The Adverse Effects of Globalization in the Philippines Most modern economist called this “World New Economic Order” that is all States in the world bend themselves to promote free flow of the economy. All country and State open its market with minimal or without any restrictions. Hence, for instance, Philippine economy is freely open for the global market with limited restriction or worst without limitation. For this reason modern economic superpowers, the members of this G7 (e. i. , United States, Japan, UK, Germany, France, Canada, Italy) hassle-free to intervene the Philippine economy.
This trend is popularly known as the Globalization. It has three elements the privatization, deregulation, and the liberalization. To explain further the essence of this Globalization, we need to put scrutiny to its three elements. First, the privatization it is the policy wherein the Government Own and Controlled Corporations (GOCC’s) where privatized by selling it to the private sector. Second, the deregulation, meaning the government has to cut its control over the industry for basic commodities, e. g. , oil, water, electricity.
Lastly, liberalization, is the policy by which all laws regarding import products were amended or abolished, for example tariff and quota. Privatization is the process where all government own corporations are privatized, and maintained by the private sector. We cannot denied that when a business is in the hands of private institution it is oriented for profit. These GOCC’s are basically State’s inherent corporations because their services are for the public consumption like the electricity, water, transportation, telecommunications, and the like.
They are essentials for the well being of the State. This trend of Globalization threaten this State’s natural order. This trend, as push by the G7, paving these economic superpowers to access to the basic industries of a subject country. The truth is members of G7 has all the available resources, for the intervention of certain economy of a subject state. Take for example the Philippines, as said it is the largest producer of geothermal energy in the world, yet one of the highest rate of electricity in the world.
This is true because the Philippines’ electric industry is on the hands of private company. This is also true to other basic industry. Second element that is deregulation. To deregulate meaning the government has no legislative intervention over the certain corporation which main industry is for public consumption, as long as the company submitted reason of the their actions. Best example of this is the Philippine Oil Deregulation Law or Republic Act (R. A. ) 8479. Before, oil price is under controlled of the government by means of its quasi-agency, Oil Price Stability Fund (OPSF).
This quasi-agency hold the price of Oil. Logically the fair market value. It is possible because when the price of Oil in the world market is low the OPSF remain its price to the local market as it was brought high, the remaining stocks were sold higher than the world market. The government gained huge profit from this scheme. And when the price of Oil in the world market go up the government reimburse it from the profit they gained when it was low. So it’s a circle as long as the price of Oil is stable and affordable.
But when this G7 introduced the policy of globalization, underdeveloped and developing countries no way to run but suck it, bypassing the negative effects. When the R. A. 8479 and the OPSF were abolished, its pave the private companies to raise the price of oil to their discretion. Today the policy of oil price hike in the local market is determined by the movement of world market, which is obviously under controlled by the G7 and the greedy oil exporting countries. Now it is unstable and skyrocketing. Lastly, the liberalization meaning to liberalize.
This process is done by means of amending or worst abolish the laws regarding restriction or limitation of import products, for example the tariff and quota. When a certain economy is liberalized, product of developed countries basically can enter to the developing and least develop nation. It’s obvious that these products are surplus from their market, simply outsource the surplus. In the developed countries like the United States there are also economic struggle, but not in negative sense. The problem is the surplus products and surplus capital.
Hence, US government today is more than willing to do tax reimbursement or refund: to circulate the market. They don’t want history to be repeated way back in the mid 1940-the economic depression. It is also true to their products they need to find a new market. Basically, modern economic States did not help these underdeveloped and the developing States uplifting their poor condition, if they do so they’re putting themselves in jeopardy. We conclude that if it is the reason of the policy, so why seems all the nation still upholding this trend of Globalization?
There are so many reasons. One reason, take for example the Philippines poor and developing country. The economy is heavily dependent on its agriculture and natural resources. Its been a clamor to develop its economy it badly needed funds. The government in order to avert such problem needs to lend huge amount of money from world financial institutions like the World Bank and the International Monetary Fund (IMF). These financial institutions obviously from the G7 because they have the huge share.
And basically these institutions existed for that cause-to controlled and to intervene over the the borrowing States. The Philippines is relatively young, poor country it passes several difficulties, one of this is the rampant corruptions. For this problem the State needs to gamble, borrowed money from these world financial institutions. Since the problem is systemic the circle is still going- borrow money, and put it to the pocket of corruption. Until such time that the debt of the Philippines were ballooning.