International Political
Economy
International Political Economy (IPE)
• It is a sub-field of Political Science which deals with the convergence of
international political and economic forces
• Ex. Powerful nations having dominant multi-national corporations (MNCs)
• These MNC control global markets and they are representatives of the interests
of their home nations
• IPE is also responsible for giving the most mainstream discussion on
Globalization
• Economic globalization became the major basis of defining Globalization
• Globalization is often associated with Western liberalism
• Free trade, privitization, and foreign direct investments became major parts of
Globalization
Global Trade and Politics
• Since the 1990's a more open global trade system was adopted
• Free Trade-reduction of barriers to trade among nations
• Removal of Tariffs (taxes levied on imported products)
• Ex. Since the Philippines joined the ASEAN Free Trade system there is an increase
of Thailand and Indonesia sourced cars (Montero, Hilux, Avanza, and Expander)
• But this open and liberal trading system created major problems
• Domestic firms are pushed out by the entry of cheaper imported products
• Decline of Marikina Shoe industry due to the entry of cheaper Chinese and Vietnamese shoes
• Free Trade favors mainly more developed nations and their MNCs
IPE and the Global System
• IPE can also discuss about the global world order
• Each economic order creates the 'powerful' and the 'weak'
• With the current system the international arena is organized mainly
based on the Western dominated system
• World Trade Organization-is a product of this world system
• It mainly sustains free trade by its protection against tariffs
• One nation can use the WTO to pressure other countries to open their
Markets
• This can change depending on the powerful economies and the crisis
the occurs
Contemporary History of Global Order
• COLD WAR Period
• Nations are traditionally divided by culture, geography, religion,
colonial influence and so on
• Since the end of WWII global division was more on economic and
ideological terms
• FIRST WORLD-Western Nations under US-Euro leadership
• SECOND WORLD-Communist bloc under the control of the Soviet Union
• Also include CHINA, North Korea, Vietnam
• THIRD WORLD- Developing Nations like the Philippines but subjected to the
Super Power conflict
World Division after Cold War
• The economic turbulence in the 80's and the political dissolution of
the SOVIET system led to economic and political changes in many
nations
• Economic ORDER became the main point of division
• DEVELOPED vs DEVELOPING - conflicting dichotomy
• Level of DEVELOPMENT became the main basis for global division
• SOCIO-ECONOMIC CONDITION-the basis for clasification
• WESTERNIZATION- buzz word for development
• DOMINATION of the REST by the WEST and its merry MEN
2008 and the GLOBAL DIVISION
• Crisis in the WEST led to the changes in Gobal Order
• the ECONOMIC recession in the Developing World led to the rise of the
REST
• BRIC(S)-Jim Oneil Classified them as regional powers
• BRAZIL-Largest Economy in LATIN AMERICA
• RUSSIA-Major Economy in Eastern Europe and controls vast energy (oil and natural
gas) resources outside of the Middle East
• INDIA- Largest Economy in South Asia
• CHINA-Second Largest Economy in the World and controls the global production
chain
• SOUTH AFRICA- Major regional economic power in Africa not part of the original
BRIC
the REST followed
• There is a shift in economic growth and activity from the West
(Europe and Amercia) and Japan to the developing world.
• East Asian Tiger Economies (South Korea, Taiwan, SIngapore,)
became the more succesful 'catch up' economies
• Second Tier Tiger Economies-Mainly South East Asian Economies
(Thailand, Indonesia, Malaysia) became another examples of the
growth in the East
• Next Round Players (soon to be tigers) Philippines, Vietnam, and
other Hight Growth Economies in the Continent are promising cast for
development
Points
• TIGER Economies-used to represent the fast and high growth nations
mostly found in East Asia
• Japan started the trend then followed by South Korea, Taiwan, Singapore, and
HK. ASEAN nations followed the trend but not all succeded
• These economies started from the pits of poverty
• But with high economic growth for 2 decades these countries became major
trading nations
• they rely on EXPORT for their development
• Most exports began with agriculture products and textiles then transitioned
to machineries and eventually to high tech products
China-Breaking from the Ranks
• China greatly benefited the 2008 crisis
• China was able to become the main creditor of the US because of the
increasing debt of America.
• Debt burden was gretly strained by the War on Terror campaign and the 2008
Crisis
• If you have access to Netflix watch THE BIG SHORT (Brad Pitt Film)- the movie
explains the cause of the 2008 crisis.
• China's consistent economic growth has propelled the once backward
nation into an economic Titan.
• Its economic growth is fueling its military industry
China and the Rest
• China's Rise as a possible super power.
• https://www.youtube.com/watch?v=1SBnK9XIlZE
• China's Military development.
• https://www.youtube.com/watch?v=BEEP_XkON-g&pbjreload=10
• China's growth may also spell new forms of inequity
• Economic- Sino centric growth will undermine others like the West and other
Countries that are not geared towards a more China based economic activity
• Military - Greater growth in the Military Spending will lead to security problems
for other nations (see Philippine's claim of the Spratly's)