers and
acquisitions corporations have been growing very rapidly and some of the largest
TNCs now have annual profits exceeding the GDPs of many low and medium
income countries.
Multinational Corporations (MNCs) are companies that operate in two or
more countries, leveraging the global environment to approach varying markets in
attaining revenue generation. These international operations are pursued as a result
of the strategic potential provided by technological developments, making new
markets a more convenient and profitable pursuit both in sourcing production and
pursuing growth.
United Nations for Economic and Social Council (ECOSOC) is
responsible for promoting higher standards of living, full employment, and economic
and social progress; identifying solutions to international economic, social, and
health problems; facilitating international cultural and educational cooperation; and
encouraging universal respect for human rights and fundamental freedom.

World System
World system refers to the inter-regional and transnational division of labor,
which divides the world into core countries, semi-periphery, and the periphery
countries. Core countries focus on higher skill, capital-intensive production, and the
rest of the world focuses on low-skill, labor-intensive production and extraction of raw
materials. This constantly reinforces the dominance of the core countries, making
these countries become the world hegemon. This status has passed from the
Netherlands, to the United Kingdom and (most recently) to the United States.

Global Economic Integration

The high degree of economic interdependence among today’s economies
reflects the historical evolution of the world’s economic and political order. At the end
of World War II, the United States was economically and politically the most powerful
nation in the world, a situation expressed in the saying, “When the United States
sneezes, the economies of other nations catch the cold.” But with the passage of
time, the U.S economy has become increasingly integrated into the economic

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activities of foreign countries. The formation in the 1950s of the European Union, the
rising importance of multi-national corporations in the 1960s, the 1970s market
power in world oil markets enjoyed by the Organization of Petroleum Exporting
Countries, and the creation of the euro at the turn of the twenty-first century all
resulted in the evolution of the world community into a complicated system based on
a growing interdependence among nations.
Over the past 50 years, the world’s market economies have become
increasingly integrated. Exports and imports are a share of national output has risen
for most industrial nations, while foreign investments and international lending have
expanded. This closer linkage of economies can be mutually advantageous for
trading nations. It permits producers in each nation to take advantage of
specialization and efficiencies of large-scale production. A nation can consume a
wider variety of products at a cost less than that which could be achieved in the
absence of trade. Despite these advantages, demands have grown for protection
against imports. Protectionist pressures have been strongest during periods of rising
unemployment caused by economic recession. Moreover, developing nations often
maintain that the so-called liberalized trading system called for by industrial nations
serves to keep the developing nations in poverty.

Summary
The rate of globalization has increased in recent years, as a result of rapid
advancement in communication and transportation technology. Advances in
communication enable businesses to identify opportunities for investment. At the
same time, innovations in information technology enable immediate communication
and the rapid transfer of financial assets across national borders. Improved fiscal
policies within countries and international trade agreements between them also
facilitate economic globalization.

Activity
Answer questions properly and lay down your bases.
1. Does global free trade do more harm than good?
2. Do you agree in “buying Filipino” products even if you have to pay a higher
price?
3. Give the top 25 world’s best companies in 2019 (include their industry and
headquarters.
4. Do you think that the Philippines is harmed as other countries transfer their
activities to us through outsourcing?

References

Aldama, Prince Kennex R.(2018). The Contemporary World. Quezon City:

Rex Bookstore, Inc.

Ang, Jaime G. et al (2018). The Contemporary World. Manila: Mindshapers

Co., Inc.

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 _______________(2020). The Contemporary World: An Outcome-Based
Education Approach. http://www.scribd.com

Other Sources

Global Policy Forum (2005) www.globalpolicy.org

Lund University Library (2018). www. lub.li.se

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