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Republic of the Philippines

NUEVA VIZCAYA STATE UNIVERSITY


College of Arts and Sciences
Bambang, Nueva Vizcaya

The Contemporary
World
MODULE 1
Definitions and Nature of
Globalization
Objectives:
At the end of the discussions, the students are expected
to:
1. share a personal definition of globalization;
2. describe the nature of globalization;
3. differentiate competing conception of globalizations;
4. synthesize and agree on a working definition of
globalization for the course
Definition of globalization
Globalization is a term used to describe the
changes in societies and the world
economy that are the result of
dramatically increased trade and cultural
exchange. In specifically economic
contexts, it refers almost exclusively to
the effects of trade, particularly trade
liberalization or "free trade".
It is a common belief that globalization plays a role just
at international levels of trade and commerce, but the fact is
that it has played an important role in making our lives much
more comfortable too. The phones, apparels, gadgets or
accessories that we use in our day-to-day life are be available
to us through globalization. Knowingly or unknowingly, we
are all under the impact of globalization, and more
importantly it has helped in bringing international peace and
justice to mankind.
Nature of Globalization
1. Liberalization:
It stands for the freedom of the entrepreneurs to establish any
industry or trade or business venture, within their own countries
or abroad.
2. Free trade:
It stands for free flow of trade relations among all the nations.
Each state grants MFN (most favored nation) status to other states
and keeps its business and trade away from excessive and hard
regulatory and protective regimes.
3. Globalisation of Economic Activity:
Economic activities are be governed both by the domestic market
and also the world market. It stands for the process of integrating
the domestic economy with world economies.
Nature of Globalization
4. Liberalization of Import-Export System:
It stands for liberating the import- export activity and securing a
free flow of goods and services across borders.
5. Privatisation:
Keeping the state away from ownership of means of production
and distribution and letting the free flow of industrial, trade and
economic activity across borders.
6. Increased Collaborations:
Encouraging the process of collaborations among the
entrepreneurs with a view to secure rapid modernisation,
development and technological advancement.
Nature of Globalization
7. Economic Reforms:
Encouraging fiscal and financial reforms with a view to give
strength to free world trade, free enterprise, and market
forces.
Globalization accepts and advocates the value of free world
trade, freedom of access to world markets and a free flow of
investments across borders. It stands for integration and
democratization of the world’s culture, economy and
infrastructure through global investments.
“Globalization” can mean:
The formation of a global village - closer contact
between different parts of the
world, with increasing possibilities of personal exchange,
mutual understanding and friendship between "world
citizens",
Economic globalization - "free trade" and increasing
relations among members of an industry in different
parts of the world (globalization of an industry), with a
corresponding erosion of National Sovereignty in the
economic sphere.
Signs of globalization
Increase in international trade at a faster rate than the growth in the
world economy
Increase in international flow of capital including foreign direct
investment
Greater transborder data flow, using such technologies such as
the Internet, communication satellites and telephones
Greater international cultural exchange, for example through the export of
Hollywood and Bollywood movies.
Some argue that even terrorism has undergone globalization. Terrorists
now have attacked places all over the world.
Spreading of multiculturalism and better individual access to cultural
diversity, with on the other hand, some reduction in diversity through
assimilation, hybridization, Westernization, Americanization or
Sinosization of cultures.
Erosion of national sovereignty and national borders through
international agreements leading to organizations like the WTO
and OPEC
Greater international travel and tourism
Greater immigration, including illegal immigration
Development of global telecommunications
infrastructure
Development of a global financial systems
Increase in the share of the world economy controlled by
multinational corporations
Increased role of international organizations such as
WTO, WIPO, IMF that deal with international
transactions
Increase in the number of standards applied globally;
e.g. copyright laws
Anti- globalization
Many anti-globalism activists see globalization as the
promotion of a Corporatist agenda, which is intent on
constricting the freedoms of individuals in the name of
profit. They also claim that increasing autonomy and
strength of corporate entities increasingly shape the
political policy of nation-states.
globalization imposes credit based
economics, resulting in unsustainable growth of debt
and debt crises.
Pro-globalization (globalism)

Supporters of free trade point out that economic


theories such as comparative advantage suggests that
free trade leads to a more efficient allocation of
resources, with all those involved in the trade
benefitting. In general, they claim that this leads to
lower prices, more employment and better allocation
of resources.
Globalization in the Philippines

The country is taking part in the process of


globalization ever since the country signed
agreements with World Trade Organization in 1995.
Now, globalization is very effective in the Philippines,
it has allowed major changes in the nation like more
labor, and more Filipino and foreign companies has
emerged in the nation in order to help the country’s
developing economy.
Globalization can make the Philippines into a better
nation if the Philippine leaders to make their economy
more advance through global trading and allowing more
foreign investors to the help boost the economy. And by
accomplishing those goals, the Philippines should be able
to reduce the poverty level as well as increase labor force
for job opportunities for those that are in need for a living.
However, since the poverty level is still increasing, most
Filipinos has managed to find work overseas and they have
managed to seek better living than in the Philippines. The
most effective factor in the Philippines is education. The
society’s mentality is to be educated and it’s with education
that people in the nation see their opportunity for a better
life in the future.
Advantages
Peaceful Relations
Most of the countries have resorted to trade relations
with each other in order to boost their economy,
leaving behind any bitter past experiences if any.
Employment
Considered as one of the most crucial
advantages, globalization has led to the generation of
numerous employment opportunities. Companies are
moving towards the developing countries to acquire labor
force.
Education
A very critical advantage that has aided the
population is the spread of education. With
numerous educational institutions around the
globe, one can move out from the home country for
better opportunities elsewhere.
Product Quality
The product quality has been enhanced so as to
retain the customers. Today the customers may
compromise with the price range but not with the
quality of the product. Low or poor quality can
adversely affect consumer satisfaction.
Cheaper Prices
Globalization has brought in fierce competition
in the markets.
Communication
Every single information is easily accessible
from almost every corner of the world.
Circulation of information is no longer a
tedious task, and can happen in seconds. The
Internet has significantly affected the global
economy, thereby providing direct access to
information and products.
Transportation
Considered as the wheel of every business
organization, connectivity to various parts of the
world is no more a serious problem. Today with
various modes of transportation available, one can
conveniently deliver the products to a customer
located at any part of the world.
GDP Increase
Gross Domestic Product, commonly known as
GDP, is the money value of the final goods and
services produced within the domestic territory of
the country during an accounting year.
Free Trade
Free trade is a policy in which a country
does not levy taxes, duties, subsidies or
quota on the import/export of goods or
services from other countries. There are
countries which have resolved to free trade
in specific regions. This allows consumers
to buy goods and services, comparatively at
a lower cost.
Travel and Tourism
Globalization has promoted tourism to great
heights. International trade among different
countries also helps in increasing the number of
tourists that visit different places around the world.
External Borrowing
With the help of globalization, there is opportunity
for corporate, national, and sub-national borrowers
to have better access to external finance, with
facilities such as external commercial borrowing
and syndicated loans.
Disadvantages
Health Issues
Globalization has given rise to more health
risks and presents new threats and challenges
for epidemics.
- the dawn of HIV/AIDS. Having its origin in the
wilderness of Africa, the virus has spread like
wildfire throughout the globe in no time.
- Food items are also transported to various
countries, and this is a matter of
concern, especially in case of perishable items.
Loss of Culture
With large number of people moving into and out
of a country, the culture takes a backseat. People
may adapt to the culture of the resident country.
They tend to follow the foreign culture
more, forgetting their own roots. This can give rise
to cultural conflicts.
Uneven Wealth Distribution
It is said that the rich are getting richer while the
poor are getting poorer. In the real
sense, globalization has not been able to reduce
poverty.
Environment Degradation
The industrial revolution has changed the outlook
of the economy. Industries are using natural
resources by means of mining, drilling, etc. which
puts a burden on the environment.
Disparity
Though globalization has opened new avenues like
wider markets and employment, there still exists a
disparity in the development of the economies.
Structural unemployment owes to the disparity
created. Developed countries are moving their
factories to foreign countries where labor is cheaply
available.
Conflicts
It has given rise to terrorism and other forms of
violence. Such acts not only cause loss of
human life but also huge economic losses.
Cut-throat Competition
Opening the doors of international trade has
given birth to intense competition. This has
affected the local markets dramatically. The
local players thereby suffer huge losses as they
lack the potential to advertise or export their
products on a large scale. Therefore the
domestic markets shrink.
Globalization can be:
1. Cultural
2. Economic
3. Political
4. Social
5. Industrial
6. Technological
Group Activity
Working definition of globalization for the course
References
http://www.revistadestatistica.ro/suplimente/2012/4/srrs4_2012a22.p
df
Dacles, Darwin Don M. & Maslang, Kenneth L.(2018), The
Contemporary World. Bayombong, Nueva Vizcaya: SMU Publishing
House