GE S O C

102

CHAPTER 2:
THE STRUCTURES
OF GLOBALIZATION

THE CONTEMPORARY WORLD

INSTRUCTOR: MR. ANTHONY WILLIAM CENIZA
OBJECTIVES:
At the end of the lesson, the students should be
able to:

• Define • Define modern

economic world
globalization; system; and
• Identify the factors • Articulate a stance
that facilitate on global
economic economic
globalization; integration.
Sub-topics:

The Structures of
Globalization
• Global • Role of • World
Econom International
System
y Financial
Institutions in • Internationali
• Market the Creation of sm vs.
Integ rati Global Globalization
on Economy
• Global
Corporation
Global Economy
Global economy/world economy – refers to the international
exchange of goods and services that
is expressed in monetary units of money.

World economy – is
exclusively limited to economic
activity and is typically judged in
monetary terms.
Example: illegal drugs and
other black market goods
Global Economy Economic
Globalization
 concerned on the globalization of production,
finance, markets, technology, organizational
regimes, institutions, corporation and labor.

 has grown at an increased rate due to an increase

in communication and technological advances
which made countries gradually cut down trade
barriers and open up their current accounts and
capital accounts.

This recent boom has been largely supported by

developed economies integrating with majority world
through foreign direct investments and lowering costs of
doing business, the reduction of trade barriers, and in
many cases cross border migration.
Market Integration
When prices among different location or related goods
follow the same patterns over a long period of time, market
integration exist.

Market integration is
an indicator that
explains how much
different markets
are related to each
other.
Role of International
Financial Institutions in
the Creation of Global
Economy
International Financial Institution (IFIS)
An international Its owners or
financial institution shareholders
is chartered by are generally
more than one national
country and governments.
therefore are
subjects to
The International Financial Institution
(IFIs) are:

1. International 2.Multilateral Development

Monetary Fund Banks (MDBs) which include:
(IMF)
a. World Bank Group
b. African Development Bank
c. Asian Development Bank
d. Inter-American Development Bank
e. European Bank for Reconstruction
and Development
Membership Composition of IFIs
1. only sovereign countries are
admitted as member-owner
2. broad country membership to
include borrowing developing
countries and developed donor
countries
3. membership in regional development
banks include countries around the
world as members
4. has its own independent
legal and operational states
 • IMF provides temporary financial assistance to
member countries to help ease balance of
Main Objective s
payments adjustments.

• M D s provide financing for development to

developing countries through
 long term loans (with maturities of up to 20
years) at interest rates way below market
 rates.
very long-term loans (sometimes called
maturities
credits of 30-40 years) at interest rates
with
market
below
rates.
 Grant financing by some M D s for technical
advisory
assistanceservice or project
preparation.
Global Corporation
A global corporation is one that operates in more than one country.
Particularly in the United States, the term can mean different things to
different contexts, with the characteristics of a global corporation
varying accordingly. (Craig Berman, 2017)
Michael Porter In the world of
Harvard
of and
finance In contrast, an
national
defined, a inter ny
University investment,
global a is
corporation one
compathat has
headquarters,
a
global as a
business
maintains one one that has isexample in the
significant for
States, but also
that
headquarters
strong in United
country, but investments and business
does overseas
one might have a
investments
has in facilities in multiple and
presence in
multiple foreign countries but lacks large area
locations. a dominant multiple
s.
headquarters.
World System
World system deals with inter-regional and transnational division of
labor, which divides the world into core countries, semi-
periphery countries, and the periphery countries.

World System Theory

 also known as world-systems
analysis or world systems
perspectives.
 a multidisciplinary, macro-scale
approach to world history and
social change which emphasizes
the world- system (and not nation
states) as the primary (but not
exclusive) unit of social analysis.
Internationalism vs. Globalization
(Source: Herman E. Daly, 1999)

Internationalization Globalization
 refers to the increasing  refers to global economic
importance of integration of many formerly
international trade, national economies into one
international relations, global economy, mainly by free
trade and free capital mobility, but
treaties, alliances, etc.
also by easy or uncontrolled
International means migration.
between or among  It is the effective erasure of
nations. national boundaries for
economic purposes.
THA NK
YOU!