THE

CONTEMPORAR
Y WORLD
Week 3

Market Integration
International Financial
Institutions

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3 Sectors of Economic Systems
1. Primary Sector
2. Secondary Sector
3. Tertiary Sector

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1. Primary Sector
⮚ Extracts raw materials from
natural environment
⮚ E.g. Farmers, Miners

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2. Secondary Sector
⮚ Gains raw materials and
transforms them into
manufactured goods.
⮚ E.g. petroleum refinery

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3. Tertiary Sector
⮚ Involves services than goods
⮚ Doing things than making things
⮚ E.g. Education, Transportation

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International Financial Institutions

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BRETTON WOODS SYSTEM
> Established due to sufferings of
world ‘s major economies
because of World War I, Great
Depression in 1930’s and World
WarII
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5 ELEMENTS OF BW SYSTEM
1. Expression of Currency in terms of
gold or gold value to establish a par
value
2. Official Monetary Authority in each
country ( central bank or national
treasury)
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3. Establishment of an overseer for the
exchange rates, thus, IMF was founded
4. Eliminating restrictions on the currencies
of the member states in international
trade
5. US dollar became the global currency

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GENERAL AGREEMENT ON TARIFFS AND
TRADE (GATT)
An international organization for liberalization of
trade that grew out of Bretton Woods System
and primarily focuses on tariff reduction to any
international trading system.
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WORLD TRADE ORGANIZATION (WTO)
Its operations are premised on the
neoliberal idea that all nations benefit
from free and open trade and it is
dedicated to reducing and ultimately
eliminating barriers to such trade.
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TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY
RIGHTS (TRIPS)
> Is an international legal agreement between all the member nations
of the World Trade Organization (WTO). It sets down minimum
standards for the regulation by national governments of many
forms of intellectual property (IP) as applied to nationals of other
WTO member nations.
> This involves intangible ideas, knowledge and expressions that
require use to be approved by the owners.

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AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES
(TRIMS) are rules that apply to the domestic regulations a country
applies to foreign investors, often as part of an industrial policy.
> These are range of operating or performance measures that host-
country governments impose on foreign firms to keep them from
having distorting effect on trade in goods and services.

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International Monetary Fund (IMF)
> It deals with exchange rates,
balances of payments, international
capital flows, and the monitoring of
member states and their
macroeconomic policies.
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WORLD BANK (WB)
It provides funds to government-sponsored
or guaranteed programs in so-called
Part II (member states that are middle-
income or creditworthy poorer nations).

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EUROPEAN UNION (EU)
> This organization was designed to enhance European
political and economic integration by creating a
single currency (the euro), a unified foreign and security
policy, and common citizenship rights and by advancing
cooperation in the areas of immigration, asylum, and
judicial affairs.

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ORGANIZATION OF PETROLEUM
EXPORTING COUNTRIES (OPEC)
> it is a multinational organization that was
established to coordinate the petroleum
policies of its members and to provide member
states with technical and economic aid.

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FOREIGN DIRECT INVESTMENT
(FDI)
> it involves investments by one firm in
another firm that exists abroad in a
different nation-sate, with the
intention of gaining control over the
latter’s operation. 19
MULTINATIONAL CORPORATIONS
(MNC)
⮚ A firm that has the power to coordinate
and control operations in more than two
countries, even if it does not own them.
⮚ Global corporations
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INTERNATIONAL STANDARD ORGANIZATION (ISO)

> an international institutes of technical standards that

sustain and vindicate the quality assurance of the
goods and services available in the global market.

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