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Contemporary World Reviewer
Medical Technology (BSMT1)
Emilio Aguinaldo College
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THE CONTEMPORARY WORLD (REVIEWER)
Globalization – refers to the process by which more people across large distances become connected in more and different ways.
It refers to the interaction of people and primarily an economic process of integration which has social and cultural aspects as well.
As people become more intricately connected to many others across large distances – not all people to the same extent, the world is becoming a – “Single place”.
It involves growing diffusion, expanding interdependence, more transnational institution and an emerging world culture and consciousness.
The academic version of this is to equate globalization with “ deterritorialization”.
Deterritorialization – is the process through which the constraints of physical space lose their hold on social relations.
Globalized World Cup – known as the World Cup is the most prestigious football tournament in the world and also the most widely viewed sports event in the world that started in 1930. (From 13 countries to 200 countries).
Deterritorialization – identifies the globalization with the process by which capitalism expands across the globe as powerful economic actors seek profit in global markets and impose their rules – everywhere
a process often labeled as – Neoliberalism.
Neoliberalism – a modified form of liberalism tending to favor free – market capitalism.
Globalization to different people (Lechner, 2015)
A new opportunity to spread the faith and convert lost souls abroad. (Korean Pentecostal Missionary)
Growing new tools while staying deeply involved in the home village. (Dominican Immigrant)
Sampling variety of new shows, some adopted from foreign formats. (Indian Television viewer)
Chance to escape rural poverty by cutting threads off designer jeans. (Chinese Apparel Worker)
Managing a far – flung supply chain to get products to stores. (American Shoe Company)
Rules of the global game that favor the rich North over the poor South. (Filipino global justice advocate)
THEORIES OF GLOBALIZATION (LECHNER,
2015)
- World System Theory – perspective that globalization is essentially the expansion of the capitalist around the globe.
Capitalist World System – originated in the 16 th century when the Europe established enduring connections 3As (Asia, Africa and Americas).
It is considered as a single economy – a market and a regional division of labor.
The dominant classes of this system (CORE), were supported by the strong states as exploited labor, resources and trade opportunities.
NOTE: Labor, resources and trade opportunities are notable in PERIPHERAL AREAS.
Semi – periphery – are any industrializing, mostly capitalist countries are positioned between the periphery and the core countries.
- The central purpose of the world system is capital accumulation by competing firms, which go through cycles of growth and decline.
Karl Marx – “The Marxist Tradition”. In Marx’s view, the dialectical nature of history is expressed in class struggle between the owners of the means of production, or bourgeoisie and the workers or proletariat.
Bourgeoisie – the capitalist’s class who own most of society’s wealth and means of production.
Proletariat – working – class people regarded collectively. (Latin word: proletarius)
World Polity Theory – states an important component of “world society ”. From this perspective, is all – encompassing “world polity” and its associated world culture.
World Culture Theory - agrees that world culture is indeed new and important but it is less homogenous than world polity.
Shrinking world
- Globalization is a result when human activities take place on a worldwide scale, which means people increasingly live in a “global village” or a “shrinking world”
Reasons why globalization will not make the world homogenous (Lechner, 2015)
General rules and models are interpreted in light of local circumstances.
Growing similarity provokes reactions.
Cultural and political differences have themselves become globally valid.
The interdisciplinary understanding of globalization
- Political scientist
Political activity can also transcend national borders through global movements and Non – Government Organization (NGO).
- Economist
Integration through the international trade of markets in goods and services. It includes direct measure just like tariffs and transport costs, etc. (eg. OFW)
- Sociologist
Cole (2017) states that the globalization is ab outgoing process that involves interconnected changes in the cultural and social spheres.
- Involves the ever increasing integration of these aspects between nations, regions, communities and isolated places.
Social Media
- A brilliant tool of communication that can be easily accessed globally and affects how people communicate with other people and even in different cultures.
- Historian
- Globalization is not a phenomenon but the world itself took hold only recently which records shows first use in English in 1930.
Market Globalism – an idea that reflects the concepts of globalization. It seeks to endow globalization with free market norms and neoliberal meanings. NOTE: the term “globalization” gained in currency in the late 1980s.
The five core claims of Market Globalism (Steger, 2005)
- Globalization is about the liberalization and global integration of markets.
- The vital functions of the free – market – its rationality and efficiency.
- Bring about greater social integration and material progress.
- Free – market capitalism – “ the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient your economy will be.
Globalization is inevitable and irreversible.
Nobody is in charge of globalization
“ self – regulating market”
- Globalization benefits everyone
- Economic growth
- Prosperity
- Globalization furthers the spread of democracy in the world.
Neoliberalism - proposes that human well – being can best be advance by liberating individual entrepreneurial freedoms and skills.
- The role of the state – to create and preserve an institutional framework appropriate to such practices.
Privatization – process of transferring an enterprise or industry from the public sector to the private sector. Public to private sectors:
- Philippines Airlines (PAL)
- Philippine Long Distance Corporation (PLDT)
- Manila Electric Company (MERALCO)
- Manila Waterworks and Sewerage System (MWSS) – “Manila Water Company/Services”
CHARACTERISTICS OF NEOLIBERALISM
- Government must limit subsidies
- Make a reforms to tax law in order to expand tax base
- Reduce deficit spending
- Limit protectionism
- Open markets
- Removal of fixed exchange rates
- Back deregulation
- Privatization
4. Floating Exchange rate
A regime where the currency price is set by the forex market based on supply and demand compared with other currencies.
- Nations were “living in sin” by 1973
Global actors in Economic Globalization
1. International Governmental Organization (IGO)
Refers to an entity created by treaty, involving two or more nations, to work in good faith, on issues of common interest.
- Strive for peace, security and deal with economic and social questions.
2. International Non – Governmental Organization (NGO)
Work towards solutions that can benefit undeveloped countries that face the backlash of economic globalization.
3. Multinational Corporation (MNCs) Corporations which have overseas branches. One of the many changes they have brought to developing countries is increase in automation.
Automation – the use of various control systems for operating equipment such as machinery.
The effects of Economic Globalization on Developing Countries
1. Increased Standard of Living Gives the governments of developing nations (roads, health care, education, social services, etc.)
2. Access to new markets (1971)
- One of the largest benefit of the globalization.
- Develop new technologies and provide new products and services
3. Widening Disparity in incomes
Foreign companies and foreign capital creates a reduction in overall unemployment and poverty, it can also increase the wage gap between those who are educated and those who are not.
4. Decreased Employment Foreign companies into developing countries increases employment in many sectors especially for skilled workers. Automation in the manufacturing and agricultural sectors lessens the need for unskilled labor and unemployment rises in those sectors.
International Financial Institution Institutions that provide financial support via grants and loans for economic and social development activities in developing countries.
- Provide loans, grants and technical assistance to governments
- Play a significant role in the privatization and regulation of public utilities and natural resources.
Asian Development Bank
Example of financial institutions categorized as regional development bank in which has 31 offices around the world. (Ortigas Avenue, Pasig City)
International Financial Institutions
- World Bank (WB)
- Internal Monetary Fund (IMF)
- European Investment Bank (EIB)
- Islamic Development Bank (IDB)
- Asian Development Bank (ADB)
- European Bank for Reconstruction and Development (EBRD)
- CAF – Development Bank of Latin America (CAF)
- Inter – American Development Bank Group (IADB)
- African Development Bank (AfDB)
- Asian Insfrastructure Investment Bank (AIIB)
1. World Bank (Washington, D)
Founded in 1944 , the International Bank for Reconstruction and Development – soon called the World Bank – has expanded to a closely associated group of five development institutions.
Goals of World Bank
- End extreme poverty by decreasing the percentage of people living on less than $1 a day to no more than 3%
- Promote shared prosperity by fostering the income growth of the bottom 40% for every country.
Five Organization of World Bank
1. International Bank for Reconstruction and Development (IBRD)
Lends to governments of middle – income and creditworthy low – income countries. 2. International Development Association (IDA)
Provides interest free loans – called credits and grants to governments of the poorest countries.
3. International Finance Corporation (IFC)
Largest global developing institution focused exclusively on the private sector.
- They help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets and providing advisory services to businesses and governments
4. Multilateral Investment Guarantee Agency (MIGA) – 1998
Promote foreign direct investment into developing countries to support economic growth, reduce poverty and improve people’s lives.
5. International Centre for Settlement of Investment Disputes (ICSID)
Provides international facilities for conciliation and arbitration of investment disputes.
International Monetary Fund An organization of 189 countries working to foster:
- global monetary cooperation,
- secure financial stability,
- facilitate international trade,
- promote high employment and sustainable economic growth and;
- reduce poverty around the world.
Note: IMF known as the Fund, was conceived at a UN Conference in Bretton Woods, New Hampshire, United States , in July 1944.
IMF’s responsibility :
- primary purpose is to ensure the stability of the international monetary system
International Monetary System
the system of exchange rates and international payments that enables countries and their citizens to transact with each other.
Mission of IMF
1. Surveillance
- oversees the international monetary system and monitors the economic and financial policies 189 countries.
- Highlights possible risk to stability and advices on needed policy adjustments
2. Lending
- Provide loans to member countries experiencing actual or potential balance of payments problem.
- Enable countries to rebuild their international reserves, stabilize their
currencies, continue paying for imports, and restore conditions for strong economic growth.
3. Capacity Development
- Helps member countries design and implement economic policies that foster stability and growth by strengthening their institutional capacity and skill.
Note: IMF gets its money from its member countries.
MARKET INTEGRATION – term that is used to identify a phenomenon in which markets of goods and services are somehow related to one another.
- A situation in which the prices of related goods and services sold in a defined geographical location also begin to move in some sort of similar pattern to one another.
- Koester (2017), a state of affairs or a process involving attempts to combine separate national economies into larger economic regions. Integration – stimulating trade and improving divisions of the labor among countries has been recommended by many economist.
General Agreement of Tariffs and Trade (GATT) (1948) Promoting greater acceptance of the most favored nation principle.
Forms of Integration
1. Preferential Agreement Involves lower trade barriers between those countries which have signed the agreement.
2. Free trade agreement
Reduces barriers to trade among member countries to zero. 3. Customs Union
Represents a higher stage of economic integration than a free trade area as the member countries adopt a common external tariff. 4. Common Market
Goes beyond customs union in allowing for free movement of labor and capital within the union.
5. Economic Union The highest form of economic integration. In addition, to the conditions of a common market, member countries also agree to integrate monetary, fiscal and other policies.
- Brunei Darussalam – joined January 7, 1984
- Vietnam – July 28, 1965
- Lao PDR and Myanmar – July 23, 1997
- Cambodia – April 30, 1999
ASEAN – created in 1967 as a political group to strengthen the power and increase growth and development in member nations.
ASEAN Economic Community (AEC ) – a major milestone in the regional economic integration agenda in ASEAN offering opportunities in the form of a huge market.
- In 2014, AEC is the third largest economy in Asia and the 7th largest in the world.
AEC Blueprint 2025 – aimed towards achieving the vision of having an AEC by 2025 that is highly integrated and cohesive.
- Competitive, innovative and dynamic
- Enhanced connectivity and sectoral cooperation
- A more resilient, inclusive
- People – oriented, people – centered community, integrated with the global economy
Five Interrelated and mutually reinforcing characteristics of ASEAN Economic Community:
- Highly integrated and cohesive economy
- A Competitive, innovative and dynamic ASEAN
- Enhanced connectivity and sectoral cooperation
- A resilient, inclusive, people – oriented, and people – centered ASEAN
- A global ASEAN
The four pillars of the ASEAN Economic Community
- Single market and production base
the region as a whole must become a single market and production base to produce and commercialize goods and services anywhere in ASEAN.
2. Competitive economic region
The region must emphasize on the competitiveness of its production and capacity for export, as well as the free competition inside of its frontiers.
3. Equitable Economic Development
To receive the benefits of the AEC, the people and businesses of ASEAN must be engaged into the integration process of the AEC.
4. ASEAN Integration into the globalized economy
ASEAN must not be isolated but an integrated part of the global economy.
Five core principles of the ASEAN single market and production base
- Free flow of goods
- Free flow of service
- Free flow of investment
- Free flow of capital
- Free flow of skilled labor
Business Process Outsourcing (BPO) – is a billion dollar business in the Philippines because of less expensive operational and labor costs. Call centers provide almost type of customer relations:
- Travel services
- Technical support
- Education
- Customer care
- Financial services
Global Corporation – is a business that operates in two or more countries. “Multinational Company”. Apple Inc. – is an American technology company headquarters in California that designs, develop and sells consumer electronics and computer software.
“Whatever you do, work at it with all your heart, as working for the Lord, not for human masters. It is the Lord Christ you are serving. “ Colossians 3:
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Contemporary World Reviewer
Course: Medical Technology (BSMT1)
University: Emilio Aguinaldo College
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