CONTEMPORARY WORLD

Globalization -The intensification of all the interactions (economic, political, social) among the
different actors in the international system

Globalization is a term used to describe how trade and technology have made the world into a more
connected and interdependent place. Globalization also captures in its scope the economic and social
changes that have come about as a result. It may be pictured as the threads of an immense spider
web formed over millennia, with the number and reach of these threads increasing over time.

1. Development of Globalization
 Traders traveled vast distances in ancient times to buy commodities that were rare and
expensive for sale in their homelands.
 The Industrial Revolution brought advances in transportation and communication in the
19th century that eased trade across borders.
 The critical steps in the path to globalization came with the North American Free Trade
Agreement (NAFTA), signed in 1993. One of NAFTA's many effects was to give American
auto manufacturers the incentive to relocate a portion of their manufacturing to Mexico
where they could save on the costs of labor.
 The Bretton Wood Conference where GATT or the General Agreement on Tariff and
Trade was born.
 Governments worldwide have integrated a free market economic system through fiscal
policies and trade agreements over the last 20 years. The core of most trade
agreements is the removal or reduction of tariffs

2. Pros and Cons of Globalization

A. Pros
-A larger market for goods and services
-Cheaper consumer prices
-Outsourcing can benefit both domestic firms and foreign labor
-Increased standard of living

B. Cons
-Concentrates wealth in richer countries
-Some poorer countries can be left behind
-Poorer countries can be exploited of their labor and physical & intellectual resources
-Cultures and the products consumed around the world can become homogenized
 3. Perspectives in Globalization

A. Hyperglobalist

 View globalization as purely economic

 Positive Effects of Globalization
B. Skeptics
 View globalization as Not ‘Globalization’ but Americanization or Westernization
C. Transformationalist
 Middle-ground
 Globalization as Transformation of Human lives
 Both Positive and Negative sides Negative Effects of Globalization

2. Ways to achieve Globalization

A. Liberalization of Trading Policies

B. Foreign Direct Investment

C. Privatization

D. Presence of Multinational Companies

E. Contractualization

3. Global Economy

A. Historical Background

World War II

 War between the Allied Powers (USA, Britain, France, and USSR) and the Axis Powers
(Germany, Italy, and Japan)
 Political (World Domination) and Economic (Resources)
 Allied powers win in 1945
 Devastation after the war = Developmental problems
 The need for global cooperation for development
 Establishment of International Institutions due to the intensified relationships among
the different members of the community (Globalization)

B. Bretton Wood Conference

 1944 – Bretton Woods, New Hampshire; 44 delegates

 GOLD STANDARD based on US Dollars
 Adjustable-peg exchange rate system

 Created the International Bank of Reconstruction and Development (IBRD) – now

known as the World Bank – and the International Monetary Fund (IMF)

 1947 – Attempt to create an International Trade Organization (ITO)

  The US Congress vetoed the ITO. Alternatively, the General Agreement on Tariffs and
Trade (GATT) was created. This would later become the World Trade Organization
(WTO).

C. Problems encountered after the Bretton Wood Conference

 Cold War
 1971 – Abandonment of the Gold Standard
 Triffin Dilemma – international liquidity à US provides more dollars ß risk in
converting dollars into gold
 Vietnam War, Korean War, US Deficits, Oil Crisis

D. The Global Financial Institution

I. The World Bank

5 Institutions under the World Bank (worldbank.org)

1. International Bank of Reconstruction and Development – loans for middle-income

and deserving low-income countries
2. International Finance Corporation (IFC) – loans for the private sector
3. International Development Association (IDA) – interest-free loans (credits) to
poorest
4. Multilateral Investment Guarantee Agency (MIGA) – encourage foreign direct
investments
5. International Center for Settlement of Investment Disputes (ICSID) –
conciliation and arbitration of investment disputes

II. International Monetary Fund

Functions:
1. Foster global monetary cooperation
2. Secure financial stability
3. Facilitate international trade
4. Promote higher employment
5. Reduce poverty

III. World Trade Organization

 Formerly the General Agreement on Tariffs and Trade (GATT)

 Became the WTO in 1995
 Facilitation of international trade is the main goal of the WTO
 Rules-based system was established

Functions
 Trade Negotiations
 Dispute Settlement
 Implementation and Monitoring
  Building Trade Capacity

Basic Information
MEMBERSHIP: 164 members and 24 observers

DIRECTOR-GENERAL: Ngozi Okonjo-Iweala

HEADQUARTERS: Geneva, Switzerland

Definition of Terms:

1. Triffin Dilema

 In October 1959, a Yale professor sat in front of Congress' Joint Economic Committee
and calmly announced that the Bretton Woods system was doomed.
 The dollar could not survive as the world's reserve currency without requiring the
United States to run ever-growing deficits. This dismal scientist was Belgium-born
Robert Triffin, and he was right.
 The Bretton Woods system collapsed in 1971, and today the dollar's role as the reserve
currency has the United States running the largest current account deficit in the world
Concentrates wealth in richer countries Some poorer countries can be left behind
 Poorer countries can be exploited of their labor and physical & intellectual resources
Cultures and the products consumed around the world can become homogenized

2. Floating Currency
 A floating exchange rate is a regime where the currency price of a nation is set
by the forex market based on supply and demand relative to other currencies.
This is in contrast to a fixed exchange rate, in which the government entirely or
predominantly determines the rate.
 A floating exchange rate is one that is determined by supply and demand on the
open market.
 A floating exchange rate doesn't mean countries don't try to intervene and
manipulate their currency's price, since governments and central banks
regularly attempt to keep their currency price favorable for international trade.
 A fixed exchange is another currency model, and this is where a currency is
pegged or held at the same value relative to another currency.
 Floating exchange rates became more popular after the failure of the gold
standard and the Bretton Woods agreement.

3. International Liquidity
  The term ‘International liquidity’ refers to the supply of certain categories of
financial assets or claims which are created by all the different countries and
international financial organizations in the international community, as receptacles
of calculable ready purchasing power over all the domestic currencies in vogue”

4. Privatization

 transfer of government services or assets to the private sector. State-owned assets

may be sold to private owners, or statutory restrictions on competition between
privately and publicly owned enterprises may be lifted. Services formerly provided
by government may be contracted out. The objective is often to increase
government efficiency; implementation may affect government revenue either
positively or negatively.

The Inter-State System

1. Configuration of World Power
A. BIPOLARITY
 Two dominant powers in the world
 USA and USSR emerged as world powers after WWII
 Engaged in the COLD WAR
B. UNIPOLARITY
 A single world power exists (hegemon)
 USA became the sole power after the disintegration of USSR

C. MULTIPOLARITY
 There are multiple world powers
 Our situation today can be described as such
 Unlike before, power is measured by economic prosperity

2. International Law
 Usually, these refers to treaties and agreements among the different actors
 Not the same as domestic laws
 Due to the sovereignty of state actors, they are based upon CONSENT
 No assurance of COMPLIANCE especially from powerful states

3. UNITED NATIONS
 Predecessor: League of Nations (after WWI in 1920)
 Established after WWII in 1945 (San Francisco Charter of 1945)
 HEADQUARTERS: New York
 MEMBERSHIP: 193 states
 LEADERSHIP: António Guterres
 MANDATE: to end international war and promote social and economic development

Organs of United Nations

1. General Assembly

 Meeting of all member states

 Recommendatory function only

 appointing the Secretary-General on the recommendation of the Security Council

 electing the non-permanent members of the Security Council

approving the UN budget

2. Security Council

 Composed of 5 permanent members (USA, Russia, France, UK, China)

 10 elected members – 2-year term
 Intervention arm (international security)
 Legitimate use of force

3. International Court of Justice

 To decide legal disputes among states
 Recommend sanctions
 The seat of the Court is at the Peace Palace in The Hague (Netherlands).
 The Court is composed of 15 judges, who are elected for terms of office of nine
years by the United Nations General Assembly and the Security Council. It is assisted
by a Registry, its administrative organ. Its official languages are English and French.

 Secretariat

 Composed of the Secretary-General (presides the General Assembly meeting) and

Staff
 Manages the general assembly
 Record keeper of the sessions
 The Secretariat is organized along departmental lines, with each department or
office having a distinct area of action and responsibility. Offices and departments
coordinate with each other to ensure cohesion in the UN’s programme of work.
VII. ASEAN

1. Basic Information

 Establishment: August 8, 1967 (Bangkok Declaration or ASEAN Declaration)

 Founding Members: Indonesia, Malaysia, Singapore, Thailand and Philippines
 Other members: Brunei Darussalam (January 4, 1984); Viet Nam (July 28, 1995); Laos
and Myanmar (July 23, 1997); Cambodia (April 30, 1999); Timor Leste (2023)

2. Objectives
 To accelerate the economic growth, social progress and cultural development in
the region through joint endeavors in the spirit of equality and partnership in order
to strengthen the foundation for a prosperous and peaceful community of
Southeast Asian Nations;
 To promote regional peace and stability through abiding respect for justice and the
rule of law in the relationship among countries of the region and adherence to the
principles of the United Nations Charter;
 To promote active collaboration and mutual assistance on matters of common
interest in the economic, social, cultural, technical, scientific and administrative
fields
 To provide assistance to each other in the form of training and research facilities in
the educational, professional, technical and administrative spheres;
3. Principles
 Mutual respect for the independence, sovereignty, equality, territorial integrity, and
national identity of all nations;
 The right of every State to lead its national existence free from external interference,
subversion or coercion;
 Non-interference in the internal affairs of one another;

 Settlement of differences or disputes by peaceful manner;

 Renunciation of the threat or use of force; and

 Effective cooperation among themselves

The World Division

1. Division after the Cold War
  The EAST and WEST Dichotomy was created

 Western countries are considered to be more advanced as compared to Eastern

counterparts

 The West promoting their VALUES as UNIVERSAL; the East trying to adapt these values
OR trying to resist (to find own identity)

2. Clash of Civilization

 Samuel Huntington believed that the conflicts after the Cold War are not IDEOLOGICAL
but, CULTURAL

 More particularly, it will be based on RELIGIOUS BELIEFS

 The September 11 attack on the World Trade Center gave this theory more credence

 Different Division of the World

1. Sinic: the common culture of China and Chinese communities in Southeast Asia.
Includes Vietnam and Korea.
2. Japanese: Japanese culture as distinctively different from the rest of Asia.
3. Hindu: identified as the core Indian civilization.
4. Islamic: Originating on the Arabian Peninsula, spread across North Africa, Iberian
Peninsula and Central Asia. Arab, Turkic, Persian and Malay are among the many
distinct subdivisions within Islam.
5. Orthodox: centered in Russia. Separate from Western Christendom.
6. Western: centered in Europe and North America.
7. Latin American: Central and South American countries with a past of a corporatist,
authoritarian culture. Majority of countries are of a Catholic majority.
8. Africa: while the continent lacks a sense of a pan-African identity, Huntington claims
that Africans are also increasingly developing a sense of African Identity.

 Decline of the Western Power

1. The current Western decline is a very slow process and is not an immediate
threat to World powers today.
2. Decline of power does not occur in a straight line; it may reverse, speed up, or
pause.
3. The power of a state is controlled and influenced by the behavior and
decisions of those holding power.

 Clashes of Civilization
 1. The West's ability to maintain military superiority through the nonproliferation of
emerging powers.
2. The promotion of Western political values such as human rights and democracy.
3. The Restriction of non-Western immigrants and refugees into Western societies.
4. The West's ability to maintain military superiority through the nonproliferation of
emerging powers.
5. The promotion of Western political values such as human rights and democracy.
6. The Restriction of non-Western immigrants and refugees into Western societies.
7.
4. The Division using Brandt Line

 The world is divided by an imaginary line called the Brandt Line

 Incidentally, most of the countries NORTH of this line are developed ones. Meanwhile,
those SOUTH of this line are developing ones.
 There is a strong anti-globalization (homogenizing) movement from the Global South

Characteristics of the North Characteristics of the South

Global North Global South
1/4 of the world's people 3/4 of the world's people

4/5 of world's income 1/5 of world's income

Average life expectancy more than 70 years Average life expectancy of 50 years

Most people have enough to eat 1/5 or more suffer from hunger and malnutrition

Most people are educated 1/2 of the people have little chance of any
education

Over 90% of the world's manufacturing industry less than 10% of the world's manufacturing
industry

About 96% of the world's spending on research 4% of the world's research and development
and development
 Global Issues
1. The climate crisis
This is the big one. A toxic combination of dependence on fossil fuels and unsustainable
industrial practices has created extremely dangerous weather events that threaten to destroy
terrestrial and marine ecosystems as well as our access to basic resources like food and water.
Most of the world’s recent natural disasters – including superstorms, freak floods and out of
control fires, as well as some of hottest and coldest seasons on record – are the direct result of
man-made, fossil-fuel induced global warming.

2. Marine ecosystem deterioration

 Our oceans aren’t doing much better. Global warming has caused an increase in
coral bleaching, killing ecosystems sustained by the nutrients the coral provide,
including fishing grounds on which local communities across the world depend.
 We are also endangering countless marine species with unsustainable fishing
practices like overfishing and bycatch, where dolphins and turtles are caught in
commercial fishing nets and later discarded as waste. Meanwhile, pollutants like
boat fuel, pesticides, fertiliser, sewage and plastics are causing ocean dead zones
– spots where no organism can live.

3. The hunger crisis and water scarcity

 One in nine people in the world go hungry each day and suffer from nutritional
deficiencies as a result. Current estimates show that 957 million people across 93
countries do not have enough to eat.
 The problem isn’t that we aren’t producing enough food; it’s that people lack
access to food. Many people don’t have enough money to buy basic foodstuff
and cannot grow their own. And the number of displaced persons who suffer
from food insecurity is increasing too. According to the World Food Programme
(WFP), countries with the highest level of food insecurity also have the highest
outward migration of refugees.
4. The hunger crisis and COVID-19
 The ongoing COVID-19 pandemic severely exacerbated the food and
water crisis, seeing food and fuel prices rise dramatically due to
supply chain issues, failing economies, and an energy crisis brought
on by forced lockdowns and closed borders.
 The hunger crisis and the war in Ukraine . The recent Russian
invasion of Ukraine further complicates this problem. Sanctions
against Russia, one of the world’s biggest producers of fossil fuels,
have further increased energy prices, causing food prices to rise too,
ultimately making it much harder on people already struggling to
afford food. Ukraine is also one of the world’s largest exporters of
grain, which it has had to stop producing due to the war. Most of
these exports were due to countries suffering food shortages.
Together, Russia and Ukraine are also the world’s largest exporter of
fertiliser. The war has caused a lack of supply, creating higher prices
for farmers that ultimately translate to higher food prices.

5. Health Issues
 The current overwhelming threat to our overall global health and
well-being is the COVID-19 pandemic.
 Even though we now have access to effective vaccines and treatment
is better understood, more than six million people have died, and the
virus continues to threaten vulnerable populations across the world,
especially in those areas where access to healthcare is limited. There
have also been serious socio-economic side effects that will further
contribute to health issues, including mental health issues, for a long
time to come.
6. Gender Inequality

 There are well-established historic and social barriers to economic and

personal freedom for women across the world. While much has been done
to alleviate this, there is still quite a way to go, especially in communities
where women are disempowered from a young age, held back from
attending school for financial reasons or because of the perception that
their education does not matter.
 Globally, women still earn less than men, and women with children tend to
earn even less. Meanwhile, it is estimated that one in three women are
subjected to physical or sexual violence. This places women at greater risk
of mental health issues caused by trauma, as well as sexually transmitted
infections.
 Other diseases also affect health on a global scale. Fortunately, increased
access to clean water and improved education around proper sanitation
has resulted in an overall decrease in the prevalence of some
communicable diseases like hepatitis, cholera, malaria, tuberculosis and
HIV. And while the focus of the global healthcare community has now
shifted to non-communicable diseases like cancer, diabetes, chronic
respiratory and cardiovascular diseases, all of these health problems
remain a concern in countries that lack healthcare resources.
 International Organization
Organization Nature Director Members
North Atlantic NATO promotes ALBANIA (2009)
Treaty democratic values Jens Stoltenberg BELGIUM (1949)
Organization and enables BULGARIA (2004)
members to consult CANADA (1949)
and cooperate on CROATIA (2009)
defense and CZECHIA (1999)
security-related DENMARK (1949)
issues to solve ESTONIA (2004)
problems, build trust FRANCE (1949)
and, in the long run, GERMANY (1955)
prevent conflict. GREECE (1952)
HUNGARY (1999)
NATO is committed ICELAND (1949)
to the peaceful ITALY (1949)
resolution of LATVIA (2004)
disputes. If LITHUANIA (2004)
diplomatic efforts LUXEMBOURG
fail, it has the (1949)
military power to MONTENEGRO
undertake crisis- (2017)
management NETHERLANDS
operations (1949)
NORTH
MACEDONIA
(2020)
NORWAY (1949)
POLAND (1999)
PORTUGAL (1949)
ROMANIA (2004)
SLOVAKIA (2004)
SLOVENIA (2004)
SPAIN (1982)
TÜRKIYE (1952)
 THE UNITED
KINGDOM (1949)
THE UNITED
STATES (1949)
Asia Pacific To support Dr Rebecca Australia; Brunei
Economic sustainable Fatima Sta Maria Darussalam;
Cooperation economic growth Canada; Chile;
and prosperity in the People's Republic
Asia-Pacific region. of China; Hong
Kong, China;
United in our drive Indonesia; Japan;
to build a dynamic Republic of Korea;
and harmonious Malaysia; Mexico;
Asia-Pacific New Zealand;
community by Papua New
championing free Guinea; Peru; the
and open trade and Philippines; the
investment, Russian
promoting and Federation;
accelerating regional Singapore;
economic Chinese Taipei;
integration, Thailand; the
encouraging United States of
economic and America;
technical
cooperation,
enhancing human
security, and
facilitating a
favorable and
sustainable business
environment. Our
initiatives turn policy
goals into concrete
results and
agreements into
tangible benefits.
OPEC to coordinate and HE Al Ghais Republic of Iran,
Organization of unify the petroleum Iraq, Kuwait, Saudi
Petroleum policies of its Arabia and
Exporting Member Countries Venezuela are the
Countries and ensure the Founder Members
stabilization of oil of the
markets in order to Organization.
secure an efficient,
economic and These countries
regular supply of were later joined
petroleum to by Qatar (1961),
consumers, a steady Indonesia (1962),
income to producers Libya (1962), the
and a fair return on United Arab
capital for those Emirates (1967),
investing in the Algeria (1969),
petroleum industry. Nigeria (1971),
Ecuador (1973),
Gabon (1975),
Angola (2007),
Equatorial Guinea
(2017) and Congo
(2018).
North American NAFTA provides Shri Steephen Mexico, Canada,
Free Trade coverage to services and the United
Agreement except for aviation States
(NAFTA) transport, maritime,
and basic
telecommunications.
The agreement also
provides intellectual
property rights
protection in a
variety of areas
including patent,
trademark, and
 copyrighted
material. The
government
procurement
provisions of the
NAFTA apply not
only to goods but to
contracts for
services and
construction at the
federal level.
Additionally, U.S.
investors are
guaranteed equal
treatment to
domestic investors
in Mexico and
Canada.
G8 The G8 is a forum Gary Carroll France, Germany,
that provides the Italy, the United
opportunity for its Kingdom, Japan,
members to co- the United States,
operate in Canada, and
addressing global Russia
challenges. The
standards it sets,
commitments it
makes and steps it
takes aim to drive
prosperity and
economic growth all
over the world.
BIMP EAGA Brunei Darussalam, Dato’ Ahmad Brunei
Indonesia, Malaysia Zamri bin Darussalam,
and the Philippines Khairuddin Indonesia,
created the East Malaysia and the
ASEAN Growth Area Philippines
 to shift economic
activities from
resource extraction
to higher levels of
processing and
value-added
production, focusing
on industries that
adopt clean and
green technologies.
EU The common European Austria, Belgium,
European Union principles and values Parliament Bulgaria, Croatia,
that underlie life in president – Republic of
the EU: freedom, Roberta Metsola Cyprus, Czech
democracy, equality Republic,
and the rule of law, European Council Denmark, Estonia,
promoting peace president – Finland, France,
and stability. Charles Michel Germany, Greece,
Hungary, Ireland,
European Italy, Latvia,
Commission Lithuania,
president – Ursula Luxembourg,
von der Leyen Malta,
Netherlands,
Poland, Portugal,
Romania,
Slovakia, Slovenia,
Spain and
Sweden.
 Sustainable Development Goal
1. Eliminate Poverty
2. Erase Hunger
3. Establish Good Health and Well-Being
4. Provide Quality Education
5. Enforce Gender Equality
6. Improve Clean Water and Sanitation
7. Grow Affordable and Clean Energy
8. Create Decent Work and Economic Growth
9. Increase Industry, Innovation, and Infrastructure
10. Reduce Inequality
11. Mobilize Sustainable Cities and Communities
12. Influence Responsible Consumption and Production
13. Organize Climate Action
14. Develop Life Below Water
15. Advance Life On Land
16. Guarantee Peace, Justice, and Strong Institutions
17. Build Partnerships for the Goals