Transforming Global Economy

Transforming
Lives,
Shaping the

 define economic globalization;
 identify the factors that facilitate
economic globalization;
 define modern world system; and,
 articulate a stance on global economic
integration.
Learning Outcomes

Global Economy
 It is referred to as World economy.
 It refers to the international
exchange of goods and services
that is expressed in monetary units
of money.
 It may also mean as the free
movement of goods, capital,
services, technology, and
information.

 “Global” or “International” economy is
distinguished and measured separately
from national economies.
GLOBAL ECONOMY

 is exclusively limited to human
economic activity and is typically judged
in monetary terms.
 it is simply an aggregate of the separate
country’s measurements.
WORLD ECONOMY

 is concerned on the globalization of
production, finance, markets,
technology, organizational regimes,
institutions, corporations, and labor.
GLOBAL ECONOMY or
ECONOMIC GLOBALIZATION

 it exist when prices among different
location or related goods follow the
same patterns over a period of time.
 is an indicator that explains how much
different markets are related to each
other.
Market Integration

(IFIS)International Financial Institution
-an international financial institution is
chartered by more than one country and
therefore are subjects to international law.
Role of International Financial
Institutions in the Creation of Global
Economy

Owners/Stakeholders-are generally
national governments
 Creation of multiple nations-most
prominent IFIS
 Bilateral Financial Institution (created
by two countries)-exist and technically
IFI’s
Economy

 The best known IFI’s were created
after the World War II-to assist in the
reconstruction of Europe and provide
mechanisms for international
cooperation in managing the global
financial system.
Economy

1. International Monetary Fund (IMF)
2. Multilateral Development Banks
(MDBs)
a. World Bank Group
b. African Development Bank
The International Financial
Institutions (IFIs)

b. African Development Bank
c. Asian Development Bank
d. Inter-American Development Bank
e. European Bank for Reconstruction
and Development
IMF &WB-are specialized agencies but are
governed independently.
The International Financial
Institutions (IFIs)
Regional
Development
Bank (RDP)

1. only sovereign countries are admitted as
member-owner
2. broad country membership to include borrowing
developing countries and develop donor countries
3. Membership in regional development banks
include countries around the world as members
(not limited to countries from the regions)
4. has its own independent legal and operational
states.
Membership Composition of IFIs

IMF provides temporary financial
assistance to member countries to
help ease balance of payments
adjustments
 MDBs provides financing for
development and developing
countries through….
Main Objectives

Long term loans (with maturities of
up to 20 years) at interest rates way
below market rates
Funds-international capital market
Main Objectives

 very long-term loans (sometimes
called credits with maturities of 30-40
years) at interest rates below market
rates.
Fund-for loans comes from direct
contributions by government in the
donor countries
Main Objectives

Grants financing by some MDBs for
technical assistance advisory service
or project preparation.
Main Objectives

Basic Level
Global Corporation is one that
operates in more than one country.
 Michael Porter (Business Analyst
and Academics)
Global businesses more narrowly business
as one that maintains a strong headquarters
in one country, but has investments in
multiple foreign locations.
Global Corporation

World of Finance & Investments
Global Corporation is one that has
significant investments and facilities in
multiple countries but lacks a dominant
headquarters.
-are governed by laws of the country
where they are incorporated
Global Corporation

In Contrast,
 International Company is one that
has headquarters
Ex: United States
Global Corporation

In Contrast,
 International Company is one that
has headquarters, but also does
business overseas and might have a
large presence in multiple areas
Ex: United States
Global Corporation

World-Systems- are defined by the
existence of a division of labor.
 Modern World-System-has a multi-state
political structure (the interstate system)
and therefore its division of labor is
international division of labor.
3 Division of Labor (accrdg.to the
prevalence of profitable industries or
activities)
Global Interstate System
1. core 2. semi-periphery 3. Periphery

World-Systems- deals with inter-regional
and transnational division of labor, which
divides the world into:
World-Systems
1. Core
-focus on higher
skill, capital
intensive
production
-developed and
industrialized
countries
-the
manufacturing
countries
2. Semi-periphery
-the individual
states can gain or
lose their core
-middle income
countries like
India, Brazil
3. Periphery
-least develop and still
developing countries
-the poor part of the
world
-Labor intensive/ and
or low skill products
-source of cheap
labor , raw materials
and agricultural
production for core
and semi-periphery
countries

---is also known as world-system analysis or
would-systems perspective
---it is a multi-disciplinary, macro-scale
approach to world history and social
change which emphasizes the world-system
(and not nation states) as the primary (but
not exclusive) unit of social analysis.
World System Theory

---Is sometimes referred
to as World Governance
---is a movement
towards political
cooperation among
transnational actors,
negotiating response to
problems that affect
more than one state or
region.
Global Governance

United Nations (UN)
 International
Criminal Court
 World Bank
---tend to have limited
or demarcated power
to enforce compliance
Institutions of Global Governance

it restrain governments by inducing
increased budgetary pressure
 government attempt to curtail the
welfare state, which is often seen as a drag
on international competitiveness by
reducing especially their expenditures on
transfers and subsidies
Effects of Globalization Governance

 The European Institute for International
Law and International Relations (Brussels)
 ISPI Istituto per gli Studi di Politica
Internazionale (Italian Institute For
International Political Studies) Milan, Italy
 Institute of World Politics (Washington,
D.C)
Institutions that govern International
Relations

 Department of International Studies (Centro
Universitario de Sciencias Sociales y
Humanidades) at University of Guadalajara
located in Guadalajara, Mexico
 Department of American studies (Centro
Universitario de Ciencias Sociales y
Humanidades) at University of Guadalajara
located in Guadalajara, Mexico
 The Royal Institute of International Affairs,
(PIIA), Karachi, Pakistan
Relations

 The New Zealand Institute of International
Affairs (Wellington, New Zealand)
 The Australian Institute of International Affairs
(Deakin, ACT, Australia)
 The Canadian Institute of International Affairs
(Toronto, ON, Canada)
 Geneva School of Diplomacy and International
Relations (Geneva, Switzerland)
 Graduate Institute of International and
Development Studies (Geneva, Switzerland)
Relations

 International Strategic Research Organization
(ISRO/USAK)
 EGMONT-Royal Institute for International
Relations (Egmont), Brussels, Belgium
 University of Florida International Center (U.
S.A)
 Center for International Center Jahangirnagar
University (Savar, Dhaka, Bangladesh
 South American Institute for Policy and Strategy
( Porto Alegre, Brazil)
Relations

Internalization-refers to the importance of international
trade, international relations, treaties, alliances etc.
International-means between and among countries
Nation-the basic unit
Globalization-refers to global economic integration of
many formerly national economies into one global
economy, mainly by free trade and free capital mobility or
by easy or uncontrolled migration.
International Trade-(governed by comparative advantage)
becomes interregional trade (governed by absolute
advantage).
Internationalism VS. Globalization

“integration”-derived from “integer”,
meaning “one”, “complete”, or
“whole”
--it is the act of combining into one
whole
As the saying goes “to make an
omelette you have to break some eggs”
Internationalism VS. Globalization

Main Functions
1. Maintain peace and security for all
its member-states
2. Other Functions of UN:
2.1 aims to protect human rights and provide
humanitarian assistance when needed
2. 2 plays an integral part in social and
economic development
THE UNITED NATIONS (UN)

Main Functions
2.3 it annually publishes the Human
Development Index to rank countries in
terms of poverty, literacy, education
and life expectancy.
 to investigate any dispute or situation which
might lead to friction
 to recommend methods of adjusting such disputes
or terms of settlement

Main Functions
 To formulate plans for the establishment of
system to regulate armaments
 to determine the existence of a threat to the
peace or act of aggression and recommend what
action should be taken
 to call on members to apply economic sanctions
and other measures not involving the use of force
or stop aggression
 to take military action against an aggressor

Main Functions
 to recommend the admission of new members
 to recommend to the General Assembly the
appointment of the Secretary-General and
together with the assembly, to elect the Judges of
the International Court of Justice

For the future, the UN has established
what it call its Millenium Development
Goals.
--these goals relating to reducing of
poverty, child mortality, fighting
diseases and epidemics, and developing
a global partnership in terms of
international development by 2015
Role of UN Today and the Future

UN General Assembly was established in
1945 under the UN Charter
--occupies a central position as the chief
deliberative, policymaking and
representative organ of the United
Nations it provides a unique forum for
multilateral discussions of the full
spectrum of international issues
covered by the Charter
The UN General Assembly

Functions and Powers of the UN General
Assembly
 consider and make recommendations on
the general principles of cooperation for
maintaining international peace and
security, including disarmament
 discuss any questions relating to
international peace and security and,
excerpt where a dispute or situation is
currently being discussed by the Security
Council, make recommendations on it.

Assembly
 Discuss, with the same exception, and make
recommendations on any questions within the
scope of the Charter
 Initiate studies and make recommendations to
promote international political cooperation, the
development and codification of international law,
the realization of human rights and fundamental
freedoms, and international collaboration in the
economic, social, humanitarian, cultural,
educational and health fields

Assembly
 Make recommendations for the
peaceful settlement of any situation
that might impair friendly relations
among nations
 Receive and consider reports from the
Security Council and other United
Nations organs

Assembly
 Consider and approve United Nations budget and
establish the financial assessments of member-
states
 Elect the non-permanent members of the Security
Council and the members of the other United
and, Nations councils and organs on the Council,
appoints the Secretary General.

Membership in the United Nations
 Almost very fully recognized independent
states and members of the UN.
 To become a member of the UN a state
must accept peace and all obligations
outlined in the Charter and willing to carry
out any action to satisfy those obligations
 General Assembly made the final decision
on admission to the UN after
recommedation by the Security Council

Challenges of Global Government in the
21st Century--Bokova,Irina
 the increasing fragmentation of the
international community is a cause for
concern
 climate change, poverty, violent conflict,
intolerance and extremism present direct
threats to the unity and well being of the
international community.
 alarming number of induividuals displaced
by conflict, continues to put pressure on
countries across the globe.

Challenges of Global Government in the
21st Century
 migration to Europe has put core values to
test, while the capacities of receiving
stages in the Middle East, like Lebanon and
Jordan, are being pushed to the limit.
 attacks on cultural rights and cultural
heritage, particularly in Syria, Irag and Mali,
threaten inter-cultural tolerance.

3 Points to address these challenges
1. openness of mind and out-of-the box
thinking is crucial
2. international community must build
resilient societies
3. a new thinking about peacebuilding

Learning Activity:
Go to a trip in the web and look for an
international economic organization (ex:
Asian Development Bank) or an international
company (like Honda, Yamaha, Mc Donalds,
etc). Gather as much information as you can.
Accomplish these tasks:
a. research the origins and history of the
institution you have chosen;
b. map the international connections it has
created;

Learning Activity:
c. identify the major country-leaders of this
institution;
d. locate the Philippines in this map of
interconnections.
Then answer this questions:
1. How does this institution influence global
economic activity?
2. How does it affect economics in the
Philipiines.

Transforming Global Economy

Recommended

Recommended

More Related Content

Similar to Transforming Global Economy

Similar to Transforming Global Economy (20)

Recently uploaded

Recently uploaded (20)

Transforming Global Economy

Editor's Notes