The Contemporary

World

hn Mark D. Bugarin, CSPE

Social Sciences Instructor
Chapter 1

The Structure of Globalization

 The phenomenon of
globalization is a fact of
life.
 ?
What is Globalization?
The view on
globalizatio
n taken
primarily as
an economic
process.
 Defined by
It is usually
recognition
related to
by
global
organizations
managemen
, business
t and
must have
market
 Proxim
ity

Three
interrel Locatio
n
ated
factors

Attitud
e
Proximity

Organizations now operate in much closer

proximity than ever before to a greater number
and a range of customers, competitors, suppliers
and government regulators.
Location

The location and integration of an

organization’s operations across several
international boundaries is part of
globalization.
Attitude

This attitude combines a curiosity about the

world outside one’s nation borders with a
willingness to develop the capabilities for
participating in the global economy.
Globalization and
Competitiveness

 Competitiveness refers to the relative standing of

one competitor against other competitors.

 Competitiveness has become a prominent

business and government concern in the era of
global business as a contest among nations.
 ?
w to measure globalization
 Economic
Globalization

It measures long
distance flow of goods,
capital, and services
as well as information
and perception that
accompany market
exchange.
 Social
Globalization

It measures the
spread of ideas,
information, images
and people.
 Political
Globalization

It measures the diffusion of

government policies in terms of
the number of embassies and
consulates in a country,
membership in international
organization.
Chapter 2

Market Globalism
 The integration of
the world economy
has increased
significantly.
 e dthe
ass
creern . ivithye s d
i nnc ts c t
i s t a ol
e o u y
Remarkable Changes ea i
t
snge
h , c
e
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e n
mprongd e ,
c o n om
f t h e C
g
nch l m o c . e d o
.
e
s
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tco c
a
hnd
ap i ta
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twa j o r
y m e
w
t
nor l d
t e
h ic
n
eun i t
fS r e ip
ch ird o
l th e i som
Th
e World Economy
u ml a
e
t i
f s
on Th emof
o
n d ce
p
n
ant
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e
ec
,o n
a r.
o lre a e n c h
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v e rg ast in
em hedl om
Ta
 Capitali
st
s te m
i c Sy Socialist
n
o om
Ec
Mixed
This classification is based on
the dominant method of
resource allocation.
Market Allocation
A market allocation system relies on
households and frms to allocate
resources.
Command Allocation

In a command allocation system, the

country or nation has broad powers to
serve the public interest on what is
appropriate based on their judgment.
Mixed Allocation

Mixed allocation stems on the principle that

there is no “pure market or command
allocation systems” among the world’s
economies.
LD BANK FOUR-CATEGORY SYSTE
The World Bank has developed
a four-category system of classifcation
that uses per capita (GNP) as a base.
Low-Income Countries

Low-Income countries have a GNP per

capita of less than $766.

 Limited industrialization.
 High birth rates.
 Low literacy rates.
 Political instability and unrest.
Low-Middle Income Countries

 Countries that can be assigned to the

lower income and lower-middle income
categories are known collectively as less-
developed countries.

 Their GNP per capita is between $766

and $3, 035.
Upper-Middle-Income Countries

 These countries are also

known a industrializing or
developing countries with a
GNP per capita ranging from
$3,036 to $9, 385.
High-Income Countries

 High-income countries are also

known as advanced,
developed, industrialized or
post-industrialized countries.
THE SIX CORE CLAIMS
OF MARKET GLOBALISM
 Globalization: Liberalization and Global
1. Integration of Markets
It dwells on the vital functions
of the free market.

Globalization: Inevitable and Irreversib

2. Irreversible market
. forces driven
by
technological innovations that
make the global integration of
 Nobody is in Charge of Globalization
3.
Focuses on the classical liberal
concept of the ‘self-regulating market’.

Globalization Benefits Everyone

4.
Usually unpacked in material terms
such as economic growth and
prosperity.
 Globalization: Furthers the Spread
5. of Democracy in the World

This links ‘globalization and ‘market’

to the adjacent concept of democracy.

Globalization Requires War on Terror

6.
The Neo-conservative commitment to
‘American values’
of freedom, security, and free markets.
Chapter 3
GOVERNMENTS AND CITIZENS IN A
GLOBAL INTERCONNECTED
WORLD OF STATES
 The formation of a
state is the highest
expression of a
political act of men.
 ?
What is STATE?
A state is a community of persons, more or less
numerous, occupying a defnite territory,
possessing an organized government, and
enjoying independence from external control.
 ?
What is NATION?
It is defned as people, or aggregation of men,
existing in the form of an organized society.
 STATE NATION

 It is more of a  It is more racial or

political concept. ethical.
People Territory

Elements of the State

Government Sovereignty
PEOPLE This is the entire
body of those
citizens of a state
who are invented
with political power
for political purposes.
TERRITORY It is the geographical
area under the
jurisdiction of
another country or
sovereign power or
state.
Government
Kinds of Government
It is the totality of 1. De Jure (Legitimate
Government)
authorities which rule
2. De Facto (Illegitimate
a society by carrying Government)
Three Kinds of De Facto
out fundamental •. Government by Revolution

rules. •. Government by Secession

•. Government by Occupation
Sovereignty
It is the supreme Two Kinds of Sovereignty
absolute and 1. Internal Sovereignty
(Control and direct the
uncontrollable power
internal affairs of a country)
by which an 2. External Sovereignty
independent state is (Control and direct the
external affairs of a country)
governed.
 Political Risk
It is the change in political environment or government policy
that would adversely affect a company’s ability to operate
effectively and proftably.

auses of Political Risk

 Tension
 Taxes
 Seizure of Assets
Chapter 4

THE GLOBALIZATION OF
ECONOMIC RELATIONS
Economic Globalization is
a historical process, the
result of human
innovation and
technological progress.
 It refers to the increasing
integration of economies
around the world,
particularly through the
movements of goods,
services, and capital across
borders.
 Interconnected
Dimensions
of
Economic Globalization
When a country exports
Trade Surplus
more than it imports.
When a country imports
Trade Deficit
more then it exports.
The Globalization of
Financial and
Capital Markets
Absolute Advantage

The production of goods enjoyed

by one country over another when
it uses fewer resources to produce
that goods than the other country
does.
Trade Barriers

Also called obstacle to trade.

These are forms of protection
shielding some sector of the
economy from foreign
competition.
Tarif

A tarif is a tax
on imports.
Export Subsidies

Is a government payments
made to domestic firms to
encourage exports. It can
also act as a barrier to trade.
Quota

A quota is a limit on the

quantity of imports.
The Globalization of
Technology
And
Communication
 Capital is not the only factor of production
required to produce output, labor is equally
important.

To be productive, the workforce must be

healthy.

Technology transfer and communication

have become part of manpower training in
most agricultural countries.
The Globalization
of
Production
Production is the process which
inputs are combined and
transformed into output.

Production technology relates

inputs to outputs.
 THE WORLD TRADE
ORGANIZATION AND GATT
 GATTwas
GATT is aintended
treaty among
to be a123 nations
multilateral,
whose governments
global initiative, agreed,
and GATT at leastdid
negotiators in
principle,
succeed to promote
in liberalizing trade
world among
merchandise
trade.
members.
PREFERENTIAL TRADE
AGREEMENTS
Free Trade Areas
A free trade area (FTA)
is formed when two or
more countries agree to
abolish all internal
barriers to trade among
themselves.
Customs Union

A customs union
represents the logical
evolution of a free
trade area.
Common Market

A common market is
the next step in the
spectrum of economic
integration.
 Caingles, Ryan
Carino, Alleiah

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