The New Rules of the Game
The term Globalization is coined with numerous thoughts and ideas, both positive and negative alike. Many countries are for it, while some are against it. However, as its name would suggest, one thing undeniable with it is that it is a global phenomenon, affecting and involving every nation composing our world at present. Globalization is the integration of nations, integration in almost every aspect of the life of a nation. Be it in the economic aspect of a state, political aspect, or even in the cultural facet, Globalization has undeniably made its mark on every nation, in every continent. As a result, we are now more and more involved with our neighboring countries more than we have thought of. Some would argue that Globalization has made countries more permeable, that is, the access to a state has now become easier and swifter brought about by the rising involvement among nation-states.
With the phenomenon of Globalization creeping in to every door of every nation-state, the tendency for these countries is to form co-operations among their region in almost every facet, most especially in the economic aspect.
As the various nations of the world grew their interdependencies among them – interconnections in the political aspect and much so the economic aspect, without a doubt a country would not be insulated from crises that are occurring on the economy of an overseas nation. Economic globalization causes the major regions of the world such as the Asian region to cooperate among themselves, and in so doing, their economies are transformed and integrated into an interlocking regional and global economy. As what happened in the Asian Financial crisis that damned the region’s economy, major Asian nation-states felt the full impact of the force even if they are miles and miles apart from each other.
This is an inevitable effect of Globalization, especially in the economic aspect. What started in Thailand with the financial collapse of the Thai Baht, spread across the region and prompted the intervening of the International Monetary Fund (IMF) by lending a total of $40 billion to the affected nation-states particularly the most hard hit ones including South Korea, Thailand, and Indonesia to ease the impact of the crisis. Affecting even the newly industrializing countries (NIC) of the time, such effects have inevitably dampened the region’s growth. The Asian Financial crisis of the late 90’s decade drastically slowed the economic growth of the region including the Philippines, South Korea, Indonesia, Malaysia, Laos and Hong Kong to cite a few.
How bad is the effect of the crisis? The Asian Financial crisis have dropped the Philippines’ GDP growth rate to 0% specifically during 1998, notwithstanding that all the nation-states suffered from a loss of demand and confidence throughout the region. The Asian Financial crisis has significantly affected the economy of the region most especially on the macro-level. This included the sharp drops and reductions on the value of currencies, stock markets, and other asset prices of the countries within the region.
Now more than a decade later, the Asian region has coped through the crisis and adapted stricter financial and market strategies that will better them in crises such as this one that may grip them in the future.