The State in the Global

Economy
Module 12

Submitted to:
Mr. Lido Jardio
By:
Santos, Paul Evanz Q.
Esquivel, Maria Gracia M.
Desuyo, Yunus A.
11 – HUMSS A

March 2023
 TABLE OF CONTENTS

1. Introduction……………………………………………………………………………………………………..

2. Body…………………………………………………………………………………………………………………….

2.1 Knowledge………………………………………………………………………………………………………

2.1.1 Globalization………………………………………………………………………………………
2.1.2 Global Economy……………………………………………………………………………………
2.1.3 The State in The Global Economy……………………………………………………………
2.1.4 Effects of Globalization……………………………………………………………………………
2.1.5 The New Geography of Power…………………………………………………………………

2.2 Comprehension…………………………………………………………………………………

2.3 Analysis……………………………………………………………………………………………

2.4 Synthesis……………………………………………………………………………………………

2.5 Application……………………………………………………………………………………………

3. Summary……………………………………………………………………………………………

4. Conclusion…………………………………………………………………………………………

4.1 Quotation……………………………………………………………………………………………
4.2 Annexes……………………………………………………………………………………………
4.2.1 References………………………………………………………………
4.2.2 Assessment………………………………………………………………
INTRODUCTION

The State in the Global Economy

The state is primarily responsible for promoting and regulating the economic
activities that take place within its boundaries. Nonetheless, a nation's steady and
balanced economic growth is largely dependent on its foreign commerce in
products and services. This is even truer now that the circumstances for the
development of the so-called global economy have been established by the
political calm of international politics, the opening up of national markets, the
removal of trade restrictions, and the digital and communications revolution.
States also seek to protect their economy from the whims of global commerce
while also looking to benefit from it by using two different sorts of interventions.
First is import controls, and the most well-known tool in this regard is the
imposition of customs barriers on imported goods. This helps to boost domestic
production by discouraging the sale of certain goods on the home market. The
adoption of an import and export quota system, or the setting of boundaries
beyond which a specific commodity can no longer be imported or exported, is
frequently linked to the application of customs tariffs. Checks and evaluation tests
to establish whether a specific product is authentic are further tools intended to
limit international trade.

DEFINITION OF TERMS

STATE AUTHORITY

The term authority identifies the political legitimacy, which grants and justifies the
ruler's right to exercise the power of government; and the term power identifies
the ability to accomplish an authorized goal, either by compliance or by
obedience; hence, authority is the power to make decisions and the legitimacy to
make such legal decisions and order their execution.

INTERGOVERNMENTAL ORGANIZATION (IGO)

The term intergovernmental organization (IGO) refers to an entity created by

treaty, involving two or more nations, to work in good faith, on issues of common
interest. In the absence of a treaty an IGO does not exist in the legal sense.

GLOBAL ECONOMY

Global economy can be defined as the sum of activities that take place both
within a country and between different countries. Each country is a separate unit,
with its own industrial production, labor market, financial market, resources and
environment.

INTERPENDENT ECONOMY

Economic Interdependence exists between countries when they rely upon each
other in order to buy and sell affordable goods.

NEW WORLD ORDER

New period of history evidencing dramatic change in world political thought and
the balance of power in international relations.

DEVELOP WESTERN COUNTY

The Western world, also known as the West, primarily refers to various nations
and states in the regions of Australasia,Europe,and the Americas.
POST COLONIAL

The term post-colonial is used to describe a certain type of state and a certain
type of politics. The states that emerged out of colonial empires in the Middle
East often inherited the colonial institutions that were in place. Many of the
leaders who emerged had been military officers who had served in armies that
were run by the British, the French, or even the Ottomans.

WESTERNIZATION

Westernization, the adoption of the practices and culture of western Europe by

societies and countries in other parts of the world, whether through compulsion
or influence. Westernization reached much of the world as part of the process of
colonialism and continues to be a significant cultural phenomenon as a result of
globalization.

EFFECTS OF GLOBALIZATION

For instance, globalization has been shown to increase the standard of living in
developing countries, but some analysts warn that globalization can have a
negative effect on local or emerging economies and individual workers.

THE SECOND AND THIRD WORLD NATION

First World

“Second World” refers to the former communist-socialist, industrial states,

(formerly the Eastern bloc, the territory and sphere of influence of the Union of
Soviet Socialists Republic) today: Russia, Eastern Europe (e.g., Poland) and some
of the Turk States (e.g., Kazakhstan) as well as China.
Third World
“Third World” are all the other countries, today often used to roughly describe
the developing countries of Africa, Asia and Latin America. The term Third World
includes as well capitalist (e.g., Venezuela) and communist (e.g., North Korea)
countries as very rich (e.g., Saudi Arabia) and very poor (e.g., Mali) countries.

NATION STATE

Nation-state, a territorially bounded sovereign polity a state that is ruled in the

name of a community of citizens who identify themselves as a nation.

INTERNATIONAL COMMERCE

International commerce is the buying and selling of goods between sovereign

nations.

INTERPENDENCE

Interdependence is the idea that a group can become mutually reliant on each
other. This can occur at the national level or the individual level.

INTERNATIONAL COMMERCE POLICIES

A commercial policy also referred to as a trade policy or international trade policy

is a government's policy governing international trade.

NEW GEOGRAPHY OF POWER

A country is considered powerful if it has a strong economy, a large military, and a
smart population. This power can be defined as national industrial strength,
educational level and size of the population, and military might.

FOOTLOSE

Free to do what you like and go where you like because you have no
responsibilities.

KNOWLEDGE
Globalization

Long before the expeditions of Marco polo, Christopher Columbus and

Ferdinand Magellan, the world has its own Natural Order of Trade or an older
version of Globalization is in place but as our culture evolves our simple trade
turned into so much more complicated form of transaction, as no longer two
bodies benefit from it but the entirety of the world does and so a Newer form of
Globalization arrives as today’s mega-corporations take their businesses across
the seas, the world will have its Old Order shaken by this New kind of
Globalization.

Globalization is the process of interaction and integration among people,

companies, and governments worldwide. The term globalization first appeared in
the early 20th century (supplanting an earlier French term mondialization),
developed its current meaning sometime in the second half of the 20th century,
and came into popular use in the 1990s to describe the unprecedented
international connectivity of the post-cold war world (Wikipedia).

In other words 21st Century’s Globalization serves as the worlds new core of
transactions as all of life’s basic commodities down to our own culture can be
greatly influenced by Globalization.
Global Economy

Global Economy based on its own terms global economy refers to the growing
trends for economic activity to operate between countries and even beyond
them. This trend started in the second half of the twentieth century, with the
growth of international trade and the liberation of production and finance from
the control of states, it also determines which of the world’s countries are more
powerful and wealthier than the other, due to a certain country’s immense
influence on the world economy which will become the determining factor on
how powerful the country is.

The State in The Global Economy

Whether a State-nation likes it or not, it will always be on the wave of the

Global Economy being surrounded by international corporations favorite weapon
“Globalization”, Though it also depends on their own capability to hold
themselves on the right position, as under-developed states greatly suffer and
those who are more developed than the other are able to progressively grow, as
the saying by Mahatma Gandhi goes “The world is big enough to satisfy
everyone’s needs, but will always be too small to satisfy everyone’s greed”.

The amount of perseverance a developing country should have is by a thinkers

standards would sum up to be “immeasurable”, the underdeveloped and
developing countries will remain dependent on the developed countries, While
their people are mired in poverty and remain in competition with other poor
states in the export of agricultural produce and minerals.

Effects Of Globalization

The Effects of Globalization surely will tantamount as big as our world, though
it is a statement one should observe first before confirming, here are the following
negative effects of globalization.
1. It favors Westernization, meaning that other nation-states are at a
disadvantage when dealing with the North America and Europe. This is
particularly true in the agricultural industry, in which second- and third-world
nations face internal competition from Western companies

2. Nation-states are forced to examine their economic policies in light of the

many challenges and opportunities that multinational corporations and other
entities of international commerce present. Multinational corporations,
particularly, challenge nation-states to confront the unique issue of foreign direct
investments, forcing nation-states to determine how much international influence
they allow in their economies.

3. Globalization creates a sense of interdependence among nations, which could

create an imbalance of power among nations of differing economic strengths.

Though there are some negative effects of globalization to our world’s trade
and industries all negativities have its own positive effects.

1. Foreign direct investment (FDI) tends to grow at a much greater rate than
world trade does. This can help to boost technology transfer, industrial
restructuring, and the growth of global companies.

2. Technological Innovation the increased competition helps inspire new

technological development. The growth in FDI helps improve economic output by
making processes more efficient.

3. Increased global trade enables large companies to realize economies of scale.

This reduces costs and prices, which in turn supports further growth. However,
this can hurt many small businesses trying to compete at home
(thebalancemoney,2022)

As Globalization continuously forge the path to progress, as we moved

forward, we should make sacrifices on our way, because without a flint and stone
we won’t have our torch lit to mark our goal.
The New Geography of Power

At the end of Cold War the entirety of the world have become more connected
more so than ever
as this sparks the beginning of peace and also trade, and in terms of territory the
larger a state has it, the more power they will have, as peace introduces itself a
new imbalance in power also emerges.
these are the three components of the new geography of power.

1. The first concerns the actual physical territories where much of globalization
materializes in specific institutions and processes.

2. The second concerns the ascendance of a new legal regime to govern cross-
border economic transactions, a trend not sufficiently recognized in current social
science literature.

3. The third component concerns the fact that a growing number of economic
activities are taking place in the digital space.

Adding these three to the unrestricted assets of a state means that the
traditional belief that the state and global economy are two separate realms of
their own might be incorrect since this helps a state, and also the global economy
may seem that the two are interconnected after all.

COMPREHENSION
In our perspective(s), we studied and read this module completely and
comprehensively. In our understanding this module only presented the following:
meaning of State in the Global Economy, Effects of Globalization, and The New
Geography of Power.
The meaning of State in the Global Economy is the way of balancing the economic
development and it controls all the transactions between countries. The Effects of
Globalization on the other hand, have good and bad effects in countries because
the Globalization creates an imbalanced of power among nations.

Lastly, The New Geography of Power states that the relationship between the
global economy and the state has not been captured by the traditional notion of
the state and the global economy as two mutually exclusive realms.

ANALYSIS

Based on our Observations the global economy as a whole has continuously

presented the world its negative effects, here are some of the problems that we
have observed happening to a state due to it being affected by the global
economy.

Income disparity or inequality in terms of educated and non-educated people’s

salary
This is one of the negative effects of global economy to the people due to the
fact that
a country’s economy is ever-changing, and a salary or income is what truly divides
the people
into two, The rich and the poor an example would be the garment industry in
Bangladesh, for instance, employs an estimated four million people, but the
average worker earns less in a month than a U.S. worker earns in a day. In 2013,
(National Geographic Society,2022).

Increased Child Labor Opportunities

Child labor has always been a problem for a country due to it being mired in
poverty
the incapable became capable, it is the harsh reality and a sad effect of an
Economy incapable of lifting its people up an example of such is In the Philippines,
there are 2.1 million child laborers aged 5 to 17 years old based on the 2011
Survey on Children of the Philippine Statistics Authority (PSA) . About 95 percent
of them are in hazardous work. Sixty-nine per cent of these are aged 15 to 17
years old, beyond the minimum allowable age for work but still exposed to
hazardous work. (Child Labor in the Philippines (ILO in the Philippines), n.d.)

Low Standard of Living

Happens due to the fact that some countries have a under-developed
economy this means it has fewer job opportunities, poor management of the
government, lack of healthcare services and worse low life expectancy meaning
people tend to suffer than prosper, an example of such horrible problems taking
place is in South Sudan, the African landlocked country created in 2011, has been
designated a least developed country (LDC) by the United Nations General
Assembly. More than half the nation’s population of 8.3 million is estimated to
live in absolute poverty and to suffer from malnourishment (UNCTAD,n.d).,
furthermore according to Social Progress Imperative(SPI), South Sudan ranks 169
to their list of countries with the highest to lowest standard of living, establishing
that South Sudan’s resident have been failed by their own Government and their
Economy (Global Index, SPI, 2022).

Escalation of Geopolitical Conflicts

As countries rose into power many others aspire to be as powerful as them
and therefore has set themselves a criterion, and one of the keys to become a
powerful country is having a large territory, and so even in times of peace there
will always be disruptors who just seeks to fill in their greed, with political powers
moving like this the economy in itself will be placed in great danger and with an
economy at stake, its people, their own people will be on the table, as an example
there are currently numerous geopolitical conflicts: North Korea, Afghanistan,
U.S.-Saudi-Iran rivalry, Syria, Ukraine, Venezuela – the list can be extended at will.
Even the fear that one of these conflicts could escalate is unsettling investors.
However, investments are the prerequisite for economic growth. Should
geopolitical conflict develop into a cross-border military conflict, this would result
in an economic slump in all countries involved. Added to this would be negative
effects on the entire global economy. (GED, 2018).
SYNTHESIS
In our first problem, Income disparity or inequality in terms of educated and non-
educated people’s salary, may result to the country’s suffering. Some countries
just thinking of money, they don’t care about their people. People are divided in
to two groups, “rich” and “poor”. In reality, people who are rich receives more
money than the poor people. So, the outcome is the rich become richer, and the
poor people become poorer because of the salary inequality.

Our second problem, Increased Child Labor Opportunities. Child labor is really a
bad or negative way in life. We can say some of the children are prepared and fit
to work but that is not really the case. We know that not all people are rich and
can eat in their desire. Child labor is not really acceptable, all of the children
needs the care their parents. Let’s say a specific family is really poor and has
nothing to eat, is that an excuse to make the children work? What about their
parents? The result on the kids will be traumatizing, because of the reason that
they are working in such a young age. Children should experience at least to play
because they’re kids, kids should be playing not working.

In our third problem, Low Standard of Living, a low standard of living, on the other
hand, indicates that people in a society are more likely to experience poverty,
poor health, and limited opportunities. This also has implications for the economy,
as a low standard of living can lead to a decrease in productivity and an increase in
inequality.

The last problem in our list, Escalation of Geopolitical Conflicts. Geopolitical risks
trigger increased risk aversion among investors. They negatively impact stock
market returns in all advanced economies, whilst two-year US Treasury yields
decline. Capital flows were found to be affected too, with lower flows to emerging
markets, but higher flows to developed markets.

SUMMARY

The State in the Global Economy

What really is a State in the Global Economy? When we talked of global economy,
we refer to the growing trends for economic activity to operate between countries
and even beyond them. This trend started in the second half of the twentieth
century, with the growth of international trade and the liberation of production
and finance from the control of states. Like it or not, a state has to face up to an
interdependent economy. This is the new world order. The effect of an
interdependent economy varies in developed western countries and post-colonial
countries. The developed world enjoys the advantage in the balance of
opportunities and threats. In contrast, the underdeveloped and developing
countries remain dependent on the developed countries. They are mired in
poverty and remain in competition with other poor states in the export of
agricultural produce and minerals.

Of course the Global Economy doesn’t go as smooth as you can imagine, there are
a lot of effects in Globalization. For example:

Globalization creates a sense of interdependence among nations, which could

create an imbalance of power among nations of differing economic strengths. The
role of the nation-state in a global world is largely a regulatory one as the chief
factor in global interdependence. While the domestic role of the nation-state
remains largely unchanged, states that were previously isolated are now forced to
engage with one another to set international commerce policies. Through various
economic imbalances, these interactions may lead to diminished roles for some
states and exalted roles for others.

The New Geography of Power

Economic globalization represents a major transformation in the territorial

organization of key economic sectors. To what extent it also represents a possible
transformation in the structures of politico-economic power is a difficult question.
There are three components in the new geography of power.

In conclusion, The State in the Global Economy is the state who is the main
promoter and regulator of the economic processes that occur within its
boundaries. However, a country's continuous and balanced economic
development is based mainly on its international trade in goods and services.
(Negri, 2014).

APPLICATION
As a HUMSS student looking to find a remedy for our environment, the first
step in addressing globalization will be for the government to accept the issue and
provide the necessary level of collaboration. As in the terms of foreign investors
they intend to expand their businesses in under-developed countries, though this
might be ideal for the investors the government in hindsight should also provide
support on their own local business. And in terms of trade, fair trade will aid
globalization to a great extent because it will be equitable and protect our trade in
the social, economic, and political conditions for small investors. As a result,
attention will be paid to keeping the price of goods stable. We can also encourage
the government to impose taxes, if necessary, on all goods and services imported
from abroad and to provide financial support to local investors.
 Adding on some solutions for the problems as stated by our observation
analysis of the negative effects of global economy on a state, first off countries
who still rely on industrialization in the likes of small or large factories employing
hundreds, countries like this should find other ways rather than keeping up with a
wave long past, instead of catching up, the government should focus on other
matters like agriculture, transportation, high-ways and roads, and infrastructure, a
good example of this is the Philippines build-build-build project (BBB) proposed
and made effective by the Duterte Administration, that according to Philippine
News Agency(PNA) and also based on DPWH data as of May this year, “Build,
Build, Build” projects provided 6.5 million jobs to Filipinos from 2016 to 2020.
(PNA,2022)

This will not only provide jobs that are able to pay equitably to its employees
this will also give people who are sunk in poverty jobs that would be able to
support their families, it will also provide the country the aesthetics needed to
catch an investors eyes to our country, and this would also lessen the need for
child labor as their families will be able to provide their needs,

As for geographical disputes countries as such should think twice or thrice on

making such decisions as not only do they put their own lives at stake but also
many others, as our proposed solution we think that there should be laws placed
that would prevent such to happen in a global range, in the likes of Ukraine and
Russia we effectively saw what other countries did to slow down Russia’s
advantageous attack on Ukraine, U.S stopped their export and transport of goods
to Russia to slow them down, and we believe that non-violent actions like this will
take effect in time, but will be more effective than wasting human blood on a
senseless war, also to add as a solution to this geographical dispute of power we
proposed that leaders of countries shouldn’t have the power to just wage greed-
filled wars, as we all know governments doesn’t only have a brain to symbolize the
power it must also have its might that may act what the brain commands, and so
we proposed that in order for this kinds of dispute not escalate in a global matter,
Generals or parts of a leaders circle should first have a voting session in order to
chose between “Agree” to “Disagree”, and in order to have neutral side of the
circle the leader must employ at least two or three, high ranking officials from
other countries that may provide a change of mind for such drastic actions.

CONCLUSION
In conclusion this topic of state and the global economy has changed our
perspective on our daily lives not only did we read some sad articles that may
truly question your view on politics, as we view it now, we still believe that in
everything, there is a good and a bad thing and though we lose, we sometimes
win, it is the harsh reality of life, and this life as we view it is a test from God
Almighty, and

“As Life Challenges us, we must be up to the task because there is only one future
and now more than ever is the time we determine our future”

As to what we have seen happen due to globalization and global economy, the
people affected the only key to their future, Our future to become a much more
welcoming one is in ourselves, it is whether we choose to act now or stay put
forever, that will determine whether the world will shake us down or we will show
the world, the unshaken.
 REFERENCES

https://languages.oup.com/google-dictionary-en/
https://education.nationalgeographic.org/resource/effects-economic-globalization/
https://en.wikipedia.org/wiki/Globalization
https://www.thebalancemoney.com/globalization-and-its-impact-on-economic-growth-
1978843
https://www.ilo.org/manila/areasofwork/child-labour/lang--en/index.htm#:~:text=Children
%20work%20in%20farms%20and,homes%20as%20child%20domestic%20workers
https://www.socialprogress.org/global-index-2022-results
https://ged-project.medium.com/7-risks-for-the-global-economy-7fc66bde4af5
https://www.pna.gov.ph/articles/1179572