A Political Economy Approach
Edited by Jehoon Park, T. J. Pempel and Heungchong Kim
Chapter 6: Inter-regional Trade, Intra-regional Trade, and Globalization based on Regionalization
6. Inter-regional trade, intra-regional trade, and globalization based on regionalization1 Shuji Matsuno ECONOMIC GROWTH BY GLOBALIZATION AND MARKETIZATION The current global economic depression has been called ‘the worst crisis in 100 years’. However, such a description may suggest the idea that the current economic situation resembles an unavoidable ‘natural disaster’. The negative growth of the 2009 world economy, the first since the end of the Second World War, was not a natural disaster but a result of excessive dependence on globalization and marketization, which had persisted since the end of the 1970s. In the early 1970s, the US tried to restore international competitiveness in the private sector by readjusting the dollar’s exchange rates and reducing military expenditures. In August 1971, President Nixon, facing a growing current deficit and foreign debt, introduced the New Economic Policy that ended the dollar’s convertibility into gold and imposed a surcharge on import taxes. The policy was followed by continuing depreciation of the dollar and drastic reform of the international monetary system. In 1973, the US government withdrew forces from Vietnam, and thereafter the US economy enjoyed a ‘peace dividend’ and a long-term expansion called the ‘New Economy’ that depended mainly on the information technology (IT) industry and financial sectors. The end of the Vietnam War also presented an opportunity for the Association of South East Asian Nations (ASEAN) to transform itself from an anti-communist league to an association for regional economic cooperation, based on its original mission. Regional cooperation, stabilization of international politics, and...
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