COURSE CODE: GE 103

COURSE NAME:
Contemporary World
COURSE MODULE: 5
AUTHOR

Dr.Leoncio P. Olobia
Olobia, L. The Contemporary World. Leyte Normal University.

Module 5
Global Interstate Systems

Overview

This module will introduce you to many political issues surrounding globalization. While
globalization is generally conceived as interconnectedness among nations, the notion of state
as a political unit that focuses on international affairs has been generally understood to be over
and above any globalization process in the past. Such idea was and continues to be accentuated
on protection and welfare of citizens of the state. Moreover, issues like sovereignty,
nationalism and economic independence have been the core of many discussions surrounding
the state.

With the advent of globalization, global and regional alliances have been forged to instill
interconnectedness among nations. Institutions like ASEAN, World Bank, International
Monetary Fund were created in order to address the issue on interdependence among states,
not as independent units.

Objectives

At the end of the module, you are expected to

 Discuss global corporations and global governance

 Analyze the implications of global governance on domestic government
 Explore on the role of the state in globalization

MOTIVATIONAL ACTIVITY

In two sentences, explain how the Philippine government helps other governments in the
world.

I. GLOBAL CORPORATIONS

In this section, you will learn that growth of international trade has been made possible
because of the interventions of trade organizations implying that no country is ever completely
independent. You will also realize that international trade facilitates prosperity among nations
and, thus, the need for international regulatory groups cannot be overly emphasized. The need
for such groups is articulated in the conduct of large-scale trade activities. Among their
functions include tariff reductions, flow of goods and services, customs certificates, etc. These
functions have been discussed in the previous modules so that you should be familiar with
them by now.

One of the important results of trade agreements is their ability to make transactions so much
easier. For instance, production of Nike shoes will require capital from China but labor from the
Philippines. This example explains a case of trade agreement where production and exchange
are occurring cross borders. These companies are called Multinational Corporations (MNC) or
Transnational Corporations (TNC). They are also called global corporations. You will expect that
some of these global corporations take advantage of resources in different countries to make
them enjoy bigger profits transported back to their home countries carrying the image of their
home country. Some of them are popular corporations like Coca-Cola, McDonald’s that are
found globally but tell everyone that they are American companies.

You will know that transnational corporations as global corporations play a great role in the
global economy due to their comparative advantage in production. Also, influential
corporations have economic and political control in some countries not to mention their impact
on trade flows.

A case in point is the Philippine economy where you find yourself in. As indicated earlier,
production of Nike shoes in China will utilize labor from the Philippines because it is much
cheaper here. The effect in such labor transfer would be an increase in labor employment
among Filipinos even if wages are low. Consequently, such labor inclusion also brings with it
technological knowledge so that poor Filipinos are now educated as well aside from being
employed. This articulates a sense of interdependence among nations.
A more pronounced pitfall of the process has to do with the fact even if Filipinos are now
income-earners, they end up displaced at work due to low wages and long hours on duty,
vulnerable to exploitation. While some will benefit from economic encroachment, mostly the
upper echelons of the society, majority will be thrown into grim scenario. However, when labor
laws in the Philippines will be limiting TNC movement, China will just leave in the country and
establish a new country elsewhere leaving massive unemployment in the country. In another
light, setting up shoes factory in the Philippines takes away Chinese labor which should have
been enjoyed by them.

Then again, you will reckon that the activities described in the previous paragraph are being
done by my global corporations because they allocate resources to different countries, overall
output increases and they indicate knowledge transfer not to mention technological
innovations. In the cultural front, exchange of goods, services and factors of production spreads
ideas, norms and values among trading nations. This process is called diffusion.

II. Global Governance in the 21st Century

In this section, you will realize that global governance emerged due to many factors. First, the
declining power of nation-states created an understanding of a much higher global order. You
will notice that in the previous discussions, the state exercised power and control over its
domestic processes under the theme of domestic governance.

Second, large amounts of flow from in and out of border nations have facilitated global
governance. Digitization processes linked nations, ideas about global power and global village
have been encouraged more distinctly than before. In the conduct of international exchanges,
issues about nation-state like internal complaints from citizens owing to foreign intrusion and at
the same time external complaints from foreign citizens on their rights and privileges.

Third, large migrations of people between nation-states have asserted the need for global
governance as migrating people often have legality issues with many crossing borders illegally.
This is classic in the Mexico-United States migration where many Mexicans have been interring
the US mainland illegally so that barricades have been installed in the borders to prevent influx
of illegal entries. The issue is exacerbated with the fact that many of them have drug and
criminal records, thus, the need for order that would only be addressed by global governance.

Fourth, internal struggles within nation-states have created international impact so that global
governance, sometimes misconstrued as intervening politics have to be carried out to appease
warrying cultures and sub-cultures. The Philippines has one case of longtime insurgency
instigated by the New People’s Army (NPA) and all other groups that established camps
collecting food and money from communities they are surrounded with, jeopardizing the lives
of community people. With that, international alliances like the United Nations are determined
to create order among warrying groups, thus, the need for global governance.

Fifth, so many global problems we have today that nation-states cannot solve them
independently. The recent pandemic caused by Covid-19 is a clear example of global
governance as opposed to independent nation-state policies that do not adhere to protocols
set by WHO, for instance. During the onset of the pandemic, coordinated efforts among nations
on quarantine procedures, isolation and treatment of positive patients were procedures that
required global participation and to this day, they remain vital processes.

II. EFFECTS OF GLOBALIZATION TO GOVERNMENTS

You will realize that there are strong arguments why sovereignty and independence of nations
remain vital. Each state has the right to self-determination where internal affairs are managed
by state leaders with minimal interventions from the outside, unless they are really needed.
This autonomy of nations was articulated in ‘autarky’ situation were initially nations closed
boarders and attempted to practice self-sufficiency in production that no international trade
was necessary. The same analysis holds true with political situations today that assert on
domestic governance. There is the notion of autonomy for each state and that decisions of
conflicts such as peaceful negotiations are done through institutions of the government that
generally rallies the causes of the people it protects. Also, a civil society functions as
supplement to the government. Example of civil society includes educational institutions,
private economy, hospitals, non-profit organizations, etc.

Challenges

A. Traditional Challenges. Intervention from other countries has always been construed
as invasion to a domestic government. A case in point was Saddam Hussein’s invasion of Kuwait
in 1990 that resulted in international dislodgement by the United States. Another very clear
case of external intervention is that with the United States to the Philippines viewed in so many
ways. First, it threatens autonomy of the Filipino people as US encroaches upon sovereignty
and consequently creating colonial mentality to the detriment of the Filipino people. Another
scenario on external intervention is when a United States helps the Philippines fight against
insurgency instigated by the New People’s Army and Abusayaf, where the US assists in the fight
against radical groups threatening domestic people. In this case, a domestic problem is assisted
by an external force.
Internal political problems also create domestic disturbance. A case in point is when a
government is threatened by a coup d’ etat (military take over) and assembles a large group of
people supporting a military-led takeover. Most relevant case of internal problem was the EDSA
revolutions that overthrew Marcos dictatorship and Estrada’s corruption inflicted government.

B. Challenges from National/Identity Movements. This contends that cultural identities

usually found in a country that they belong to can also be identified in other countries. A case in
point are Kurds residing in Iraq, Iran and Turkey. Chinese people are scattered all over the world
and the Philippines is no exception to that.

C. Global Economics. Global economy asserts that states should conform to the
procedures of a free market economy. In the 1980s, neoliberal economics or neoliberal
capitalism was born which insisted on free trade and demanded the dismantling of trade
barriers. As such, free trade was seen as a standard protocol that should be followed
everywhere. It allowed countries to achieve free flow of goods and capital without interference
from the state, hence, neoliberal economics reduced the function of states in a globally-induced
trade liberalization.

D. Global Social Movements. Social movements are movements of people that are
spontaneous or that emerge through enormous grassroots organizations (Aldama, 2018). They
occur across borders as transnational movements involve massive people.

III. The Relevance of the State Amidst Globalization

Four elements comprise a state: permanent population characterized by people that are not
nomadic that move around indefinitely to different places and time but rather stay in one
location; territory is characterized by clear boundaries controlled by a government which
regulates relations, protects its citizens and relates with other states. The state is formally
constituted sovereign political structure encompassing people, territory, and its institutions on
the one hand, and maintaining its autonomy from other states on the other hand (Aldama,
2018).

The New Role of The State:

Source: GLOBALISATION AND THE ROLE OF THE STATE 4.1 Introduction ...
https://repository.up.ac.za/bitstream/handle/2263/.../02chapters4-5.pdf?...

While many roles such as facilitator, enabler, regulator, activator and provider were assigned to
government, it should not automatically be considered that the state should be the provider of
goods such as health services, education and social welfare services (Hart, 2004:1). The role of
the state should be confined to what individuals cannot do for themselves, such as provide
security, put in place the necessary legal framework, act as mediator between supranational
institutions with regard to trade, provide a clean and safe environment, economic stability,
provide public transport, provide social welfare and develop a framework to enable people to
take responsibility for their own lives (Hart, 2004:2). The role of government could be defined
in terms of whatever role the electorate decided to give it. The role of the modern state would
ideally be based on a democratic political system, and the creation of a good quality of life for
all citizens through protected human rights, the application of the rule of law, and minimum
interference by government in the social and economic life of the individual (Crous 2006:398).
One of the roles of government in the 21st century will be to react appropriately to many
challenges such as the changing demography in countries; the dwindling and ageing population
of western Europe and the changes that HIV/AIDS has made and will make in the demographic
structures of sub-Saharan African countries. The economic role of the state has increasingly
become vital in the successful implementation of a country’s development strategy (Stiglitz,
1998:2). The notion that government involvement in the economy is unnecessary and
ineffective has been dispelled with the idea of partnerships between the public and private
economic sector. Government and the private sector can act together utilising each sector’s
unique attributes, with government acting as the regulator of financial institutions to ensure
competition and maintain safety and soundness of financial systems (Stiglitz, 1998:8). The
World Bank has identified four principles to reflect the overall range of the role of government:
mandating, facilitating, partnering and endorsing when creating an enabling environment for
corporate social responsibility (World, Bank 2003:9).

Assessment

1. Create a digital poster that depicts global governance and explain it in 1-2 paragraphs only.
Post your poster in the FB page.
2. Create a 5-min vlog on the issues and relevance of global governance in relation to the
Philippine society. Submit your vlog in the FB page also.

References:

Aldama, R. (2018). The Contemporary World. REX Bookstore, first edition.

GLOBALISATION AND THE ROLE OF THE STATE 4.1 Introduction ...
https://repository.up.ac.za/bitstream/handle/2263/.../02chapters4-5.pdf?...