Contemporary World
LESSON 3: THE STRUCTURE OF GLOBALIZATION
GLOBALIZATION
● STEGER (2014)
o states that globalization is the expansion and
intensification of social relations and
consciousness across world time and space
implies that there are forms of connectivity.
● It is multidimensional phenomenon, creating
economic, political, cultural, and even technological
forms of connectivity.
ECONOMIC GLOBALIZATION
● Refers to the expanding interdependence of world
economies.
● SHANGQUAN (2000)
o states that economic globalization attributes to
the growing scale of cross-border trade
commodities and services, flow of international
capital, wide, and rapid spread of technology.
● ACCORDING TO THE INTERNATIONAL
MONETARY FUND (IMF)
o economic globalization is like a historical process,
the result of human innovation and technological
progress.
● It refers to the increasing integration of economies
around the world, particularly through the movement
of goods, services, and capital across borders.
● Economic globalization can be traced from the time
when there was economic movement in Asia, Africa,
and Europe through ‘’Silk Road’’
● Silk road is a network of trade routes that connected
the East, particularly China, and the West.
ECONOMIC GLOBALIZATION IN THE PHILIPPINES
● In the Philippines, cross-border trading can be best
illustrated by the country’s trading partnership with
China, United States, and Australia.
● Foreign direct investment is being systematized
through establishing companies here in the
Philippines.
● E.g., Toyota Motor Philippines Corporation which is a
subsidiary of Toyota Motor Corporation based in
Toyota, Japan.
FOUR DIMENSIONS OF ECONOMY
● Globalization of trade of goods and services.
● Globalization of financial and capital markets.
● Globalization of technology and communication.
● Globalization of production.
FIRST DIMENSION OF ECONOMY
● This is demonstrated in the World Trade
Organization (WTO)-eases trade among countries.
● The WTO was first established in 1995.
● The emergence of China as a major supplier and
exporter of manufactured goods that has affected the
world economy.
● The increasing number of business process
outsourcing in the Philippines(BPO).
SECOND DIMENSION OF ECONOMY
● Evident liberalization of financial and capital markets.
● Cross-listing of shares on one or more foreign stocks
exchange
● Cross-hedging and diversification of portfolio
● Round-the-clock trading worldwide
THIRD DIMENSION OF ECONOMY
● Emphasizes that the various transactions and
interactivities that transpire instantly due to the
internet and communication technology.
FOURTH DIMENSION OF ECONOMY
● Best illustrated by the existence of multinational
corporation (MNC) and transnational corporations
(TNC)
● The Coca-cola Company is an example of MNC-
(Atlanta, Georgia,and USA)
● Toyota Motor Corporation is also an example of MNC
● Nestle is an example of TNC
NATION-STATES
● Some scholars believe that nation-state is one of the
actors or drivers of economic globalization, but of
different levels.
● BOYER AND DRACHE (1996) state that the role of
nation-states as manager of the national economy is
being redefined by globalization.
● BRODIE ( 1996) call that the government as the
‘’midwives’’ of globalization.
RHYSSA REAL-1ST YEAR CANINE 1
 TRANS:

GLOBAL CORPORATION ● National currencies were abandoned and delegated

monetary policies onto a supranational level
● Some experts claim that the actors are now the global administered by European Central Bank (European
corporation. commission, 2008).
● OHMAE (1995) argues that the nation-state has
ceased to exist as the primary economic organization
unit in the global market.
● REASONS: because most Filipinos are now using or
consuming global products and services like H & M,
Uniqlo, Accenture, Amazon, Alibaba,and FedEx.

INTERNATIONAL MONETARY SYSTEM

● It is one of the actors that facilitate economic
globalization.
● It refers to internationally agreed rules, conventions,
and institutions for facilitating international trade,
investments and flow of capital among nation-states.

THE THREE GLOBAL IMS

THE GOLD STANDARD

● The standard functions as a fixed exchange rate

regime, with gold as the only international reserve
and participating countries determine the gold content
of national currencies (Benczes, 2014).
● During the world war 1, when countries depleted their
gold reserves to fund their armies many were forced
to abandon the gold standard and switched to fiat
currency. –Not backed up by precious metals or not
redeemable in gold.
THE BRETTON WOOD SYSTEM
● It was inaugurated in 1994 during the United Nations
Monetary and Financial Conference.
● The leaders sought to create a global economic
system that would ensure a long-lasting global peace.
● An idea that was largely influenced by the British
economist John Maynard Keynes
● US dollar was the only convertible currency.
● It was agreed by 44 countries to adopt the gold-
exchange standard.
EUROPEAN MONETARY SYSTEM
● The European Monetary System or EMS was an
arrangement created in 1979 that involved European
Economic Community (presently known as European
Union) members deciding to link their nation's
currencies to foster financial stability in Europe.
● It was a successful in the stabilization of exchange
rate

RHYSSA REAL- 1ST YEAR CANINE 2