MARKET
INTEGRATION
MARKET INTEGRATION
LEARNING GOALS
Explain the role of financial
01 institutions in the creation of global
economy.
Narrate a short history of global
02 market integration in the 20th
Century
Identify the attributes of global
03 corporations.
Differentiate European integration
04 from ASEAN integration.
International Financial Institution
Are institution that provide financial support via grants and loans for
economic and social development activities in developing countries.
IFI includes public bank, such as world bank International monetary
fund, and regional development banks.
They play significant role in the privatization and regulation of public
utilities and natural resources.
International Financial Institution
Usually Classified as international financial institution
1. World Bank (WB) 6. European Bank for Reconstruction and
Development (EBRD)
2. International Monetary Fund (IMF) 7. CAF- Development Bank of Latin
America
3. European Investment Bank (EIB) 8. Inter-American Development Bank
Group (AIDB)
4. Islamic Development Bank (IsDB) 9. African Development Bank (AFDB)
5. Asian Development Bank (ADB) 10. Asian Infrastructure Investment
Bank (AIIB)
THE WORLD BANK
All of these efforts Originally, its loans
support the bank group’s
helped rebuild countries
twin goals of ending
extreme poverty by 2030
devastated by World War
and boosting shared II
prosperity of the poorest
40% of the population in
all countries.
Founded in 1944; the
This is the International Bank for
world’s largest Reconstruction and
development Development-soon called
the World Bank.
institution.
The World’s Bank
Founded in 1944, World Bank is an
Intern-loans to the countries of the
world capital programs and has a
headquarters is located in Washington
D.National Financial institution that
provides.
Goals of World Bank
The world bank is a vital source of financial and technical assistance to devel
oping
countries around the world. It has 2 goals for the world to achieve by 2030
End Extreme poverty by decreasing the percentage of people
living on less than $1.90 a day to no more than 3%
Promote shared prosperity by fostering the income growth
of the bottom 40% for every country.
The Five Organizations of World Bank
01 The International Bank for Reconstruction
Development (IBRD)
02 The International Development Association
(IDA)
03 The International Finance Corporation (IFC)
04 The Multilateral Investment Guarantee
Agency (MIGA)
05 The International Centre for Settlement of
Investment Disputes (ICSID)
INTERNATIONAL MONETARY FUND
Created in 1945.
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.
The IMF, also known as the Fund, was conceived at a UN conference
in Bretton woods, New Hampshire, United states in July 1944.
THE IMF’s RESPONSI
BILITIES
THE MISSION OF INTERNATIONAL
MONETARY FUND
01 SURVEILLANCE
Keeping track of the global economy and
the economies of member countries.
02 LENDING
Lending to countries with balance payment
difficulties.
03 CAPACITY DEVELOPMENT
Giving practical help to members.
WHERE THE IMF GETS ITS
MONEY?
LENDING CAPACITY OF IM
F
MARKET INTEGRATION
“ A term that is used to identify a phenomenon in which
markets of goods and services are somehow related to one
another being experience similar patterns of increase or
decrease in terms of the prices of those products.
“
MARKET INTEGRATION
At times, the integration may be
01 intentional with a governmental
implementing certain strategies as
a way to control the direction of the
economy. Market Integration may
03 also occur with just
about any type of related
When market integration, the markets.
02 events occurring within 2 or more
markets exerting effects that also
prompt similar changes or shifts in
other market that focus on related
goods.
HOW MARKET INTEGRATIO
N WORKS?
FORMS OF INTEGRATION
Preferential Agreement
01 It involves lower trade barriers between those countries
which have signed the agreement.
Free Trade Agreement
02 It reduces barriers to trade among member countries to zero, but
each member still has autonomy in deciding on the external rate
of tariff for its trade with non-member countries.
Customs Union
03 It represents a higher stage of economic
integration than a free trade are as the member
countries adopt a common external tariff.
04 Common Market
To integrate both product and factor markets of
member countries.
05
04 Economic Union
It is the highest form of integration.
European Integration
European Union is a unique economic and political
union. It was created in the aftermath of the second
world war.
European economic community (eec) • France
- created in 1958.
• Italy
- increasing economic • Luxembourg
cooperation between six • Netherlands
countries:
• Belgium
Legal basis of European union
European union is a based on the rule of law. Means
every action taken by European Union is founded on
treaties that have been approved voluntarily and
democratically by all European Union member countries.
Treaty is a binding agreement between European member
countries. It sets out European Union, objectives, rules for
European Union institution , how decisions are made and
the relationship between European Union and its member
European union countrie
s
• Austria • Finland • Italy • Romania
• Belgium • France • Latvia • Slovakia
• Bulgaria • Germany • Lithuania • Slovenia
• Croatia • Greece • Luxembour • Spain
• Cyprus • Hungary g • Sweden
• Czech • Ireland • Malta • United
Republic • Netherlands kingdom
• Denmark • Poland
• Estonia • Portugal
The European union flag
The European Union Flag symbolizes both the European Union
and more broadly, the identity and unity of Europe. It features at
circle of 12 gold stars on a blue background. They stand for the
ideals of unity, solidarity and harmony among the peoples of
Main treaties that helps created European union
Treaty of Lisbon
- signed on December 13, 2017.
- make the European Union more democratic, more efficient and better able to address global problems, such as climate
change, with one voice.
Treaty of nice
- signed on February 26, 2001
- reform the institution so that the European Union could function efficiently after reaching 25 member countries.
Treaty of Amsterdam
- signed on October 2, 1997
- to reform the European Union institution preparation for the arrival of future member countries.
Treaty on European union
- MAASTRITCH TREATY- SIGNED February 7, 1992
- to prepare for European Monetary Union and introduce elements of a political union such as citizenship, common foreign
and internal affairs policy.
Single European act
- signed on February 17, 1986 in Luxembourg and February 28, 1986 in The 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.
Merger act (Brussels treaty)
- signed on April 8, 1965
- to streamline the European institutions. It creates a single Commission and a single Council to serve the then three
European Communities (EEC, Euratom, ECSC), repealed by the Treaty of Amsterdam.
Treaties of Rome: eec and euratom treaties
- signed on March 25, 1957
- to set up the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM).
Treaty establishing the European coal and steel community
- signed on April 18, 1951
- to create interdependence in coal and steel so that one country could no longer mobilize its armed forces without others
knowing. This eased distrust and tensions after WWII. The ECSC treaty expired in 2002.
European union, as economic union to
political union
Economic Union has evolved into an organization spanning policy areas, from climate,
environment and health to external relations and security, justice and migration. A name change
from the European Economic Community (EEC) to the European Union (EU) in 1993 reflected
this.
The European is based on the rule of law, everything it does is founded on treaties,
voluntarily and democratically agreed by its member countries. The EU is 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
A UNION OF SINGLE CURRENCY
Launched a single European currency: The Euro
Got a Nobel Peace Prize in 2012 for advancing the
causes of peace, reconciliation, democracy and
human rights in Europe.
BENEFITS OF EURO
People no longer need to change money when travelling
or doing business within the euro area, saving time and
transaction costs.
It cost much less to make cross-border
payments.
Consumers and businesses can compare
prices more easily.
ASEAN
Integration
Association of Southeast Asia Nation or
ASEAN
Established on the 8th of August in Bangkok,
Thailand
Founding Fathers of ASEAN namely:
Indonesia - Adam Malik
Malaysia - Narciso R. Ramos
Philippines - Tun Abdul Razak Other countries who joined the ASEAN :
Singapore - S. Rajaratnam Brunei Darussalam – January 7, 1984
Thailand – Thanat Khoman Vietnam – July 28, 1995
Lao PDR or Laos – July 23,1997
Myanmar – July 23, 1997
Cambodia – April 30, 1999
A Union of Human Rights and Equality
The Core Values of EU
THE RULE OF THE LAW AND
RESPECT FOR HUMAN RIGHTS
HUMAN EQUALITY
DIGNITY
Freedom DEMOCRACY
Establishment of the ASEAN Economic Community
(AEC)
Major milestone in the
Established in 2015 regional economic
A B integration agenda in
ASEAN
The third largest
C
economy in Asia and
the seventh largest in the
world
The Five Interrelated and Mutually
Characteristics of ASEAN Economic
The AEC Blueprint 2025 consist of five interrelated and mutually
reinforcing characteristics namely:
A Highly Integrated and Cohesive Economy
A Competitive, Innovative, and Dynamic ASEAN
Enhanced Connectivity and Sectorial Cooperation
A Resilient, Inclusive, People-Oriented, and People-Centered ASEAN
A Global ASEAN
The ASEAN Free Trade Area (AFTA)
The ASEAN Free Trade Area (AFTA) has now been virtually established,
ASEAN Member Countries have made significant progress in the lowering of
Intra-regional tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for
AFTA, More than 99 % of the products in the CEPT Inclusion List
(IL) of ASEAN-6, comprising Brunei Darussalam, Indonesia, Malaysia, the
Philippines, Singapore and Thailand, have been brought down to the 0-5 %
tariff range.
The ASEAN countries are engaged in a Principle of
process to transform ASEAN into a real economic the
community by the end of 2015.
ASEAN
Originally built as a political alliance to
limit the spread of communism in Southeast Asia,
Economic
ASEAN gradually became a diplomatic organization Community
to manage regional issues and expand trade with the inclusion of
Vietnam, Cambodia and Laos and their
opening to a market economy.
The Four of the ASEAN Economic Community
Single Market and Production Base
Competitive Economic Region
Equitable Economic Development
ASEAN’s integration into the globalized economy
The Five Core Principles of the ASEAN
single market and production base
Free flow of goods
Free flow of services
Free flow of investment
Free flow of capital
Free flow of skilled labour
The Global Economy and Outsourcing
The production of a particular “American” car:
30% to the car’s value goes to Korea for assembly,
17.5% to Japan for components and advanced technology
7.5% to Germany for design
4% to Taiwan and Singapore for minor parts
2.5% to the United Kingdom for Advertising and marketing services
1.5% to Ireland and Barbados for data processing
37% only to the production value generated in the United States
The Call center Industry in the Philippines
In the Philippines, the call dominate the Filipino outsourcing industry with
voice-based services accounting for more than 70% of the Business Process
Outsourcing (BPO) revenues generated in 2010. The Philippines is currently ranked
#1 in the world in terms of offshore voice-based services. The strong growth of this
BPO sector is likely to continue for at least another decade.
• Global Corporation
•Global Corporation is a business that operates in two or more
countries.
•It also goes by the name “multinational company”.
•Expanding your business globally can offer several
•Advantages over ruining a strictly domestic company,
•but operating in multiple countries also posed logistical and
•cultural challenges.
•A major motive of becoming a global corporation is to expand
revenue opportunities and to diversity business risks.
Global Corporations and Globalization
Globalization can also offer Economies of scale means that
01 the benefits of economies of 03 when you use more equipment in
production or buy supplies and
scope and economies of
resale products in larger quantities,
scale.
you can get better cost per unit,
increasing profitability.
Economies of scope means that Getting workers to think
02 you can take advantage of 04 globally when their values
different skills sets and market differ from the values of
advantage. colleagues in other countries in
even harder
Thank you!
