Actors that facilitate Economic Globalization
After recognizing the definition of economic globalization, it is important to discuss the
different agents that bring about interdependencies of global economies. There are
different views on who or what the actors are that facilitate economic globalization. On
one hand, some scholars believe that it is still the nation-state but of different levels.
Boyer and Drache (1996) state that the role of nation-states as manager of the national
economy is being redefined by globalization. Although such is the case, nation-states still
act as buffer to negative effects of globalization. In support, Brodie (1996) calls the
government as the “midwives” of globalization. It means that nation-states are still
relevant despite assuming a global perspective and act as mediators between the effects
of globalization and the national economy. Government policies and regulation either
permit or deny the smooth connection among world economies. On the other hand, some
experts claim that the actors are now the global corporations. Ohmae (1995) argues that
the nation-state has ceased to exist as the primary economic organization unit in the
global market. Filipino consumers, for instance, prefer to consume and avail of global
products and services like H&M, Uniqlo, Accenture, Amazon, Alibaba and FedEx. As a
result of transforming the national economy into a global one, Reich (1999) posits that
national products, technologies, corporations, and industries become obsolete. San
Miguel Corporation and Jollibee Foods Corporation are good illustrations of this effect.
These two Filipino companies have expanded outside their home country as they are
present in Europe, US and the rest of Asia. According to Gereffi (2005) , such TNCs are
the main driving force of economic globalization accounting for two thirds of the world
export. Forbes lists down companies from 63 countries that together account for $35
trillion in revenue, $2.4 trillion in profit, $162 trillion of assets and have a combined market
value of $44 trillion (Schaefer, 2016).
An international structure for money, power and interest was created in order to set a
system in the financial and economic relations in the modern day. The establishment of an
international monetary system (IMS) is one of the actors that facilitate economic
globalization. IMS refers to internationally agreed rules, conventions, and institutions for
facilitating international trade, investments and flow of capital among nation-states.
Historically, there are three global IMS – the gold standard, the Bretton Wood System,
and the European Monetary System (EMS). The gold standard functions as a fixed
exchange rate regime, with gold as the only international reserve and participating
countries determine the gold content of national currencies (Benczes, 2014). In the
Bretton Woods System, the US dollar was the only convertible currency. Thus, it was
agreed by 44 countries to adopt the gold-exchange standard. Also two financial
institutions were established: the International Bank for Reconstruction (IBRD) and the IMF.
The former, now known as the World Bank, is responsible for post-war reconstructions
while the latter aims to promote international financial cooperation and strengthen
international trade. Another form of integration is the establishment of the EMS. It came
about after the collapse of the Bretton Woods System. EMS was successful in the
stabilization process of exchange rates. It then prompted the foundation of a new
European Economic and Monetary Union (EMU). National currencies were abandoned
and member states delegated monetary policy onto a supranational level administered by
the European Central Bank (European Commission, 2008). The development of
international trade and trade policy is also a form of such economic integration. Trade
patterns must not be stagnant. Flow of goods must be voluntary but restricting it might
affect the relationship between and among states.
Does economic globalization divides or unites the world?
With the nation-states, global corporations and international monetary systems as actors
of economic globalization, the world is now confronted with a number of ongoing debates
as to whether economic globalization unites or divides the world. Benczes (2014) believes
that economic globalization fosters universal economic growth and development. For one,
globalization allows a worldwide distribution of incomes. Australia, for instance, cannot
provide all the raw materials they need for certain products or services, so it needs other
nation-states to produce or provide these materials. Also, economic globalization reduces
poverty (World Bank, 2002). As foreign countries are in need of workforce and human
capital, Filipino nurses become overseas workers ; they go to Europe and other foreign
countries to support their families in the Philippines. Lastly globalization creates mutual
dependence between developing and developed
