PHINMA-University of Pangasinan

Arellano St., Dagupan City, 2418

United Nations – The United Nations is an international organization designed to

make the enforcement of international law, security, and human rights; economic
development; and social progress easier for countries worldwide. The United
Nations includes 193 member countries and two permanent observer entities that
cannot vote. The UN Charter sets out four primary purposes: Maintaining worldwide
peace and security. Developing relations among nations. Fostering cooperation
between countries in order to solve economic, social, cultural, or humanitarian
international problems

The global Interstate System is the whole system of human interactions. The
modern world-system is structured politically as an interstate system of competing
and allying states. Political Scientists commonly call this the international system,
and it is the main focus of the field of International Relations. Why countries need
to be in a good economic relationship with each other is evident due to
interdependence.

International Criminal Court of Justice - The International Criminal Court (ICC)

is an intergovernmental organization and international tribunal in The Hague,
Netherlands. The ICC has jurisdiction to prosecute individuals for the international
crimes of genocide, crimes against humanity, war crimes, and the crime of
aggression. The establishment of an international tribunal to judge political leaders
accused of international crimes such as the Tokyo-Rome-Berlin Axis that
started World War II.

World Trade Organization - The World Trade Organization (WTO) is the only
international organization dealing with the global rules of trade. Its primary function
is to ensure that trade flows as smoothly, predictably, and freely as possible. The
WTO has six key objectives: (1) to set and enforce rules for international trade, (2)
to provide a forum for negotiating and monitoring further trade liberalization, (3) to
resolve trade disputes, (4) to increase the transparency of decision-making
processes, (5) to cooperate with other major international economic institutions
involved in global economic management, and (6) to help developing countries
benefit fully from the global trading system.

NAFTA - The North American Free Trade Agreement's purpose is to reduce trading
costs, increase business investment, and help North America be more competitive
in the global marketplace. The agreement is between Canada, the United States,
and Mexico.

International Monetary Fund - The International Monetary Fund (IMF) is an

organization of 189 countries, working to foster global monetary cooperation,
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secure financial stability, facilitate international trade, promote high employment
and sustainable economic growth, and reduce poverty worldwide.

NATO - The North Atlantic Treaty Organization (NATO)'s essential and enduring
purpose is to safeguard the freedom and security of all its members by political and
military means

World Bank - The International Bank for Reconstruction and Development (IBRD),
commonly referred to as the World Bank, is an international financial institution.
The purposes include assisting the development of its member nation's territories,
promoting and supplementing private foreign investment, and promoting
long-range balanced growth in international trade.

World Health Organization - The WHO has multiple leadership priorities that
include providing access to universal health care, preventing infectious diseases,
and researching factors that affect health. The Organization's purpose is to direct
and coordinate health for its signatory nations, provide leadership and determine
paths for research. WHO's main functions can be summed up as follows: to act as a
directing and coordinating authority on international health work, ensure good and
productive technical cooperation, and promote research—the objective of WHO is
the attainment by all peoples of the highest possible level of health.

UNICEF - is committed to ensuring special protection for the most disadvantaged

children – victims of war, disasters, extreme poverty, all forms of violence and
exploitation, and those with disabilities. UNICEF response in emergencies to protect
the rights of children.

Martial Law - Philippine President Ferdinand Marcos declared martial law, citing
threats to national security, public order and state sovereignty.

An economic system, or economic order, is a system of production, resource

allocation, and distribution of goods and services within a society or a given
geographic area. It includes the combination of the various institutions, agencies,
entities, decision-making processes, and consumption patterns that comprise a
given community's economic structure.
An economic system organizes the distribution and exchange of a country's goods,
resources, and services. From an economics perspective, a financial system
regulates various economic issues, including production, the supply of capital and
labor, and all other physical resources.
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The Traditional Economic System
The most basic of all the economic types and in practice since ancient times, the
traditional financial system involves very little division of labor (in other words,
individuals specializing in producing specific goods) and very little in the way of
economic governance.
Characteristics of a Traditional Economy
1. Traditional economies are often based on one or a few of agriculture, hunting,
fishing, and gathering.
2. Barter and trade are often used in place of money.
3. There is rarely a surplus produced.
4. Often, people in a traditional economy live in families or tribes.

Advantages of a Traditional Economy

1. Traditional economies produce no industrial pollution and keep their living
environment clean.
2. Traditional economies only produce and take what they need,
3. So there is no waste or inefficiencies involved in creating the goods required to
survive as a community.
Disadvantages of Traditional Economy
1. It isolates the people within that economy.
2. Large outside economies can overwhelm a traditional economy
3. It offers very few choices, and they can only have whatever they produce in the
area.
4. There may be a lower overall quality of life.
5. It creates specific health risks, like malnutrition, diseases.
6. Unpredictability creates survival uncertainties.

The Command Economic System

A more advanced economic system compared to the traditional financial system,
the command economic system involves planning from a centralized point, either a
local government or indeed the national government, as under communist rule.
Nonetheless, some people would argue that the command economy has advantages
in that the government can better control supply and demand than the market can.
The idea is that a command economy can lead to lower prices for the public while
also ensuring an ongoing, plentiful supply of jobs for the population.
Command Economy Characteristics
1. Government is in control of the pricing of goods and services by central economic
planning.
2. The government owns all the factors and means of production.
3. The government makes all decisions for finances in the country, may even assign
people jobs.
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4. Social equality is the essential feature of a command economy. No one is rich or
poor.
Advantages: Low levels of inequality and unemployment, and the common good
replacing profit as
the primary incentive of production.
Disadvantages: include lack of competition and lack of efficiency.
The Market Economic System
A market economy is a system where the laws of supply and demand direct goods
and services. (1). Supply includes natural resources, capital, and labor. (2) Demand
includes purchases by consumers, businesses, and the government. Businesses sell
their wares at the highest price consumers will pay

Market forces control the economy.

1. Consumers are deciding whether to buy a good at a specific price, wait before
buying it, or never buy a market force. They want lower prices of commodities.
2. Businesses pricing products to create maximum profit, taking into account
consumer demand, is another market force. They produce more if consumers buy
more.
Advantages of a Market Economy
1. Competition leads to efficiency because businesses that have fewer costs are
more competitive and make more money.
2. Innovation is encouraged because it provides a competitive edge and increases
the chance for wealth.
Disadvantages of a Free Market Economy
1. Factors of Production is not employed if it is not profitable.
2. The market system may not produce certain goods and services.
3. The free market may encourage harmful goods.
4. Production may lead to negative externalities.
5. A free market economy may increase the gap between the rich and the poor.
6. Unemployment and Inequality.

The Mixed Economic System

Traditional economic systems are incapable of dealing with the advanced
requirements of a developed society, but there are arguments for and against both
the market and command economies. This is why the mixed economic system
emerged, a mix between the command economy and the market economy.

Mixed economy
A mixed economy is an economic system combining private and public enterprises.
A mixed economic system is a system that combines aspects of both market and
command. A mixed economic system protects personal property and allows a level
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of economic freedom in the use of capital, but also allows for governments to
interfere in economic activities to achieve social aims

Characteristics of mixed economy:

1. Co-existence of the Private and Public Sectors- minor industries for the people
and major industries belong to the state such as Expressways, LRT/MRT and Dams,
National Power Corporation, etc.
2. Existence of Joint Sectors like Public and private, both private companies
3. Regulation of Private Sector such as price control and declared illegal products.
4. Planned Economy – the businessmen decide what to produce, how much
5. Private Property – individuals can have own properties as long as he can have
the means to buy
6. Provision of Social Security – benefits and insurances returns upon retirement
7. The motive of Business Concerns – profit maximization, market share, survival in
the market
8. Reduction of Inequalities of Income and Wealth – all are given the chance to
participate in wealth accumulation.
Advantage: A mixed economy permits private participation in production, which in
return allows healthy competition that can result in profit. It also contributes to
public ownership in manufacturing, which can address social welfare needs.
The disadvantage of mixed economies: is that they tend to lean more toward
government control and less toward individual freedoms. Sometimes, government
regulation requirements may cost a company so much that it puts it out of
business. In addition, unsuccessful regulations may paralyze features of production.

Distribution of emergency food aid and humanitarian assistance can is one

of the intervention when it comes to food shortages due to conflicts
disrupting agricultural production

Laissez-faire is a theory that restricts government intervention in the economy. It

holds that the economy is strongest when all the government does is protect
individuals' rights. It also assumes that free-market forces alone correctly price
every investment.

A foreign direct investment (FDI) is a purchase of an interest in a company by a

company or an investor located outside its borders. Generally, the term is used to
describe a business decision to acquire a substantial stake in a foreign business or
buy it outright to expand its operations to a new region. It is not usually used to
describe a stock investment in a foreign company.
• Foreign direct investments (FDI) are substantial investments made by a company
into a foreign concern.
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Arellano St., Dagupan City, 2418
• The investment may involve acquiring a source of materials, expanding a
company's footprint, or developing a global presence

How Foreign Direct Investments (FDI) Work

Companies considering a foreign direct investment generally look only at open
economies that offer a skilled workforce and above-average growth prospects for
the investor. Light government regulation also tends to be prized. Foreign direct
investment frequently goes beyond capital investment. It may include the provision
of management, technology, and equipment as well

Horizontal FDI:

● Horizontal FDI occurs when a company invests in foreign countries to

replicate its existing business activities.
● The primary goal of horizontal FDI is to penetrate new markets,
increase market share, or gain access to resources in different
geographical locations.
● Example: A multinational fast-food chain opening new restaurants in
foreign countries to expand its customer base and increase its global
market presence. Each new restaurant operates similarly to those in
the company's home country, serving the same menu items and
following standardized processes.

Vertical FDI:

● Vertical FDI involves investment in different stages of the production

process or value chain, either upstream (backward integration) or
downstream (forward integration).
● The main objective of vertical FDI is to optimize production efficiency,
reduce costs, or secure supplies by integrating various stages of
production across borders.
● Example:
● Backward Integration: An automobile manufacturer investing
in a foreign country to acquire a supplier of critical components,
such as engines or electronics. By owning the supplier, the
manufacturer can ensure a stable supply of parts, control
quality, and potentially reduce costs.
● Forward Integration: The same automobile manufacturer
investing in a foreign market to establish its own distribution
network or retail outlets. By selling directly to consumers, the
manufacturer can capture more value from its products, control
the sales process, and enhance brand visibility.
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What Is the Difference Between FDI and FPI?
Foreign portfolio investment (FPI) is the addition of international assets to a
company's portfolio, an institutional investor such as a pension fund, or an
individual investor. It is a form of portfolio diversification achieved by purchasing
the stocks or bonds of a foreign company. Foreign direct investment (FDI) requires
a substantial investment in a company based in another country. The outright
acquisition of FDI is generally a more significant commitment made to enhance a
company's growth. Both FPI and FDI are generally welcome, particularly in
emerging nations. Notably, FDI involves a greater responsibility to meet the
country's regulations that host the company receiving the investment.

What Are the Advantages and Disadvantages of Foreign Direct Investment

(FDI)?
FDI can foster and maintain economic growth, both in the recipient country and in
land investing. Developing countries have encouraged FDI to finance the
construction of new infrastructure and the creation of jobs for their local workers.
On the other hand, multinational companies benefit from FDI to expand their
footprints into international markets. However, a disadvantage of FDI is that it
involves the regulation and oversight of multiple governments, leading to a higher
level of political risk.

What Are Some Examples of Foreign Direct Investment (FDI)?

One of the most prominent examples of Foreign Direct Investment (FDI) in the
world today is the Chinese initiative known as One Belt One Road (OBOR). This
program sometimes referred to as the Belt and Road initiative, involves a
commitment by China to substantial FDI in a range of infrastructure programs
throughout Africa, Asia, and even parts of Europe. The program is typically funded
by Chinese state-owned enterprises and organizations with deep ties to the Chinese
government. Similar programs are undertaken by other nations and international
bodies, including Japan, the United States, and the European Union

Declaration of Martial Law

On the evening of September 23, 1972, the late President Ferdinand Marcos
appeared on national television to formally announce that the Philippines was under
Martial Law. This began almost ten years of military rule in the country. Marcos
formally ended Martial Law on January 17, 1981. Still, it was not until 1986 when
democracy was restored – after the dictator and his family were forced into exile,
overthrown by a popular uprising that came to be known as the People Power
Revolution. When Marcos signed Proclamation 1081 on September 21, 1972, he
cited the communist threat as justification. His diary, meanwhile, said the
proclamation of Martial Law became a "necessity," following the supposed ambush
of then defense secretary Juan Ponce Enrile. There were subsequent reports that
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said the ambush was staged, with the Official Gazette citing Enrile's admission in
1986 that it was faked to justify the imposition of Martial Law.

Technological Innovation is the process where an organization (or a group of

people working outside a structured organization) embarks on a journey where the
importance of technology as a source of Innovation has been identified as a critical
success factor for increased market competitiveness.

Technological innovations comprise new products and processes and significant

technological changes of products and processes. Innovation has been implemented
if it has been introduced on the market (product innovation).

Technology is applying scientific knowledge for practical purposes or the branch of

knowledge concerned with applied sciences.

Innovation is evolutionary and is a response to an unsolved problem and

unexploited opportunity. It is the effort to create purposeful, focused change in an
enterprise’s economic or social potential.

Creativity and Innovation

1. Creativity involves the use of imagination or original ideas to create something.
It is the idea phase. In other words, creativity is the idea phase, and Innovation is
the action phase.
2. Innovation is the act of introducing something new. The word "new" relates to
creativity, and the term "act of introducing' refers to Innovation.

TYPES OF INNOVATION
1. Incremental Innovation:
These are small but important improvements in a product, process or service. Such
innovations are associated with enhanced customer satisfaction. Example: Intel
Pentium III to Pentium IV LAN to WAN
Modular Innovation. These innovations do not alter the overall product structure,
but change can occur in the component technology. Example: Change in car engine
technology will not change any other features.
2. Architectural Innovation:
These innovations take existing technologies and link new technologies in novel
ways; they are built not on new technological breakthroughs but on integrating
competencies, i.e., product structure change with no important effect on component
subsystems. Example: Change of shape of a car with no change in engine. Honda's
smaller motorcycles.
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3. Radical Innovation:
These innovations are revolutionary. Railroads, electricity, computers, the Internet
can be termed as breakthrough innovations. Railroads changed the way in which
goods and people were transported. Electricity changed the way people lived and
used equipment. Computer changed how organizations worked. The Internet
transformed how people communicate, acquire knowledge and do business. Radical
innovations are also known as breakthrough innovations and discontinuous
innovations. Example: Digital imaging(polaroid) Quartz movements(watches) Radial
tires.

How equity differs from equality?

Equality generally refers to equal opportunity and the same levels of support for all
segments of society. Equity goes a step further and refers to offering varying levels
of support depending upon the need to achieve greater fairness of outcomes.

Interdependence.
Globalization leads to interdependence between nations, which could cause regional
or global instabilities if local economic fluctuations impact many countries relying on
them.

A sustainable world is the outcome of the different development strategies and

program implementation that will keep the world in existence over a long time.

Sustainability is living to minimize humans' negative impact on the earth and the
animals and plants we share it with. Making sustainable choices is a means to
preserve the world and tackle climate change for future generations to come.

Sustainable development, in the dictionary, is economic development that is

conducted without depletion of natural resources. However, it applies to and can be
incorporated into everything we do. Its application spans from growing food,
sourcing product materials, operating a business to building societal infrastructure
and how we live individually and as a society

Ways to Achieve Sustainable Development

Sustainable Development is an increase in quality of life within a community
between two points in time, using the skills of the population and the ecological
services from the landmass it manages in a manner that can be maintained in
perpetuity. It is accomplished through a combination of :
1. Technological Development is the creation or enhancement of systems of
infrastructure with an expectation of an increase in the efficiency that people can
use their time to convert resources
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into the means to meet their wants and needs, such that it will increase the quality
of life of a community and,
2. Human Development is the identification and removal of the obstructions
within the self, family, or community that prevent people from being able to meet
their needs, and by so doing, increase the freedoms, choices, and capabilities of the
population.

Food security; as defined by the United Nations' Committee on World Food

Security; means that all people, at all times, have physical, social, and economic
access to sufficient, safe, and nutritious food that meets their food preferences and
dietary needs for an active and healthy life. Household food security exists when all
members, at all times, have access to enough food for an active, healthy life.
Individuals who are food secure do not live in hunger or fear of starvation.

Enhance small-scale farming and support local food systems is one strategy to
improve food security in vulnerable regions

Importance of Global Food Security

1. Food insecurity – often rooted in poverty.
2. Poverty decreases the ability of countries to develop their agricultural markets
and economies.
3. Access to quality, nutritious food is fundamental to human existence
4. Increased global security and stability. Improved health and healthcare.

Food Availability
Food availability relates to the supply of food through production, distribution, and
exchange. Enough nutritious food of sufficient quality needs to be available to
people for their consumption. Availability can be affected by: Production,
distribution, and exchange.

Food Access
Food access refers to the affordability and allocation of food and the preferences of
individuals and households. Individuals and households must acquire sufficient food
to eat a healthy, nutritious diet or have access to adequate resources needed to
grow their food (e.g., land). Food access can be (1.) Direct access – producing your
food and (2) Economic access – buying your food from suppliers. Access can be
affected by:
Affordability is the ability of individuals, households, or communities to afford the
price of food or land for producing food relative to their incomes. Location can affect
access to food and which type of access a family will rely on. A household's assets,
including payment, land, products of labor, inheritances, and gifts, can determine a
household's access to food.
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Allocation: the economic, social, and political mechanisms are governing when,
where, and how food can be accessed by consumers and on what terms. For
example, food may be unequally allocated according to age and gender within
households.

Food Insecurity - Food insecurity, on the other hand, is defined by the United
States Department of Agriculture (USDA) as a situation of "limited or uncertain
availability of nutritionally adequate and safe foods or limited or uncertain ability to
acquire acceptable foods in socially acceptable ways

Their frequency or duration can also distinguish types of food insecurity:

1. Chronic food insecurity. A long-term and persistent condition of food
insecurity. A population suffers from chronic food insecurity when it cannot meet
minimum food consumption requirements for extended periods (approximately six
months of the year or longer). Chronic (or permanent) food insecurity is defined as
the long-term, persistent lack of adequate food. In this case, households are
constantly at risk of being unable to acquire food to meet the needs of all
members
2. Transitory food insecurity. A short-term and temporary condition of food
insecurity. A population suffers from transitory food insecurity when there is a
sudden drop in the ability to produce or access sufficient food for a healthy
nutritional status (e.g., after a period of drought or as a result of the conflict).
3. Seasonal food insecurity. A condition of food insecurity that reoccurs
predictably, following the cyclical pattern of seasons.