International trade

-We do this because for equal distribution of resources.

Resource distribution
*Factors

Land -SEA, Arable - Rice

-SWA - Dry - Oil

Labor - 18 yrs old, Can read and write

USA - everyone
Bangladesh - not everyone

Capital - Transportation, Communication

Specialization - No country specializes in everything.

Absolute advantage
-Adam Smith
- Wealth of Nations

-Ability to produce goods and services at a low cost.

(Opportunity Cost - Factors of production used in making the product.)

Comparative advantage
-David Ricardo

-Ability to produce at a lower oppotunity cost.

Exports and Imports

Exports - Sell to other countries to produce efficiently.

Imports - Buy other products you can't produce efficiently.

Philippine trade problems

-Overdependence on few primary products for exports.
-Prices of our export products increases at a slower rate.
- Agricultural produts are highly dependent on the weather.
- Overdependence on few export markets.

Balance of trade
- Trade deficit - More imports less exports.
- Trade Surplus - Less improts more exports.

Trade Barriers and Agreements, Trade restrictions

Why do we have to add tax to the products of other countries?

We have to pay for the cost of production and transportation.

Trade barriers, reasons:

- Costs
- Environment
- People - Protect their jobs and health
- To teach the people a lesson

Trade barriers
1. Import quotas - Limits the no. of imports from a country.
2. VER - Voluntary export restrictions
3. Tariffs (Customs duty)
- To protect the people.
- Taxes imposed on imported products.
- Income generating sector of the economy.
4. Embargoes - Bans a country from trading (Stop buying goods from a country).

Effects of Trade barriers

Increased prices for foreign goods.

Trade wars
- Cycle or increasing trade restraints.
- Consumers suffer.
- Pataas ng pataas ang presyo.

Protectionism - Use of barriers to protect a country.

Arguments for protectionism

- Protecting jobs.
- Protecting infant industry.
- Safeguarding National security.

International Cooperation and Arguments Trading Agreements

World Trade Organization - Handles the trading issues between countries.

General agreements on Tariffs and Trade

Uruguay round

- Agreement in politics Treaties

- Agreement in Economics round

The European Union

- Free trade zones

- European, Economic, Community.

- Common market to coordinate economic and trade polocies.

- Create a single regional economy yhat rivals the strength of the American economy.

NAFTA (North American Free Trade Agreement)

*Eliminates all Tariffs and Trade agreements.

Canada, Mexico, USA.

APEC - Asian Pacific Economic Cooperation

- Countries in the Pacific rim are the members.

Globalization
- Technology Integration
- in Economies
- in Societies

Thomas Friedman

Stages of Globalization

1. Globalization 1.0

1492 - 1800 - Countries - Religion, Imperialization, Empire.

Cristopher Columbus
From Large to medium.

Countries competing in the global market.

Globalization 2.0

1800 - 2000
From Medium to small.

Comapnies competing in the global market.

- Industrial revolution
- Produce more products, more sell.

Globalization 3.0
Small to pea-size

Individual, due to wi-fi.

Individual was able to compete globally.

Thomas Friedman - World has turned round to flat.

Causes:
- Collapse of Berlin Wall - 11/'89
- Netscape and the web
- Workflow software

- Offshoring
- Supply chaining
- Insourcing
- Informing
- "The Steroids"
/ mobile phones
/ Wifi
/ PC
/ FB, Twitter, etc.

Benefits of globalization
- Static benefit - You don't have to go to know.
- Dynamic benefit - Experience as time passes by (Korea)
- Socio political benefit
- Globalization of media
- Influence (rebel on leaders, new stuff, proving other stuff, culture, etc.)

Improvement of international trade

- Technological progress
- Increase in the number of global companies <- Made distribution of goods and employment easier.
- Greater mobility of human resources
- Greater outsourcing of business processes <- Hiring another company to do your non-core activities.

Disadvantages of Globalization:
- Culture nawawala

According to Friedman, When they embrace they pour on tech and forget their culture or who they are.

Pagnagtech ka, dapat lagay mo yung kultura mo (Ex: Japan).

Sustainable development

Issues, Levels, Theories of Development <- Measure of development.

Development - Process by which a nation improves in economic, political and the social well being of its
people.

Developed Nations

USA is a good example

- Health of people, Education and productivity are ways to see if a nation is developed or not, *culture is not
a factor. GDP can be measured to determine too, but it ain't enough.

*This is because culture is the identity of a country.

We need to measure cause it serves as a guide where we need to improve.

Developed Countries
India and Philippines are examples.

Per capita GDP

We have to consider the population and income distribution.

Another measure for development is energy consumption, does it use fossil fuel?, does it use hydeoelectric?,
does it use powerplants?

Developed nations are also known as industrialized nations.

Labor Force
- Number of people who have the ability to work.

Consumer Goods
- Goods or services sold in the market
- Are a measure of development

Literacy Rate
- Measures how many people at the age of fifteen can read and write.

Life expectancy
- Infant mortarity rate
- Babies that die before the age one
- Measure if the mothers can maintain the babies or if mothers have knowledge, etc.

Nation and Health care

- If people of nation is well fed and growing, if dying, or if government can/can't support the people.

Characteristics of developed nations

Characteristics of LDC's

Newly Industrialized Countries (NIC)

Issues in Development

Population growth rate

Ex:
30 bil Fils, 15 bil are Female, tapos nagpanganak lahat, tapos 15 bil ulit na babae ang pinanganak.

Child baring age: 15-35 years old.

Consequences of Rapid Population growth:

1. Population growth affects productio. How?

2. Resource distribution (not distributed equally)

- Physical Capital - Not all areas are good in terms of technology.

- Subsistence agriculture - Cause farmers only make enough for their family.

- Human Capital - Bansa maunlad = good, us = bad

Health and Nutrition

Malnutrition

Education and Training

Brain Drain

Political Factors
- Colonial dependency to Central
- Government Corruption
- Planning
- Political instability
- Debt

Events that led to Flattening:

1. The Great War (WWI)

2. Hitler's War (WWII)
3. Cold War (War of ideals, Capitalism and Communism, Russia and US)

USA, Super power (at the time)

- No longer considered as a super power now.
- Losing because of educational system.
- Kasi mas focus sa pera, masyadong nakomportable at kinalimutan.

21st Century is considered as the Asian Century

- Asian financial crisis (AFC)
- June 1997 - Jan 1988 all countries in Asie (in the South East part mostly) experienced economic growth.

India
- Subcontinent
- Became flattener after AFC
- Focused on Gold and Silver
- Outsourcing (Call centre No.1 date, ngayon Pilipinas na)
- Bangalore
- Now considered as the second buyers, buying stocks.

You're considered as the richest man if you're owning stocks.

- Globalization - Competing global without forgetting their origins.

AFC - Utang ng utang, la namang mabenta.

China
- A leader is ruling because they have mundate of heaven, they believe.
- When member of WTO (World Trade Organization), "Awakening" by 2001, human resources is their best
resource.

Offshoring - Take foreign industries and workers there

Beijing Olympics

Japan - Shinto (Reverence to forces of nature)

US embargo - Banned so they won't be able to get rich to start war again, since they can only make weapons
for war at the time, they were screwed cause of this, then they changed theire products.
Toyota - Tanke date ginagawa, tapos ngayon kotse.
Rifle barrel ginawang sowing machines
Lens of rifle turned into camera lenses.

"Guns to Technology" -Rise above situation

1. Politics of patience and reconciliation

2. Good Educational system
3. Honor, perfection, Discipline

They seek perfection <- Cause of flattener

South Korea

Korean War

Tailor-made Educational system

3 years High school, 2 years Military service to be renewed after every 4 years.

2000 - Fruits of labor

K-Pop
Technology - Samsung kotse pinakamahal

Thailand
- Catalyst of economic growth <- Good governance

Abundant resources - Buko

Singapore
- Used to be an underdog
- Malaysia cut them off (ex part of Malaysia)

- Cleanliness
- Corruption free government
- Fine city
- Created tourists spot
- Mediocirity has no place in Singapore, disciplined society.

"The Fil soldiers are the bravest soldiers of all time" - Pm Churchill
"Give me 10,000 Filipino soldiers and I can conquer the world" - McArthur

Keep on advancing.

Development Economics

- Present economic problems

- Scarce resources

Core values of development

- Sustenance - Basic needs of the people
- Self Esteem - Self respect of person/country
- Freedom from servitude

Walt Roston

Linear stages growth Theory

- Country before achieving development, should follow the stages.

Stage 1 - Traditional stage

Stage 2 - Transitional stage (The preconditions for takeoff), Manufacturing your product
Stage 3 - Take off, you are being industrialized, easiest stage
Stage 4 - Drive to maturity
Stage 5 - High mass consumpton (Ex. Singapore)

William Arthur Lewis

- Structural Change Model theory

Underdeveloped Economy (China is an example of this theory)

Rural, Overpopulated, substinence sector.

Modern, Urban, Industrial sector

International Dependence Theory

Neo-Colonial dependence theory

Co-existence of rich and poor countries

Neoclassical Theory

Nobel prize winning economist Robert Solow

- Promotion of free market laissez-faire economy

- Magic of the market and the invisible hand

Basic coverage:
International Trade, Globalization, Trade Barriers, World is Flat, Sustainable development, 70 items, 80 for
Cream class.

Don't screw up, I've done my part. -Reiven