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A Term Paper

Presented to:

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Economics Teacher
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As a requirement for the

Fourth Quarter in

Economics subject

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Presented by:

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March 2011
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The researcher wanted answers to the following questions:

1. What is globalization? What are its concepts? What are its characteristics? How globalization did
takes place?

2. What are the elements of globalization?

3. What are the types of globalization?

4. What are the agencies responsible for the globalization of the economy?

5. What are the effects of globalization in the world economy? What are the advantages and
disadvantages of globalization?

6. What is globalization according to Filipino economists? What are its advantages and disadvantages
in the Philippine economy?

  

Vn the world nowadays, our economy has been undergoing a major change in the face of the
world economy. Our country has since been economically developed after several economic crises,
and political, social and religious events through the test of time, and our economy during the colonial
times up to the time of Marcos(except During WWVV, our country has been one of the countries to
have an advanced economy. But during and after the Martial Law era, our economy had been slipped
up and succumbing it to economic collapse. Now, from the 20th century, our economy had been
improving. Why? Vt is because of GLOBALVATVON. Globalization has been one of the reasons why
our country had been economically recovered and developing, and most producers produce more
goods and most consumers had been consuming more goods. Moreover, globalization also takes place
with the development in technology and the growing business corporations and economic trade
partners, and this had contributed a lot to globalization. Nowadays, globalization didn¶t take its place
in the Philippines, but also in many countries as well.

Now, V¶ll ask you a question. Have you ever gotten a chance to shop in a mall? What do you
notice every time you enter one? Vmported products in almost all brands are available in our very own
malls. Almost all known establishments are found here. Vt¶s also noticeable that people are increasingly
getting fond of communicating via modern technology. These are made possible by the ever
growing
number of huge telecommunications companies in the country. Vt is even easier to contact people
abroad than to reach our relatives and friends in the far
flung provinces.

Because of these new technologies in communication, we¶re able to know in an instant the
events taking place in the other side of the world through cable T . Was it not through this that we
immediately learned about the 9/11 event? Things were changing too fast, and a lot of them.
Meanwhile, a lot of changes can be observed in the countryside: rice fields turned into subdivisions,
golf parks, theme parks, and even cities. The rest of farmlands are reserved for the growth of fruits and
flowers. But, what is more surprising is the massive importing of food for local consumption. There
had been a lot of changes taking place not only in our country, but in the whole world, and this has
been noticeable since the µ80s, and it persists up to nowadays. These might be an offshoot of
GLOBALVATVON.

According to Chua and Gonzales (2005, although man has the capability to live on its own,
man cannot remove the need to communicate with others in order to love and to be with. So, it is then
when from being independent to become interdependent. Vt means that man has the capability to decide
on what one must do, that has some consideration on the needs of others. Sometimes, if what we did in
a small way can be as a whole. Vf this happens to an individual, there is a big possibility that it might
happen to the society and to all mankind. This might be the reason why the present civilization might
communicate with others, and this might be a reason to set up the concept GLOBALVATVON. During
the 20th century, during the time when modern technology was invented that help communicate with
others globally, we cannot deny the truth that we must be ready in order to succeed in the
Globalization period.

But, what does globalization mean? When, where and how did it start? What are the elements
and types of globalization? What are the effects of globalization in the world economy, and in our
country? What are its advantages and disadvantages of globalization in the world economy, and in our
economy? We will find out, as we go on.




The objectives for this term paper are the following:

1. To define globalization and the concepts related to globalization, its characteristics and history;

2. To understand and analyze what are the elements of globalization, and its concepts, with its types;

3. To know, understand and analyze what are the effects of globalization in the global economy;
4. To know and analyze what are the advantages and disadvantages of globalization in the world
economy; and

5. To know what is the globalization in our country, and its advantages and disadvantages.

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According to Nuevo et.al.(2007, globalization implies the restricting or setting of a new global
economic order. There is a need of the global economy to be
restricted in order to respond to the economic crisis that is
faced by capitalist countries of the whole capitalist countries
as a whole. The capitalist system is in a serious crisis and it
needs GLOBALVATVON in order to alleviate its problems.
Moreover, globalization has a lot of meanings. For those who
go with globalization, it is both a natural and inevitable
phenomenon in history. There¶s no other way in the global
economic system but for countries to be more integrated. On
the other hand, those who criticize (or against globalization believe that this is but an intensification of
the burden of poverty in Third World countries. Moreover, this isn¶t a natural phenomenon and
therefore, there are some other ways.

According to Wikipedia (2011, globalization is being seen as the process by which regional
economies, societies, and cultures that have been joined by a global network of political ideas through
communication, transportation and trade; it is mostly connected to the term economic globalization,
which is the integration of national economies into the international economy by trade, foreign trade
investment, capital flows, the migration of people, the modernization of technology, and military
presence.

Also, according to the United Nations Economic and Social Commission for Western Asia
(UN
ESCWA, they stated that it is a widely
used term that can be defined in many ways« if in
economics, it has something to do with the reduction and removal of barriers between national borders
in order to facilitate the flow of goods, capital, services and labor, although considerable barriers
remain to the flow of labor.
 According to Tom Palmer of the Cato Vnstitute, globalization is considered as the elimination or
diminution of state
enforced restrictions on exchanges across borders and the increasingly integrated
and complex global system of production and exchange that has emerged as a result. According to
Thomas Friedman, globalization is the impact of the flattening of the world, and argues that globalized
trade, outsourcing, supply
chaining, and political forces have changed the world permanently, for
better and worse. Moreover, he, he argued that the pace of globalization is rapid and will continue to
have an impact on business organization and practice.

According to Herman Daly, he argues the terms globalization and internationalization which is
being used interchangeably but there¶s a significant formal difference. The term internationalization
refers to the importance of international trade, relations, treaties, etc. owing to the (hypothetical
immobility of labor and capital between or among nations.

Finally, Takis Fotopoulos states that globalization is the result of systematic trends manifesting
the market economy¶s grow
or
die dynamic, following the rapid expansion of transnational
corporations.

Now, we will try to solve the following arguments that support globalization and critically
analyze the truth behind these:

A. According to Nuevo et. al. (2005, the only way out of the global recession is through the
strict implementation of a ³free market´. Theoretically, price equilibrium can be attained if the
dynamics of the forces of supply and demand will be left out on their own that is without government
intervention; in this way, all of those involved in the market
will benefit, mostly the producers, the middlemen and the
consumers. But, this only hides the fact that there¶s no such
thing as free market. The truth is, the global economy has
already been dominated and monopolized by a few
transnational corporations and banks (TNCs and TNBs. The
bottom
line is that ³free competition´ is only between these TNCs and financial institutions. The
integration of poor economies in this kind of competition would only mean the further marginalization
of workers and farmers, and consequently, cause the downfall of local production.

B. Globalization itself is the technological revolution which has brought people and countries
closer towards a ³global village´. According to globalization advocates, there will be more
opportunities and benefits from the advances of technology. One of its achievements is what we call
³the information superhighway´, which is when everyone can supposedly participate, by digital
communication system and the Vnternet. But actually, it is
wrong to equate globalization with technological
revolution. Although it is a major factor that speeds up the
process of globalization, it doesn¶t necessarily reflect the
essence of globalization. Nevertheless, we can still raise
some points on who compromises the ³majority´, who
supposedly benefits from these technologies. Vt is also
important to answer the question of ³who has access to
these technologies?´ although it¶s pretty obvious that
the information superhighway is limited to those who can afford the equipment as well as the cost of
being connected.

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According to studies, about 80% of the people around the world have no access to these
advance technologies, such as computers, telephone, satellite technology and many more. Based on the
table, the industrialized nations are more developed and have wider access to advanced technology;
while in the underdeveloped countries have less developed and has less access to advanced technology.
But what matters more than the question of access is the issue of who controls and gains from these
technologies. The truth is, only a few huge corporations own and control the latest technology.

Today, intellectual property rights (VPR is strictly being implemented. Vt means that anyone
who wants to access/benefit from these new innovations would have to pay for the patent rights first. a
good example is the Microsoft Company, which is owned by Bill Gates, one of the world¶s richest
people. Anyone who wants to install a Windows
based program in their computer would have to buy it
first from Microsoft or from any of its authorized distributors. With this, the income and profits of
giant corporations owning and controlling the technology will be secured.
 C. Globalization holds the promise of industrialization and economic development. Vt banners
the successes of the so
called ³tiger countries of Asia´ or
the newly
industrialized countries (NVCs of Asia (e.g.
South Korea, Taiwan, Singapore, Malaysia, Hong Kong,
etc.. The economic experience of these countries on
foreign trade, investments and exports has resulted to their
industrialization and development. At first glance,
advocates of globalization would seem right. Vsn¶t that these
NVCs are considered proofs of globalization s? success?
But if we will analyze closely, the existence of NVCs wouldn¶t necessarily mean success of the logic of
globalization. Any economic development of the NVCs could be attributed to speculative capital and its
role in export reprocessing of products for the transnational companies. Vn fact, there isn¶t a single
industrial based in these so
called NVCs. There¶s no industrialization that took place in these countries.
Their ³development´ is just only a product of the global capitalist system; which is a reason why
global economic crisis happened, that made these countries were immediately and severely affected.

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According to Stief (2010, the idea of globalization can simplified by identifying what are the
main characteristics of globalization. These are the following:

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What makes globalization possible is the ever
increasing capacity for and efficiency of
how people and things move and communicate. For the past many years, people across
the globe didn¶t have the ability to communicate and couldn¶t interact without difficulty.
Nowadays, new gadgets born from advanced technology, such as telephones, cell
phones, computer, and Vnternet can help a person send a call of a message, fax or show
live video conference call can be easily be used to connect people. Moreover, anyone
with enough budget can travel to other places and be in another part of the world in a
matter of time, by the means of transportation. Vn other words, the ³friction of distance´
is lessened and the world begins to become small.
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A general increase in awareness, opportunity and transportation technology has allowed
for people to move about the world in search of a new home, a new job, or to migrate to
others in case of danger. Most migration takes place within or between developing
 countries, possibly because of lower standards of living and lower wages pushes
individuals to place with a greater chance for economic success. Moreover, capital
(money is being moved globally with the ease of electronic transference and a rise in
perceived investment opportunities. Developing countries are a popular place for
investors to place their capital because of the enormous room for growth.
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The term diffusion simply means to spread out, and that is exactly what any new found
knowledge does. When a new invention or way of doing something pops up, it doesn¶t
stay secret for long. A good example of this is the appearance of automotive farming
machines in Southeast Asia, an area long home to manual agricultural labor. Based on
this, the diffusion of knowledge has something to do with the advancement of
information by education (e.g giving lectures that are related with academics and
technology and by Vnternet (e.g easy and accessible electronic information.
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