TCW MODULE 1 Introduction to the Study of Globalization

What is globalization?

After centuries of technological progress and advances in international cooperation, the world is
more connected than ever because of globalization. Globalization is a phenomenon used to
describe the growing interdependence of the world’s economies, cultures, and populations,
brought about by cross-border trade in goods and services, technology, and flows of investment,
people, and information.

Globalization according to some scholars:

Globalization according to various disciplines:

You should always remember that the term globalization has several contending meanings
because it varies across different disciplines. However, in the absence of a generally accepted
definition of globalization, it can be seen or understood as either a process, a condition or
an ideology.
Does it mean that all countries around the globe are becoming the same?
Globalization is not simply homogenization; on the contrary, it enhances cultural identity. First,
People are not mere objects of cultural influences, but subjects who can reject or integrate culture.
Besides, with the development of science and technology, people are closer than before. The
sense of “togetherness” brought with globalization is not at all in conflict with diversity. In the new
era of globalization, people become much more concerned about the uniqueness and particularity
of their own culture.

Globalization promotes interdependencies. Various countries have built economic

partnerships to facilitate these movements over many centuries through the growing
interdependence of the world’s economies, cultures, and populations, brought about by cross-
border trade in goods and services, technology, and flows of investment, people, and information.

Other important concepts related to Globalization

 Globalization. This term is used to describe a product or service that is developed and
distributed globally but is also adjusted to accommodate the user or consumer in a local
market.
 Liberalization. This refers to the removal of barriers and restrictions imposed by national
governments to create an open and borderless world economy.
 Internationalization. This refers to activities by entities such as corporations, states,
international organizations, private organizations and even individuals with reference to
national boarders and national governments.
 Universalization. Denotes a process of spreading various objects, practices and
experiences to the different parts of the world. If Western modernity spreads and destroys
local cultures, this variant of universalization is called Westernization, Americanization or
Mcdonaldization.

Theoretical Paradigms associated with Globalization.

The above-mentioned approaches are just some of the major theoretical underpinnings that seek
to provide a clear conceptualization of globalization. While it cannot be denied that the formulation
of these theories have resulted in seemingly endless academic debates centered on the correct
way of interpreting globalization, they have also helped us in correcting some of the wrong notions
and misconceptions about globalization. It is truly that the concept of globalization is very
complicated because it affects the life of every individual in the society.
 As globalization broadened, its literature has also boomed and resulted in the generation
of several theories and conceptual frameworks. Each of these theories gives us a distinct
way of interpreting social realities that form part of the phenomenon of globalization. The
theoretical paradigms to be discussed below serves as the function of a lens that we can
use to get a clear view of globalization.

World System Theory

Immanuel Wallerstein argues that the modern world system emerged as early as the 1500s
through a series of economic transitions and now connects all countries through a single division
of labor. Immanuel Wallerstein pointed out that core countries in the developed world extract labor
and raw materials from peripheral ones. Capital according to Wallerstein, now accumulates
through an ever-expanding network of trade routes, property rights, and labor agreements that
simultaneously connect the world while reinforcing its inequalities. adheres the idea that
capitalism has created a global enterprise that swept the 19th century leading to the present time.

Characteristics of World System Paradigm

The centrality and immanence of the inter-state system and inter-state rivalry to the maintenance
and reproduction of the world system. This system creates a geographic division of labor.
1. Core Nations, are those most modernized nations, having diversified economies and
stable internal politics. Regarded as powerful and developed centers of the system.
Comprises of Western Europe, North America, and Japan.
2. The Peripheral Nations referring to those nations in the world system that are forced to
specialized in the export of unprocessed raw materials and food to the core nations. This
also refers to regions that have been forcibly subordinated to the core through colonialism
or other means. It includes Latin America, Africa, Asia, the Middle East, and Eastern
Europe.
3. Semi-peripheral, these are nations that fall in between the core and peripheral nations,
being most industrialized than the peripheral but less industrialized in than of the core.
states and regions that were previously in the core and are moving down the hierarchy, or
those that were previously in the periphery and are moving up. Like, Argentina, China
India, Brazil, Mexico, Indonesia, and Iran.
Global Capitalism Theory
This theory treats globalization as a novel stage in the evolving system of the world capitalist.
According to Sklair (2000, 2002), this theory espoused the “transnational practices” (TNPs) as
operational categories for the analysis of the transnational phenomena. Like for example TNPs:
monetary remittances migrant entrepreneurship collective transfer of resources or products.
Example of Transnational Capitalist Class:
 Executives of transnational Corporations
 Globalizing bureaucrats
 Politicians, Professionals
 Consumerist Elites in the media
 Commercial sector
Moreover, according to Robinson (2003, 2004), Globalization creates new forms of transnational
class relations across borders and new forms of class cleavages globally and within countries,
regions, cities, and local communities, in ways quite distinct from the old national class structures
and international class conflicts and alliances.

The Theory of Network Society School of Taught

This paradigm does not subscribe to the contention that capitalism fuels globalization;
Instead, it put forth the premise that technology and technological change are the causes
that comprise globalization.

One of the proponents of this theory was Manuel Castells wherein he suggests that the rules
of global capitalism have changed to embrace the new information technologies. Power now
flows not from corporations or states, but through the informational flows and codes that
connect those corporations and states and the world. Castells added that the advancement of
the Information Age doe does not necessarily mean that the world has become flat; rather with
technological advance, he argues, come new global forms of inclusion, fragmentation, and
integration.

Moreover, Anthony Giddens, another proponent of this theory, suggest that globalization has
led to the creation of a ‘global risk society.’ Human social and economic activities, especially in
modernity, produces various risks such as pollution, crime, new illnesses, food shortages,
market crashes, wars, etc. and societies have become more responsible for managing the risks
of their activities intentionally, or, more often than not, unintentionally produce.

In the era of globalization, however, human activities have become connected across the globe,
so that events in one part of the world create consequences for people in many other areas of
the globe.
David Harvey, in his now-classic 1990 study “The Condition of Post-Modernity”, argues that:
globalization represents a new burst of time-space compression produced by the very
dynamics of capitalist development. He also states that it is this compression of social time–
space through economic activity that is the driving force behind globalization. The term “time–
space compression” refers to the way the acceleration of economic activities leads to the
destruction of spatial barriers and distances.

Saskia Sassen (1949), initiated that the international spread of the notion of human rights could
override distinctions of nationality and citizenship. Under a global human rights regime, she
argues that law must treat people as persons-qua-persons first, and citizens only second.
Moreover, she stated that, “globalization is more than its common representation as growing
interdependence and formation of self-evidently global institutions. It also includes sub-national
spaces, processes, and actors. The global gets partly structured inside the national and this
process entails a denationalizing of what was historically constructed as national.

The Theory of Global Paradigm

Emphasizes the rapid growth of the mass media and resultant global cultural flows and images.
Focuses on phenomena such as globalization and religion, nation and ethnicity, global
consumerism, global communications, and globalization of tourism. The concept McDonaldization
popularized by Ritzer describes the sociocultural processes by which the principles of the fast-
food restaurant came to dominate more and more sectors of the US and later world society.

TCW MODULE 2 The Global Economy

Globalization is defined as the ongoing economic, technological, social, and political integration
of the world that began after the Second World War. At this point in your continuous search for
knowledge on globalization, there is a need to analyze the actors that facilitate economic
globalization. Let us define first economic globalization, Shangquan (2002) defines economic
globalization as an increasing interdependence of world economies as a result of the growing
scale of cross-border trade of commodities and services, the flow of international capital, and
wide and rapid spread of technologies.

Factors that Facilitate Economic Globalization

Globalization is taken primarily as an economic process (Abelos et.al 2019). Business
organizations are aiming their produced product and services to meet not just local but
international standards. These foster greater relationships among people across boarder and time
and space. They form networks, groups of elites, and world organizations and serve as global
actors that contributed unique insights into global politics, law, and economy.

Formation and Role of Networks

Formation and Role of Elites
 Formation and Role of Institution

Countries and regions are economically very different from each other. Its defining characteristic
is the wide disparities in economic achievement and consequent standards of living.
But what do we meant by the global economy and economic globalization? The global economy
refers to the interconnected worldwide economic activities that take place between multiple
countries. These economic activities can have either a positive or a negative impact on the
countries involved. For Szentes (2003) economic globalization is a process of making the world
economy an organic system by extending transnational economic processes and economic
relations to more and more countries and by deepening the economic interdependencies among
them. Benczes (2014) follows this definition and emphasizes that he interpretation of the
current trends in the world economy.
Toward the end of the Second World War, in July 1944, representatives from the United States,
Great Britain, France, Russia, and 40 other countries met at Bretton Woods, a resort in New
Hampshire, to lay the foundation for the post-war international financial economic system that
gave birth to IMF, GATT, WB and furthers with WTO. The main objectives of these economic
systems is to prevent another worldwide economic cataclysm like the Great Depression, to aid
 the recovery of war-torn countries and to foster economic cooperation among states. The
following are the functions of the aforementioned economic systems.

International Monetary Fund World Bank

Important functions of IMF Important functions of WB

 Facilitate the cooperation of countries on monetary  Aims to reduce poverty in middle-income and
policy, including providing the necessary resources for creditworthy poorer countries by promoting
both consultation and the establishment of monetary sustainable development, through loans,
policy in order to minimize the effects of international guarantees, and non-lending-including analytical
financial crises. and advisory-services.
 Tries to foster social reforms to promote economic
 Help stabilize exchange rates between countries development, such the empowerment of women,
building schools and health centers, provision of
 Provide a safeguard to members of the IMF against clean water and electricity, fighting disease, and
balance of payments crises. protecting the environment.

General Agreements on Tariffs and Trade (defunct) World Trade Organization

Important functions of GATT before Important functions of WTO
 Avoid trade wars by raising protectionist barriers.  Providing forum for trade negotiations
 Aid economic recovery through reconstructing and  Handling trade disputes
liberalizing global trade.  Monitoring Members’ trade policies
 Providing technical assistance and training to
developing and least developed economies

These International Economic System (IES) has been anchored in the neoliberal
paradigm since 1980s. It involves reducing the government regulation in order to extend the role
of the private sector in the market and the society. Global justice movements have sought to
expose the inadequacies of the system in addressing the needs of developing world and its
frailties and vulnerability to financial crises. The IES’s are pillars of globalization. Designed to
help manage the international financial system, they have taken on major roles as drivers of
closer economic integration of all of the world’s countries, from the advanced to the least
developed. They have provided funds and advice to assist countries with their economic
development and policy-making.
Globalization has brought the global economy into a wider range of perspectives and effects.
Global economy before the way it is today, it goes through a series of a process starting from the
ancient times up today. Remember that during the early times when civilization began to develop,
there has been a notable series of engagement and interconnections among people across the
world.
Starting from the silk road, a trade route between China and the Mediterranean promoted the
exchange of ideas, goods like silk, porcelain, which resulted in the exchange of cultures and
beliefs. The economy back then was centered on expanding networks of trading for the benefit
of their own country, but mostly reliant on agricultural farmland especially in Eastern countries
and barter trading. During the period of exploration and colonization, economic activity focuses
on finding gold and silver, this type of economic system refers to mercantilism. Eventually, this
led to the rise of western powers like Spain, Portugal, England, and later on America, the Soviet
Union, and Germany. After World War I a new global economic system emerges called capitalism.
 
Economic globalization can be understood as a process of absorbing national
economies into an interlinked and interdependent global market economy.
 The Brenton Woods Institutions created by the victors of World War II in 1944 are the
IMF, WB, GATT (defunct). These institutions were created to aid the recovery of war-
torn countries and to foster economic cooperation among states
 The international economic system has been anchored in the neoliberal paradigm since
1980s. It involves reducing the government regulation in order to extend the role of
private sector in the market and society.

Market Integration
What is Market Integration?
It is a process that refers to the expansion of firms by consolidating marketing functions and
activities under single management. For example, the establishment of whole selling facilities by
food retailers, in these manners there is a concentration of decision making under one
management. This also involves the price of related goods using the same currency, for example,
the use of dollars in international trading, the Euro among European Nations. Market integration
is also evident in the principle of the General Agreement on Tariff and Trade GATT in 1945, Article
1 of the GATT states that “All contracting parties must accord any advantage, favor, privilege, or
immunity granted to any product from any other country immediately and unconditionally to all
other members.” The concept of free trading is another result of market integration.

Free Trade refers to a policy removing the barriers in trading among to or more nations. Under
this, goods and services can be bought and sold across borders with little or no government tariffs,
quotas, subsidies, or prohibitions to inhibit their exchange. The Worlds Major Free Trade Areas
are North American Trade, Association of Southeast Asian Nations Free Trade Area, Southern
Common Market, Common Market of Eastern and Southern Africa. There are also not free trade
areas, but there are union and partnership Agreements, for example, are the European Union
and Trans-Pacific Partnership. (World trade Organization, n.d.)

What Explains the Rapid Market Integration in Recent Decades?

In the study conducted by Garret (2000), there are four perspectives in determining the
reason for rapid market integration and its relationship to globalization:

First, perspective according to Garrett, “what we are witnessing today, is nothing new
because the current level of market integration is only returning to those last era of economic
internationalization the turn of the 20th century “

The second perspective is the technological determinism, opposes that shrinkage of time
and space has been so intense and so universal that there is essentially nothing that can be
done to stop it. This only means that technology changes the lives of people, political, social,
and economic systems across the world.

Example, the transition from feudalism to capitalism, changing occupational and skills structure
of the labor in the labor force in the 20th century, the emergence of Post-industrialism in the
Post- World War era, and the 24-hour global non-stop trading across the world.

The Third perspective is technological change, this involves big data, internet, machine
learning, artificial intelligence, robotics, 3D printing, biotechnology, nanotechnology, renewable
energy technologies, satellite, and drone technologies. This impacted the political and socio-
economic activities across the world.

The fourth perspective is the critical role of government in making policy. For example, the
formation of international organization and signing an agreement on trading among member
nations like GATT, WTO, etc.

Global Financial Institutions and Global Market Integration

Global Market integration paved the way for the emergence of global financial institutions that
aided the nation-states in government and economic affairs. There are two major financial
international institutions: The World International Monetary Fund, and the World Bank. The
formation of an international financial institution during Post-World War II are founded by groups
of countries to promote public and private investment to foster economic and social development
in developing and transitioning countries. Allied powers came together in 1944 at the conference
known as Bretton Woods under the intellectual leadership of Harry Dexter White, US Senior
Treasury official, and John Maynard Keynes. The conference planned new rules of new
economic order to prevent countries following the principle “beggar-thy-neighbour” policies that
had led to the Great Depression. It also established the two key institutions, the International
Monetary Fund and World Bank to manage this new economic order. (Zaide, 2015)

International Monetary Fund

This is an autonomous organization affiliated to the UNIO. From an initial strength of 31
members, it now commands a 125- strong membership.
Functions of the IMF
1. Works as a short-term credit institution;
2. Provide for the orderly adjustment of exchange rates;
3. Acts as a reserve base for member countries to borrow from
4. Provides foreign exchange loans against current transactions;
5. Provides international financial consultancy services.
6. Furthermore, the IMF promotes global monetary cooperation and international
financial stability. The role of IMF is to provide short-term loans to prevent devaluation
and retain the state’s fixed exchange rate in instances of the temporary balance of
payments and deficits.
In addition, IMF assists countries that hit by the crisis by providing financial support. So now,
what are the situations that trigger a crisis? (International Monetary Fund, n.d.)
One is domestic factors, this includes inappropriate fiscal and monetary policies which can lead
to large economic imbalances (large current account and fiscal deficit and high level of external
and public debt) an exchange rate fix an inappropriate level, which can erode competitiveness
and lead to persistent current account deficit and loss of official reserves and a weak financial
system which can create economic boom and busts. Political instability or weak institution can
also trigger crises by exacerbating economic vulnerabilities. Another is external factors, this
includes shocks ranging from natural disasters to the increase of the price of commodities.
Whether the cause is domestic or external in origin, crises can take many different forms:
balance of payment problems occur when a nation is unable to pay for essential imports or
service its external debt repayments; financial crises stem from illiquid or insolvent financial
institutions, and fiscal crises are caused by excessive fiscal deficits and debt. Often, countries
that come to the IMF face more than one type of crisis as challenges in one sector spread
throughout the economy. Crises generally result in a sharp slowdown in growth, higher
unemployment, lower incomes, and greater uncertainty which causes a deep recession. In
acute crisis cases, defaults or restructuring of sovereign debt may become unavoidable.
World Bank
Grants long-term loans for the economic development of less developed countries and the
reconstruction of war-torn countries in Europe.
The functions of WB are:
1. Provides loan services to member governments
2. Provides development loans on soft terms to poor member nations
3. Provides support to private or joint sector projects
4. Provides insurance guarantees to foreign investors
5. Setting investment-related disputes among member nations through conciliation
or arbitration.

Comparative Economic Forecasts in the Midst of COVID’19 Pandemic

GROWTH RATE FORECAST
On the other hand, inflation is expected to reach 2.2% this year and 2.4% in 2021, with further
downside pressure from lower global oil prices. With inflation projected to remain within the
central bank’s target range of 2.0% to 4.0%, authorities have room for further monetary policy
expansion to cushion any lingering effects of the pandemic on the economy. But despite the
decline in the economy, ADB expects a strong recovery to 6.5% GDP growth in 2021, assuming
that COVID-19 infections in the country are curbed by June this year.

CURRENT CREDIT RATING OF THE PHILIPPINES

Standard & Poor's credit rating for Philippines stands at BBB+ with stable outlook. The
country ranks 61 on the overall credit rating among countries. Moody's credit rating for
Philippines was last set at Baa2 with stable outlook. Fitch's credit rating for Philippines
was last reported at BBB with stable outlook. Moody said the Philippines’ sustained
improving fiscal metrics with national government debt falling to 39.6 percent of
gross domestic product (GDP) in 2019 from 50.2 percent in 2010 that helped in
maintaining its investment grade credit ratings.(Trading Economics,2020)
In general, a credit rating is used by sovereign wealth funds, pension funds and other
investors to gauge the credit worthiness of Philippines thus having a big impact on the
country's borrowing costs. In this case, as stated by Carlos Dominguez the Secretary of
finance because of the good credit rating of the Philippines, the pandemic has already
forced the government to borrow P1.22 trillion from January to April, exceeding the P1.02-
trillion gross borrowings for the entire 2019. Dominguez says the government has spent
P375 billion so far for its response to COVID-19. He also said that the proportion of debt
to gross domestic product (GPD) has improved to record-low of 39.6 percent, revenues
posted its biggest share to domestic output at 16.1 percent in 2019, inflation remains
manageable, and foreign reserves continue to rise, with the end-May 2020 level at USD93
billion. (Villanueva, 2020)
Moreover, it is also reported that our government secured a $500 million equivalent to 25
billion in Pesos financing package from Asian Development Bank support the countries
to support the country's budgetary requirements to address the Coronavirus (Rada,
2020). All in all, The Philippines' outstanding debt soared past 9 trillion pesos (roughly
183.9 billion U.S. dollars) as of end-June as the government borrowed more to fight the
COVID-19 pandemic, the country's Bureau of Treasury said on July 29, 2020. In a
statement, the treasury bureau said the total debt stock for the month reached 9.05 trillion
pesos, an increase of 163.3 billion pesos (roughly 3.3 billion U.S. dollars) or 1.8 percent
compared to May "due to the net issuance and availment of domestic and external
financing." Of the total outstanding debt stock, the bureau said 32 percent were sourced
externally while 68 percent are domestic debt.
Data from the Department of Finance (DOF) of the Philippines showed that from January
to June, the government has availed program loans worth 216.3 billion pesos (roughly
4.4 billion U.S. dollars) for coronavirus response, with 130.5 billion pesos (roughly
2.6 billion U.S. dollars) from the Asian Development Bank and 85.8 billion pesos (roughly
1.74 billion U.S. dollars) from the World Bank. (Xinhua,2020)

Market integration motivated by globalization resulted in the emergence of global corporations.

What is a global corporation?
This is also known as a global company, or any company that operates in at least a country
other than the where it originated (LaMarco, 2018)
The global corporation has been existing for a few centuries, the earliest of which were
chartered around the sixteenth century in places like England, Holland, etc. At first, these
corporations are said to be not-for-profit entities to build institutions such as schools, hospitals
for public goods. Around the 17th century, these corporations focused on making money
through profit. Their wealth was used for colonial expansion parts of Asia, Africa, and the
Americas. The British merchant established the British East India Company which monopolized
trading in India. The Dutch East India Company was formed by the Dutch merchant. The
American Revolutionary War in 1776, and the publication of Adams Smith, the father of free
trade theories, Wealth of Nations, argues that large business associations limit competition, and
thus, the ending of colonial monopoly. (Zaide, 2015)

Multinational Corporations
Also referred to as transnational corporations operate in more than one country. They act
as modernizers of the world economy, promote efficiency and growth of the world
economy, promote regional agreements and alliances, and increase money circulation in
the economy are some of the salient roles of MNC’s. (Ferrer, 2018). Western nations
such as the United States and the European Union member states continued to dominate
the world economy as financiers, producers, and consumers. Their banking merchants,
multinational corporations, and individual entrepreneurs dominated world finance and
business. (Zaide and Zaide 2015, p393)

The new source of wealth came from the intellectual properties and patents of Western
inventors, including modern computers and applications. American inventors like Bill
Gates, Steve Jobs, and Mark Zuckerberg became the household names. The patented
inventions as the Windows software, the iPod, iPad, iPhone, and Facebook. Thus the
20th century as also known as for new knowledge revolution.” a new “intellectual
revolution,” or the computer revolution.

WORLD’s 5 BIGGEST CORPORATE GIANTS

(Gourtsilidou,2020)
We live in an era where fewer than 10% of the world's public companies account for more
than 80% of all profits. Below are the world’s largest corporations, compiled by market
capitalization (the total market value of a company's outstanding shares):

Apple - The company’s headquarters are in Cupertino, California. Apple, with a market
capitalization of 1.172 trillion dollars recently announced financial results for its fiscal 2020
first quarter. The company posted quarterly revenue of 91.8 billion dollars, an increase of 9%
from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of
4.99 dollars, up 19%, also an all-time record. International sales accounted for 61% of the
quarter’s revenue.

Microsoft Corporation - The computer tech company with a market capitalization of 1.101
trillion dollars produces, licenses, and supports dozens of software products and computing
devices. Microsoft announced financial results for its fiscal 2020 first quarter as compared to
the responding period of the last fiscal year. Revenue was 33.1 billion dollars and increased
14%, operating income was 12.7 billion dollars and increased 27%, net income was 10.7
billion dollars and increased 21% and diluted earnings per share was 1.38 dollars and
increased 21%. Microsoft returned 7.9 billion dollars to shareholders in the form of dividends
and share repurchases in the first quarter of the fiscal year 2020, an increase of 28%
compared to the first quarter of the fiscal year 2019.

Alphabet Inc. - The third biggest company in the world with a market capitalization of 902
billion dollars is Alphabet Inc. In 2019 Alphabet again delivered strong revenue growth, with
revenues of 162 billion dollars, up 18% year over year. On capital returns, in the fourth
quarter of 2019, the company repurchased 6.1 billion dollars of shares, which was more than
 double the amount of repurchase in the fourth quarter of 2018. As of year-end, the company
had 21 billion dollars remaining in the program.

Amazon - The company with a market capitalization of 887 billion dollars is based in Seattle.
Net sales increased 21% to 87.4 billion dollars in the fourth quarter of 2019, compared with
72.4 billion dollars in the fourth quarter of 2018.
Operating income increased to 3.9 billion dollars in the fourth quarter 2019, compared with
operating income of 3.8 billion dollars in fourth quarter 2018. Net income in 2019 increased to
11.6 billion dollars, or 23.01 dollars per diluted share, compared with net income of 10.1
billion dollars, or 20.14 dollars per diluted share, in 2018.

Berkshire Hathaway Inc. - Berkshire Hathaway, with a market capitalization of 545.7 billion
dollars is based in Omaha, Nebraska. Berkshire earned 81.4 billion dollars in 2019 according
to generally accepted accounting principles.
The components of that figure are 24 billion dollars of operating earnings, 3.7 billion dollars of
realized capital gains and a 53.7 billion dollars gain from an increase in the amount of net
unrealized capital gains that exist in the stocks the company holds

EMERGING ROLES OF MNCs

(National Research Council,2020)
I. INCREASING INTERNATIONAL COMPANY ALLIANCES
Since the end of the Cold War, the world economic system has been strongly distorted by
political intervention. Even though politically oriented trade frictions are being heightened at the
authority’s level between Japan and the United States, industrial leaders of the two international
locations are aggressively forming strategic alliances and promotion pleasant collaboration. This
tide of corporate level competitive interdependence and world alliance undertaking is steadily
turning into a good sized issue in the world economy. Indeed, it is paradoxical, but relying on
company alliances and interdependence is perhaps a better method for growing industrial
strength than financial nationalism.
Moreover, the paradigm of modern technological innovation is rapidly changing. In order to
cope with the paradigm shift, many companies are forming strategic alliances across national
borders in order to survive. The alliance network is so complex and tight that even nationalistic
political pressure no longer can break such alliances. We think this trend is very desirable for
increasing international collaboration and for improving world peace. International industrial
collaboration is a strong weapon for comprehensive national security. The strategic business
alliance is a useful means of improving international collaboration
II. COMPREHENSIVE NATIONAL SECURITY
Most countries have been pursuing what we call comprehensive national security for their
national interests. For example, Japan based MNCs have the strong belief in the coexistence
that aims for mutual benefits for the advancement of social welfare. That means that local
cultures and customs have to be respected and the unilateral enforcement of domestic business
and labor practices should be avoided except as otherwise agreed upon by both parties for their
mutual benefit. We never underestimate the great benefits that Japan has received from the
U.S.-Japan Mutual Security Treaty. We do not deny the fact that the Japanese economy has
advanced more rapidly than it otherwise would have. However, Japan has also made extra
efforts to make this possible within the framework of various restrictions. Many Japanese
companies have been restricted in their businesses to peaceful applications for national security
reasons.

IMPACT OF COVID’19 TO MAJOR CORPORATIONS

From small businesses to biggest store giants and corporations many of them have
declared bankruptcy because of the Covid’19 pandemic. The Harvard Business
Review have reported that the crisis has caused a big crash to international flows in
modern history. Current forecasts, while inevitably rough at this stage, call for a 13-
32% decline in merchandise trade, a 30-40% reduction in foreign direct investment, and
a 44-80% drop in international airline passengers in 2020. These numbers imply a
major rollback of globalization’s recent gains, but they do not signal a fundamental
collapse of international market integration. It is because of falling consumer demand,
reduced entertainment spending, and stay-at-home orders mandating certain
businesses stay closed continue to take their toll on a retail industry that has been
struggling for the past several years as consumers pivot to online shopping.

LIST OF MAJOR COMPANIES THAT DECLARED BANKRUPTCY

(Tucker,2020 of Forbes):
 Aeromexico, the largest airline in Mexico, filed on July 1, but planned to double its
domestic flights and quadruple its international flights in July compared with June as it
ramps up operations following strict coronavirus shutdowns.
 The ALDO Group, a Montreal-based shoe retailer that operates about 3,000 locations in
more than 100 countries, filed on May 7 under pressure from store closures.
 Global Eagle, the company that lets you surf the internet with in-flight Wi-Fi and watch
movies in the air, filed on July 22 to reduce its debt by $475 million as air travel has
sharply declined during the pandemic.
 JCPenney filed on May 15, weighed down by $4.2 billion in debt. The prominent
department store chain has lost money for nine straight years, and its troubles were
exacerbated by the pandemic that forced its 850 remaining locations to close.
 NPC International, which is Pizza Hut’s largest franchisee with about 1,200 locations and
also operates nearly 400 Wendy’s restaurants, filed on July 1 but planned to keep its
restaurants open.
Fortunately, in the Philippines, no company has filed for bankruptcy even after more than two
months of community quarantine, according to Labor Secretary Silvestre Bello III, although
several companies have signified opting for temporary closure. Under such circumstances,
employees are still secured of their employment status. Filing for bankruptcy is one remedy for
companies that are unable to pay their debts.
 The Global Interstate System & Global Governance
What is Global Interstate System?
The global interstate system is the whole system of human interconnections that develop
international relations among nation-states. These systems use mechanisms that govern the
world to ensure the balance of power among the government and to avoid destructive
competition. One of the mechanisms use is the formation of international organizations like the
United Nations, and the international financial organization in which they facilitate relations
among states and promote international standards.
On the other hand, modern politics is governed through nation-states. When we say state it
refers to a community of persons, more or less numerous, occupying a defined territory,
possessing an organized government, and enjoying independence from external control. On the
other hand, Nation is defined as people, or aggregation of men, existing in the form of an
organized society, usually inhabiting a distinct portion of the earth.
The question now is, why is the world organized the way it is? What are the historical
antecedents of contemporary world politics?
Before the formation of sovereignty among nations, the world was involved in two destructive
wars, the Thirty Years War of the Holy Roman Empire (1618-1648) and the Eighty Years War
between Spain and the Dutch Republic ( Zaide and Zaide, 2015)

The Thirty Years War of the Holy Roman Empire started as religious conflicts between
various Protestant and the Catholic States. When the Holy Roman Emperor Ferdinand II,
tried to impose religious uniformity and forcing his domains to accept Roman Catholicism.
These resulted to fear and anger among Northern Protestant states because the imposition
violated their rights as stipulated in the signed Peace Treaty of Augsburg. The conflict
becomes a war not just of religions but of political powers and dominance.

Eighty Years War (1568-1648) also known as Dutch Revolt. The Netherlands during the
fourteenth and fifteenth century had been united under the Duke of Burgundy. It was inherited
by Charles V, and became the Holy Roman Emperor and later on by Philip II of Spain.
Various circumstances occurred during this period that caused dissatisfaction and unrest in
the Netherlands. Just like the Thirty Years War, conflicts mainly focus on religion. The
followers of John Calvin protested against the imposition of the Holy Roman Empire that
Catholicism must be the sole and only religion to follow. In the course of history, this religious
conflict turns into a war of political power and dominance in Europe and the empire territories.

The Thirty Years War and Eighty Years War did not end the conflicts in Europe but it was able
to establish the precedent of peace reached by diplomatic congress and a new system of the
political order in Europe that is now based upon the concept of co-existing sovereign countries
or known as the principle of Westphalian sovereignty. This series of treaties were signed
between May and October 1648 in held in Westphalian cities of Osnabruck and Munster. The
peace negotiations involve a total of 190 delegations representing European powers.
 Salient Points of Peace of Westphalia
1. The power taken by Ferdinand III in contravention of the Holy Roman Empire’s
constitution was stripped and returned to the rules of Imperial States
2. All parties would recognize the Peace of Augsburg of 1955, in which each prince
would have the right to determine the religion of his state, the option being
Catholicism, Lutheranism, and Calvinism. This affirms the principle of ‘whose realm,
his religion’
3. Christians living in principalities where their domination was not the established church
were guaranteed the right to practice their faith in public during allotted hours and in
private at their will
4. General recognition of the exclusive sovereignty of each party over its lands, people,
and agents abroad, and responsibility for the warlike acts of any of its citizens or
agents

IMPORTANCE OF PEACE OF WESTPHALIA

The Peace of Westphalia helped us to understand and quantify the power of nation-states.
The treaty established new political norms and concepts of international political affairs and
dominance such as the legal equality of states, non-intervention, and a repudiation of the
principle of supra-nationalism.
Supranationalism is defined as the voluntary association of three or more independent
states willing to yield some measure of sovereignty for mutual benefit.
For example, Europe has experienced strong centripetal and centrifugal forces throughout its
history. From the Roman Empire to the European Union, the historical pattern of development
in Europe is a model study in regional geography. From empire to nation-state and now to a
union, the continent struggles to confront these cultural forces that unite and divide. The EU is
an example of what supranationalism can produce. To compete in a global economy, the
nation-states of Europe must cooperate and coordinate their industrial activities to support
their high standard of living. The EU member states are a part of the elite “have” nations of
the world. (Saylordotorg,2020)

What happened to the international political affairs after the Westphalia? (Cavendish, 1988)
The world faced a series of new events that challenge the international order. The rise of power
of Napoleon Bonaparte (1769-1821) French emperor who sought to spread the principles of the
French Revolution across Europe (Napoleonic Wars, 1803-1815) key was the formation of
Napoleonic code, where it pursued: Forbade birth privileges, freedom of religion, meritocracy in
government services and this event resulted to, a brief hegemony in Europe.
Britain, Prussia, Russia, and Austria opposed French Empire and saw the collapsed of
Napoleon Bonaparte in 1814, they started planning the postwar world. The Concert of Europe
also known as the Congress of Vienna was the first of a series of international meetings in
which the purpose was to restore the balance of power in Europe peacefully. This later become
the model of the first-formed international organizations such as the League of Nations in 1919
and the United Nations in 1945.
The Concert key points are reviving the power of monarchy as a government system, return
Christian values in Europe, repudiation of the Napoleonic Code, and renewed peace in Europe
through

Global Politics and World War

The main cause of war is not the nature of man, but the nature of the international
system itself. States are in competition for power, the international system will generate
war like Kenneth Waltz who talks about war as something essentially related to the
international system being a balance of power in an anarchist system. As soon as we
reach a certain order of balance, we will not fight. (Baripedia,2020)

World War I
World War I according to Martin (2020), is known as the "war to end all wars," occurred
between July 1914 and November 11, 1918. By the end of the war, over 17 million people
had been killed, including over 100,000 American troops. While the causes of the war are
infinitely more complicated than a simple timeline of events, and are still debated and
discussed to this day, the list below provides an overview of the most frequently-cited
events that led to war.

CAUSES OF WORLD WAR 1

Mutual Defense Alliances

Countries throughout the world have always made mutual defense agreements with their
neighbors, treaties that could pull them into battle. These treaties meant that if one country
was attacked, the allied countries were bound to defend them. Before World War 1 began,
the following alliances existed:
 Russia and Serbia
 Germany and Austria-Hungary
 France and Russia
 Britain and France and Belgium
 Japan and Britain
When Austria-Hungary declared war on Serbia, Russia got involved to defend Serbia.
Germany, seeing that Russia was mobilizing, declared war on Russia. France was then
drawn in against Germany and Austria-Hungary. Germany attacked France by marching
through Belgium pulling Britain into war. Then Japan entered the war to support its British
allies. Later, Italy and the United States would enter on the side of the Allies (Britain, France,
Russia, etc.).

Imperialism

Imperialism is when a country increases their power and wealth by bringing additional
territories under their control, usually without outright colonizing or resettling them.

Before World War I, several European countries had made competing imperialistic
claims in Africa and parts of Asia, making them points of contention. Because of the
raw materials these areas could provide, tensions around which country had the right
to exploit these areas ran high. The increasing competition and desire for greater
empires led to an increase in confrontation that helped push the world into World War
I.

Militarism

As the world entered the 20th century, an arms race had begun, primarily over the
number of each country's warships, and the increasing size of their armies in countries
began, training more and more of their young men to be prepared for battle. The
warships themselves increased in size, number of guns, speed, method of propulsion,
and quality armor, beginning in 1906 with Britain's HMS Dreadnought. Dreadnought
was soon out-classed as the Royal Navy and Kaiserliche Marine quickly expanded their
ranks with increasingly modern and powerful warships.

By 1914, Germany had nearly 100 warships and two million trained soldiers. Great
Britain and Germany both greatly increased their navies in this time period. Further, in
Germany and Russia particularly, the military establishment began to have a greater
influence on public policy. This increase in militarism helped push the countries involved
into war.

Nationalism

Much of the origin of the war was based on the desire of the Slavic peoples in Bosnia
and Herzegovina to no longer be part of Austria-Hungary but instead be part of Serbia.
This specific essentially nationalistic and ethnic revolt led directly to the assassination
of Archduke Ferdinand, which was the event that tipped the scales to war.
 But more generally, nationalism in many of the countries throughout Europe contributed
not only to the beginning but to the extension of the war across Europe and into Asia.
As each country tried to prove their dominance and power, the war became more
complicated and prolonged.

Assassination of Archduke Franz Ferdinand

The immediate cause of World War I that made the aforementioned items come into
play (alliances, imperialism, militarism, and nationalism) was the assassination of
Archduke Franz Ferdinand of Austria-Hungary. In June 1914, a Serbian-nationalist
terrorist group called the Black Hand sent groups to assassinate the Archduke. Their
first attempt failed when a driver avoided a grenade thrown at their car. However, later
that day a Serbian nationalist named Gavrilo Princip shot the Archduke and his wife
while they were driving through Sarajevo, Bosnia which was part of Austria-Hungary.
They died of their wounds.

The assassination was in protest to Austria-Hungary having control of this region:

Serbia wanted to take over Bosnia and Herzegovina. The assassination of Ferdinand
led to Austria-Hungary declaring war on Serbia. When Russia began to mobilize to
defend its alliance with Serbia, Germany declared war on Russia. Thus began the
expansion of the war to include all those involved in the mutual defense alliances.

EFFECTS of World War I

 WW1 caused the downfall of four monarchies: Germany, Turkey, Austria-Hungary and
Russia.
 The war made people more open to other ideologies, such as the Bolsheviks that came
to power in Russia and fascism that triumphed in Italy and even later in Germany.
 WW1 largely marked the end of colonialism, as the people became more nationalistic
and the one country after the other started colonial revolts in Southeast Asia, the Middle
East and Africa.
 The war changed the economical balance of the world, leaving European countries
deep in debt and making the U.S. the leading industrial power and creditor in the world.
 Inflation shot up in most countries and the German economy was highly affected by
having to pay for reparations.
 With troops traveling all over the world, influenza was spread easily and an epidemic
started which killed more than 25 million people across the world.
 With all the new weapons that were used, WW1 changed the face of modern warfare
forever.
 Due to the cruel methods used during the war and the losses suffered, WW1 caused a
lot of bitterness among nations, which also greatly contributed to WW1 decades later.
 Social life also changed: women had to run businesses while the men were at war and
labor laws started to be enforced due to mass production and mechanization. People all
wanted better living standards.
 After WW1, the need for an international body of nations that promotes security and
peace worldwide became evident. This caused the founding of the League of Nations.
 WW1 boosted research in technology because better transport and means of
communication gave countries an advantage over their enemies.
 The harsh conditions of the Treaty of Versailles caused a lot of dissent in Europe,
especially on the side of the Central Powers who had to pay a lot for financial
reparations.
World War I saw a change in warfare, from the hand-to-hand style of older wars to the
inclusion of weapons that used technology and removed the individual from close
combat. The war had extremely high casualties over 15 million dead and 20 million
injured. The face of warfare would never be the same again.

WORLD WAR 2
World War II was the biggest and deadliest war in history, involving more than 30
countries. Sparked by the 1939 Nazi invasion of Poland, the war dragged on for six bloody
years until the Allies defeated Nazi Germany and Japan in 1945.

CAUSES OF WORLD WAR 2 (Parkin, 2018)

The Treaty of Versailles and the German Desire for Revenge

German combatants had felt betrayed by the signing of the armistice at Compiègne on 11
November 1918 amidst domestic political unrest that was driven by a civilian context of war
fatigue and hunger. Some of the high-profile agitators at this time were left-wing Jews, which
fuelled the conspiracy theory of a Jewish Bolshevik disloyalty that later gained so much
traction as Hitler laid the psychological groundwork in preparing Germany for another war.
The devastating experience of the First World War left the victorious nations and their people
desperate to avoid a repeat. At the insistence of the French, the terms of the Versailles Treaty
were punitive in the extreme and left Germany destitute and its people feeling victimized.

Economic downturns
Economic downturn can always be relied upon to create conditions of civil, political and
international unrest. Hyper-inflation hit Germany hard in 1923-4 and facilitated the early
development of Hitler’s career. Although recovery was experienced, the fragility of the
Weimar Republic was exposed by the global crash that hit in 1929. The ensuing Great
Depression in turn helped to create conditions, such as widespread unemployment, that
facilitated the National Socialist Party’s fatal rise to prominence.

Nazi ideology and Lebensraum

Hitler exploited the Treaty of Versailles and the dents in German pride that it and defeat in
war had created by instilling a renewed sense of (extreme) national pride. This was
predicated in part by ‘us and them’ rhetoric that identified the German nation with Aryan
supremacy over all other races, amongst whom particular disdain was reserved for the Slavic,
Romany and Jewish ‘Untermenschen’. This would have dire consequences throughout the
years of Nazi hegemony, as they sought a ‘final solution’ to the ‘Jewish question’. As early as
1925, through the publication of Mein Kampf, Hitler had outlined an intention to unite
Germans across Europe in a reconstituted territory that included Austria, before securing vast
tracts of land beyond this new Reich that would ensure self-sufficiency. In May 1939 he
explicitly referred to the oncoming war as being bound up with the pursuit of the ‘Lebensraum’
to the east, with this referring to the whole of Central Europe and Russia up to the Volga.

The Rise of Extremism and the Forging of Alliances

Europe emerged from World War One a very changed place, with swathes of political ground
being taken up by players on the extreme right and left. Stalin was identified by Hitler as a key
future adversary and he was wary of Germany being caught territorially between the Soviet
Union in the east and a Bolshevik Spain, together with a leftist French government, in the
west. Thus, he chose to intervene in the Spanish Civil War in order to bolster the right-wing
presence in Europe, whilst trialing the effectiveness of his new air force and the Blitzkrieg
tactics it could help deliver. During this time the friendship between Nazi Germany and
Fascist Italy was strengthened, with Mussolini also keen to protect the European right while
gaining the first place from which to benefit from German expansionism. Germany and Japan
signed the Anti-Comintern Pact in November 1936. The Japanese increasingly distrusted the
West following the Wall Street Crash and held designs on subjugating China and Manchuria
in a manner that echoed Nazi objectives in the east of Europe. Superficially, the most unlikely
of diplomatic agreements was established in August 1939, when the Nazi-Soviet non-
aggression pact was signed. In this act the two powers effectively carved up the perceived
‘buffer zone’ that existed between them in Eastern Europe and paved the way for the German
invasion of Poland.

The Failure of Appeasement

American isolationism was a direct response to the European events of 1914-18 that the US
had ultimately become embroiled in. This left Britain and France, already terrified by the
prospect of another war, without a key ally in world diplomacy during the tense interwar
period. This is most commonly highlighted in relation to the toothless League of Nations,
another product of Versailles, which patently failed in its mandate to prevent a second global
conflict. Through the mid-1930s the Nazis re-armed Germany in spite of the Treaty of
Versailles and without sanction or protest from Britain or France. The Luftwaffe was founded,
Naval forces were expanded and conscription was introduced.
 World War II and ITS EFFECTS (Amadeo,2020)
 The Allied nations won. Of those, the United States and the Soviet Union gained the most.
 The war solidified the role of the U.S. superpower that had begun in World War I. The 1944
Bretton Woods agreement established a new global monetary system. It replaced the gold
standard with the U.S. dollar as the global currency. It established America as the dominant
power since it was the only country with the ability to print dollars.
 The agreement also created the World Bank to help emerging market countries to reduce
poverty. The International Monetary Fund provides technical assistance and short-term loans to
prevent financial crises in member countries.
 In 1945, the Allies created the United Nationsto prevent another world war. In 1949, the North
Atlantic Treaty Organization was founded to protect European nations from threats by
communist countries.
 The Soviet Union took over the eastern European countries it had liberated from the Germans.
The war strengthened Joseph Stalin's rule.52The German annihilation of Soviet people created
a "never again" mentality that led to the Cold War.
 With other countries focused on rebuilding, America and the Soviet Union engaged in the Cold
War power struggle. The nuclear bomb set up the necessity of detente to prevent global
annihilation.

Other Impacts of World War II

 Since then, developed countries haven't fought each other. Most wars have been civil wars, often
assisted by foreign countries.
 Allied forces controlled the countries and territories of the Axis powers. Millions of Germans and
Japanese were forced out of the territories they lived in and sent back "home." The victors
dismantled their former enemies' ability to make war by dismantling factories.
 East and West Germany were divided, as was Berlin. The U.N. Partition Plan for Palestine led
to Israel's independence in 1948. President Truman said it was a matter of justice for the Jewish
people.
 In 1941, Germany and Italy split up Yugoslavia into Croatia, Bosnia, and Herzegovina.53
 North and South Korea were divided, which led to the Korean War. The war led to a four-year
civil war in China that allowed communism to take power.
 The Bengal Famine led to India's uprising and independence from Great Britain. Japan's
occupation of the Dutch East Indies led to the formation of an independent Indonesia.

Ideas Shaping the World

The beginning of the early 1800smark the birth of ideology that shapes the world as to what it is
today. The French Revolution that reached the Philippines, contributed to the awakening of
nationalism. It is manifested in the writings of our national heroes like Jose Rizal through his
writings, Noli Me Tangere and El Filibusterismo.
The birth of liberalism which meant to change the old order of things and to support the popular
rule, and reforms in politics and society. Remember that the world was governed by Colonial
Empires such as the Roman Empire which holds the religious and political power in most of
Europe, the French Empire, Spain, and Britain. Liberals support ed the principle of nationalism
because they seek independence from foreign control.
Another political ideology the conservatism, on the other, resisted change. They supported the
old traditions of political and social order. Edmund Burke, an English statesman condemned the
French Revolution because according to him, it destroyed monarchy and traditions. Unlike
liberalism, conservatism suppressed nationalism because it threatened to upset the traditional
political order.

Immanuel Kant (1795):

“For states in their relation to each other, there cannot be any reasonable way out of the
lawless condition which entails only war except that they, like individual men, should give up
their savage [lawless] freedom, adjust themselves to the constraints of public law, and thus
establish a continuously growing state consisting of various nations which will ultimately
include all the nations of the world.” What does this mean? Agreements among states
merely avert war and Nations needed to give up their freedom and subject themselves to a
larger system of law (analog with citizens in a country). A form of global government needed
to create and enforce these laws.

Jeremy Bentham (1748 – 1832)

He coined the term “international” in 1780 “International law”: law between states “The end
that a disinterested legislator upon international law would propose to himself would … be the
greatest happiness of all nations takes together.”
He advocated the creation of international law that would govern inter-state relations.
Bentham believed that objective global legislators should aim the propose legislation that
would create the greatest happiness of all nations taken together.
Giuseppe Mazzini (1805-1872)
Mazzini’s Nationalist Internationalism
He was an architect of Italian unification, ardent nationalist, and major critique of the
Metternich system.
He is the first one to reconcile nationalism with universal internationalism. He also believed in
a Republican government without kings, queens and hereditary succession and proposed a
system of free nations that cooperated with each other to create an international system. For
him, free and independent states would be the basis of an equally free, cooperative
international system.

US President Woodrow Wilson (1856-1924)

Wilsonian Internationalism
Nations were subject to the universal laws of God, which could be discovered through reason
Principles include self-determination, democratic government, collective security, international
law, and a league of nations. “I am proposing, as it were, that the nations should with one
accord adopt the doctrine of President Monroe as the doctrine of the world: that no nation
should seek to extend its polity over any other nation or people, but that every people should
 be left free to determine its polity, its way of development—unhindered, unthreatened,
unafraid, the little along with the great and powerful.”

Global Politics and the Formation of the United Nations

The 20th century marked as the “age of international organization. The ideas of Wilson,
Kant, and Mazzini became the foundation in the formation of League of Nations which was
founded in the 1919 Paris Peace conference after WW1. The role of this organization is to
maintain world peace through international arbitration, eventually, this leads to the birth of task-
specific international organizations like the WHO and the ILO (international civil service).

The formation of the international organization was challenged by the ideology of Socialist
internationalism, like socialism, is an ideology that sees workers of the government should own
and control the means of wealth for the benefit of all the people not just for a few (Zaide and
Zaide, 2015) Karl Marx (1818-1883) believed that “Workers of the world should unite” and that
“The proletariat has no nation”

The Socialist International (1889-1916)

The organization of labor and socialist parties, mainly in Europe, were able to achieve
Achievements: 8-hour working day, International Women’s Day, May 1. Its parties became major
players in the electoral politics of Europe, eventually collapsed in 1916 as its member parties
supported the war efforts of their respective states

Communist International (Comintern),1919-1943

This was a product of the Bolshevik victory in Russia. Lenin’s tool to promote revolution
Central body for all Communist Parties across the world, Dissolved in 1943 to appease Allied
Powers

The Comintern and the Third World

Lenin: “Monopolies, oligarchy, the striving for domination and not for freedom, the
exploitation of an increasing number of small or weak nations by a handful of the richest or most
powerful nations — all these have given birth to those distinctive characteristics of imperialism
which compel us to define it as parasitic or decaying capitalism.”

Ho Chi Minh:“ You must excuse my frankness, but I cannot help but observe that the
speeches by comrades from the mother countries give me the impression that they wish to kill a
 snake by stepping on its tail. You all know today the poison and life energy of the capitalist snake
is concentrated more in the colonies than in the mother countries… Yet in our discussion of the
revolution, you neglect the colonies, while capitalism uses them to support itself, define itself, and
fight you.”

The Major Challenge to Internationalism: Fascism

The rise of Hitler’s supreme power in Germany resulted in a new global order. The
government controls the resources which are vital in the economic and political process. This lead
to colonization of different parts of the world with Japan and Italy as their ally. He advocated the
primacy of ethnic majorities and a regional sphere of influence.

The Formation of the United Nations aims to preserve peace after the war, reinforced
principles of sovereignty and non-intervention, it reflected the postwar balance of power

Security Council is to maintain peace and security Permanent 5 has veto (vestiges of the
Concert). UN took over the duties of the League, grew larger than the league because of
decolonization.

GENERAL INORMATION ABOUT UNITED NATIONS

The United Nations (UN) was created in 1945 by the Allied Powers, the victors of the
Second World War. The mandate of this organization is to maintain international peace
and security and to foster international cooperation in addressing humanitarian and,
social, economic and cultural issues. This is the only organization that can authorize the
use of force against aggressor. On the other hand, UN can be a conflict actor in itself or
an instrument for action driven by the interests of particular states. It also comprises of
six principal organs in which the objectives of the UN are being carried out. Among the
six organs of the UN, the Security Council is considered as the most potent organ with
the power to make legally binding resolutions and comprises of the strongest military
states.
Functions the Security Council
 To veto a substantive resolution.
 To determine the existence of a threat to the peace or act of aggression and to
recommend what action should be taken.
 To investigate any dispute or situation that might lead to international friction.
 To implement sets of instruments or intervention to maintain peace and order.
(sanctions, peacekeeping and peace enforcement)
The SC is composed of 15 member, five of them are considered as the five permanent
members (PM) and the rest are considered as the non-permanent members of the
council. The five permanent members are all allies of the Second World War, and are
 nuclear states. The other 10 non-permanent members of the council are elected by the
General Assembly for overlapping two-year terms.
The Purpose of UN Sanctions
 to change undesirable behavior (e.g. Syria);
 to limit opportunities for undesirable behavior (e.g. Iran, extensive restrictions on
technology/knowledge in the nuclear sector);
 to deter other countries from choosing an undesirable course of action.
Functions the Economic and Social Council
 Responsible for the direction and coordination of the economic, social humanitarian
and cultural activities carried out by the UN. It is also the largest and most complex
subsidiary body.
 This organ is supported by WB and IMF.
Functions the Trusteeship Council
 To supervise the administration of territories as they transitioned from colonies to
sovereign nations.
Functions the International Court of Justice
 To settle legal disputes between states (contentious cases) and provides advisory
opinions on legal questions referred by the UN organs and specialized agencies, in
accordance to international law.
Functions the General Assembly
 The only UN organ with universal representation with all 193-member states
represented in the body. This remains to be the primary decision maker of the UN.
Functions the Secretariat
 To carry out the substantive and administrative work of the United Nations as
directed by the General Assembly, the SC and other councils.
Although the UN is an organization that ensures peace and security and resolves conflicts,
there are issues that arise inside this organization. Gould and Rablen (2017) state two distinct
sets of criticisms relating to the efficiency of the council and the degree of equity regarding
power allocation. For the inequity in the country level, the problem lies in the over-
representation of the PM countries; in the regional level, there is lack of representation for Asia
and Africa while Eastern and Western Europe are over-represented – an overt manifestation of
the North and South Divide. Thus, different reforms have been raised to change the structure
particularly the Security Council to distribute the concentration of power and to foster inclusive
decision-making for marginalized and excluded member-states.
 TCW MODULE 3 Global Divides
Defining Global North and Global South

Geographically speaking, the term North referring to the countries belonging in the
Northern hemisphere, which includes the Western countries America, Europe and Africa, while
on the other hand, South referring mostly to the Asian countries. Sawe (2017) pointed out that
in the contemporary world, the global division use to categorize the countries level according to
its socio-economic and political stability and not just of it geographical location.

The International Monetary Fund and World Bank use mechanisms in determining the
level of development among countries, such as the GDP income per capita, level of
industrialization, and infrastructure and technological advancement. Non- economic factor such
as Human Capital Investment (HDI), which quantifies the country’s level in terms of quality of
education, literacy, and health are also use in determining the degree of economic
development (Majaski, 2019).

What is Global North in the Contemporary World?

Global North refers to countries that are politically and economically stable, also
referred as “rich” and “develop countries”, more economically develop countries MEDC’s, this
includes the members of Group of 8 or the “G8” (United States, France, Russia, Germany, Italy,
United Kingdom, Canada, and Japan). But in 2014, Russia was indefinitely suspended from the
group after annexing Crimea, an autonomous public of Ukraine, G8 is now referred as
G7. (Liberto, 2020).

What makes the Global North “rich” and “develop”? Genrally, this countries have good
economic standing, better quality living and quality of life (Ferrer, 2018).

What is Global South in the Contemporary World?

Global South refers to the “underdeveloped countries”, “developing” the “poor side”
and “Third World Countries Butler (2020). These are mainly underdeveloped agricultural
countries of Asia, Africa and Latin America. Generally, countries that suffer from high poverty,
high child mortality, low economic and educational development, and vulnerable to exploitation
by large corporations and industrialized nations, and they have high foreign debts levels.
When and How the Concept Begun

The Rise of Colonialism

As early as the 17th century, during the age of exploration and colonization, the world was
divided into West and East by Spain and Portugal. They compete in exploring the world for the
purpose of finding gold and silver, since this is the means of measuring the wealth and power of
a nation.

This competition led to the signing of Treaty of Tordesillas, were they divide the exploration
route to east and west. Spain explore most of the Asian countries like the Philippines in which it
was incidentally found, because originally they are looking for the Moluccas Island.

In the 19th and 20t century Britain and France was the leading colonial powers, they were able to
rule the whole African continent. The purpose now is not just to find gold and silver, but to
conquest established political and economic power. Britain established colonies in America, and
Asia, they founded the East India Company, Netherlands, Dutch East India Company, where in
they monopolize the trading and commerce in India.

The decline of Western Kingdoms, led to the global changes such as, the decline of monarchial
type of government system, abolition of monopoly in trading. New world order emerged when
America and Russia arose into power, such as introducing a new political, governmental and
economic system, America pursuing democracy and capitalism, while on the other hand, Russia
pursued the socialism and communism.

After WWII, colonize countries were given freedom and establish its own government and secure
its sovereignty but they still dependent to powerful nations like America in terms of economics
and governance.

The Cold War

The Cold War (1946-1991) was consider as global battle for supremacy between United States
of America and democratic countries on the other hand, the Soviet Union and its communist allied
countries. Cold War was a war fought by means of propaganda and secret tactics and not by
direct war between the super powers. It is also a clash of ideas or political ideologies between
democracy and communism.
What is the Connection of Cold War in the Global Divides?

During this time, countries are being categorize according to its alignment between
Russia-East and the America- West. After the fall of Russia, they were classified as
Second World Country together with China. America now was classified as First World
Country together with European countries. This categorization left out many countries
which were poorer than First World and Second World countries. This “poorer” countries
were categorized now as the Third World countries. In the contemporary world, global
north comprises of countries belongs to more economically developed countries MEDC’s
on the other hand global south comprises of countries belongs to least develop countries
LEDC’s. But there are exceptions like Australia, New Zealand, Japan, Singapore, and
South Korea,

CHARACTERISTICS OF GLOBAL NORTH AND SOUTH

Characteristics of the North Characteristics of the South

¼ of the world’s people ¾ of the world’s people

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

Average life expectancy more than

Average life expectancy of 50 years
70 years

1/5 or more suffer from hunger and

Most people have enough to eat
malnutrition

½ of the people have little chance of any

Most people are educated
education

Over 90% of the world’s Less than 10% of the world’s

Manufacturing industry manufacturing industry

 About 96% of the world’s spending 4% of the world’s research

on research and development Development

Why is that, as you go more on Southern part of the world it becomes poor and less
developed? And as you go Northern, becomes richer and developed?

There are theories that explains this situation of the world.

I. Functionalist Perspective of Inequality

 It is a belief that "inequalityis not only inevitable but also necessary for the smooth
functioning of society.”
 Economic inequality, is the unequal distribution of income and opportunity between
different groups in society. It is a concern in almost all countries around the world and
often people are trapped in poverty with little chance to climb up the social ladder
 Social inequality, is the issue pertaining to the lack of housing, health care, education,
employment opportunities, and status
II. Modernization theory
 The Modernization theory posits that countries go through evolutionary stages and that
industrialization and improved technology are the keys to forward progress.
 Low-income countries are affected by their lack of industrialization and can improve
their global economic standing through:
o An adjustment of cultural values and attitudes to work
o Industrialization and other forms of economic growth (Armer and Katsillis, 2010)
 First countries to adopt modern technologies, attitudes, and institutions will turn to be
the most wealth and successful
 Countries that hold on to traditional views and process will fall behind until modern
corporations and novel technological advancements eventually overtake traditional
institutions.
III. Dependency Theory
 According to dependency theory, global inequality is the result of core nations exploiting
resources and labor in peripheral and semi-peripheral countries, creating a cycle of
dependence. As long as peripheral nations are dependent on core nations for economic
stimulus and access to a larger piece of the global economy, they will never achieve
stable and consistent economic growth.
 Can be defined as an explanation of the economic development of a state in terms of
external influences- political, economic, and cultural- on national development policies
(Raúl Prebisch)
 Colonial imperialism, Exploits other countries by excessive exportation of resources,
taking additional profits and controlling through neo-colonialism
 Poverty is created as a result of capitalism, imperialism, and colonialism
IV. Neoliberalism Theory
 Policy model—bridging politics, social studies, and economics—that seeks to transfer
control of economic factors to the private sector from the public sector. It tends towards
free-market capitalism and away from government spending, regulation, and public
ownership.

Furthermore, countries that have a high Human Development Index, GDP income
per capita, with technological advancement most likely offer a quality of living among its
people. The pursuit of happiness may vary among people, it can be quantify according to
the quality of life, such as material wealth, good health, quality education, which are the
result of good governance. The Worlds Happiness Report in 2019, focuses on happiness
and the community, how happiness has evolve over the past dozen years, with a focus
on the technologies, social norms, conflicts and government policies that have driven
those changes. The Top 10 happiest countries in the world are:

1. Finland
2. Denmark
3. Norway
4. Iceland
5. Netherlands
6. Switzerland
7. Sweden
8. New Zealand
9. Canada
10. Austria

Asian Regionalism
Regionalization refers to "societal integration and the often undirected process of
social and economic interaction." There is a regional concentration of economic flows
and countries respond economically and politically to globalization in various ways.

Regionalism refers to the formal process of intergovernmental collaboration between

two or more states. It is a set of conscious activities carried out by states within a region
to cooperate while regionalization is a less conscious process which is the outcome of
these states policies. It is more on political process characterized by economic policy
cooperation among countries.

Combining these concepts, Asian regionalism is a product of societal integration

brought by the undirected process of social and economic interaction. Asian regionalism
focuses on economic interaction, whereby the countries adopt the principle of free flow of
goods and services which are coordinated with foreign economic policies between
countries. Long before the colonization and emergence of globalization, they had
developed interaction between Asian regions, this manifest in early trading through Barter
System. Fine textiles, silk, gold and other metals are valuable products.

The Silk Road is another breakthrough in the development of trading and commerce not
just among Asian people but and to the rest of the world. This is a trading route connecting
East to West (Gregorio Zaide and Sonia Zaide, 2015).

ASIAN REGIONALISM

In the recent years, integration and development in Asian region has been the center of
discussion among Asian leaders. Geopolitics, economic alliances, and forming
international organizations at par with other regions in the world are the key measure in
forming regionalism among Asia countries. This also contributed in forming a new global
order.

What is the Foundation of Asian Regionalism?

 We can understand the foundation Asian regionalism through historical approach.

The first phase was the First Asian Relations Conference in 1947 and 1949 India
convened which. The primary aim of the conference was to create political pressure for
decolonization and to give a collective voice or identity to the nationalist aspirations and
newly independent countries of Asia

 The chief point of this phase was the Asia-Africa conference in Bandung, Indonesia in
1995. The purpose goes beyond decolonization to developing rules of conduct in
international affairs and exploring ideas and avenues for economic cooperation. These
conferences discuss matters in line with political security and economics, but this
also resulted to contest on economic nationalism and economic liberalism as understood
 in development countries to advance free trade (Acharya, 2012). At this point, you can
understand that slow Asian region forming cooperation to achieve a specific goal.

 The second phase of the development of Asian regionalism was the formation of ASEAN
and the Pacific community notion. Prior to this, United States and Japan plays a vital role
in forming regionalism, US sought to create security and economic regionalism, Japan
focus on economic, with security being an indirect goal, a by-product of economic
cooperation.

 The rising urgency of regionalism, motivated by globalization cooperation among

neighbouring countries, takes into its full take off when ASEAN was formed. Just like the
other regions in the world, Asia establish an international organization that will support the
welfare and development of the region. The ASEAN Association of Southeast Asia
Nations, under the banner of cooperative peace and prosperity, its chief projects centre
on economic cooperation, the promotion of trade among ASEAN countries and the rest of
the world. (Moon, 2003)

 The Post-Cold War motivated the third phase of the development of Asian regionalism.
ASEAN during this time remained the centre of regionalism, to develop strong economic
ties among nations, ASEAN Free Trade Area was formed, and the establishment of
ASEAN Regional Forum, this was the first multilateral security organization, security is
defined not in military or collective defense, but as cooperative security measures aimed
at developing confidence and avoiding conflict among Asian nations and the rest of the
world.
What is Now the Standing of Asia as a Region?
(Asia Pacific & South Asia: Northeast Asia, SEA, Pacific Islands, South Asia)

Diversity: most progressive: South K, Japan, and Singapore

Poorest Countries: Cambodia, Laos, Nepal

Most populated: China and India

 World’s smallest: Bhutan and Maldives

1/3 of the world's land mass

2/3 of the global population
Largest share of global GDP (35%); USA 23%;
As a region: Europe 28%
Over 1/3 of world's exports
Prevalence of poverty, HIV/AIDS, gender
inequality and other socio econ problems

Why Do We Need to Form Alliances?

(Claudio, Lisandro and Patricio Abinales, 2018)

Military Defense purposes

North Atlantic Treaty Organization (NATO) -Formed during cold war when several
Western European countries plus the United States agreed to protect Europe against the
threat of the Soviet Union
Response of Soviet Union:
WARSAW Pact- regional alliance created by Soviet Union
- comprise Eastern European Countries under Soviet Domination
RESULT: Soviet imploded in December 1991, but NATO remains in place

Pool Resources

This is to get better returns for their exports and expand leverage against trading partners

Sample Organization:
 Organization of the Petroleum Exporting Countries (OPEC)-established in 1960 by
Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to regulate the production and sale of
oil.
 Protect Independence from the Pressures of Super Power Politics
Example:
NON-ALIGNED MOVEMENT- created by the Presidents of Egypt, Ghana, India,
Indonesia and Yugoslavia in 1961. (120 members) the prime goals to pursue world
peace and international cooperation, human rights, national sovereignty, racial equality,
non- intervention and peaceful conflict resolution.

Economic Crisis Compels Countries to Come Together

Example #1:
-Thai economy collapsed in 1996. Troubled international banks demanded that the Thai
government pay back its loans.
-Crisis spread to Asian countries. IMF tried to reverse the crisis, but it was only after
ASEAN countries along with China, Japan and South Korea agreed to establish an
emergency fund to expect a crisis that the Asian economies stabilized.
Example #2:
ASEAN- formed as a coalition country which were pro-American and supportive of the
United States intervention in Vietnam. After Vietnam War, it continued to act as a military
alliance to isolate Vietnam after it Invaded Cambodia resulted to the beginning of
Economic Cooperation.

ASIAN REGIONALISM IN THE CONTEMPORARY TIMES

Asian regionalism change across time, from forming political regional alliances to
economic integration. Formation of the regional trading bloc, free trade, and forming an
international organization that will support the development of each Asian country. The
Post- Cold War resulted to the formation of "new regionalism", those who shares the same
values, norms, institutions, and systems that exist outside of the traditional, established
mainstream institutions and systems. The key factors in the "new regionalism" are the
collaborative multi-level governance, innovation and learning, integrated development,
rural-urban interactions and place-based development.

For example:
ASEAN issued its Human Rights Declaration in 2009, but the regional body left it to
member countries to apply the declaration's principle as they see fit.
ASEAN PARLIAMENTARIANS FOR HUMANRIGHTS resulted to non-governmental
organizations and civil society groups pushing to prevent discrimination, uphold political
freedom, and promote democracy and human rights throughout the region.
 But despite of the positive impacts brought by the regionalism there are certain instances
where it encounters problems and conflicts. On the other hand, before we proceed on
identifying problems let’s first define the difference between the new regionalism from
state to state regionalism for us to have a firm grasp of the lesson.

DIFFERENCE OF NEW REGIONALISM TO STATE-TO-STATE REGIONALISM WHEN IT

COME TO IDENTIFYING PROBLEMS

(Claudio, Lisandro and Patricio Abinales, 2018)

STATE TO STATE REGIONALISM NEW REGIONALISM

New Regionalism advocates such as NGO

States treat poverty or environmental Global Forum see the issues as reflections of
degradation as technical or economic issues flawed economic development and
that can be resolved by refining existing environmental models. By flawed means
programs of state agencies, making minor economic development plans that are
changes in economic policies and creating market-based, profit driven, and hardly
new offices that address these issues concerned with social welfare, especially
among the poor

NEW CHALLENGES FOR NEW REGIONALISTS

1. Disagreements surface over issues like gender and religion

Example:

Pro-choice NGOs breaking from religious civil society groups that side with the
Church, Muslim imams, or governments opposed to reproductive rights and
other pro-women policies

2. Some civil society groups are not welcoming to the new trend and set up an obstacle after
another.

Example:

Migrant Forum Asia and its ally, the Coordination of Action Research on AIDS
(CARAM), lobbied ASEAN governments to defend migrant labor rights. Their
program of action however, slowed down once countries like Malaysia, Singapore
 and Thailand refused to recognize the rights of undocumented migrant workers
and the rights of the families of migrants.

CONTEMPORARY CHALLENGES

I. Resurgence of militant nationalism and populism

Example:

1. The refusal to dismantle NATO after the collapse of the Soviet Union for example, has
become the basis of the anti-NATO rhetoric of Vladimir Putin in
2. The relationship of United States- the alliance's core member- with NATO has become
problematic after Donald Trump demonized the organization as simply leeching off
American military power without giving anything in return.
II. Continuing financial crisis of the region

Example:

1. European Union. Continuing financial crisis of the region is forcing countries like
Greece to consider leaving the union to gain more flexibility in their economic policy;
2. Anti-immigrant sentiment and a populist campaign against Europe have already led
to the United Kingdom voting to leave the European Union in a move the media has
termed “BREXIT”
III. Sacrificing sovereignty to maintain regional stability

Example:

-Philippines and China

IV. Differing visions of what regionalism should be for
Example:
-Non-Western and developing societies have different view regarding globalization,
development and democracy
-Singapore, China and Russia see democracy as an obstacle to the implementation and
deepening of economic globalization because constant public inquiry about economic
projects and lengthy debates slowdown implementation or lead to unclear outcomes:
DEMOCRACY=EFFICIENCY.