Business or economic globalization is the global integration of markets. In the past century this has been one of the major global megatrends as economies of the world battle it out to have a share in the lucrative global business arena. Asia has not been left behind in this rush. It has taken several domestic and international steps meant to boost its businesses with foreign economies on a global scale. Trade agreements and improvements on the quality of products are some of the steps that Asia has taken to boost its presence in the global business arena. However, Asia has experienced several problems in the course of establishing its presence in the global market. Some of these problems have been domestic or external. External factors include the recent global financial and economic crisis that has affected several economies across the world. These economic crises across the globe have at some point provoked a backlash against globalization. However, the idea that globalization can be stopped is absolutely wrong. Protectionism and a global backlash against globalization have all failed to materialize over the years although several of the forces that are trying to underpin globalization are powerful forces. Several businesses are depending on market expansions beyond their local markets and global economies have grown to be more interdependent than it has ever happened (D’Costa, 2012). Asia has therefore not been left behind despite the fact that it faces several problems that are both domestic and foreign.
Asian values are a domestic factor that has affected the globalization of Asian economies. Asian values embody the Confucian ideas of hard work, respect for authority, belief that the interests of an individual should not be prioritized in preference to the interests of the community and thrift. These ideals are coupled with a deep preference for social, economic and cultural rights than the countries and individual political rights. These values have been found to be contrary to the universality nature of human rights and tend to entertain undercurrents that are undemocratic in some countries. These undercurrents include the suppression of dissidents and the unnecessary and excessive use National security laws. These laws have had a profound negative impact on Asia’s drives to take its economy global. Although some commentators may have said that Asian values have contributed to the rise of some of the countries, Asian values have been argued by economists in a different way. Most economists believe that Asian values are lame excuses to autocratic governance and corruption that has hampered globalization of Asian businesses. Martin Lee an elected opposition leader in Hong Kong once said that this was a “pernicious myth”. The former Bangkok’s leaded Lee Yaw Khan is a great supporter of Bangkok’s economic approach that is Laissez-faire in approach. Lee’s theories are often referred to as the “Lee Thesis”.
They advocate for the idea that political rights and freedoms are capable of hampering economic development and growth. What he means by this statement is that political freedoms and the levels of human rights that are advocated for by western countries are not applicable in Bangkok. These rights lead to the formation of trade unions, demonstrations and strikes, activities that according to Lee are not healthy for economic growth. According to this line of thinking, order, social and personal discipline rather than political freedoms and liberty are the pillars of Asian societies. These are the most appropriate for the people of Asia. Lee and others who support his ideologies agree that political freedoms, democracy and liberty are foreign concepts especially from the West that cannot work in their societies. Lee declared that the Asian financial crisis that occurred between 1997 and 1998 and the economic collapse that followed significantly marked the death of Asian values argument. He stated that economic progress in Asia can only be made without the establishment of the so called democratic systems that are an idea of the west (Suryadinata, 2006).
Another problem that Asia faces towards globalization of its economies is the lack of competent leadership towards globalization (International Monetary Fund, 1997). It has emerged as a major economic hub in the last two decades driven by its increased innovativeness and increased consumption levels. Until the last few years, the growth was propelled by being the world’s workshop that provided cheap labor to the western world. That has changed over the past few years. That engine has lost its steam with Asia having acquired a new set of domestic consumers who demand more sophisticated and quality products than they used to. This has led to a change of how companies market their products, trade and manufacture. As a result, the products produced have managed to meet international quality expectations. This has enabled Asia to export some of its products to several countries. However, the set of leaders in Asia have posed as grand obstacles towards this. They are either incompetent or are still sticking to the traditional Asian values that disfavor globalization of Asian economies (Yeung, 2007).
Political instability is another factor that has negatively affected the globalization of the Asian economy. Without stable political structures, no economy can ever realize the dream of going global or realizing any significant achievements. Asia is not an exception to this law of economic success. Political stability and economic growth are deeply connected. The level of uncertainty that is associated with political environments that are not stable repels investments in a region therefore slowing economic growth. The Vietnamese economy is a good example of how political instability can cripple economic success. The country is ruled entirely by the ruling party. An economy that was at one time viewed as a promising economy is now in distress. Between 1997 and 2006, the economy was very stable with a very low inflation rate. The level of trade deficit was moderate. However, after 2006 both the private and public sectors started experiencing problems arising from waste of resources and political instability. The problem of inflation occurred again with an annual rise of 23% per year. Vietnam has been falling behind in regard to economic growth. Unless the country strengthens its political structures, the dream of globalization shall lie low in this part of Asia. Vietnamese leadership should seek to grow the economy in a politically stable environment. Democracy should be ushered in despite the resistances that it may face. The political tensions that exist between North and South Korea are another hindrance to globalization of business in Asia. If these two countries were not conflicting and engaging in productive activities that are of mutual benefit, the Asian economy would receive a boost. However, the tensions between them do not allow a stability that would facilitate this kind of a relationship between the two countries. All Asian leaders should avoid politics and conflicts that are not productive so that they can realize massive economic growths and make positive strides towards business globalization.
Globalization has led to new demands to government systems on the regional security. There are several occurrences touching on regional security that have occurred in the past and negatively impacted globalization in Asia and how Asians perceive globalization. Sudden shifts in power balance have occurred in Asia. This is because globalization fuels sudden economic growths that lead to these shifts. The stagnation of the Japanese economy and the sudden growth of the Chinese economy have changed the strategic equation in Asia forever. This has happened over a very brief period of time. Such shifts create discomforts in the region that have made some people in Asia to remain opposed to globalization (Gangopadhyay, 2006). Globalization has also brought new demands to the military in Asia. Globalization may at times be viewed as a threat to sovereignty. This fuels demands on the military structures.
Particularly relevant to Korea and Taiwan, globalization brought problems to the countries financial sides. Due to globalization, barriers to capital flows were tremendously lowered. This was as a result of the deregulation to financial markets that occurred and the consequent improvement to technological transactions. Capital increased its mobility and it was able to travel across the world to look for higher returns. This trend strengthened the interconnection that existed between international markets but increased the volatility of the Korean and Taiwan local currencies. If external financial factors trigger national currency fluctuations or the conditions that influence the planned return to foreign capitals suddenly change, large amounts of capital outflows or inflows may occur. This is what happened to Asia during the global financial crisis. For countries that have malfunctioning financial systems with high debt ratios, this kind of flow of capital can be seriously fatal.
Asian leaders should tackle these problems by increasing consultations on how international businesses are done. They should consider learning the procedures that were adopted by other countries which succeeded in the same arena. The leaders should be willing to embrace new concepts that will help them succeed in the global business arena. Without doing this, the progress of Asia in global business will be slow and each year millions that could have been pumped into the economies will be lost. The major advantage to this approach is that Asia will be learning from real situations that have happened in the past not experimental cases. This means that the probability of success will be extremely high. The major disadvantage to this approach is that methods and approaches that have worked in other countries may not necessarily work in Asia. This is because the political systems, social systems and values in Asia are different in the countries from which the Asian leadership will choose to learn from. What has worked for those countries may not necessarily work for Asia. Asia has a political system that is different from most of the countries in the world. The Asian population is also largely conservative.
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