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

WHY HAS REGIONALISM BECOME SUCH A POPULAR STRATEGY TO COPE WITH GLOBALIZATION? {Insert student’s name} September 22, 2013 WHY HAS REGIONALISM BECOME SUCH A POPULAR STRATEGY TO COPE WITH GLOBALIZATION? According to Mayall (2000, p. 16) globalization is whereby world economies become increasingly integrated resulting into a global economy characterized by making of the global economic policy, via international agencies such as the world trade organization. Consequently, globalization can be perceived as emerging global culture, whereby the populations of the world not only consume similar goods but also services. Mittelman (2000a, p. 190) regionalism just like globalization seem to have a vague meaning: a region is defined as not only a geographical unit but also as an organized cooperation in a given field or a social system as well as acting as subject with a unique identity. In the economic perspective, Wyatt-Walter, (1998, p. 78), it is evident that regionalism has proven to be effective in assisting to not only secure markets but also in providing economic growth via establishment of regional trade agreements (RTAs). However, in the globalization, institutions such as World Trade Organization and the International Monetary Fund, the existing agreements which bind the governments to liberate the markets, to certain degree restrict their abilities in pursuing macroeconomic policies. Nonetheless, Mayall (2000, p. 21) under the regional trade agreements, it is evident that economic policies remain not only consistent but also stable, because the participating nations cannot violate them through provoking sanctions from other members (Akira, 2000, p. 40). A good example is the North American Trade Agreement which have not only stabilized but also increased the economic and political policies of Mexico. Wyatt-Walter, (1998, p. 78), in his study however argued that global market systems enable huge amounts of capital to be reinvested and disinvested in a relatively short period. The mentioned makes states to lose control over economic development and exchanges and hence holds a reduced role in economic development. However, in regard to the mentioned argument Akira, (2000, p. 29) regionalism assist countries to work gradually towards attaining global free trade by allowing nations to increase their competition level as well as enable domestic industries to adjust according to the global standards. Consequently, less developed countries have become members of the Southern Common Market, European Union, as well as Asia-Pacific Economic Cooperation is an evidence of the economic stability that is provided by regionalism (Todaro & Smith, 2003, p. 56). In the recent, ASEAN nations have continued to vie for regional trade agreements with china with an aim of renewing growth and rebuilding economic stability that was shaken by 1997 economic crisis (Mayall, 2000, p. 31). Hence, nations establishing economic contacts with hegemonic powers can be perceived as more beneficial to smaller countries compared to the mentioned countries subjecting themselves to hegemonic-controlled free market. According to Mittelman, (2000a, p. 190), the major weakness of globalization compared to regionalism because of its inability to address not only transnational security but also political issues. Akira (2000, p. 40) in his study have argued that globalization is selective in nature. This is because some while some nations gain from the process of implementing neo-liberalist principles some lose. On the other hand, regionalism have been established in order to locally address the problems and prevent foreign interventions. For instance, the African unity was established with an aim of preventing external manipulation which globalization does not prevent. Consequently, the African Union has successfully addressed multilateral. The success of the African unions regional is evident through quick response to peace negotiations in the Darfur genocide and reduced interstate wars (Wyatt-Walter, 1998). Toshiro & Inoguchi, (2008, p. 89) apart from the security issues, globalization has failed to ensure that aspects of multilateral political legislation is implemented all over the world. For instance the Climate Change Conference held in Copenhagen and the Kyoto Protocol resulted into implementation of minimal binding regulations in the world whereby globalization has made pollution issue to be transnational. According to Wyatt-Walter (1998, p. 75), states being in a position not to have control over the health of its citizens has bad effects for its legitimacy as the government and hence should collaborate with other world players in order to ensure safety. The mentioned is evident in carbon trade market in the European Union whereby despite the failures experienced in the Kyoto protocol and in the Copenhagen conference, pollution regulations were implemented. Akira (2000, p. 40) in his study points out that despite the rise in globalization, nations have lost control particularly over their society’s external relations as a result of being exposed to mutual cultural influences. According to Mayall (2000, p. 33) cultural influences exist in a co-modified manner. For instance, throughout the world, consumption patterns are converging while languages become Anglicized and youths consuming similar music styles and pop culture. The mentioned spread of what is known as imagined communities where there is existence of standardized education, language and even values has greatly faced opposition as a result of culturally diminishing impacts it has. Both interstate as well as sub-state regionalism has existed in response to cultural globalization with an aim of preserving distinct cultural attributes (Todaro & Smith, 2003, p. 67). With increasing rise of regionalism in order to fill up the gaps left by modern globalization, scholars have asked if the world is steering away from global unity. According to Wyatt-Walter (1998, p. 93), there is need to define new regionalism as a concept of the world order. This is because regionalism of the world has repercussions over the world’s regions. Additionally, regionalism focuses on creation of the regional identity and not a more global identity. For instance the European Union focuses on creating European identity while African union aims at creating an African one (Mayall, 2000, p. 34). According to Mittelman (2000a, p. 199), with existing multilateral institutions which are characterized regulations over all the regional bodies, it is challenging to overturn multilateral systems and globalization. Additionally, with the emergence of inter-regionalism, particularly with respect to relationship across different regions, on a larger scale the world is capable of acting cohesively. For instance, the European Union has not only held meetings with Asia-Europe and initiated interregional talks with East Asia countries but has also established an interregional accord with MERCOSUR (Wyatt-Walter, 1998, p. 50). Hence, it can be pointed out that economic and political stability provided to nations by regionalism, can enable future interregional to be peaceful. Consequently, in the face of existing tamed globalization, Todaro & Smith (2003, p. 56), in their study have argued that nations have responded via regionalism with an aim of preserving cultural, political and economic stability. Today, regionalism is emerging as a component of globalization processes. According to Mittelman (2000a, p. 193) if globalization is perceived as the compression of spatial and temporal aspects of social relations, then regionalism can be clearly understood as a component of globalization chapter. Based on the aforementioned view, by assisting national economies to be more competitive in the world markets, regional integration will result into multilateral cooperation on a global perspective, the opening of the local economies as well as adoption of liberal premises pertaining to cooperation (Akira, 2000, p. 40). Hence, regional integration process can be perceived as part of global or international economic order particularly at the end of the 20th century. According to Akira (2000, p. 37), regionalism focuses on formulation of policies that will encourage intra-regional trade and result into barriers to external trade an aspect that contradicts the perception of the globalization proponents which emphasizes free movement of production factors on a global scale and not limited to regions. Basing on the argument Wyatt-Walter, (1998, p. 74) points out that putting non-tariff and tariff barriers on non-members is likely to make regional organizations to reduce not only global trade but also efficiency in the market. Consequently, globalization proponents perceive rules of origin favor the local enterprises and are unfairly disadvantaging the multinational corporations while at the same giving the local enterprises undue advantage. The mention, renders the market forces irrelevant as well as reducing competitiveness an aspect that results into gross market inefficiencies (Mayall, 2000, p. 56). Mittelman, (2000a, p. 193), regionalism nonetheless, emphasizes on the importance of employing local factors of production as well as use of locally available raw materials. According to regional bloc view, the mentioned will spur economic development which are void of exploitation particularly from capitalist oriented MNCs (Cox, 1998, p. 22). However, the counter arguments by globalization and MNCs proponents is that they should be allowed to increase market efficiency globally by sourcing factors of production and raw materials from areas which are most affordable in the world (Toshiro & Inoguchi, 2008, p. 49). But if nations are allowed to outsource raw materials and other factors of production from other places, resources within other regions may not be exploited and aspect that can make the regions to continue expressing poverty (Todaro & Smith, 2003, p. 61). Hence, global efficiency should not be promoted at the expense of regional economic development and efficiency. Additionally, WTO membership which is an element of globalization should result into competitiveness and increase production efficiency, enhance integration in the world economy, and offer additional benefits from globalization particularly in the long-term (Cox, 1998, p. 21). Nonetheless, in the short term, it has restrictions which can result into problems to the member states. This entails subsidies reductions, decreased government support particularly for local producers and restrictions in the application of state instruments for the purpose of regulation. The mentioned things, particularly local producers support are what regional blocs such as COMESA seek to attain (Mittelman, 2000a, p. 190). For instance, African countries are only capable of producing primary commodities that mostly characterized by low income elasticity of demand in comparison with manufactured goods which are commonly a preserve of developed nations (Todaro & Smith, 2003, p. 66). Akira, (2000, p. 40), hence points out that African countries as well as COMESA members are in inferior position mostly in the global economic arrangement. World trade which is supported by globalization is in favor of developed countries an aspect that make developing countries experience continued balance of payment deficits and are in foreign debt. This makes them to be dependent on developed countries to buy commodities so that they are in a position to earn foreign exchange so as to buy the manufactured goods from the developed nations (Mittelman, 2000a, p. 189). Consequently, conditions that are attached to the foreign aids that developing countries receive prove that countries are not only externally directed but also dependent. For example, drawing from 2003, WTO statistics, developing countries owed $114.8 billion in terms of external debt, while countries such as Malawi and Burundi had more of external debts than their total gross national income (Akira, 2000, p. 40). In most cases, it is evident that most donor countries in the pretense of promoting globalization, tend to lend nation-state and purchase its loyalty that to a regional bloc (Todaro & Smith, 2003, p. 56). Therefore, they insist on bilateral arrangements with the nation seeking the aid. Consequently, even with the decisions that the states make with regard to domestications and acceptance of the resolution of the regional bloc are mostly influenced by the bilateral sarrangements and donor countries in place (Akira, 2000, p. 39). Todaro & Smith (2003, p. 56), however pointed out that exist some consistencies between regional economic integration and globalization. Indeed in the process of accelerated integration and foreign trade liberation in the world economy, regional integration is of significance. This is mostly due to the fact that regional integration restricts sovereignty particularly of the member states in the economic policy formulation (Akira, 2000, p. 37). The mentioned enables states integration into the global economic system. Mayall (2000, p. 16) in his study highlights the advantages of integration which include realization of economies of scale via markets and pooling of resources. Additionally, regionalism contributes to increased specialization, increased competitiveness of services and goods globally, as a result of development on intra-regional competition. Furthermore, regionalization contributes to better opportunities for engineering and scientific exchange as well as joining efforts to develop technology and science and creation of better infrastructure not only in finance and transport but also in communication (Toshiro & Inoguchi, 2008, p. 65). In conclusion, the benefits of regionalism are the ones that form the bedrock for globalization. The mention is due to the fact that enhancement of mobility of factors of production require efficient infrastructure to promote them. Regional trading blocs such as COMESA are some of the resources. COMESA has focused on disseminating information on world trade organization as well as other world trading societies in addition to developing capacities in the region so as to allow active participation in the global economy. References Akira, K. (2000). A note on globalization and regional integration. http://project.iss.u- tokyo.ac.jp/kikkawa/iss-1.pdf. Cox, R. W. 1998. “A Perspective on Globalization” in James H. Mittelman, ed., Globalization: Critical Reflections (Boulders, CO:Lynne Rienner), 21–30 Mayall, J. 2000. Nationalism and International Society. Cambridge: Cambridge University Press. Mittelman, J. H. 2000a. “Rethinking the “New Regionalism” in the Context of Globalization,” Global Governance 2: 189–213. Todaro, M. P. & Smith, S. C. (2003). Economic Development, 8th ed. Dorling Kindersley (India) Prvt. Ltd., New Delhi, India. Toshiro, T. & Inoguchi,T. (2008). “Globalism and Regionalism,” United Nations University Press. Vinod K. A. & Fogarty, E.A. (2001). “Between Regionalism and Globalization: European Union Interregional Trade Strategies,” Wyatt-Walter, A. (1998). “Regionalism, Globalization, and World Economic Order” in Louise Fawcett and Andrew Hurrell, eds., Regionalism in World Politics.Oxford: Oxford University Press. 74–121. Read More