LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

I - Module 7 – (A) FUTURE(S) OF GLOBALIZATION

II – Topics

7.1 Poverty & Lack of Ample Development under Globalization

7.2 Income Inequality and Tax Dodging
7.3 Public Control of the Financial System

III - TIME FRAME: 6 hrs.

IV - INTRODUCTION:

It was on December 11, 2001 when the People‟s Republic of China – a nominally
communist country – officially became the 143rd member of WTO. Pro-globalization
adherents trumpeted it as an unmistakable proof that capitalist globalization can no longer
be challenged. \after all, almost a decade before China‟s integration into the capitalist world,
the Union of Soviet Socialist Republics (USSR) or the Soviet Union had been officially
dismantled. At onset of the second millennium, globalization is still a positive buzzword, and
capitalism continues to prevail. Meanwhile, others are part of the alter-globalization bloc,
which believes that globalization ought to take a middle ground, and prioritize people over
profits and communities over corporations.

V - INTENDED LEARNING OUTCOMES: In this lesson, the students will be able to:

1. synthesize ideas and perspectives on globalization;

2. propose solutions to contemporary problems associated with globalization;
3. write a term paper on a topic related to globalization.

VI - PRE – ASSESSMENT: Answer the following questions briefly.

1. Why poverty exist in your place?

2. What happened in your place of residency if there is massive tax fraud?

3. Why financial system must be established in a country?

VII - LEARNING ACTIVITIES

Poverty & Lack of Ample Development under Globalization

In his 2013 New Year‟s Day homily, then Pope Benedict XVI acknowledged the
existence of “hotbeds of tension and conflict caused by growing instances of inequality
between rich and poor, by the prevalence of a selfish and individualistic mindset which also

GE – Contemporary World / 2nd Semester 2021-2022 Page 24

LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

finds expression in an unregulated financial capitalism.” Meanwhile, his more progressive

successor, Pope Francis–a Jesuit from Latin America, the land of revolutionaries such as
Hugo Chavez, Ernesto “Che” Guevara, and Fidel Castro–ascribes widespread poverty on
“new forms of colonialism.” Pope Francis also labeled capitalism as “the dung of the devil,”
calling for the overhaul of globalization by asserting that poor countries should not be merely
relegated to being providers of raw materials and cheap labor for developed countries. Their
remarks remain relevant today.

Aside from the traditional statistical evidence on Third World poverty, nontraditional
measures of poverty can be also cited to prove the fact that there is widespread poverty in
the Global South. For example, Lubin cites a report from Fondation Scelles, a French anti-
prostitution nongovernment organization (NGO), which estimates the number of prostitutes
in the world from 40 to 42 million, majority of whom come from impoverished or developing
countries.

Meanwhile, other Third World citizens have other options such as becoming cogs of
the labor markets in First World countries, where the wages are relatively higher. Out of the
USD 601 billion estimated remittances sent by migrants in 2015, USD 441 billion was sent
by migrants to developing countries, “nearly three times the amount of official development
assistance. The true size of remittances, including unrecorded flows through formal and
informal channels, is believed to be significantly larger.” This proves that currently, most
migrants still come from Third World countries as work opportunities in their homeland are
either scare or financially unrewarding. There are now more than 247 million migrants, with
the top migrant destination countries mostly from the developed world: the US, Saudi Arabia,
Germany, the Russian Federation, the United Arab Emirates, UK, France, Canada, Spain,
and Australia. In some countries, migrants make up a huge percentage of the population;
examples are Qatar (91%), UEA (88%), Kuwait (72%), Jordan (56%), and Bahrain (54%).

Nowadays, the news is

riddled with poor people being
pushed past their limits, driving them
towards extreme actions such as
eating garbage or mud to survive or
committing suicide. For example, the
Philippine Daily Inquirer reported that
Kristel Tejada, a first year student at
the University of the Philippines (UP-
Manila) “took her own life two days
after she was forced to put her
studies on hold because she could
not pay the tuition.” Meanwhile, highlighting the disparity of incomes and hopes under the
current system, news on signs of macroeconomic development are also numerous. The
Philippine president at the time graced the opening of the $1.2-billion Solaire Casino Report
and Casino, “kicking off the Philippines‟ high stakes bid to join the world‟s elite gaming
destinations of Macau and Las Vegas.”

Within the context of the Philippines‟ Christian heritage, Pope Franci‟s observation in
his apostolic exhortation Evangelii gaudium (The Joy of the Gospel) offers a valid point for
collective reflection on continuing macroeconomic growth that fails to benefit everyone:

GE – Contemporary World / 2nd Semester 2021-2022 Page 25

LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

“Almost without being aware of it, we end up being incapable of feeling compassion at the
outcry of the poor, weeping for the other people‟s pain, and feeling a need to help them, as
though all this were someone else‟s responsibility and not our own. The culture of prosperity
deadens us; we are thrilled if the market offers us something new to purchase. In the
meantime, all those lives stunted for lack of opportunity seem a mere spectacle; they fail to
move us.”

Despite their desperation, a number of Filipinos still choose to survive so as to live.

Some who do not have money for food live off leftovers called pagpag (also called garbage
chicken), which are taken from trash bins. This has been documented by Ferdinand
Dimadura‟s award-winning short film “Chicken a la Arte”. In another report it is claimed that
“garbage chicken is a grim staple for Manila‟s poor.” Filipinos are not alone in having strange
meals just to survive. In Haitian slums, cakes made from mud are a staple. This happens
despite the fact that almost half of the world‟s food is thrown away–an amount equivalent to
two billion tons–partly due to Western disapproval of consumer food with cosmetic defects.

Task 18: Make a collage depicting the causes of poverty. Be creative as you can.

Income Inequality and Tax Dodging

In a report entitled “An economy for the 99%,” Oxfam, a UK-

based anti-poverty NGO, describes the global trend of income
disparities by pointing out that “eight men own the same wealth as the 3.6 billion people who
make up the poorest half of humanity.” In another article, Oxfam reports the interview
conducted among women working in a garment factory in Vietnam. These women are
described to work for 12 hours a day, 6 days a week, and yet struggle to supply their daily
needs with their wage of one dollar per hour. Their situation contrasts with the executives of
some of the world‟s biggest fashion companies for which these women work for.

Moreover, Oxfam mentions how big businesses fuel inequality through corporate tax
dodging which costs poor countries at least USD 100 billion each year. The said amount is
enough to provide education for 124 million children who are out of school; and pay for
healthcare programs that could save at least 6 million children from death every year.

The elite‟s tax dodging, operations through

the intricate formation of so-called shell corporations
have been laid bare by the Panama Papers, an
“unprecedented leak of 11.5m files from the
database of the world‟s fourth biggest offshore law
firm, Mossack Fonseca. The records were obtained
from an anonymous source by the German
newspaper Suddeutche Zeitung, with shared them
with the International Consortium of Investigative
Journalists (ICIJ). The ICIJ then shared them with a large network of international partners,

GE – Contemporary World / 2nd Semester 2021-2022 Page 26

LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

including the Guardian and the BBC. The Panama Papers “show the myriad ways in which
the rich can exploit secretive offshore tax regimes. Twelve national leaders are among the
143 politicians, their families and close associates from around the world known to have
been using offshore tax havens.” Such systems of countries with lax tax rules that allow rich
corporations and individuals to hide their wealth in intricate shell layers of the corporations,
so as to evade taxation in their home countries where tax rates are higher. Indeed, EU tax
authorities have cracked down on high-tech giant apple, ordering the said firm to pay USD
14.5 billion in back taxes, plus interest after a “two-year EU investigation determined that
Ireland and Apple struck an illegal deal that allowed the technology giant to pay virtually no
taxes from 2003 to 2014 on profits for sales throughout the 28-nation region.” In the
Philippines, Mighty Corporation, a big local tobacco firm offered “to pay the government
Php25 billion to cover tax deficiencies” as if faced “3 tax cases before the Department of
Justice (DOJ), totaling Php37.88 billion.” And after being publicly mentioned by President
Rodrigo Duterte.

Governments around the world consider tax dodging and tax evasion as serious
crimes for such activities technically rob them of money which can be used to finance social
services such as health care, education, housing and the like. Unfortunately, even without
tax dodging and tax evasion, the global trend of lowering corporate and top income tax rates,
purportedly to help simulate investments, all the more widens the gap between the richest
and the poorest segments of the population. Thomas Piketty notes that such tax systems
have only allowed the wealthiest segments of the population to accumulate more and more
wealth, while at the same time making societies more unequal, despite the expansion of the
world‟s wealth. The complaint of the ordinary folk that the pie has gotten bigger but their
share remains just a pitiful mouthful continues to be valid. A handful of billionaires thrive as
hundreds of millions of poor minimum wage earners endure poverty as their wages are way
below the standard living wage (wage needed to cover basic necessities such as food). In
the Philippines, the daily minimum wage range as of 2017 is Php235.00 to Php491.00, while
the family living wage stands at Php 1,088.00. The Philippines minimum wage is also far
below the 4,000-peso daily family income for the government‟s own definition of a
“comfortable life,” as described by the National Economic Development Authority (NEDA).

Task 19: Identify and propose 5 contemporary problems associated with globalization
specifically in income inequality and tax dodging. Follow matrix below.

Problems Solutions

1.

2.

3.

4.

5.

GE – Contemporary World / 2nd Semester 2021-2022 Page 27

LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

Public Control of the Financial System

The 2008 crisis compelled almost everyone to agree that big

corporate-controlled multinational banks have partly caused the current
international financial crisis by seeking short-term profits at the expense of depositors. This
eventually forced neoliberal governments around the world to provide multi-billion dollar
bailout funds to banks from taxpayers‟ money slashed away from the already insufficient
budget for badly needed social services. The big corporate banks‟ failure to manage the
banking system efficiently and effectively for the past decades, and their distress call to
governments when they sank, gave credence to snowballing calls toward strengthening
public control over the world‟s financial system. Various documented forms of banking fraud,
rogue trading, or money laundering involving banks or their officials and employees further
sully the reputation and capability of the private sector to handle the banking system.
Numerous cases of banking fraud, pocketing of depositors‟ money, rogue trading, price
fixing, money laundering, and foreign exchange collusion by banks and their employees or
managers have been reported in the media. Some court convictions were handed and fines
were also imposed. These reports strongly suggest that big banks need to be subjected to
more state regulation and public control, as a way of preventing a repeat these anomalies
and of the 2008 crisis. It must be noted that the failure of these banks have offices and
subsidiary entities in the Third World. In fact, even independent Third World banks subscribe
to. Hence, the idea of putting the people–that is, feasibly via the state or any entity that
represents them–back in control is being explored as an alternative to the current financial
system.

Nouriel Roubini, an economist who predicted the 2008 crisis and the collapse of big
corporate banks in the
developed world, favors
nationalizations or putting big
banks into public control as a
way of “cleaning up” or
reforming them. The great
Filipino nationalist Senator
Lorenzo Tañada co-wrote
“Proposals for a Nationalist
and Democratic Constitution”
during the period of crafting
the 1987 Constitution.
Tañadas progressive
proposals are worth
reviewing, even though most of them were not included in the current Constitution. In the
said document, he advocated for the nationalization of Philippine banks and government
provision of credit to entrepreneurs as ways of ensuring public investments for the country‟s
development. Besides nationalizing existing private banks, another option is to build public
banks for public development projects. In 2016, British Shadow Chancellor John McDonnell
unveiled the UK Labor Party‟s campaign pledge to build such an entity, a new EUR 500-
billion national investment bank, and “a network of regional banks, inspired by Germany‟s

GE – Contemporary World / 2nd Semester 2021-2022 Page 28

LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

government-owned development bank (which could) rescue Britain‟s communities from

decay and rebuild Britain‟s industries after years of neglect.” Beyond banks, governments
can also engage in building and expanding cooperatives to promote public control over the
world‟s financial resources.

In the Philippines, cooperatives are exempted from paying taxes, in accordance with
Article 60 and 61 of Republic Act No. 9520 (Philippine Cooperative Code of 2008), hence
these mostly grassroots-controlled financial institutions have a greater flexibility in expanding
benefits for ordinary citizens. Successful cooperative enterprises in the US and in Spain can
be further studied. In Michael Moore‟s documentary Capitalism:A Love Story (2009), the
success of a big community bakery and a medium-sized technology firm are featured as
evidences that cooperatives can work efficiently while providing greater income opportunities
for its stakeholders, as compared with privately run industries. Another success story is that
of the big cooperative enterprise Mondragon in the Basque region of Spain. Mondragon
employs 70,000 workers, most of whom are shareholders of the world‟s most profitable and
biggest cooperative on record. Lebowitz explains that forming cooperatives have other
benefits such as maximization of income per member (which further spreads economic
development); public control over pooled resources and the claims over profits; and
strengthening of the collectivist logic of the cooperative that enables people to share their
knowledge and abilities for they benefit in doing so, thereby building solidarity in the
community. In essence, Lebowitz argues that cooperatives strengthen cooperation between
citizens and their commitment to democratic decision-making.

Task 20: Write a term paper focusing global financial system. Follow the parts of term
paper writing.

I. Introduction:
II. Body (main point, examples)
III. Conclusion Paragraph:

VIII - SELF- EVALUATION:

Complete the stem inside the box/ answer the question.

Poverty happens when….. How tax fraud be How financial system of a

addressed? country be strengthened?

GE – Contemporary World / 2nd Semester 2021-2022 Page 29

LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

IX - REVIEW OF CONCEPTS

 Tension and conflict caused by growing instances of inequality between rich and
poor.
 Widespread poverty is a new form of colonialism.
 Migrants come from Third World countries because of scarcity or financially
unrewarding in their homeland.
 Tax dodging is an illegal method used to reduce the amount of tax that a person or
company has to pay.
 Progressive taxation is a system of imposing higher tax rates on richer/ richest
individuals and corporations
 Land reform is a program of redistributing large landholdings to poor, landless
farmers.
 Technology transfer is the capability in using and/or producing technology, usually
from developed to less developed countries, as a way to improve the latter‟s
economic performance and achieve higher levels of development.

X - POST TEST: Answer the questions briefly.

1. What purposes are served by the analysis of research data?

___________________________________________________________________

2. What functions are served by statistics in quantitative data analysis?

___________________________________________________________________
How are data presented in qualitative and quantitative researches?
___________________________________________________________________

XI - REFERENCES

1. Ardales, V. (Al, PK. (2018). The Contemporary World. 1st Ed.

2. San Juan, DM. (2018). Journey through Our Contemporary World. Vibal Publication,
Manila, Philippines
3. https://www.google.com/search?q=image+of+philippine+poverty
4. https://www.google.com/search?q=image+of+a+financial+system
5. https://www.google.com/search?q=image+of+tax+inequality

GE – Contemporary World / 2nd Semester 2021-2022 Page 30