International

Monetary Fund (IMF)

Regards ‘economic globalization”

as a historical process representing
the result of human innovation and
technological progress.
Characterized by the increasing
movement of goods, services, and
capital across institutions.

These changes are the products of

people, organizations, institutions,
and technologies
INTERNATIONAL
TRADING

The Silk Route was truly international,

it was not truly “global” because it had
no ocean routes that could reach the
American continent

1571 – Galleon Trade

Manila, Philippines –
Accapulco, Mexico
 INTERNATIONAL
TRADING

The galleon trade was part of the age of

mercantilism.

16th - 18th century, countries primarily in

Europe, competed with one another to sell
more goods as a means to boost their
country’s income (monetary reserves)

Tariffs- Monarchies
1867 – United Kingdom, U.S. and other
European nations adopted the gold standard
at an international monetary conference in
Paris.
Its goal was to create a common
system that would allow for more
efficient trade and prevent the
isolationism of the mercantilist era.

The countries thus established a

common basis for currency prices and
a fixed exchange system –all based on
the value of gold.
The countries depleted their gold reserves to fund
their armies, many were forced to abandon the
gold standard.

Since European countries had low gold reserves,

they adopted floating currencies that were no
longer redeemable in gold.
Returning to a pure standard became more
difficult as the global economic crisis called the
Great Depression started during the 1920s and
extended up to 1930s, further emptying
government coffers
This depression was the worst and
longest recession ever experiences by
the Western world.
 Though more indirect versions of
the gold standard were used until
as late as the 1970s, the world
never returned to the gold
standard of the early 20th century.

Today, the world economy

operates based on what are called
fiat currencies – currencies that re
not backed by precious metals and
whose value is determined by their
cost relative to other currencies.
The Bretton Woods Agreement was
reached in a 1944 summit held in
New Hampshire, USA on a site by
the same name. The agreement
was reached by 730 delegates, who
were the representatives of the 44
allied nations that attended the
summit. The delegates, within the
agreement, used the gold
standard to create a fixed currency
exchange rate.
After the two world wars, world leader sought
to create a global economic system that would
ensure a longer-lasting global peace.
They believed that one of the ways to achieve
this goal was to set up a network of global
financial institutions that would promote
economic system interdependence and
prosperity.

The Bretton Woods System was

inaugurated in 1944 during the United
Nations Monetary and Financial
Conference to prevent the
catastrophes of the early decades of
the century from recurring and
affecting international ties.
The IMF was originally created in
1945 as part of the Bretton Woods
agreement, which attempted to
encourage international financial
cooperation by introducing a
system of convertible currencies at
fixed exchange rates.
The IMF is an international organization
of 183 member countries to promote
international monetary cooperation
and exchange stability; to foster
economic growth and high employment
; and to provide short-term financial
assistance to countries to help ease
balance of payments adjusTments (IMF,
2019)
 International Financial Institutions
(IFI)

The generic name given to all financial

institutions operating on an international
level, ranging from development banks, such
as the World Bank and the European Bank
for Reconstruction and Development, and
monetary authorities, such as the
International Monetary Fund. These
organizations give loans to governments for
the large-scale projects, restructuring and
balance of payments on condition that they
make specific changes that IFIs believe will
boost economic growth
 Transnational
Corporations

is a company that has

operations in multiple
countries. TNCs are also
referred to as
multinationals. These
companies are usually
registered in all countries
they operate in, and hold
large amounts of revenue-
generating assets.
 G8 and G20

Group of nations that

serve as an advisory
organizations that
discuss current
economic and
political problems and
transfer the ideas
from the forum in
national legislative
regulations
The Group of Eight (G-8) was an assembly of
the world's largest developed economies that
have established a position as pacesetters for
the industrialized world. Leaders of member
countries, the United States, the United
Kingdom (U.K.), Canada, Germany, Japan,
Italy, France, and until recently, Russia, meet
periodically to address international economic
and monetary issues.
In 2014, Russia was suspended indefinitely
from the group after annexing Crimea, an
autonomous republic of Ukraine. As a result,
the G-8 is now referred to as the G-7
 The members of the
G20 are Argentina,
Australia, Brazil, Canada,
China, France, Germany,
India, Indonesia, Italy,
Japan, Republic of Korea,
The G20 membership comprises Mexico, Russia, Saudi
a mix of the world’s largest
Arabia, South Africa,
advanced and emerging
economies, representing about Turkey, the United
two-thirds of the world’s Kingdom, the United States
population, 85 per cent of and the European Union.
global gross domestic product
and over 75 per cent of global
trade.
 GLOBAL CIVIL SOCIETY

Either composed of individuals or groups of individuals

disadvantaged by the effects of the globalization of the world
economy, they protest and seek alternatives while on the other
hand, global social movement constituting a basis for an
alternative to a new world order
 Modern World System

The modern world system constitutes a social

system composed of boundaries, structures,
member groups, rules of legitimation, and
coherence , world economy, according to
Wallerstein, is divided into core states and
peripheral areas including semi-peripherals.
According peripherals are mostly where
production or raw materials are sourced out,
while the semi-peripherals processed or
distributed the products to the core areas-
sites of major demands for goods and services.
There are significant and meaningful
movements of resources, products, people in
different economies facilitated by modern
transport and communication. to the world-
system theory, the
Lesson 3: THE STRUCTURE OF GLOBALIZATION

DEFINITION OF TERMS

GLOBAL INTERSTATE-
INTERNATIONALISM –

Is an institutional Puts emphasis on diversity and

arrangement of celebrates multiculturalism,
governance that addresses while globalism focuses more
regional or globalized on economic aspect of the
exchanges among countries
issues that go beyond the
and society
scope of a nation-state
 INTERSTATE SYSTEM

System of unequally powerful and competing states in which

no single state is capable of imposing control on all others.
These states are in interaction with one another in a set of
shifting alliance and wars and changes in relative power of
stares upsets any temporary set of alliance leading to a
restructuring of the balance power
 International Key Roles
Organization
International Looks at the stability of the international monetary
Monetary Fund system by monitoring global economy, lends to
(IMF) countries, and provides policy and technical advisory
functions to members
World Trade Regulates international trades, ensures smooth flow of
Organization trade, and provides a forum for negotiations for trade
agreements among countries and regions of the world
World Health Responsible for global researches on medicines and
Organization vaccines including the World Health Report and Survey
Organization for 35 member countries aim to stimulate economic
Economic progress and world trade by providing a platform to
Cooperation and compare policy experiences and identify good practices
Development in domestic and international economic policies and
programs of its members
 International Organization Key Roles
International Labor Organization Deals with labor problems and international
labor standards and social protection for
workers
Food and Agriculture Organization Leads international efforts to defeat hunger,
of the United Nation (FAO) eliminate food insecurity and malnutrition,
and increase resilience of livelihoods and food
UNESCO Contributes to peace and security by
promoting international collaboration through
educational, scientific, and cultural reforms
International Civil Aviation For regulations of international air transport;
Organization (ICAO); International shipping and prevention of pollution at sea;
Maritime Organization (IMO); developing standards on ICT; international
International Telecommunication intellectual property rights standards
Union (ITU); The World Intellectual
Property Organization (WIPO)
 Effects of Globalization to Government

One of the key aspect of state sovereignty is the

government.

Government - it is a group of people who have the

ultimate authority to act on behalf of a state.

Each state has its own right to self-determination and

that other country should not intervene in the affairs
of that state unless there are extraordinary reasons to
do so.
 Effects of Globalization to Government

Other countries must recognize the sovereignty or the

right to govern one’s own territorial borders.

Each state is autonomous unto itself and responsible

within its own system of government to those who are
governed. The decision, conflict, and the resolution of
that conflict are done through the institutions of
government established and codified in that particular
state, whether or not through elections.
 Effects of Globalization to Government

Elections, especially in democratic society, provide the

leadership of the state. In addition, the policy is
developed and implemented in the interest of the people
of a state by a specific government.

A civil society within a state can also act as a

counterweight or as a supplement to government.

- private economy, educational institutions, churches,

hospitals, fraternal organizations, and other non-profit
organization.
 Challenges to the government

Challenges from
Traditional National/Identity
Challenges Movements

Global Social
Global Economics
Movements
 Traditional Challenges

External intervention can generally be described as

invasion by other countries.

SADDAM HUSSEIN
External intervention
Internal Political challenge
 Challenges to the government

Challenges from
Traditional National/Identity
Challenges Movements

Global Social
Global Economics
Movements
 Challenges from National/Identity
Movements

It is important to know that a

nation has cultural identity that
people attached to, while state is
a definite entity due to its specific
boundaries. However, different
identities can live in different
states.
Challenges from National/Identity
Movements

Kurds reside in several

different countries
including Iraq, Iran, and
Turkey.

The Catalans live primarily

in Spain but we can also
find some of them inn
France.
Challenges from National/Identity
Movements

Scottish nationalism
is another example Global
that challenges the movements,
traditional notions such as Al-
Qeada and ISIS,
of state sovereignty.
are another
In 2014, Great
example of
Britain had a vote in
national or
Scotland to decide identity
whether Scotland movements. In
was going to this case, they
become its own are structures
autonomous state around the
apart from Great fundamentalist
 Challenges to the government

Challenges from
Traditional National/Identity
Challenges Movements

Global Social
Global Economics
Movements
 Global Economics

Global economy demands the states to

conform to the rules of free-market
capitalism. Government austerity
comes from developments of
organizations that cooperate across
countries such as….
 Global Economics

Regional
Agreement
 Global Economics

Neoliberal economics or Free trade was seen as the ideal or the

neoliberal capitalism
started in the 1980s. normative belief, that is the best
economy is one where there is free
It made sure that trade everywhere. Laws and standards
governments did bot impose that would interfere with the flow of
restrictive regulations on capital in a particular country, including
corporate presence, as well environmental regulation, were deemed
as on the free flow of capital
to discourage economic growth.
and jobs.
 Global Economics

Neoliberal economics requires a state to

cooperate in the global market through the free
flow of capital, the privatization of services, and
fiscal austerity or constraint. In turn, the
government’s role is diminished as it relates to
the market. Neoliberal economics is seen as a
threat, in general, because a state cannot protect
its own economic interest as a sovereign state.
 Global Economics

A specific example to expand global

economic influence is the use of IMF and
the World Bank in forcing government
reforms in poorer country. Furthermore, the
regional economic development efforts
focused on expanding free trade and
market liberalization.
 Global Economics

Businesses from develop countries put their

factories and pay people to build factories
and produce goods in developing countries
worldwide. These corporations will sell the
products in developing countries. This
exacerbates rising inequality in the world.
 Global Economics
- allowed people to travel across border
- encouraged economic cooperation and
collaboration of member states.
20 years later, Greece
adopted the Euro as its
own currency and got rid of
the drachma

1981 - EU The government of Greece borrowed money for

infrastructure improvements (2004 Olympics)
This put Greece in a large delt. In 2007 & 2008,
Barriers (passports,
visas, and license the worldwide financial crisis made Greece’s
plates) economy to collapse.
 Challenges to the government

Challenges from
Traditional National/Identity
Challenges Movements

Global Social
Global Economics
Movements
 Global Social Movements

We have global social movements. Most of the time,

they are not seen as a threat but they definitely
challenge state sovereignty.

Social movements are movements of people that are

spontaneous or that emerge through enormous
grassroots organization. These social movements are
transnational movements which mean they occur
across countries and across borders. Therefore,
states have less control over them
Global Social Movements

Human rights movement create a public

sentiment, value, and agenda. The idea is
that there are certain rights that states
cannot neglect or generally, what we call
human rights.

If the country decides that they are going to

have particular policy and if that policy
violates the international standard of human
rights, there is challenge to the ability of
states to fully implement it.