GLOBALIZATION OF WORLD

ECONOMICS

JANINE LADAN-CINCO
INSTRUCTOR
 OBJECTIVES:

AT THE END OF THIS LESSON YOU ARE EXPECTED TO:

1. DEFINE ECONOMIC GLOBALIZATION

2. ANALYZE THE ACTORS THAT FACILITATE ECONOMIC
GLOBALIZATION; AND
3. ARTICULATE A STANCE ON GLOBAL ECONOMIC INTEGRATION
ECONOMIC GLOBALIZATION

Refers to the expanding interdependence of world economies. It’s a

growing scale of cross-borders trade commodities and services, flow of
international capital , and wide and rapid spread of Technology.
(Shangquan,2000)

Example: Philippines’ trading partnership with China, the United States

and Austrilia.
 INTERNATIONAL MONETARY FUND

International Monetary Fund (IMF)- regard “economic

globalization” as a historical process representing the result
of human innovation and technological progress.
 BENCZES’ FOUR INTERCONNECTED
DIMENSIONS OF ECONOMY(2014)

1. Globalization of trade of goods and services – ex. Creation of World Trade

Organization in 1995.
2. Globalization of financial and capital markets -- ex. Cross-listing of chairs,
cross-hedging and diversification of portfolio, and round the clock trading
worldwide.
3. Globalization of technology and communication – ex. Emphasizes that various
transactions and interactives that transpire instantly due to the internet and
communication technology.
4. Globalization of production – Multinational Corporations (MNCs) and
Transnational Corporations (TNCs).
 ACTORS THAT FACILITATE
GLOBALIZATION

• Nation-states – imposes tax and tariffs on trades.

• Global Corporations – local companies have expanded outside their home country
ex. Jollibee Corp and San Miguel Corp.
• International Monetary Systems (IMS) – refers to internationally agreed rules,
conventions, and institutions for facilitating international trade, investments and
flow of capital among nation-states.
- Gold Standard
- The Bretton Woods System
- European Monetary System
 THE BRETTON WOODS SYSTEM

After the two world wars, world leaders sought to create a global economic
system that would ensure a longer-lasting global peace.

Bretton Woods System was largely influence by the ideas of British economist
John Maynard Keynes.

Keynes believed that economic crises occur not when a country does not have
enough money, but when money is not being spent and, thereby, not moving.
 DELEGATES AT BRETTON WOODS
AGREED TO CREATE TWO FINANCIAL
INSTITUTIONS:
1. International Bank for Reconstruction and Development (IBRD/World
Bank) to be responsible for funding postwar reconstruction projects.
2. International Monetary Fund (IMF) – global lender of the last resort to
prevent individual countries spiraling into credit crises.
 ECONOMIC GLOBALIZATION TODAY

In the past, those benefited the most from free trade were the advanced that were
producing an selling industrial and agricultural goods.

The United States, Japan, and the member-countries of the European Union were
responsible of 65 percent of global exports.

The developing countries only accounted for 29 percent.

By 2011, developing countries like with the Philippines, India, Argentina,
China and Brazil accounted for 51 percent for the global exports while
the share of advance nations – including the United States – had gone
down to 45 percent.

World Trade Organization (WTO) – a new organization founded in 1995

to continue the tariff reduction under the General Agreement on Tariffs
and Trade (GATT).

The series of Trade talks under the WTO have led to unprecedented
reductions in tariffs and other trade barriers, but these process have often
been unfair .
Develop countries are often protectionists, as they repeatedly refuse to lift
policies that safeguard their primary products that could other
overwhelmed imports from the developing countries.

Protectionism – When a government legislates policies to reduce or block

international trade.

The best example of this is Japan. Japan strong-minded refusal to allow

rice imports to the country to protects its farmer sector.
 CONCLUSION

1. Globalization is anchored on changes in the economy.

2. Global Culture, for example, is facilitated by trade.
3. Filipinos would not be as aware of American culture if not for the
trade that allows local to watch American movies, listen to American
music, and consume American products.
4. Governments must also continue to device ways of cushioning the
most damaging effects of economic globalization, while ensuring it’s
benefits accrue for everyone.