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Globalisation and Regionalisation: Give evidence of the new challenges for regions in a global economy
What is Globalization? ... Among the key economic aspects of globalization are global economic networks. ... Supporters point to the significant reductions in poverty achieved by countries, which have embraced integration with the world economy such as China, Vietnam, India and Uganda. ... Over the past two decades, as financial openness has increased across the world, global flows of foreign direct investment have more than doubled relative to gross domestic product. ... The global economic slowdown has reduced financial flows in the past couple of years, against the long-term trend of increases, and political and economic instability have exacerbated problems in some regions. Capital flows in Latin America dropped from a peak of $US126 billion in 1998 to $72 billion in 2001, reflecting regional problems and global uncertainty. ... The World Bank generally favors greater openness to trade and FDI because the evidence suggests that the payoffs for economic development and poverty reduction tend to be large relative to potential costs or risks (while also paying attention to specific policies to mitigate or alleviate these costs and risks). ... Far from condemning these countries to continued isolation and poverty, the urgent task of the international community is to help them become better integrated in the world economy, providing
assistance to help them build up needed supporting institutions and policies, as well as by continuing to enhance their access to world markets. ...
Finally, given this backdrop, it may not be surprising (though it is not very helpful) that globalization is sometimes used in a much broader economic sense, as another name for capitalism or the market economy. When used in this sense the concerns expressed are really about key features of the market economy, such as production by privately owned and profit-motivated corporations, frequent reshuffling of resources according to changes in supply and demand, and unpredictable and rapid technological change. It is certainly important to analyze the strengths and weaknesses of the market economy as such, and to better understand the institutions and policies needed to make it work most effectively. ... Certainly there are many well-known cases of countries where inequality has risen as they became more integrated into the world economy. ... Global Economic Prospect 2004 found the number of people living on less than $1 a day in China fell from 361 million in 1990 to 204 million in 2000. ... On the contrary there is some evidence (Ades and Glaeser, 1999) that greater trade openness has tended to reduce inequality between countries. ... Trade Representative, explained that its three-pronged strategy of moving on a global, regional and bilateral basis has the purpose of “creating a competition in liberalization, placing America at the heart of a network of initiatives to open markets. ...
One step back
A strategy of “competitive liberalization” might thus in fact lead to a fragmentation of the world trade system rather than freer global trade. ...
Poor second-best
In any case, regional and bilateral deals are a poor second-best to global free trade. ...
Regionalism the WTO way
The tangled web of preferential agreements that countries are weaving — each with their own differing tariff rates, rules-of-origin requirements and industrial and health regulations — threatens to tie the world economy up in red tape. ...
Conversely, if the United States and Europe are united, they facilitate the consensus on a global basis.
Approximate Word count = 4049
Approximate Pages = 16.2
(250 words per page double spaced)
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