Chapter 1: Globalism versus Regionalism
1. GLOBALISM VERSUS REGIONALISM The closing years of the twentieth century are notable for the expansion and deepening of globalization. It essentially refers to the on-going economic, financial, technological, social and political integration of countries around the globe. New technologies, steeply declining transport and communication costs and more liberal trading and financial regimes have led to increased trade volumes, larger investment flows, and creation of increasingly footloose production networks that ignore national boundaries. At this point in time some twenty-five developing economies have successfully joined in the global economic integration process. This new group of economies has been christened the emerging-market economies.1 Historically, globalization is not known for unidirectional progress. Yet, barring the unforeseen, the contemporary wave of globalization is likely to continue and more countries will try and integrate with the global economy in the foreseeable future (Das, 2003a). A three-way interaction between globalization, the supra-national institutions and various sub-groups of economies has created a new dynamics in the global economy. All the sub-groups of economies, developing, transition, emerging-market and industrial are feeling the pervasive effects of globalization. Second, these economies are also being affected by, and affecting, institutions like the Bretton Woods twins and the World Trade Organization (WTO).2 On the one hand, evolution of these supra-national institutions is influencing the policy options in these country groups, and on the other, the ability of these country groups to have an impact on the supranational institutions has been rising. This dynamic three-way interaction is having a discernible impact...
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