THE GLOBAL

ECONOMY
• The United Nations (UN) which is considered as an international organization
tried to address the different problems in the world. Their efforts were guided by the
eight Millennium Development Goals such as :
• Eradication of extreme poverty and hunger
• Achieving universal primary education
• Promoting gender equality and women empowerment
• Reducing child mortality (child death rate)
• Improving maternal health
• Combating diseases like HIV/AIDS and Malaria
• Ensuring Environmental Sustainability
• Having a global partnership for development.
• In terms of eradicating poverty, it becomes problematic and difficult to fully achieve
this goal since there are different standards of living around the world depending on
the economic status of each country as a member of UN.
• In the case of the Philippines, a person is considered “mahirap” or living in a
poverty line or poverty threshold, if he makes less than 100, 534 pesos a year
around 275 pesos a day.
• According to UN, extreme poverty can be characterized as severe deprivation of
basic human needs and defines as living on less than $1.25 a day.
• It can therefore be apprehended that there are differences when it comes to the
standard of the member country and the UN. If you are going to analyze it in the
case of the Philippines, following the standard of the UN who said that those who
are living in poverty line are those who are living on less than $1.25 a day.
• UN reported that 836 million people are still living in extreme poverty but it went
down from 1.9 billion. It can be noticed that although it does not totally eradicate
poverty, there is a slight success when it comes to the eradication of extreme poverty
in the world.
• It can be seen that UN had made a difference and somehow contributed in
eradicating poverty but the greatest contributor would be the ECONOMIC
GLOBALIZATION since world economies have become more interconnected
since the start of free trade in each country.
• It refers to the increasing interdependence of world economies as a result of
a growing scale of cross-border trade of commodities and services, ( ex.
imports and exports of products) flow of international capital (presence of
multinational corporations in other countries around the world),and wide
and rapid spread of technologies.
• There are two types of economies as associated with ECONOMIC
GLOBALIZATION. These are PROTECTIONISM and TRADE
LIBERALIZATION.
• It means a policy of systematic government intervention in foreign trade with the
objective of encouraging domestic production. This encouragement involves giving
preferential treatment to domestic producers and discriminating against foreign
competitors.
• It actually means that the government would implement or say for example impose
tariffs or quotas to imported products in order to make sure that the domestic
product would be prioritized and patronized first by the citizen rather than
purchasing foreign products that are imported by the country. The goal of this
policy is to protect the domestic producers.
• Countries such as China, Japan and the US are examples of this economy according
to Ritzer.
• World War II heavily influenced the shifting of the dominant economic policy from
protectionism to trade liberalization of free trade. Free trade agreements and
technological advances in transportation and communication means goods and
services move around the world more easily than ever.
• This economic policy focuses more on free trade being governed by free trade
agreements entered by different countries. Its focus is more
• on open-market. It means that products and services are free to enter in different
country.
• Sustainable development refers to the degree to which the earth’s resources can be
used for our needs even in the future. It refers to the development of our world
today by using the earth’s resources and the preservation of such resources for the
future.
• Economic globalization resulted into lack of sustainability. Why? Because
development entails the continuous production of the world’s natural resources
resulting into disadvantage in the environment where our resources coming from
and therefore cannot preserve or secure for the sustainability of our future.
• Development was hastened by the Industrial Revolution. Industrial
Revolution is a period wherein different industries or factories emerged in
the economy.
• Cycle of EFFICIENCY also was made possible under Industrial Revolution.
Efficiency refers to finding the quickest possible way of producing large
amount of particular product. Since that there was an increased in the
demand, they tend to always produce large amount of product. This resulted
to a harm in the planet such as the emission of carbon from factories
resulted into the damage of atmosphere.
• Development was hastened by the Industrial Revolution. Industrial
Revolution is a period wherein different industries or factories emerged in
the economy.
• Cycle of EFFICIENCY also was made possible under Industrial Revolution.
Efficiency refers to finding the quickest possible way of producing large
amount of particular product. Since that there was an increased in the
demand, they tend to always produce large amount of product. This resulted
to a harm in the planet such as the emission of carbon from factories
resulted into the damage of atmosphere.
• Harvey (2005) noted that neoliberals and environmentalists debate the impact of
free trade on the environment.
• Environmentalists argue that environmental issues should be given priority over
economic issues since free trade through its expansion of manufacturing is
associated with environmental damage.
• Neoliberals saw the efforts of environmentalists as serious impediment to trade.
• On the other hand, some seek to integrate environmentalists and neoliberalist ideas.
Ecological modernization theory sees globalization as a process that can both
protect and enhance the environment through inventing ways of enhancing the
environment.
• Global food security means delivering sufficient food for the entire world population. It is
the concern of all countries and it means the sustainability of society such as population
growth,climate change,water scarcity and agriculture.
• Breene (2016) cited the case of India wherein that country is accounted for 18 percent of
the economy’s output in Agriculture and 47% of its workforce and considered as the 2nd
biggest producer of vegetables in the world. Despite of those facts, still 194 millions of
Indians are considered as undernourished .It means that there is a challenge in food security
because despite of the fact that a specific country is capable of producing any crop, it
doesn’t guarantee that there is a food security within the country.
• Failure in food sue to environmental damages as a result of development of globalization.
Environment or natural resources is very important since it is the source of our food.
• Economic and trade globalization is the result of companies trying to
outmaneuver their competitors. As a result, these companies are searching
for the cheapest way to produce a specific product in order to gain more
profit. Tendency is they tend to produce products in other country which has
lower wages and weak regulation when it comes to salary of the workers.
This process creates inequality as it produces WINNERS and LOSERS.
• Winners are those business owners who will benefit from the high profit and
those consumers who will also benefit by purchasing a product with a low
price since it is produced in a much lower capital.
• One of the best ways to help those in extreme poverty is to enable them to
participate in the economy. A perfect example is microcredit. In 2006, a Bangladeshi
professor named Muhammad Yunus won the Nobel Peace Prize for giving small
loans on average around $100 to low-income people in rural areas. The borrowers
used this loan to fund plans in order to increase their income by means of starting
small businesses.
• Microcredit does not totally solve the problem of extreme poverty but supports the
idea that it enables the people to participate in the economy that can make their lives
better. According to Yunus, these poor people must innovate everyday in order to
survive. They have the innovation but they remain poor because they don’t have the
means to turn their creativity into sustainable income because they don’t have the
capital.
• The division of nations such as the terms “the North and the South”, “developed
and less developed”, the “core and the periphery” suggests that there are differences
between countries and it reflects INEQUALITY in the Contemporary World.
• There are two types of Global Economic Inequality; Wealth Inequality and Income
• Inequality.
• Wealth refers to the net worth of a country . It takes into account all the assets of
the nation whether is natural (Natural resources that a country has), physical
(businesses within the country) and human (workforce of a specific country.) less the
liabilities. Wealth inequality therefore speaks about the distribution of assets.
• There is no monetary measures that sums up the assets.
• Income is the new earnings that are constantly being added to the pile of a country’s
wealth. Example is the Gross Domestic Product (GDP). Income inequality therefore
talks about the earning which are being distributed and values about the flow of
goods and services. Unlike in wealth, income has a monetary measures.
• According to the Global Wealth report, global wealth today is estimated to be about
3.5 trillion dollars and it is not distributed to different countries equally. Therefore,
there is inequality between different countries. Countries like US and Japan were able
to increase their wealth leaving other countries behind.
• Branko Millanovic (2011) explained global inequality by describing an “economic big
bang” wherein Industrial Revolution caused the
• differences among countries. Through the explosion of industry and modern
technology, some countries become economically developed while others are
developing countries. It resulted to economic gap between different countries maybe
because some countries cannot afford to have modern technology.