This document discusses economic globalization and related topics through four main sections. It begins by defining economic globalization and its emergence in the 1500s. It then examines the Bretton Woods system established in 1944 to regulate international monetary systems and addresses organizations it created like the IMF and World Bank. Other economic organizations are also outlined. Finally, it explores the role of multinational corporations in globalization through foreign direct investment and other activities.

1. Prepared by:
ANTONIO T. DELGADO

2. DISCUSSION OUTLINE
ECONOMIC
GLOBALIZATION
THE BRETTON
WOODS SYSTEM
OTHER ECONOMIC
ORGANIZATIONS
THE MULTINATIONAL
CORPORATION
01 02
03 04

3. 01

4. ECONOMIC GLOBALIZATION
It refers to the increasing interdependence of world
economies as a result of the growing scale of cross-
border trade of commodities and services, flow of
international capital and wide and rapid spread of
technologies (Gao, 2000).

5. ECONOMIC GLOBALIZATION
It is one of the three main processes of ‘generic’
globalization, with the two others being political
globalization and cultural globalization.

6. WHEN DID IT START?
According to Flynn and
Giraldez (1995), economic
globalization emerged
with the founding of
Manila in 1571.

7. Spanish galleon routes (white): West Indies or trans-atlantic route begun in 1492, Manila galleon
or trans-pacific route begun in 1565. (Blue: Portuguese routes, operational from 1498 to 1640)

8. ATTRIBUTES OF THE
GLOBAL ECONOMY
• Global communication
systems
• Transportation systems
• Transnational business
strategies
• Flexible forms of capital
accumulation
• Global agreements that
promote free trade

9. ATTRIBUTES OF THE
GLOBAL ECONOMY
• Market economies and
private enterprises
• Abundance of global
goods and services
• Economic disparities
• International workers,
managers, and
executives

10. A Prior Epoch of Globalization
A global economic system, specifically a global capitalist
system, emerged in about 1896 and reached something
of a peak throughout the world by 1914.

11. Differences in: Then Now
TRANSPORTATION
railroads
and steam ship
airplane
COMMUNICATIONS telegraph Internet
THE GLOBAL ECONOMIC SYSTEM

12. THE GLOBAL ECONOMIC SYSTEM
STRUCTURAL SIMILARITIES: THEN AND NOW
• Large-scale flows of capital
• Large-scale immigration
• Global economic specialization
• Specialization based on “law” of comparative advantage
• Emphasis on free trade

13. THE GLOBAL ECONOMIC SYSTEM
PROBLEMS CREATED: THEN AND NOW
• The poor are subjugated by the operations of the global
economy
• Not all parts of the world gain equally
• Certain industries and social classes lose out
• The poor tend to suffer most when forced to repay debts

14. 02

16. BACKGROUND
• Fear of the recurrence
of the Great Depression
• Fear of a resurrection of
barriers to trade and the
free flow of money
• Concern for financial
stability

17. • July 1944
• Mount Washington
Hotel, Bretton Woods,
New Hampshire
BRETTON WOODS
CONFERENCE

19. 5 KEY ELEMENTS OF BWS
1. Each participating state would establish a ‘par value’ for
its currency expressed in terms of gold or in terms of the
gold value of the US dollar as of July 1944
2. Each country would agree to exchange its own currency
for those of other countries at the established exchange
rates, plus or minus a one-percent margin

20. 5 KEY ELEMENTS OF BWS
3. The International Monetary Fund (IMF) was created to
establish, stabilize, and oversee exchange rates
4. Member states agreed to eliminate all restrictions on the
use of its currency for international trade
5. The entire system was based on the US dollar

21. ECONOMIC ORAGANIZATIONS CREATED BY BWS
GATT
General Agreement
on Tariffs and Trade
It was a system for the
liberalization of trade
It was superseded by
the WTO in 1995.
It is simply a forum.
WTO
World Trade
Organization
Its focus on trade
places it at the heart
of economic
globalization.
It is an independent
organization

22. ECONOMIC ORAGANIZATIONS CREATED BY BWS
IMF
International
Monetary Fund
It deals with exchange
rates, balances of
payments,
international capital
flows, and monitoring
of macroeconomic
policies
WB
World Bank
It provides funds to
government-
sponsored or -
guaranteed programs
in so-called Part II
countries .

23. THE END OF BWS
On August 15, 1971. President Richard Nixon took the US
off the gold standard, resulting in a devaluation of the
dollar and the end of the standard by which the
currencies of other nations operated.

24. 03

25. OTHER ECONOMIC ORGANIZATIONS
Organization for Economic Cooperation
and Development (OECD)
European Union (EU)
It is a broad group 36 developed nations (as of 2019). It is “the
most encompassing ‘club’ of the world’s rich countries”
The European Union (EU) encompasses 27 member states
(after the United Kingdom left on January 31, 2020). It is the
second largest domestic market in the developed world.

27. OTHER ECONOMIC ORGANIZATIONS
United States–Mexico–Canada
Agreement (USMCA)
MERCOSUR
It is the successor agreement to the North American Free
Trade Agreement (NAFTA). It took effect on July 1, 2020.
It was created by the Treaty of Asuncion in 1991 with the goal of
a common market in South America by 1995.

30. OTHER ECONOMIC ORGANIZATIONS
Organization of Petroleum
Exporting Countries (OPEC)
Trans‐Pacific Partnership (TPP)
It includes the major oil exporters and has succeeded in
greatly increasing the price of oil.
In addition to deepening economic ties and expanding trade,
the agreement is also considered “a not‐so‐secret gambit to
keep China at bay.”

32. OTHER ECONOMIC ORGANIZATIONS
Brazil, Russia, India, China, & South Africa (BRICS)
Association of Southeast Asian Nations Plus
China, Japan and South Korea (ASEAN+3)
These countries have very large and growing populations that
could serve as a massive work force and untapped consumer
market.
It was established in the late 1990s when ASEAN countries
decided to enhance cooperation with other major economies
of Asia against the backdrop of economic globalization.

36. 04

37. THE MULTINATIONAL
CORPORATION (MNC)
• It is a major player in economic globalization.
• While transnational corporations (TNCs) involve
operations in more than one country, MNCs operate
in more than two countries.

42. MNC ACTIVITIES
Foreign Direct Investment (FDI)
Portfolio Investment
It involves investments by one firm in another firm that exists
abroad in a different nation-state, with the intention of gaining
control over the latter’s operations.
It involves the purchase of equity in companies in other
countries, but the motivation is financial gain and not to obtain
control over those companies.

46. REVIEW
ECONOMIC
GLOBALIZATION
THE BRETTON
WOODS SYSTEM
OTHER ECONOMIC
ORGANIZATIONS
THE MULTINATIONAL
CORPORATION
01 02
03 04

47. ANY QUESTIONS?

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49. REFERENCES
1. ASEAN Secretariat Information Paper. (April 2020). Overview of ASEAN Plus Three Cooperation.
Retrieved from https://asean.org/storage/2016/01/APT-Overview-Paper-24-Apr-2020.pdf
2. Babones, S. (2007). "Studying Globalization: Methodological Issues". In George Ritzer (ed.). The
Blackwell Companion to Globalization. John Wiley & Sons. p. 146.
3. Flynn, D., & Giráldez, A. (1995). Born with a "Silver Spoon": The Origin of World Trade in 1571.
Journal of World History, 6(2), 201-221. Retrieved August 14, 2020, from
www.jstor.org/stable/20078638
4. Gao, S. (2000). Economic Globalization: Trends, Risks and Risk Prevention.
https://www.un.org/en/development/desa/policy/cdp/cdp_ background_ papers/bp2000_ 1.pdf
5. Ritzer G. (2011). Globalization: The Essentials. Chichester, West Sussex: Wiley-Blackwell.
6. Ritzer, G. (2019). Globalization: The Essentials, Second Edition. Chichester, West Sussex: Wiley-
Blackwell
7. Rowntree, et al. (2017). Globalization and Diversity : Geography of a Changing World. Hoboken,
NJ : Pearson