Globalization Vs Regionalization

Globalization Vs Regionalization​

By: Amit Bhushan Date: 19th May 2016

Quite a few global pundits would keep a tab on global situation especially in economic, commerce and political trends to decipher what may be implications of them in India. What essentially may be witnessed, recorded and commented upon is falling trade as well as capital flows between past trading centres such that between the USA & China and Europe & China or for that matter between the USA & Europe. That is where the volumes lie and matter most on the overall numbers tally.

Then comes in Trade between the Global majors and Energy/primary resource surplus nations. Here, the record is straight that with the USA turning energy self-sufficient, glut in energy markets has brought down prices. Along with energy, other commodities have fallen in tandem though weakness in Europe/Japan is the other most cited reason. These have culminated in demand from the emerging markets to weaken (due to loosened ability to pay on back of falling commodities prices). Thus other emerging economies which earlier used to supply manufactures are also witness to a slowdown.

The political relations basically tend to mimic economic/commerce relations since most of the relations may be based on sovereign interests which is most around preservation of domestic economy along with political order. What essentially the above analysis may miss is that there is heightened activity towards regionalization. While ASEAN remains well storied even if progress may be slower than expected. The regionalization trends are visible even in Middle East & North Africa with most nations forming some sort of politico-economic understanding with dominant regional power.

The same is also witnessed in some form in East, West and Southern Africa and Mercosur. Central Asia also may be trying to put its act together and making headwinds to open up via China on one side and Russia on the other although not with much success. Likewise India seems to be making its own attempt to trying to size the economic opportunities from Iran to Myanmar & beyond though some hitches remain as Pakistan is trying out its Globalization initiative by attempting to ally with China on one hand and the USA /Russia on the other. The regional trade flows largely remain unrecorded/unstoried in comparison to the Global USD denominated trade flows which may be declining. One of the reason could be that there has been a rise of the use of non-USD currency for settlement of such flows.

While the Global Capital and Industrial powers have continued their attempt to engage with various economies in order to push their interests which is increasing with the domestic pressures to resurrect their own trade and economy. However, the countries have new found reliance on regional allies where their can solve their overall interests much better within the region rather than relying on global powers.

The increasing security related considerations could be yet another consideration favouring regionalization as countries want to strengthen relations within neighbours and iron out differences as the simmering differences has only led to increase in complexity of the problem with different global powers developing their own interests in maintaining the problem (and thus their own importance) rather than solving the same. With the increased clamour for economic well-being by populations in developing countries, the political leadership might be hard-pressed to identify the better options for providing them the same and quite often the regional integration is able to score much better on this count as technologies which were hitherto a preserve of the global players is becoming commonplace and often regional powers may have ability to provide similar or better solutions.

Rise is regional currencies also solves the need capital related issues and thus countries in the region are able to trade with each other like never before. It is thus the globalized power play which is shrinking in space for most regions while the economic activity in smaller regions is rising. This would however take its time for various regions to mimic in size or level as integrated as in Europe. The political focus on what may be rising in economic importance for most countries might be missed by global analyst which may be tracking a fall of globalization (so to say) while ignoring the pictures in the region.

One of the reasons could be that regional behemoths have global ambitions and may themselves be focussed on global players and activities rather than what may be growing naturally. Depending upon the strength of this wave the global leaders might have to do with the remaining opportunities in the individual countries or as in some case seems happening is tying up with regions itself to plan out a favourable order rather than disturbing the regionalization trend which they may have failed to stop. In line the political impact of local developments in the large economies which hitherto had too much impact and influence may also decline as long as the developing regions are not directly in line of political or economic competition. Let's watch out the game...

 

[Swaswati Borpuzari]

Globalization and regionalization represent two significant yet contrasting trends in the modern economic and political landscape. Globalization, characterized by the increasing interconnectedness and integration of the world’s markets and businesses, has transformed the way nations interact and conduct trade. It facilitates the free flow of goods, services, capital, and ideas across international borders, often leading to economic efficiencies and the spread of technological advancements. However, globalization also faces criticism for exacerbating income inequality, threatening local cultures, and sometimes leading to environmental degradation due to the rapid expansion of industrial activities without adequate regulatory oversight.

On the other hand, regionalization emphasizes the strengthening of economic and political ties within specific geographic regions. This approach seeks to enhance cooperation and mutual benefits among neighboring countries, often through the creation of regional blocs such as the European Union, ASEAN, and NAFTA. Regionalization can promote more stable and sustainable development by leveraging shared resources, cultural similarities, and historical ties. It also tends to be more resilient to global economic shocks, as regional economies are often more self-sufficient and can better coordinate responses to crises.

The debate between globalization and regionalization is not about which is inherently better, but rather about finding a balanced approach that leverages the strengths of both. For instance, while globalization can drive innovation and economic growth, regionalization can ensure that these benefits are more evenly distributed and that local communities are not left behind. Similarly, regional blocs can negotiate more favorable terms in global trade agreements, thereby protecting smaller economies from being overwhelmed by larger, more powerful nations. Ultimately, the optimal strategy likely lies in a hybrid model that capitalizes on the opportunities presented by a globalized world while maintaining strong regional ties to support local development and resilience.

 

[Dhruv Bindhani]

Globalization Vs Regionalization​

By: Amit Bhushan Date: 19th May 2016

Quite a few global pundits would keep a tab on global situation especially in economic, commerce and political trends to decipher what may be implications of them in India. What essentially may be witnessed, recorded and commented upon is falling trade as well as capital flows between past trading centres such that between the USA & China and Europe & China or for that matter between the USA & Europe. That is where the volumes lie and matter most on the overall numbers tally.

Then comes in Trade between the Global majors and Energy/primary resource surplus nations. Here, the record is straight that with the USA turning energy self-sufficient, glut in energy markets has brought down prices. Along with energy, other commodities have fallen in tandem though weakness in Europe/Japan is the other most cited reason. These have culminated in demand from the emerging markets to weaken (due to loosened ability to pay on back of falling commodities prices). Thus other emerging economies which earlier used to supply manufactures are also witness to a slowdown.

The political relations basically tend to mimic economic/commerce relations since most of the relations may be based on sovereign interests which is most around preservation of domestic economy along with political order. What essentially the above analysis may miss is that there is heightened activity towards regionalization. While ASEAN remains well storied even if progress may be slower than expected. The regionalization trends are visible even in Middle East & North Africa with most nations forming some sort of politico-economic understanding with dominant regional power.

The same is also witnessed in some form in East, West and Southern Africa and Mercosur. Central Asia also may be trying to put its act together and making headwinds to open up via China on one side and Russia on the other although not with much success. Likewise India seems to be making its own attempt to trying to size the economic opportunities from Iran to Myanmar & beyond though some hitches remain as Pakistan is trying out its Globalization initiative by attempting to ally with China on one hand and the USA /Russia on the other. The regional trade flows largely remain unrecorded/unstoried in comparison to the Global USD denominated trade flows which may be declining. One of the reason could be that there has been a rise of the use of non-USD currency for settlement of such flows.

While the Global Capital and Industrial powers have continued their attempt to engage with various economies in order to push their interests which is increasing with the domestic pressures to resurrect their own trade and economy. However, the countries have new found reliance on regional allies where their can solve their overall interests much better within the region rather than relying on global powers.

The increasing security related considerations could be yet another consideration favouring regionalization as countries want to strengthen relations within neighbours and iron out differences as the simmering differences has only led to increase in complexity of the problem with different global powers developing their own interests in maintaining the problem (and thus their own importance) rather than solving the same. With the increased clamour for economic well-being by populations in developing countries, the political leadership might be hard-pressed to identify the better options for providing them the same and quite often the regional integration is able to score much better on this count as technologies which were hitherto a preserve of the global players is becoming commonplace and often regional powers may have ability to provide similar or better solutions.

Rise is regional currencies also solves the need capital related issues and thus countries in the region are able to trade with each other like never before. It is thus the globalized power play which is shrinking in space for most regions while the economic activity in smaller regions is rising. This would however take its time for various regions to mimic in size or level as integrated as in Europe. The political focus on what may be rising in economic importance for most countries might be missed by global analyst which may be tracking a fall of globalization (so to say) while ignoring the pictures in the region.

One of the reasons could be that regional behemoths have global ambitions and may themselves be focussed on global players and activities rather than what may be growing naturally. Depending upon the strength of this wave the global leaders might have to do with the remaining opportunities in the individual countries or as in some case seems happening is tying up with regions itself to plan out a favourable order rather than disturbing the regionalization trend which they may have failed to stop. In line the political impact of local developments in the large economies which hitherto had too much impact and influence may also decline as long as the developing regions are not directly in line of political or economic competition. Let's watch out the game...

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