{Global economy is also refered to a8 world ecanomy’ This term refers the interrtional exchange of goods and services that is expressed in jonetary uns of money. may also mean a the free movement of goods, services, technology, and information, In some contexts, “global” oF “International” economy is distinguished measured separately from national economies while the “world sy” is simply an aggregate ofthe separate country’s measurements, World economy is exchusvely limited to human economic activity and typically jadged in monetary terms. Typical examples ae illegal drugs other blak market goods which by any standard area partof the world jy, bu. for which these i by definition no legal market of any kind, Global economy or economic globalization is coneemed on the _globalizatior of production, finance, markets, technology, organizational emesis! ations, corporations and labor. While conomicgiobalization hhasheen expanding since theemergenceof trans-national trade ithas grows tan increased rate due t an increase in communication and technological fhdvances under the framework of General Agreement on Tariffs and Trade find World Trade Organization, which made countries gradually cut down “ade barriers and open up their current accounts al capital accounts‘This recent boom has been largely supported by developed economies integeaing with majocty world through foreign direct investment and lowering costs of doing busines, the reduction of trade barriers and in ‘many eases cross hore migration. ‘Market Integration When prices among different location or related gonds follow the same patterns over a long period of time, market integration enist. Silay, when groups of prices often move proportionally to each uihee and why this relation is very clear among different markets ts seid thatthe markets Aare integrated, Hence, it could be concluded that market integration isn indicator that explains how mich different markets arc elted each other Role of Intemational Financial Institutions in the (Creation of Global Economy nancial Institution (IFS), An are technically TFs. The best “Today, the world’ largest IF isthe European tnvestoent Bank, [t] with a balance sheet size of €573 billion in 2016 [2] This compares tothe te components ofthe World Bank, the IBRD (assets of $358 lion in 2018) [3 ane the IDA (assets of $18 billion in 2014. [3] For comparison, the largest commercial banks each have assets of e$2,000-3,000bilion (Source Webi) ‘The Intemational Financial Insitutions (FIs) ate: 1. Inernational Monetary Fund (IME) 2. Mulilateral Development Banks (MDUs) which which include 2. World Bank Grou b. Atrican Development Bank © Asian Development Bank i Inter-American Development Banke «© Eutropean Dank for Reconstruction an Development “The last ‘our (4) ofthese each focus ona single world region and thus are often cll! Regional Development Banks (RDI). Global n spe ae International Monetary Fu and the World Bark te nla spealized agencies i the United Nation system but ar dependent of ership Composition of TFs ‘only soverign countries ate admitted 3s member-owner ‘broad country membership to include bortoning developing countries tind developed donor counties nembership in regional development bans inclide countries aroun the © Workd as members (ot ited to eoursis from the region) 44, hasits owa independent legal and operational states a Main Objectives: ‘ ‘+ MDBs provide financing for development to developing, countries throug ng tem loans (vith matures of up 1020 yea) lines ates way tow market oes, Pung comes fom nteatinal apt markets End rdond to borrowing government in developing couric, — very lengter loans sometimes called ret with manures of30- “yea at interest rts belo market tes Funding or ons come irom ditt contibuttor by goverment nthe dane counties ~ Grant financing by some MDBs for tcl asistanee advisory Serer or projet preparation : ng i “History of Global Market Integra Labor market integration ocoursed botween 1882 and 1996 in an area of ‘Asia sretching from South India to Southeastem China and encompassing the three Southeast Asian countrles of Burma, Malaya and Thailand, min the Twentieth CenturyBy the late nineteenth century, globalization of which a principal feature ‘wasthe mass migralion nineteenth century globalization of which « principal feature was the mass migration of Indians and Chinese to Southenst Ada _gave rise to both an integrated Asian labor market and a period of real wage “convergence Integration didnot however extend beyond Asia to inchade core Industrial countries. Asian arl core areas, in contrast 1 globally integrated ‘commodity markets showed divergent tri unskilled teal wages By the 18805 steamships had largely replaced sailing. vessels for transport within Asia as well as to Western markets, and shipping fares had Begun to fall sharply. ‘Also, already underway. was the mass migration of Indian and ‘Chinese Workers, principally from the labor abundant eress of Mads in India and the provinces of Kwanglung (Guangdong) and Fukien (Fujan) in Southeastem China, to land-abundant but labor-scare parts of Asia (Chief among the immigrant-receiving countries were Burma, Malaya and ‘Thailand (Siam) in Southeast Asia. Indian and Chinese labor inflows to these ‘countries constituted the bulk of two ofthe main late nineteenth. and early {owenteth-entury global migration movements the other being European Immigration to the New World. Immigration to Southvast Asia was mot entiely in response to its growing demand for workers which, in turn, derived from rapidly expanding demand in core industrial countsles for Southeast Asian exports. Studies by Latham and Neal (1983) and by Brant (1985, 199) established the development ofan integrated Asian rice market beginning in the later part of the ineteenth century. Global Corporation While many use “slobal” in the some way as international when ie comes describing a busines, some analysts make distinctions between how teach operates, Ona basic level, a global coeporation is ane that operas in ‘more than one country. Particularly inthe United States, the lero can meat diferent things to different contexts, withthe characteristics of @ global «corporation varying accordingly, (Craig Berman, 2017) F RSET ee cei he ooking Mich) iting them from ar operons oven Fe deed spb Jpusines:o8 one that maintains a strong honquarior in one country, but hiple foreign locations Sich investments may involve direct investments in foreign assets, such as manufacturing flies oF ‘sales offices, The headquarters generally i ts hone country, though some "moves to more favorable regulatory of taxation locations overtime: Glo ‘corporations strive to create economies of scale by selling the same products thmullpeloctons and hing lol costomizaton. Inthe world of finance and invest 7 ‘Global corporations are governed bythe laws ofthe ountry whee yar incorporate A plbal business connects it len fesoures and opportunities across pola boundaries. Because a glbel fovporation mere invested nis overseas location canbe more serve {Ola opportunites = ad sso more vulnerable to tet A company that dos busines in Adin or example, might Bnd tol dealing withthe {nmplction froma local Ebola outbreak se well a ts commercial operations 1 contrast, av/intemational company is sf TUS. regulations, assuming its headquarters remain fn US. but may tlk have freien selves ac tthe Plippins which i governed By local laws. Global Interstate System. Th the mnedem world-aystem, the division of labor consists of three zones cording to the prevalence of proftable indus or ati coe sem _ periphery, and penhery. Coutres ten ofl into one or anther of these Thterdependent sones core countries, em\periphery eountnes and the Periphery counties Resoures ao redctrbuted from the underdeveloped, pial aw materials exporting por pat ofthe word (he periphery) to | developed ndustaizd oe Wortdsystoms, past wordsystems and the modem worldsystems, ave temporal features. Clea shyt represent the shore Mactan “tc ecomomy, wile ecla tends mean deeper Tong ran tendencies, such as, "general economic prowth or dekine. The term contradiction means a ger Ecrroveny in the system usually cncering some soe er ang em about the end ofthe sytem.‘Thesworldlsyeteins theory stresses that world-systems (and not nation states) “Thus we should focus not ‘individual states, but on the relations between their groupings (coe, ‘stmk-periphery and periphery), Global Governance ‘This term ‘global governance is sometimes referred to as world ‘govemance, Global is a movement towards plitial cooperation among ‘transnational actors, negotiating responses problems that affet mare than one state or region. Institutions of global governance the United [Nations the Interationsl Criminal Court, the World Bank, ete-tend te ependence, both between and between humankind and the biosphere, the tern ‘may mean the peidcce does a peaeeEte lS Aaa ND Global governance 16 nt a Singular system. There is no “world ave Wile the contemporary system of bal politcal relations is ‘not integrated, the relation between he ee ‘regimes ‘ot global overnance isnot insignificant. andthe system doer have a coboner dominant organizational form. The dominant mode of organisation today is buremvratc rational regard and coed Ie aren {0 all modem regimes of political power and frames the tanains hat perspectives. World system theory tions hat govern Intemational Relations. “The following institutions govern international relatons; These are: ‘The European Institute for International Law and International, Relaions(Bruscels) ‘ 1sPListiuto per gli Studi di Politica Internacional (allan Institute for Intemational Political Stadies) Milan, Italy * Insite of World Politics (Washington, DC) ‘Department of [terational Studies (Centro Universitario de Clercias Sociales y Humanidades) at University of Guadalajara locale in Guadalajara, Mexico "Department of Latin American Studios (Centro Universitario de Ciencias Socales y Humanidades) at University of Guadalajara locales in Guadaljara Meco “The Royal Insitute of Intemational Affairs, (PILA) Karahi, Pakistan‘The New Zealand Institute of International Affairs (Wellington, New Zealand) ae “* The Australian Institute of Intemational Affairs Aust (Deakin, ACT, ‘The Canadian Intute of Intemational Afeies. (Torn, ; Coren, ON, * Genova Sool of Diplomacy and International Relatons (Ganev, ener Sh of ators (Geneva, ‘Graduate Intine of Inemationl and Development Shuies (Coren Srivernd) in ‘Intemational Strategie Reworh Organization (SRO/USAX EGMONT ~ Royal Inst fr Intemational Relations Brussels, Belgium Fereetae * University of Florida International Center (U.S.A) * Cover foreman Aas Jahangimoger Unies, (Sea, Dhaka, Bangladesh) Hie + South American Institute for Policy an Strategy (Porto Alegre, Brazil) Internationalist versus Globalization (Gource: Herman E Daly, 1985) : =a sic unit remains the nation, even as relations among nations become increasingly neceneary : : ape efetve erasure ational boundaries for comomi purpose Internation ene nentinneneeaanaig ny (Governed by absolute advantage) What wos many, becomes ok The very word as derived frm ,* “complete.” or “whole” Integration fenieastiaees Since there canbe only one whole, only one uly with rece to which parts are ntgrte tfolloe th global econo teen logically imple national economl ntgeaten By aime ere ‘not mean thatthe productive plant ofeach country is anibilated, but rather thats pacts are tom out oftheir national context (lieintegrated), order to be re-integrated into the neve whole, the globalized economy. AS the saying goes, “to makean omelette you have to break some eggs,” The disintegration ‘ofthe national xg necessery to integrate the global omelet Inthe clasial ninetoenth-century vision ofSmith and Ricaedo 2016 the ‘ational community embraced both national labor and national capital, and these clases cooperated, albeit with confit, to produce national goods ~ largely with national natura resources. These natinal goods then competed {in international markets against the goods of other nations, produced by their own national capita/labor teams using their own resources. This is Internatiallzation a defined above Inthe globally integrated world of the lte twentieth century, however, both capital and goods are free to move internationally. One lite-noticed, tbat important consequence of fre capital mobility s to totally undercut [Ricando's comparative advantage argument for fee trade in goods, because that argument was explicitly and essentially premised on expital boing Jmmabile between nations. But dhe conventional wisdom seems to be that {ree trae in goods is beni, then re trae in capital must be ever more ‘beneficial? In any cast doesn tanger makes sense to think of national teams ff labor and capita in the globalized economy. Instead, global capitalists {competing with each other for both laborers and natural resources, aswell as ‘markets in all countries, Contemporary Global Governance Global governance or world governance {governance the United. Nations. the Intemational. Criminal ‘Court the World Bank, etc. — have limited or demarcated power to enforce ‘ompliance. The modem question of world governance exit in the context Of globalization and globalizing regimes of power: polially, economically land culturally In response to the acceleration of worldwide interdependence, both between human societies and between humankind and the biosphere, the term “global governance” may name the process of designating laws, file, regulations intended fora glabal ole Global governance is not a singular system. There is. no “world 1 but the many diferent repimes of global governance do have fommonalites 2‘The United Nations (UN) Main Functions: 1 The main funtion of UN to 1s members The UN dos tay peacelceping force which are supplied by th member stats (On spproval ofthe UN Secusty Coweta peaceleepes ae fen Sen 1 regs whee aed cnt has recy en doug Sombatarts om resin hing. In cele fee wen a Nobel Peace Prize for its actions. Sti Mo 2, Other fncions of UN The LN simsto protect human ight and provide humanitarian asistance wien ned. fn 1845 the Gort Assembly opted the Univeral Desarationof Haman Rights as standard forte humn ghis opens ‘TheUNcxrrerly provides technical asta ineletons ee elnneee ui structures adda cotati ans human ight Sod ovis fod drinking water hier, ar ther humantaran series ropes placed by famine wat end tural ter The UW plays an negra part in sail and emote development Suough ts UN Development Param Tish lagen cuceannae {font assistance in the world. In addition, the World Health Organization, ENAIDS the Gib Fund tig AIDS Rierlon, alas ON Population and and Wert nk Group one prance slim hem UN a wal Te UN alo say pb fan Dveopent Indes fark count thers of pee *ducation, and life expectancy: a A a : ‘to investigate any dispute or situation which might lend to internation, tigate any dsp hich might lad o international ‘fo secommend methods of ating such disputes ofthe tena : ting uc spun or the terms of 1 forme pi ae *fodelerine he existence otha othe eae oa appre an ‘to recommend what action should be taken; ne : *tocallon members apply economic sanctions nd oer measures involving the use of force to prevent or stop aggression; a ‘otk military acto gin on agro = for the establishment of a system to regulate ‘to ecomnend the admission of new members: “+10 recommend to the General Assembly the appointment of the Secretary Genera and, together with the Assembly, telect the Judges of the Interrational Cour of Justice. Role of UN Today and the Future For the future, the UN has established whet i€ calls its Millenium “Development Goals. Most ofits member states and various intemational Drganizations have all agreed t0 achieve these goals relating to reducing poverty, child morality, fighting diseases and epidemics, and developing a Hlobal partnership interme of international development by 2015, ‘Some member states have achieved 3 number of the agreement’ goals while othershave reached none, However, the UN has been successful over the years anc only the Future can tel how the tre realization of those goals will play he out | Source htpslwww thought comitheunited-natonsf2-143541) ‘The above functions are embodied inthe UN charter. "The UN Gereral Assembly “The UN General Assembly was established in 1915 under the UN Charter, The General Assembly occupies 2 central postion as the chiet ‘deliberative, policymaking and representative organ of the United Nations it provides aunique forum fr nyultlateral discussion ofthe fll spectrum of {ternational issues covered by the Chalet. It also plays a signfiant role in the process of standard-setting and the codifcator of iterations law. The Assembly meets in regular session Jntersively fom Septemberto December each yea, ane thereafter as requires “Functions and Povrers of the UN General Assembly ‘According to the Charter ofthe United Nations, the General Assembly may ‘Consider and make recommendations on the general principles of ‘cooperation for maintaining international peace are security, including ‘disarmament ‘Discuss any question relating to international peace and security and, ‘except where a dispute oF situation is currently being discussed by the Secnity Council, make recommendations on it,* Discs, with the sme exception and make recommendations on any son win the cope ene Chance alain he functions of any organ of the United Nations; ie a ‘ee ues and ne resmmencators pomote internal [plc coopaton the development and coda oneal he raat of nan figs and reel iene intone colabraon in te cena roo, fanaa aa ctaatorl al elie * Make ecomendatons or he peace seleen of ny ato might impair friendly relations among nations; fn = + Reine nd crit opotrom Soanty Coun and oe Uni Bogcacin ts foment Cos rnd Sonsder and wppove the Unted Nation tage and eb financial assessments of member states; " eases Bt th nor-peanns member a th Sectty Counc Imenbet of her Unie Rnlgns curs ses ogee a te ‘Reonmendaonatb Suny Coma opin te ean Coen “Membership inthe United Nations “Today (2018), rt become a er ofthe UN a stem eto ond in the Charter an wilng cacy out ay acon oa noe geac The final decom on admin to Oe UN Ww cad out bythe See Assonbly afr ecommentation by the Secviy Coun Challenges of Global Government in the 21st Century ‘On June 13,2016 The Hague institute welcomed Ina Bokows, Director General of UNESCO to speak on “Challenges of Global Governance inthe 21st Century” as part of the ongoing Distinguished Speaker Series a its Insite thea the unity and wel-beng ofthe ineratonal comments, Boke emphasize tate mun lear, a the heart of our cts and amen, to lve together. The Hague lstitute's recent report on te Toe of esas coil prevention is good example of how fo davdop innovate ae sustainable prctices wo fester communal harmony, Bokova so observed thatthe alarming numberof individuals digplaced ‘by cont which reached ecoed high in 2015, continues to put pressure on Counties across the globe, Migration #0 Europe has put core values to the fest, while the capitis of recelving states inthe Middle Fast, lke Lebanon and Jordan, are bring poshed to the limit Attacks on cultural rights and exltural heritage: parulary in Syva Tra and Mab threaten inter-ultural tolerance okova suggested three poins to address these challenges. First, ‘openness of mind and ost-of-the-bex thinking is crucial. New ideas must be transformed into norms. Bokova highlighted the historic changes brought About by the idea of human rights and human digrity. In tis the United [Notions must take leading role. UNESCO, asa facitator of intercultural Gialogue and proponent of education, can also effet change. Is efforts fo teach pocple about the history of the Holocaust, as well as programs promoting iteretlterdey, help to instill common values in youth and reat envircrments that are conducive to respectful dialogue. Secondly, the international community must build resilient societies, By fgg sachson and fotring inclusion, sce Become song ral comely mob inprove the standing aviariipation == recently only of coies have acucred Mei ecaton and ony 3% m secondary edoeation. Eiucation forthe rehugees must be pronto, in order to avoid a Tost preration’ ot yout. ‘Third, Bova urged new thinking bout peaccuiding, The word angel nerds legitimate ond effec peace ers before during and onic. Preventive metsues ate Ly ad tvs! involve the sot power oded br UNESCO's educational rl intercaltral programs Inthe sime topic Paul Collier 2018), an economist has addressed the plight of the poorest ofthe world’s poor (those living or less than $7.25 a fay according to him), in his awardeinning book, “The Bottom Billion. In his talk, Collier argues “a billion people have been stuck living in teoniomles and have been stagnant for 40 years, and hence diverging from the rest of mankind.” He says that we ean and should help alleviate their ‘iffering through an alliance of compassion and enlightened self-interest: tompassion because we are looking ata human tragedy, and enlightened fell-interest because the combination of economic divergence and global Social integration “will build a nightmare for our children” Collier argues tha this s doable because we've done t before, and he points tOU'S. efforts sy{in the late 19405 and 1950s to rebuild Western Europe to prevent i {falling into the Soviet bloc, aio. “There were four components of post-war US, assistance sl, trae, security, and governments. Fast here was Uh 1548, Marshall Plana ‘massive injection of foreign ad. Second the United States reversed its pe. ‘war protections trade ples opening up is market fo Weseen Burp ‘nd instutionalizing trode ibeaizaton, hid the United Sates revered 4 ecury policy, shifting from pre-war sslaion to a massive mllary presence in Western Europe and other parts ofthe wor. Fourth the United Sates tore up its “Eleventh Commandment-national sovereign anal Purnied an aggressive Intrationalit poly, becoming isramentl i the founding af the United Nations (UN), the Organica fer Boome {Cooperation and Development (OECD), and the inemnatonal Monetary Fund (IMA), and, aeording to Collie, also encouraging the eaton of he European Commu. Having ad outthe challenge al thehistrical precedent, Collier focused ‘on the role of curent-day governments and "mul systems of support for _govemments"—specitically on “one idea in how we could do something strengthen governance." This ane clea is based on the opportunity and the genuine basis of optimism’ created by commodity booms; “commodity booms ate pumping unprecedented amounts of money into many, though notall ofthe countries ofthe bot billion.” Collier pointed to high commoxty prices (he glo ecsion eto ht wen he gave sh and no duces oa fommodiies nso Af «tend tht fas conned ee 208 Hef pry hs Own ro nthe any bee ge comme expr prices ante prow of commod counties that hows how short-term commodity driven nea Gross Domest Prwuc (GDF) arefaiowed by economic crashes The nue snot econ butitiopotica eisabout whotCalier called the “level poversance” Youhave” god enough govemance" you dont fav a ecurce boom GOP foes pin the short erm and in th long frm. Bu or courts “ign threo of govemanc," counts “wi tad governance story boom and bust orn Coles words “hunky dary” and “bumpy duty: ‘he problem is one of political stricture. Many developing count Ihave ony the bases ot dersocracy. Thy have decor comperiions that Metermine how poltians acquie power, fut they lack the checks and Hulances that retain the wie of that power by those in poll offen comimodity-ich developing countries elected and appointed offal can late resource extraction rights deals in secret that benefit them and eign companies bat not thelr countries, Colles asked: “How can we help improve governance and introduce find balances?” He suggested the voluntary introduction of the Incusties Transparency Initiative, part of which involves the so- verified auctions” This s open and transparent auctions that reveal ‘elucof (inthis instance) resource extraction eight identify the bid, and publicize the revenues that acerue to the government, the pand ts people. ‘cours, it’s not so easy, he sid, The ods are stacked against the in tos commodity ich, gowernancospoor counties, Here Caller ‘people, rather plaintively, io become informed citizens because te have an informed society, what politicians do, especially in jn fo Alia and other nations, is gestures: things that looks good but ‘work’ and this author agrees with Collies. nce ofthe State Amidst Globalization Some qvestions ate asked: Are States stil relevant in @ phenomenon alization? How important isthe State in the contemporary era of ‘To Ali Wayne (April 27, 2009) an economistwriter scholar, theses ls had been discussed fora long time. John He argued in 1957 that the state would becomeirrelevantbecaus is inability to defend against nuclear attack Johan Galtung predicted ten Tater ttt woul! disappear as indivcuals began to develop identities Below and beyond tat ofthe sate. “The Fecnomist countered in 1995 that the state “may have more bility than people realize because tis sti the soe possessor of what is fed to bethat basic unit.” ‘Where such discussion was oncelargely confined to political economists, ‘ersergence of globalization a5 the prinipal paradigm for examining ies has made ta theme of mainstream discourse For the prio spanning 1990-1998, for example, Google Scholars return “77,500 ems that contain the word "globalization. For the period spanning, 2000-200 seretuens mare chan three times as many sells.‘A rough dichotomy has emerged amidst this surge of terest. There fare those who see the world as “fa” “borderless” and "weightless," to cite ‘but a few of the familiar formulations. They argue thatthe state is irvelevant because it cannot keep pace with economic forces. Then there ate the critics Who asset thatthe state is relevant because it caninflence the direction that those forces take ‘The problem with this debate until this time (2018) is that both camps Bet the causation wrong. The source of a state's legitimacy is not how effectively it can handle flobslzation, but rather, how effectively it ean provide public goods vise Svs other actorgiven that glubelieation Is ocursing. Thee are certainly ‘anes where non-state actors have undertaken that responsibility in the face ‘of government incompetence ~ witness Hisbolah in Lebanon and Islenie ‘charities in many East African counties. ‘Those cases, however, are exceptions. Until and unless some. other «ategony of actors can perform that service beter ona macro scale whether powerful foundations, innovative start-ups, or international economic ‘institutions ~ the state will ramain the fundamental building block. Few, of course, would dispute that tis more dificult forthe tate to {determine its oven economic course today than It was 20 or 30 years earlier, ‘The proliferation of sophisticated financial instruments has ceated what some calla “shadow world” ~ shadowy in that it operates outside of the [purview of those actors that are charged with shaping economic policy ‘The value of derivatives transactions far exceeds that of global output by a factor of seven according 0 one estimate. Such transactions cary ad Increasingly do, cause tremendous market instability. Im.an April 2008 report, the Intemational Monetary Pund (MF) noted ‘hat “The highest likelihood of a single default and the likely number of \efaulsin theevent ofa singledefaultin the group — ameasure of contagion Fisk within the global banking system — have both risen significantly [between 2007 ant 2008)" “osday’s financial crisis does litle to inspne confidence in the state's abit I nas resulted in the destruction of over $50 frilton in wealth f9qualto 71% of ast year's world output. heat. oe Cae mime es Words to Know Define the following terms according ty your understanding: Dox’ opy ro the tebook) 1. economic globalization 2 moder world system - 8 economic integration 4, global econo itegration 5 globe interme ayer = 1. Brosh Up 1, Diente globl economy from world economy