Hand-out in GEC 104 (Contemporary World)

Asian Regionalism
Regionalism presented some obstacles in the past,… But the boundaries are beginning to
disappear and we have this wonderful, intellectual synergism”.
- William Jenkins

DIFFERENCE BETWEEN GLOBALIZATION AND REGIONALIZATION

REGIONALIZATION AND GLOBALIZATION, CONFLICTING OR LINKED

PROCESSES?

Globalization and regionalization are key defining characteristics of

the contemporary world politics. These are not completely new processes because there
was an emergence of both since 1980s and particularly during the 1990s after the end of
the Cold War. There has been existing regional organization such as the EU, NAFTA, the
Arab League, APEC and others by 2006.

What are therefore the motivations and forces among these states toward regional
cooperation? And what is the relation of the regionalization process with the globalization
process? Are they conflicting process or is regionalization part of or built on globalization?

The effects of globalization can be observed and seen in the economic, cultural,
social and political spheres of the contemporary world. One impact of it is its challenge to
the nation-state and its role with the inter-national system. Globalization undermines nation-

1
Hand-out in GEC 104 (Contemporary World)

states capacity, autonomy and sovereignty. Security issues, promoting peace and stability
are reasons behind regionalization. And this can be realized through economic cooperation
within a region.

The forces of globalization and regionalization have reshaped the world economic
landscape over the past century. Global trade and financial flows have registered growth
during this period. Intra-regional economic linkages have become stronger with the
establishment of regional trade agreements. In the study conducted by Hideaki Hirata et.al
(20011), they found out that, since the mid-1980s, the importance of regional forces has
increased markedly in explaining business cycles particularly in regions that experienced a
sharp growth in intraregional trade and financial linkages. By contrast, the significance of
the global factor has decreased over the same period. Which means that the recent era of
globalization has witnessed the growth of regional cycles.

The terms Regionalization and Globalization should not be used interchangeably.

Regionalization is a process that is generally similar to globalization in a way that in
both cases, there is a movement towards economic integration of more countries. It
also means the tendency to form decentralized regions. Although, the two are similar,
regionalization is different to globalization.

While the term Globalization is the process of international integration arising

from the exchange of world ideas, products and other aspects. While regionalization is
the process of dividing a place into smaller regions. At the global level, globalization affects
both economic and political processes while regionalization only involves processes and
needs of specific places or areas of the country. One specific example of regionalization is
the division of a nation into states or regions or provinces.

FACTORS LEADING TO THE INTEGRATION OF THE ASIAN REGION

What are the factors leading to the integration of the Asian Region?

The entire world is moving towards integration. But a regional partnership is the first
step, we have the European Union, African Union, Union of South American Nations and
others.

In Asia, the Southeast Asian countries have already formed ASEAN (Association of
Southeast Asian Nations).

The idea of regional integration or regionalism can be traced back to the 19th
century, but given serious attention in the 1950s to 1960s. However, regional integration in
many parts of the world, except in Europe, were not very successful. In the 1990s, regional
integration became increasingly wide- spreading, due to rising globalization and slow
progress in World Trade Organization negotiations.

There are many factors that are leading the Asian Region into greater integration.

1. Trade- The world economy is interdependent with each other. Countries want or need
something from another part of the world, and global trade facilitates that.

2
Hand-out in GEC 104 (Contemporary World)

2. Similar Culture- Asia has a diverse culture but Asians do share in common. And this
makes it easier fit during times of negotiations.

3. Common Goals- The Asian region recognizes the mutual benefit of a slow integration.
The territories involved are not far from each other and the hard working attitude of its
population can work as a powerful tool against those from other parts of the world.

4. Security needs- this association needs to contend with foreign supported terrorist
groups which are handled well.

The Asian region extends beyond the areas or territories of the ASEAN member
nations. The northern Asian countries like Japan, Taiwan, North Korea, South Korea do not
belong to distrust each other. Someday these nations will realize the benefit of integration
with the regional autonomy.

Countries respond to globalization in different ways. There are large countries that
have enough resources that would enable them to dictate how they participate to global
integration. China, for instance, have cheap and extensive labour force which attracted
foreign investors and expand trade with countries as markets of their products. Other
countries, on the other hand, though small in area made used of their strategic location like
Singapore and Switzerland. Singapore were able to develop its harbour facilities which
enable them to become the first class transit port for ships carrying products from Africa,
Middle-East, Europe and other countries. However, there are cases wherein countries form
alliance for they believe in the saying “in numbers there is strength”. Countries form and join
regional associations for several reasons. The North Atlantic Treaty Organization (NATO)
was formed for military defence during the Cold War when several Western European
countries and United States agreed to protect Europe against Soviet Union. The Soviet
Union responded by organizing the Warsaw Pact, a regional alliance which consists of the
Eastern European countries under Soviet control. Unfortunately, the Soviet Union collapsed
in December 1991, but NATO remains.

Another reason why countries form regional organizations is in order to combine

their resources or for economic interdependence. In 1960, the Organization of Petroleum
Exporting Countries was established by Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela in
order to regulate the production and sale of oil in the world market.

Finally, there are countries that form regional organizations to protect their freedom
from the pressures of superpower countries. The Non-Aligned Movement (NAM) in 1961
was created by the presidents of Indonesia, Yugoslavia, Egypt, Ghana, and India in order to
pursue racial equality, global peace and international cooperation, human rights and conflict
resolution. It was named non-aligned because the organization refused to join with either
the capitalist democracies in Western Europe and North America or the communist states in
Eastern Europe. The movement still exist up to the present.

HOW ASIAN STATES CONFRONT THE CHALLENGES OF GLOBALIZATION AND

REGIONALIZATION

3
Hand-out in GEC 104 (Contemporary World)

What are the key challenges for Asian States arising from globalization? And what
can Asia do to enhance its prospects in the global economy?

Clearly, globalization has had a great impact on Asia’s role in the world economy.
Decade ago, the developing countries of Asia accounted for only one-sixth of world output.
But with many countries in the region having followed sound domestic policies, mobilized
huge amounts of domestic savings, and attracted private capital inflows, Asia, now
accounts for about quarter of world GDP on purchasing power parity-adjusted terms. On
this trend, the region could account for one-third of world output by the year 2005.

Generally speaking, the level of development of most Asian countries is lower than
European and American developed countries. A lot more needs and efforts are to be done
for the development of the Asian economy.

Most Asian countries take the export-oriented strategy so that they depend much on
foreign market. Due to economic globalization and the traditional international economic
order, developing countries in Asia face financial and economic crises. In the 1997-1998
financial crisis, the effect on Southeast Asian countries was severe. In 2008, Wall street’s
financial tsunami led to global economic and financial crisis which has affected Asian
economy very much. Japan has fallen into recession, and in the new economies of China
and India economic growth slowed for the first time in many years.

In this situation, Asia faces the challenges to improve the financial system, to change
the growth model, to restructure industry, and to execute standing development. In order to
solve the global financial crisis, it is necessary to strengthen Asia’s countries cooperation in
finance, investment and trade to promote Asia’s economic integration.

Answer the following questions briefly but substantial. (TO BE PASSED NEXT WEEK, ½ sheet
of paper)
1. How is regionalism different and yet a part of globalization?
2. Identify 2 challenges of globalization and regionalization that our country is facing at
present and discuss how the Philippine government face it?