ECONOMIC GLOBALIZATION

Kathlyn D. Gellangarin BAB1A

ECONOMIC GLOBALIZATION
 Economics is the study of how society uses its limited
resources, it deals with the production, distribution, and
consumption of goods and services.
 Globalization is the process by which businesses or other
organizations develop international influence or start
operating on an international scale.

 Economic Globalization refers to the global mobility of

people, capital, technology, goods, and services. It also
refers to how interdependent we have all become
specifically countries, regions and trading blocks.
FORMS
1. Protectionism
 Protecting one’s economy from foreign competition by
creating trade barriers.
 Domestic products > imported goods

 Tariff- tax levied by a government on imports and exports.

The money collected from tariffs is called a customs duty.
 Import quota- limits on the number of products that can be
imported into a country.
 Bans- forbid products on import goods.
FORMS
2. Trade Liberation
 also called “ FREE TRADE”
 Act of reducing trade barriers to make international trade
easier between countries.

× TARIFF ×IMPORT QUOTA ×BANS

HOW TO MAKE TRADES MORE EASIER?
 Free trade- trading of goods and services between two or
more countries without tariffs or taxes.
e.g. connection between Canada and South korea (97.8 % 98.2
%) no tariffs on imports

 Trade bloc- agreement between governments to reduce or

eliminate trade barriers.
e.g. Nafta( North America Free Trade Agreement) consist of
Canada, Mexico and United states.

Outsourcing- subcontract work: to buy labour or parts from a source outside a

company or business rather than using the company's staff or plant factory.
INSTITUTION OF GLOBALIZATION
 World Bank
 International Monetary Fund (IMF)
 World Trade Organization (WTO) - originates after the
World War II by United States and United Kingdom
(Bretton Woods Conference,1944).
ECONOMIC GLOBALIZATION
 Exports, not just the local selling of goods and services
make national economies grow at present.
 In the past, those that benefited from free trade where the
advanced nations that were producing and selling
industrial and agricultural goods.

 The U.S, Japan, and the member-countries of the

European Union were responsible for 65% of global
exports, while the developing countries only accounted for
29%.
ECONOMIC GLOBALIZATION
 By 2011, developing countries like the Philippines, India,
China, Argentina and Brazil accounted for 51% of global
exports while the share of advanced-nations had gone
down to 45%.

 The WTO led reduction of trade barriers, known as the

trade liberalization, has profoundly altered the dynamics
of the global economy.
ECONOMIC GLOBALIZATION
 According to IMF, the global per capita GDP rose
over five-fold in the second half of the 20th century. It
was this growth that created large Asian economies
like Japan, China, Korea, Hong Kong, and Singapore.
ECONOMIC GLOBALIZATION
 First, developed countries are often protectionist, as they
repeatedly refuse to lift polices that safeguard their
primary products that could otherwise be overwhelmed by
imports from the developing countries.

 Ex. Japan’s determined refusal to allow rice imports into

the country to protect its farming sector. Japan’s
justification is that rice is “sacred”.
It is its economic muscle as the 3rd largest economy that
allows it to resist pressure to open its agricultural sector.
ECONOMIC GLOBALIZATION
 The United States likewise fiercely protects its sugar
industry, forcing consumers and sugar-dependent business
to pay higher prices instead of getting cheaper sugar from
plantations of Central America.

 Faced with blatantly protectionist measures from powerful

countries and blocs, pooper countries can do very little to
make economic globalization more just.

 Trade imbalances, characterize economic relations

between developed and developing countries.
BENEFICIARIES
 The beneficiaries of global commerce have been mainly
transitional corporations (TNCs) and not government.
 These TNCs are concerned more with profits than with
assisting the social programs of the government hosting
them. Host countries, in turn, loosen tax laws which
prevents wages from rising.

 The term “race to bottom” refers to countries’ lowering

their labor standards, including the protection of worker’s
interest to lure in foreign investors seeking high profit
margin at lowest cost.
 Governments weaken environmental laws to attract
investors, creating fatal consequences on their
ecological balance and depleting them of their finite
resources like oil, coal and mineral.
The Philippines is not a developed country.

The nation falls behind on every one of the most

common metrics used by economist to determine
development status. The Philippines' per capita gross
domestic product (GDP), Human Development Index
(HDI) and life expectancy sit well below the
thresholds for developed country status. Moreover,
the country's infant mortality rate is very high, its
industrialization is minimal, and many of its citizens
lack access to quality health care and higher
education.
As of 2016, per capita GDP in the Philippines is
$7,358, well below any accepted minimum for
developed country status. The country's latest HDI is
0.66. Its infant mortality rate is 22 per 1,000 live
births and its life expectancy is 69 years.

The Philippines is very much a developing country,

and it has a long way to go to reach developed status.
TOP 20 Economies in the World
PHILIPPINE’s STATUS
 The Philippines is the 37th largest export economy in the
world and the 43rd most complex economy according to
the Economic Complexity Index (ECI). In 2017, the
Philippines exported $99B and imported $105B, resulting
in a negative trade balance of $5.9B. In 2017 the GDP of
the Philippines was $313B and its GDP per capita was
$8.34k.
 The top exports of the Philippines are Integrated Circuits
 ($32.2B), Office Machine Parts ($10B), Computers
 ($5.19B), Semiconductor Devices ($3.34B) and 
Insulated Wire ($2.42B), using the 1992 revision of the
HS (Harmonized System) classification. Its top imports
are Integrated Circuits ($12.1B), Refined Petroleum
 ($5.64B), Cars ($4.77B), Crude Petroleum($3.15B) and 
Industrial Printers ($2.5B).
 The top export destinations of the Philippines are China
 ($20B), Hong Kong ($14.8B), the United States($13B), 
Japan ($11.4B) and Germany ($5.3B). The top import
origins are China ($21.9B), Japan ($11.6B), South Korea
 ($8.74B), the United States ($8.34B) and Thailand ($7B).