[2.1] Globalization

• who said this "Globalization is the integration of markets, finance, and technologies in what is shrinking the world from a size medium to a size small and enabling each of us to reach around the world farther, faster, and cheaper than ever before. Like all previous international systems, it is directly or indirectly shaping the domestic politics, economic policies, and foreign relations of virtually every country."

  Thomas Friedman
• globalization


  is a speed-up process of movement and exchange of goods across borders
• globalization 1.0 (include decimal)

  • Started during the European expansion in 1492 and lasted until 1800.
  • The exploration of the new world led by Christopher Columbus sparked the interest of the Europeans to explore the world and colonize it.
  • Trading between Portugal and Spain became more active
• globalization 2.0 (include decimal)

  • The multinational British East India Company was established in 1600.
  • Products from Asia were brought to Europe.
  • Inventions in transportation, communication, trade, and science were made for global intervention.
  • Transnational organizations were formed.
• globalization 3.0 (include decimal)

  • A fiber-optic network was invented.
  • Collaboration and competition between and among countries were intensified.
  • The economy lies in the hands of individuals who know how to technology properly, not under the control of the government.
• globalization 4.0 (include decimal)

  • The world is increasingly dominated by the US and China.
  • The cyber-world is the new frontier of globalization.
  • The digital economy reckons with e-commerce and digital services.
  • Enabled by artificial intelligence but threatened by cross-border hacking and cyber-attacks.
  • The effects of climate change pave the way to negative globalization.
• World Trade Organization (WTO)

  • The only global international organization dealing with the rules of trade between nations.
  • Its goal is to ensure that trade flows as smoothly, predictably, and freely as possible.
  • Operates the global system of trade rules, acts as a forum for negotiating trade agreements, settles trade disputes between its members, and supports the needs of developing countries.
• International Labor Organization (ILO)

  • The only tripartite UN agency since 1919 and the first specialized agency of the UN in 1946.
  • Brings together governments, employers, and workers to set labor standards, develop policies, devise programs promoting decent work for all women and men, enhance social protection, and strengthen dialogue on work-related issues.
• International Monetary Fund (IMF)

  • Established in 1945 and governed by 189 countries.
  • Composed of 24 Executive Directors representing 189 countries.
  • Fosters global monetary cooperation
  • Secures fnancial stability
  • Facilitates international trade
  • Promotes high employment and sustainable economic growth.
  • Reduces poverty around the world.
  • Offers 0% interest on loans to low income countries.
• World Bank

  • World’s largest development institution.
  • Founded in 1944 as the International Bank for Reconstruction and Development.
  • Offers loans and other aids to developing countries and countries in transition.
  • Works with country governments, the private sector, civil society organizations, regional development banks, think tanks, and other international institutions on issues such as climate change, conflict, food security, education, agriculture, finance, and trade.
• Asian Development Bank (ADB)

  • Established in the 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in one of the poorest regions in the world.
  • Envisions a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.
  • Provides assistance on food production and rural development.
• dimensions of globalization

  • economics
  • moral
  • cultural
  • politics
• moral

  • Social inequality gap developed countries tend to see employment in multinational companies as exploitation while developing countries see it as a better opportunity than to work at farms.
  • Value on quality of commodity than labor.
• economics

  • Global business environment.
  • Open, liberal, free market and free trade with less regulatory barriers.
  • International investment and instant capital flows.
• multiculturalism


  The co-existence of diverse cultures is manifested in customary behaviors, cultural assumptions, and values, patterns of thinking, and communicative styles.
• politics

  • Multinational companies (MNCs) control the economy than the government.
  • Governance is heavily dependent on international organizations.
• implications of globalization

  • Higher Foreign Direct Investment (FDI) – boosts trade in the country’s economy (competitive market).
  • Improved communication and technology
  • Offshore investment and outsourcing (cheap Labor).
  • Migration (better lifestyle)
  • Environment – in search of raw materials to keep the economic demands.