Lesson 2 Weeks 3 5 The Structures of Globalization 10 Sept 2021 For Class Sharing 1 PDF
Lesson 2 Weeks 3 5 The Structures of Globalization 10 Sept 2021 For Class Sharing 1 PDF
Lesson 2 Weeks 3 5 The Structures of Globalization 10 Sept 2021 For Class Sharing 1 PDF
GLOBALIZATION
LESSON I – THE GLOBAL ECONOMY
Learning Goals
• 1. Identify the global actors in economic globalization
• 2. define the modern international monetary system
• 3. articulate a stance on global economic integration
• 4. enumerate the four monetary regimes
• 5. identify the effects of economic globalization
• Economic Globalization
• Benczes (2014) defines economic globalization as the
increasing integration of economies around the world.
- movement of goods, services, and capital across borders.
- movement of people and knowledge across international
borders.
- movement of people and knowledge across international
borders.
• What makes economic globalization distinct from internalization is
that:
-is about the extension of economic activities of nation states across
borders while the former is functional integration between internationally
dispersed activities.
-economic globalizations rather a qualitative transformation than just a
quantitative change.
-globalization is indeed a complex, indeterminate set of processes operating very
unevenly in both time and space, a more substantive definition for economic
globalization is required than the one offered by the IMF.
-In economic terms globalization is nothing but a process making the world
economy an organic system by extending transnational economic process and
economic relations to more countries and by depending the economic
interdependence among them.
• Interconnected Dimensions of Economic Globalization
The globalization of :
1. trade of goods and services
2. financial and capital market.
3. technology and communication
4. production
NOTE: it does not deny relevance of “international”, “regional”, or “national”
levels, it refuses the assumption that the nation is the only unit of analyst
and that current trends in the world economy are redesign of the external
relation of interacting nation. Instead, it claims the economic activities and
processes can be interpreted only in a global context, in an integrated word
of economy.
To what extent is the nation state still a relevant factors is a major
topic of Current debates.?
• The G-10 could supply a substantial of financial resources, but there were
concerns that even G-10 resources were not sufficient to depend the
dollars if it came under attack, Indeed, a rush to change the dollar into
gold became more likely as the U.S. balance-of-payments deficits to
continued to increase. A series of measures were therefore adopted to
bolster the dollar, and the US sought to improve its balance of payments
by reducing capital outflows. In 1965 , for example the US impose limits
on foreign investment and loans by US firms and banks. Despite
• these efforts, US gold stocks fell from $22.7 billion on 1950 to $10.7 billion in
1970. Thus, by 1968 the dollar in the effect had become convertible into gold.
• The Flexible Exchange Rates Regime
• The Breton Wood agreement had outlawed freely floating exchange rates, so
all the major trading nations were “living in sin” by 1973. The IMF meeting
to Jamaica in January in 1976 finally legalized this situation by permitting
each government to decide whether to establish a par value for its currency
markets, and the market alone determine currency evaluations. In recent
years IMF members have in facts relied extensively on managed floating, in
which central banks intervene to deal with disruptive such as excessive
fluctuation in exchange rates. Although managed floating, or “manipulating
exchange rates. , , in order to prevent effective balance-of-payments
adjustment or to gain an unfair competitive advantage.” Today the monetary
regime is mixed in nature. Major industrial countries such as the US , Japan
and Canada (and a number of LDCs)) independently float their currencies,
the EU countries seek increase regional coordination of their policies: and
• many LDCs peg the value of their currencies to key currencies or
basket of currencies. It is not surprising that some observers refer
to the current system of monetary relations as a “nonsystem”.
• The move floating rates had an intellectual appeal for both
some liberals and realist. Orthodox liberals in particular argued
that floating rates were preferable because of adjustment of
international exchange rates would depend on market pressures
rather than government investment. Thus, as early as 1953, Milton
Friedman wrote a classic article favoring the establishment of “a
system of exchange rates freely determined in open market,
primarily by the private transaction, and the simultaneous
abandonment of direct controls over exchange transaction.”
Although some liberal feared that floating rates would lead to
• Instability because of speculative capital flows, as had occurred in
1930s, Friedman argued that instability during the 1930s had
resulted more fundamental economic and financial problem.
Ironically, floating rates were also appealing to some realist because
of the view that government would be able to adopt independent
monetary policies.
• In a fixed exchange regime, “monetary policy must be subordinated
to the requirements of maintain the peg, effectively eliminating the
discretion of authorities.” A floating regime by contrast “allows
monetary policy to be set autonomously, as deemed appropriate in
the domestic context (e.g. for stabilization purposes, and the
exchange rates because a residual, following whatever path is
consistent with the stabilization policy,. By the 1970s there were
additional reasons of liberal communist
• to favor a shift to floating rates. With the marked increase in capital
flows and speculative pressure , governments could no longer
defend fixed exchange rates and floating rates would contribute to
rapid adjustment of international payments imbalance in response to
market pressure (Cohn 2005)
GLOBAL ACTORS IN ECONOMIC GLOBALIZATION
1. International Government Organization (IGO) - It refers to an
entity created by treaty involving two or more nations, to work
in good faith, on issues of common interest. The IGO strive for
peace, security and deal with economic and social questions.
Examples include: The UN , the WB and on a regional level are
North Atlantic Treaty Organization (NATO) and Association of
South East Asian Nation (ASEAN) where the Phils. also belong.
2. International Non-Government Organization(NGOs) – The
NGOs work towards solutions that can benefit undeveloped
countries that face the backlash of economic globalization .
Classifies as any non-profit , voluntary citizen’s group which is
organized on a local, national
• or international level. NGOs perform various services and humanitarian
functions, bring citizen concerns to governments, advocate and monitor
policies and encourage political participation through provision of
information. Example of these are Red Cross, Greenpeace and Amnesty
International.
• 3. Multinational Corporations (MNCs) – MNCs are corporation which
have overseas branches. One of the many changes they have brought to
developing countries is increase in automation. Automation means the
use of various control systems for operating equipment such as
machinery with minimal or reduced human interventions. It may
damage less automated local firms and require workers to develop
new skills in order to transition into the changing economy , leaving
some behind. Corporation also outsourced in recent years. Example of
MNCs which are also present in the Philippines are Ford Motor Corp.,
Fujitsu, GE, GlaxoSmithKline, and Adidas.
THE EFFECT OF ECONOMICS GLOBALIZATION ON
DEVELOPING COUNTRIES
• Mohr (2017), states that financial and industrial globalization is
increasingly substantially and is creating new opportunities for
both industrialized and developing countries. The largest impact
has been on developing countries, who are now able to attract
foreign investors and foreign capital . This has both positive and
negative effect for those countries.
1. Increased Standard of Living – Economic Globalization gives
government of developing nations access to foreign lending. When
this funds are used in infrastructure including roads, health care,
education, and social services, the standard of living in the
country increases. If the money is used selectively , however, not
all citizens will participate in the benefits.
2. Access to New Markets – Globalization leads to freer between
countries. This is one of largest benefits to developing nations.
Home-grown industries see trade barriers fall and have access to
a much wider international market. The growth this generates
allows companies to develop new technologies and produce new
products and services.
3. Widening Disparity in Income – while an influx of foreign
companies and foreign capital creates a reduction in overall
unemployment and poverty, it can also increase the wage gap
between those who are educated and those who are not. Over
the longer term, education level will rise as the financial health of
developing countries rise, but in short term, some of the poor
become poorer. Not everyone will participate in an elevation of
living standard.
4. Decreased Employment – The influx of foreign companies into
developing countries increases employment in many sectors,
specially for skilled workers. However, improvements in
technology come with the new businesses and that technology
spreads to domestic companies. Automation in the
manufacturing and agricultural sectors lessens for unskilled labor
and unemployment rises in those sectors. If there is no
infrastructure to help the unemployed train for the globalized
economy, social services in the country may became strained
trying to cave for the new underclass.
LESSON II - MARKET INTEGRATION
Learning Objectives
1. Explain the role of financial institution in the creation of global
economy
2. Narrate a short story of global market integration in the
twentieth century
3. Identify the attributes of global corporations
4. Differentiate European integration from ASEAN integration
International Financial Institutions
International Financial Institution (IMIs) are institutions that provide
financial support via grant and loans for economic and social
development activities in developing countries. IFI include public
banks, such as the world bank, International Monetary Fund, and
Regional Development Banks.. They provide loans, , grants, and
technical assistance, to governments, as well. as loans to private
business investing in developing countries. They also play a significant
role in the privatization and regulation in public utilities and natural
resources.
These multilateral share a mission of combating poverty. It is
usually chartered by more than one country and its owner and
shareholder are national governments. Some of the IFIs are created
after the WWII to assist the reconstruction of Europe and other
countries affected by the devastation of the war(Global Greenfund
Grants 2017)
INTERNATIONAL FINANCIAL INSTITUTION
1. World Bank (WB)
2. International Monetary Fund (IMF)
3. European Investment Bank (EIB)
4. Islamic Development Bank (IDB)
5. Asian Development Bank (ADB)
6. European Bank for Reconstruction and Development (EBRD)
7. Development Bank of Latin America (CAF)
8. Inter-American and Development Bank Group (IADB)
9. African Development Bank (AfDB)
10. Asian Infrastructure Investment Bank (AIIB)
THE WORLD BANK
• The World Bank is the world largest development institution. It has
worked to help more than 100 developing countries and countries
transaction adjust to this changes by offering loans and colored
knowledge and advice. The bank group work with country
governments., the private sector, civil society, organizations, regional
development bank, think tanks, and other international institutions
on issues ranging from climate change conflicts and food security to
education, agriculture, finance and trade. All of these efforts
support the Bank Group’s twin goals of ending extreme poverty by
2030 and hosting shared prosperity of the poorest 40% of the
population to all countries.
• It was founded in 1944, the International Bank of
Reconstruction and Development – soon called World Bank – has
expanded to a closely associated group of five development
institutions. Originally, its loan helped rebuilds countries
devastated by WWII. Intime. The focus shifted from reconstruction
to development, with a heavy emphasis on infrastructure such as
dams, electrical grids, irrigation system, and roads. With the
founding of the International Finance Corporation in 1956, the
institutions became able to lend to private companies and
financial institutions in developing countries, And the founding of
International Development Association in 1960 put greater
emphasis on the poorest countries, part of a steady shift toward
the eradication of poverty becoming the Bank’s Group primary
• goal. he subsequent launch of the International Center for
Settlement of Investment Dispute and the Multilateral Investment
Guarantee Agency further rounded out the Bank’s Group ability to
connect global financial resources to the needs of developing
countries.
• Today the Bank Group’s work touches nearly every sector that
is important to fighting poverty, supporting economic growth, and
ensuring sustainable gains in the quality of people’s lives in
developing countries. While sound project selection and design
remain paramount the Bank Group recognizes a wide range of
factors that are critical to success – effective institutions, sound
policies continuous learning through evaluation and knowledge –
sharing and partnership, including with the private sector World
Bank, 2017).
GOALS OF WORLD BANK (WB)
• The WB is a vital source of financial and technical assistance to
developing countries around the world. We are not a bank in the
ordinary sense but a unique partnership to reduce poverty and
support development According to WB (2017) it has set 2 goals for
the world to achieve by 2030.
• 1. End extreme of poverty by decreasing percentage of people
living on less than $1.90 a day to no more than 3 %
• 2. Promote shared prosperity by fostering the income growth of
the bottom 40 % every country.
• THE FIVE ORGANIZATION OF WORLD BANK
1. The International Bank for Reconstruction and Development
(IBRD) – it leads to government of middle-income and creditworthy
low income countries.
2. The International Development Association (IDA) – it provides
interest from loans – called credit – and grants to
government of the poorest countries. Together, IBRD and IDA make
up the world bank.
3. The International Finance Corporation (IFC) – it is the largest
global development institution focused exclusively on the private
sector. They help developing countries achieve sustainable growth by
financing investment mobilizing , capital to international financial
market , and providing advisory services to business and
governments.
4. The Multilateral Investment Guarantee Agency (MIGA) –
created in 1988 to promote foreign direct investment into
developing countries to support economic growth , reduce poverty ,
and improve people lives . MIGA fulfills this mandate by offering
political risk insurance (guarantees) to investors and lenders.
5. The International Centre for Settlement of Investment
Dispute (ICSID), The ICSID provides international facilities for
conciliation and arbitration of investment dispute.
INTERNATIONAL MONETARY FUND )IMF)
The International Monetary Fund (IMF) – is an
organization of 189 countries , working to foster global monetary
cooperation , secure financial stability, facilitate international trade,
promote high employment and sustainable economic growth, and
reduce poverty around the world.. Created in 1945, the IMF is
governed by and accountable to the 189 countries that make up its
near global membership.
The IMF also known as the Fund, was conceived at a UN conference
in Bretton Woods, New Hampshire, U.S. in July 1944. The 44
countries at that conference sought to build a framework for
economic cooperation to avoid repetition of the competitive
devaluations that had contributed to the Great Depression of the
1930s.
The IMF responsibilities
The INPs primary purpose is to ensure the stability of the
international monetary system, the system of exchange rates and
international payments that enables countries and their citizens to
transact with each other. The funds mandate was updated in 2012to
include all macroeconomic and financial sector issues that bear on
global stability.
The Mission of IMF
• According to IMF (2017) and IMFs fundamental mission is to
ensure the stability if the international monetary system. It
does so in three ways , keeping track of the global economy
and the economies if member countries lending to countries
with balance- of payments difficulties, and giving practical help
to members.
1. Surveillance – the IMF oversees the international monetary system
and monitors the economic and financial policies of its 189 member
countries. As part of this process, which takes place both at the
global level and in individual countries, the IMF highlights possible
risks to stability and advises on needed policy adjustment.
2. Lending – A core responsibility of the IMF is to provide loans to
member countries experiencing actual or potential balance of
payments problem. This financial assistance enables countries to
rebuild their international reserves, stabilize their currencies,
continue paying for imports, and resource conditions for strong
economic growth, while undertaking policies to correct underlying
problems/ Unlike development banks, the IMF does not lend for
specific projects.
3. Capacity Development – IMF capacity development – technical
implements economic policies that foster stability and growth
by strengthening their institutional capacity and skills.The IMF
seeks to build on synergies between technical assistance and
training to maximize their effectiveness.
Where IMF Gets its Money
Most resources for IMF loans are provided by member countries
primarily through payments of their quotas. Multilateral and Bilateral
borrowing work as a second and third line of defense by providing a
temporary supplements to quota resources. These temporary
resources played a critical role in enabling the IMF to provide
exceptional financial support to its member countries during the
global economic crisis. Concessional lending and debt relief for low
income countries are finance through separate contributions based
trust funds.
Lending Capacity of IMF
The IMF can use its quota funded holding of currencies of
financially strong economies to finance lending. The member
countries that participate in the financing of IMF transaction are
selected by the Executive Board on a periodic basis and include both
advanced sand emerging market economies. The IMFs holding of
these currencies , together with its own SDR holdings, make up its
usable resources. As explained above, the IMF can temporarily
supplement these resources by borrowing, (IMF, 2017)
MARKET INTEGRATION
Market Integration is a term that is used to identify the
phenomenon in which market of goods and services are
somehow related to one another being to experience similar
pattern of increase or decrease in terms of the prices of those
product. The term can also refer to a situation in which the pieces
of related goods and services sold in a defined geographical
location also begin to move in some sort of similar pattern to one
another. At times the integration may be intentional with a
governmental implementing certain strategies as a way to control
the direction of the economy. At other times, the integrating of
the markets nay be due to factor such as shifts in supply and
demand that have spillover effects on several markets.
• When market integration exists, the events occurring within
two or more markets are exerting effects that also prompt similar
changes or shifts in other market that focus on related goods. For
example, if the demand for baby dolls within a given geographical
market were to suddenly be reduced by 50% there is a good
chance that a demand for baby doll clothing would also decrease in
proportion within the same geographical market. Should the baby
doll market increase, this would usually ,mean that the market doll
clothing, would also increase. Both markets would also have the
chance to adjust pricing in order to deal with the new
circumstances surrounding the demand, as well as adjust other
factors as production.
• Market integration may also occur with just about any type of
related markets. With a stock market integration, similar trends in
trading prices for assets related to a given industry may be found
in two or more markets around the world. In like manner, financial
market integration may occur when leading rates in several
different markets begin to move in tandem with one another. In
some cases, the integration within a nation may involve the
emergence of similar patterns within capital stock and financial
markets within trends coming together to exert profound
influence on the economy of that nation (Shiferaw, 2017)
• Market Integration and How it Works
• Koester (2017) states that market integration is a state of
affairs or a process involving attempts to combine separate
national economics into larger economic regions. Integration as a
• means of stimulating trade and improving divisions of the
labor among countries has been recommended by many
economist. The foundation of General Agreement of Tariffs
and Trade (GATT) in 1948 gave further impetus to integration
by promoting, gender acceptance of the most favored nation
principle. The Article 1 of the GATT states “ all contracting
parties must accord any advantage favor, privilege of
immunity granted to any product from other country
immediately and unconditionally to all other members. This
resulted in significant integration of world market in
manufactured goods. Moreover, the eight GATT ounds have
led to considerable tariff reductions for trade in
manufactured goals, with average tariff level of less than 4%
• of OECD countries in 1997. Apart from integrating world markets
there is an increasing tendency to create new regional integration
schemes. The European Union (EU) is one of the most prominent
examples.
• Integration can be achieved by different means (Reducingnon-tariff
barriers to trade can be the main tool for integrating markets. This
type of integration is known as negative integration.The term
implies that a government’s only role if no withdraw from
interference in the movement of goods and factors of production
across national borders. Indeed, this may be sufficient to integrate
some markets for manufactured goods, where governmental
regulations play a minor role.
FORM OF INTEGRATION
1. Preferential Agreement – It involves lower trade barriers
between those countries which have signed the agreement. It is
considered the first and smallest step on the road to further
integration such schemes imply that a country or region grants
other countries preferential access the imports. Preferences can
be given in the form of tariff reductions, for unlimited volumes of
imports from specific countries or for specified import quantities.
2. Free Trade Agreement – It reduces barriers to trade among
member countries to zero, but each member country has
autonomy in deciding on the external rate of tariff for its trade
with non-member countries. The European Free Trade Area Is
one of the examples of it.
• 3. Customs Union – It represents a higher stages of economic
integration than a Free Trade Area as the member countries adopt
a common external tariff. In the Custom Union, countries agree to
abolish tariff and non-tariff barriers to trade in goods flowing
between them. In addition , they agree to a common external tariff.
This was in fact the first phase of integration of the European
Community on the way to Common Market.
• 4. Common Market – It goes beyond a Custom Union in
allowing for free movement of labor and capital within the Union.
Hence, the intention of a Common Market is to integrate both
product and factors market of member countries.
• 5. Economic Union – It is the highest form of economic integration
. In addition to the conditions of a Common Market , member
countries also agree to ingrate monetary, fiscal and other policies.
It is obvious that the least developed forms of integration
can rely on negative integration alone. However, higher forms of
integration demand agreement on adjustment or even harmonization
of national policies. For example, internal free movement of goods
and factors not only requires removal of border restriction (negative
integration), but also removal of non-tariff trade barriers caused by
different legislation in the member countries (positive integration)
Thus, deeper integration necessarily implies surrendering some
national autonomy.
THE EUROPEAN INTEGRATION
• The European Union is a unique economic and political union
between 28 European countries that together cover much of the
continent. The EU was created in the aftermath of the Second
World War. The first step were to foster economic cooperation
the idea being that countries that trade with one another become
economically independent and so more likely to avoid conflict.
• The result was the European Economic Community (ECC) created
in 1958, and initially increasing economic cooperation the idea
being that countries that trade with one another become
economically interdependent and so more likely to avoid conflict.
• The result was European Economic Community (\ECC), created in
1958, initially increasing economic cooperation between six
countries, Belgium, Germany, France, Italy, Luxembourg, and the
Netherlands. Since then, a huge single market has been created and
continues to develop towards its potential,
• Legal Basis of European Union
• The European Union is based on the rule of law. This means that
every action taken by the EU is founded on treaties that have been
approved voluntarily and democratically by all EU member
countries. For example, if a policy area is not cited in a treaty, the
Commission cannot propose a law in that areas. .
• A treaty is a binding agreement between EU member
countries . It sets out Eu objectives, rules for EU institutions, how
decisions are made and the relationship between the RU and its
member countries.Treaties are amended to make the EU more
efficient and transparent, to prepare for new member countries
and to introduce new areas of cooperations – such as the single
currency.
THE EUROPEAN COUNTRIES
1. Austria 11. Slovenia 21.. Lithuania
2. Belgium 12. Luxembourg 22. Sweden
3. Bulgaria 13. Germany 23. Malta
4. Croatia 14 Greece 24. Netherlands
5. Cyprus 15. Hungary 25. Poland
6. Czech Republic 16. Ireland 26. Portugal
7. Denmark 17. Italy 27. Romania
8. Estonia 18. Latvia 28. Slovakia
9. Finland 19. Spain
10. France 20. United Kingdom .
According to European (2017) the main treaties that help created
European Union are:
1. Treaty of Lisbon – signed on Dec 13, 2007 to make the EU more
democratic , more efficient and better able to address global problems
such as climate change , with one voice.
2. Treaty of Nice – Signed on 26 February 2001to reform the institutions
so that the Eu could function efficiently after reaching 25 member
countries.
3. Treaty of Amsterdam – Signed on 2 October 1997 to reform the
EU institution in preparation for the arrival of future member
countries.
4. Treaty of European Union - Maastricht defined on 7 February
1992 to prepare for European Monetary Union and introduce
elements of a political union such as citizenship common foreign
internal and affair policy.
5. Single European Act – Signed on 17 February 1986 in Luxembourg
and 28 February 1986 in Hague, Netherlands to reform the institutions in
preparation for Portugal and Spain’s membership and speed up decision
making in preparation for the single market.
6. Merger Treaty – Brussels Treaty – Signed om 8April 1965 to
streamline the European institution . It consist a single commission and a
single Council to serve the then three European Commission (EEC ,
Euratom , ECSC), Repeal by the Treaty of Amsterdam.
7. Treaties of Rome : EEC and EURATOM treaties, - Signed on 25 March
1957 to set up the Economic Community (EEC) and the European Atomic
Energy Community (Euratom)
8. Treaty Establishing the European Coal and Steel Community –
Signed on18 April 1918to create interdependence in coal and steel so that
one country could no longer mobilize the armed forces without others
knowing This eased distrust and tensions after WWII . The ECSC expired
treaty 2002.
EUROPEAN UNION, AN ECONOMIC UNION TO POLITICAL UNION
• What began as a purely economic union has evolved into an
organization spanning policy areas, from climate, environmental and
health to external relations and security, justice and migration. A
name change from European Economic Community (ECC) to the
European Union (EU) in 1993 reflected this.
• The EU is based on the rule of law everything it does is founded on
treaties, voluntarily and democratically agreed by its member
countries.The EU id also governed by the principle of
representative democracy, with citizens directly represented at
Union level in the European parliament and Member States
represented in the European Council and the Council of EU.
• A Union of Single Currency
– The Eu has delivered more that half a century of peace, capability
and prosperity, helped raise living standard and launched a single
European currency the sum, In 2012m, the EU was awarded the
Nobel Peace Prize for advancing the causes of peace, reconciliation,
democracy, and human rights in Europe. Thanks to the abolition of
border control between EU countries , people can travel freely
through out most of the continent . And it has become much easier
to live, work and travel abroad in Europe.
– The single or “internal market is the main economic engine, enabling
most good m services, money and people to move freely . Another
key objective is to develop also in other area like energy, knowledge
and capital markets to ensure that Europeans can draw the maximum
benefit from it.
THE BENEFITS OF EURO
Being the euro area guarantee stable prices/ The European Central
Ban (ECB) sets key interest rates at level designed to keep inflation close
to , but below 2%. It also manages a portion of the euro area’s foreign
exchange reserves and can intervene in foreign exchange markets to
influence the exchange rate of the euro. The combined size and strength
of the euro area also creates a stronger and more stable currency that is
better able to shield its members from external shocks and currency
market turbulence, then individual countries alone could achieve.
Used about by 340 million EU citizens , the single currency benefits
everybody;
1. People no longer need to change money when travelling doing
business within the Euro area, saving time and transaction cost.
2. It cost much less or nothing at all to make cross-border payments
3. Consumers and businesses can compare prices more easily , which
encourage businesses changing higher prices to bring them down.
A UNION OF HUMAN RIGHTS AND EQUALITY
• One of the EU main goal is to promote human rights both internally
and around the world. Human dignity, freedom democracy, equality, the
rule of law and respect for human rights: these are the core values of the
EU. Since the Lisbon Treaty’s entry in force in 2009, the EU’s Charter of
Fundamental Rights brings all these rights together in a single document.
The EU’s institutions are legally bound to uphold them, as are EU
governments whenever they apply EU law.
• The enlarge EU remain focused on making its governing institutions
more transparent and democratic. More powers have been given to the
directly elected European Parliament, while national parliaments play a
greater role, working alongside the European institutions. In turn ,
European citizens have an ever increasing number of channels for taking
part in the political services (Europa. eu 2017)
ASEAN INTEGRATION
On 8 August 1967, five leaders- the Foreign Ministers od Indonesia,
Malaysia, the Philippines, Singapore and Thailand – set down together in
the main hall of the Department of Foreign Affairs building in Bangkok,
Thailand and signed a documents, By virtue of that document, the
Association of Southeast Asian Nation (ASEAN) was born. The five
Foreign Minister who signed it – Adam Malik of Indonesia, Narciso R.
Ramos of the Philippines, Tun Abdul Razak of Malaysia, S. Rajaratnam of
Singapore, And Thanat Khoman of Thailand- would subsequently be hailed
as the Founding Fathers of probably the most successful governmental
organization in the developing world today. And the document that they
signed would be known as the ASEAN declaration.
• Association of Southeast Asia Nation or the ASEAN was established in
8 August 1967 in Bangkok , Thailand, with the signing of the ASEAN
Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN,
Namely:
– Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei and
Darussalam then joined in 28 July 1995 . Vietnam on 28 July 1995,
Laos PDR and Myanmar on 23 July 1997 and Cambodia on 30April
1999, making up what is today the ten Member States of ASEAN.
ESTABLISHMENT OF THE ASEAN ECONOMIC COMMUNITY
• The establishment of the ASEAN Economic Community (AEC) in
2015 is a major milestone in the regional economic integration agenda in
ASEAN, offering opportunities in the form in the huge market of US %
2.6 trillion and over 622 million people. IN 2014, AEC, was collectively
the third largest economy in Asia and the seventh largest in the world.
• The AEC Blueprints 2025, adopted by the ASEAN Leaders at the 27th
ASEAN Summit on 22 November 2015 in Kuala Lumpur, Malaysia,
provides broad directions through strategic measures for the AEC from
2016 to 2025. Along with the ASEAN Community vision 2025 and the
ASEAN Political Security Community (APSC) Blueprints 2025 and the
ASEAN Socio-cultural Community (ASCC) Blueprint 2025, the AEC
Blueprint 2025 forms part of ASEAB 2025. Forging Ahead Together. It
• succeeded the AEC Blueprint 2008-2015) which was adopted in
2007,
• The AEC Blueprint 2025 is aimed towards achieving the vision
of having an AEC by 2025 that is highly integrated and cohesive
competitive , innovative and dynamic with enhanced connectivity
and sectoral cooperation and a more resilient inclusive and people
oriented, people centered community, integrated with the global
economy.
THE FIVE INTERREL ATED AND MUTUALLY REINFORCING
CHARACTERISTIC OF ASEAN ECONOMIC COMMUNIT Y ARE;