Why Has Regionalism Become Such a Popular Strategy to Cope with Globalization - Essay Example

Name: Tutor: Title: Why has regionalism become such a popular strategy to cope with globalization? Course: Date: Question: Why has regionalism become such a popular strategy to cope with globalization? Introduction Globalization is perceived as a very high level of global economic development as well as life in its conditions and content activity which tend to expand for planetarism. This means that globalization is a change of time and space. On the other hand, regionalism involves decentralization of not only political powers but also competencies from a higher political level to a lower one. It occurred as a result of globalization where economical and political, geographical, religious, military and defense factors are the key factors which have influenced the formation of regional structures. In particular, economic aspects of regionalism aim at achieving similar economic development, maintaining regional competitiveness as well as comparative advantages within the global arena and a shared reaction to risks affecting the environment. Therefore, it is apparent that regionalism is used as an instrument or strategy of the state to achieve more goals of globalization. Today, it cannot be doubted that globalization is becoming more and more popular through the regional structures (Nedyalkova 2014). Globalization and new regionalism are mutually considered as economic, multidimensional and political processes. Regionalism is regarded as resilient to the global changes, and thus is expected to evolve in various areas of the world and in accordance with the agendas, trends and new patterns occurring in the new turbulent as well as heterogeneous world system. Research indicates that the current globalization process is largely influenced by a broader and deeper new system of regionalism (Hettne 2001). A part from the booms experienced in the international trade and foreign investments over the past twenty years, the world has undergone simultaneous developments. These include the various changes that have been established through regional arrangements and regional organizations such as EU, SADC, NAFTA, Andean Community and ASEAN. However, the fundamental question is whether such new regional dimension of the global society will continue to be a transient feature or it may become a long-term trend to show the power of nation states, global markets and globalism as pioneers of world governance? Based on the economic perspective, it has been observed that regional arrangements provide location benefits where economies of scale and cost saving in transport are achieved and more opportunities are created for both trade and investment (Dieter & Higgott 2003). In addition, regional adjustments help the developing regions to quickly recover from world crisis in particular, the hard financial crises. Therefore, it becomes quite clear that regional arrangements and regional adjustments enable developing regions to cope with the constraints and uncertainties of the international competitiveness (Telo 2007). Although the phenomenon of globalization is manifested in numerous features, the three key driving features of global economic integration include expansion of international trade within the trade and services, internationalization of production and the growing and deepening of global capital flows (Aggarwal & Fogarty 2004). It is relevant to point out that the future policy mechanism for countries and regions must be assessed in terms of their relationship with the free trade of various products and services, technological advancements and developments in transportation and communication links, free flow of capital in the global economy. Regions of the world are struggling to design their own strategy to effectively cope with the increased challenges of globalization. It is important to note that globalization and its impact on the development aspects of countries still in transition makes a number of international organizations such as United Nations Industrial Development Organization (UNIDO) to undertake critical steps to re-evaluate the technicality of their cooperation strategies and policies. In so doing, the international organizations develop the appropriate mechanisms to re-design or match their programmes of assistance and context of intervention in different countries and regions together with the new development paradigms (Mrak 2000). In their study to determine whether if or not Asia’s future will be able to experience more economic interdependence and cooperation to continue growing in power rivalry and confrontation, Gill et.al (2009) examined that greater confidence is placed more in national tools and global institutions than using regional multi-lateral tools. The authors analyzed views given by respondents from larger powers who preferred military self-sufficiency to the multi-literalism approach to preventing future, pandemics, terrorism attacks or human crises. The evidence of their survey also revealed that there is a growing confidence or potential in using regional financial mechanisms, energy cooperation, and Proliferation Security Initiative and free-trade arrangements as key regional efforts that have received favorable ratings for playing a great role in controlling proliferation within Asian region (Beeson 2003). Although the concept of East Asia Community has strongly been supported by regional strategic elites, it is not quite clear which specific countries are allowed to form that community. The authors concluded that no consensus has been reached so far to determine membership for East Asia Community (Gill et.al. 2009). Regionalism is perceived as a developing phenomenon which is transforming itself from its main geographical importance into institutional or new regionalism. This has become one of the consequences of economic globalization because it involves developing all the new mechanisms of international labor division as well as interconnecting different economic subjects not only within but also beyond a geographical region. This implies that economic globalization is managed through harmonization of different economic cycles, security rates and the regional convergence of rate of interest within the stock exchange. As a way of ensuring a systematic approach to protecting the regional interests particularly in the globalized economy, regionalism has become a key strategy to affect outsourcing so as to create more benefits for a region. Basically, regionalism is significant in showing the priority areas of governmental strategies and the economic subjects involved in the formulation and implementation of economic, political and security policies of strategic spheres. Therefore, it should be noted that regionalism helps to identify the spheres of interests based on a particular geographical context. From the regional context point of view, this clearly reflects how regionalism has become a significant aspect of the state economic policy that relies more on comparable regional advantages to cope with increased effects of globalization (Kucerova 2008, p.67-71). Coping with Globalization means reconfiguration of states through Regionalization From the radical perspective, globalization is understood as the onset of particularly borderless world which also means the climax of nation-state and the establishment of region-state. States have become more active and are now taking on greater responsibilities to pool the sovereignty towards different levels such as regional, international and supranational. This is enabled by a great shift from the government to all levels of governance. Currently, regionalization is considered as the leading form of globalization because it exists in various ways, ranging from free market zones which include SAARC, NAFTA, APEC and Mercosur to regional security alliances such as ASEAN and regional customs union like AFTA. This suggests that regionalism is used as a stepping-stone or strategy to achieve multilateralism, and thus leading global governance (RAWOO 2000). Therefore, it is relevant to mention that development regionalism reflects the traditional support for promoting regional cooperation based on the territorial size as well as economies of scale. It is notable that although the process of globalization as viewed from the economic sphere perspective is naturally partial and variable, this global process is associated with the increasingly autonomous economic aspects that easily and directly interact with national and regional economies (Pelagidis & Papasotiriou 2002). This clearly means regions are developed when global economic interface with technological forces as well as national realities. Thus, regionalism to national actors is regarded as a defense mechanism to curb the competitive pressures caused by globalization process. The fundamental idea here is that economic globalization demand a more regional integration where Foreign Direct Investment (FDI) plays a great role of creating the need to restructure and engage in more network productions. Today, it can be noted that the expansion of FDI has facilitated regional production and created service clusters needed to enhance efficiency in addition minimizing transaction costs. Therefore, globalization of FDI has made regional integration more popular than special trading arrangements (Vayrynen 2003). Conclusion Based on the above discussion, it can be concluded that the economic significance of using regionalism as a popular strategy to cope with globalization is that it helps to achieve similar economic development, maintain regional competitiveness as well as comparative advantages within the global arena. Basically, regionalism is a shared reaction to risks affecting the globalized environment. Since regionalism is a resilient to the global changes, it is apparent that it will evolve in various areas of the world based on the agendas, trends and new patterns occurring in the new turbulent as well as heterogeneous world system. There is a growing confidence in using regional financial mechanisms, Proliferation Security Initiative and free-trade arrangements as key regional efforts that have received favorable ratings for playing a great role in controlling proliferation in the world. It is worthwhile to note that regional arrangements offer location benefits particularly where economies of scale and cost saving in transport are easily achieved and more opportunities are created for both trade and investment. List of references Aggarwal, K.V & Fogarty, A.E., 2004, Regionalism and Globalization, The Interregional Trade Strategies of European Union. Beeson, M., 2003, ‘ASEAN Plus Three and the rise of reactionary regionalism’, Contemporary Southeast Asia, Vol.25, No.2, pp.251-68. Gill, B., Green, M, Tsuji, K & Watts, W., 2009, Strategic Views on Asian Regionalism, Center for Strategic & International-CSIS. Dieter, H & Higgott, R., 2003, ‘Theories of Economic Regionalism:  From Trade to Finance in Asian Co-operation’, Review of International Political Economy, Vol.10, No.3, pp.430-454. Hettne, B., 2001, ‘Globalization: The New Regionalism', University of Gothenburg, Sweden. Kucerova, I., 2008, ‘A response to the gradual globalization: Regionalism’, Globalization of the World Economy, Vol.16, No.5, pp.66-73. Mrak, M., 2000, Globalization: Trends, Challenges and Opportunities for Developing Countries, United Industrial Development Organization-UNIDO. Vienna. Nedyalkova, E.T., 2014, ‘Globalization of Economics and Development’, Media globalization, University of Southampton. Telo, M., 2007, New Regionalism and the Role of the European Union: Regional actors and global governance in a post-hegemonic era, Ashgate Publishing Limited, Hampshire, UK. Pelagidis, T & Papasotiriou, H., 2002, ‘Globalization or Regionalism? States, Markets, and the Structure of International Trade’, Review of International Studies, Vol.28, pp.519–535. RAWOO, 2000, How to cope with Globalization: Local response to globalization within the developing countries, Publication 2, The Netherlands Development Assistance Research Council. Vayrynen, R., 2003, ‘Regionalism: Old and New’, International Studies Review, Vol.5, pp.25-52. Read More