The Role of Government Policy in South East Asia in the Role of Globalisation
Globalisation cannot be defined as one, single process. It is a
complex of processes including aspects such as the growth of global
trade routes and global markets. Globalisation is linked to the growth
of supraterritorial relations between people. This is the idea that
international borders are becoming permeable, and that the time space
divide between people and business continues to become less
significant. There have been countless attempts to define
globalisation. One of the most respected is Ohmae's notion of a
Globalisation has resulted in a change in the international division
of labour. Historically, the old international division of labour
(OIDL) consisted of few global metropoles, with several satellite
regions (peripheral areas). The model show below was developed by
The metropoles shown are global cities. These include London, England
and Paris, France. The arrows represent the flow of exploitation.
Small settlements expropriate surplus from the surrounding regions,
and this chain continues until the largest settlements are exploited
by the metropolis.
The result of globalisation is a new international development of
labour. This has been the result of the post war rapid growth of the
Trans-National Company (a company with its operations spanning more
than one country). The TNCs are born in market developed, capitalist
economy nations (mainly USA, EU, Japan). As profit is the main
objective for many of these enterprises, they take advantage of cost
reducing opportunities. The geographical shift of routine
manufacturing operations has led to South East Asia becoming an
increasingly popular destination for TNC manufacturing processes.
South East Asia is shown on the map below. It contains the 'Tiger
Economies' of Taiwan, Singapore, Hong Kong, Malaysia and South Korea.
These nations are described as newly industrialising countries.
According to the theories of Rostow, nations must have a huge
financial investment in order to experience industrial takeoff. For
the nations of South East Asia, the TNC has provided an excellent
opportunity for this investment. Although the TNC carries many issues
regarding ethics and its huge power of domestic economies, it is
regarded as a positive influence by many developing nations. For these
reasons, South East Asia must try to attract the TNC to their nation,
and provide benefits over other nations in competition with them.
It is the government that plays a large role in providing incentives
to large TNCs to attract them to their nation. The state of certain
nations adopted a strategy to become export oriented as opposed to an
import substitution approach. This means that instead of...