De La Salle Araneta University

Salvador Araneta Campus, Victoneta Ave., Malabon City

11 Globalization and the New Economy

At the end of the module, students must be able to:

▪ Discern increasing globalization and its impact on flows of capital and labor.
▪ Realize the changing nature of economy and the effects of globalization.

Globalization refers to the ongoing social, political, and economic integration that has been taking
place since World War. Trade, investment, tourism, intellectual property, telecommunications,
financial transactions are areas where globalization has taken place.

In Asia, these trends are evident in the growing importance of APEC, ASEAN and foreign trade
and investment.

Globalization and the increasing usage of information communication technology has caused
changes to the traditional methods of production and operations. It has resulted in “The New
Economy” which is relatively more knowledge and technological based.

World Trends in Globalization

• International trade
• Financial flows
• Foreign direct investment and multinational enterprises
• Labor migration

Labor Migration

Migration

➢ The movement of people to a new area or country in order to find work or

better living conditions.

Labor Migration

➢ Refers to migration for the main purpose of employment.

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 De La Salle Araneta University
Salvador Araneta Campus, Victoneta Ave., Malabon City

Types of Migration

1. Internal Migration – moving to a new home within a state, country, or continent

2. External Migration – moving to a new home in a different state, country, or continent
3. Emigration – leaving one country to move to another
4. Immigration – moving into a new country
5. Return Migration – moving back to where they came from
6. Seasonal Migration – people move with each season for a period of time in response to
certain conditions (e.g. climate condition, labor demand)

People Who Migrate:

1. Emigrant – an individual who is leaving a country to reside in another.

2. Immigrant – an individual who is entering a country from another to establish a new
residence
3. Refugee – those who has moved to a new country due to problems in their respective
nations (e.g. famine, war)

Reasons for Migration

1. Push Factors –
leaving a place
due to crisis,
difficulties, and
obstacles (e.g.
food shortage,
war)
2. Pull Factors –
moving
elsewhere with
hopes of
something
better (e.g.
employment
opportunities,

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 De La Salle Araneta University
Salvador Araneta Campus, Victoneta Ave., Malabon City

better living
conditions)

Reasons/Causes of Migration

1. Poverty
2. Armed conflict
3. Political turmoil
4. Education
5. Social Strife
6. Economic hardships
7. Unemployment

Pros and Cons of Migration

Positive Effects of Migration

1. Job vacancies and skills gaps can be filled

2. Sustained economic growth
3. Provision of services to ageing population (in cases of insufficient young people
locally)
4. Host countries are enriched by cultural diversity (welcome introduction of new
flavors including new dishes)

Negative Effects of Migration

1. Possibility of exploitation
2. Increase in population can put pressure on public services
3. Possibility of integration difficulties and conflict/friction with the local dwellers
4. Human trafficking

Globalization: Philippines

Philippines have actively developed an export oriented sector, mainly agricultural based to repay foreign
debts incurred since 1960s. trade reforms did not really take off until the early 1990s. domestic
manufacturing production was further stimulated with the setting up of export process zones.

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 De La Salle Araneta University
Salvador Araneta Campus, Victoneta Ave., Malabon City

In the early phases, exports were mainly concentrated in primary commodities such as food crops,
minerals and timbers. There has been a rise in manufactured exports in recent years. In addition, the
government has also established the Foreign Investment Act which attracted substantial capital inflows.

Information Technology and the New Economy

The nature of the New Economy in Industrial countries emphasizes three developments:

• Globalization of Business
• Growth of Information Technology and the Knowledge Economy
• Rapid growth in productivity, reduction in costs, and growth of international value chains

Asia and the New Economy

Potential impact of the new economy on Asia

• Growth of trade will create more jobs

• Skill intensive exports will grow (programmers, internet experts, website designers, other
computer technicians)
• Internet could create a more level playing field, although risks of digital divide exist
• Greater payoff in education

Activity
Explain:

Has globalization been good for developing countries?

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