ABSTRACT
Globalization is not a new phenomenon, but this time around its impact has propelled the world economy into uncharted territory. The global economy is now more open and interdependent than ever before. The WTO and its predecessor body, the GATT, has facilitated an explosive growth in world trade and development. The process began in the late 1970s and was subsequently reinforced by the implosion of the Soviet Union (1991), leading to the disappearance of the bipolar international military balance of power and the redundancy of Communism as a viable and sustainable political ideology. Capitalism lay behind these events, establishing itself as the dominant economic model. Nowhere, is the impact of re-ordered political-economic priorities more evident than in Northeast Asia, where 25 per cent of global output is generated. The region’s three strongest economies have all gained from economic liberalization. Japan, still the world’s second biggest economy, has benefited from a series of institutional and corporate liberalization reforms as a direct response to the economic difficulties faced during the ‘lost’ decade. Japan’s economy is now growing again, enjoying huge trading surpluses, and becoming increasingly global through (real and potential) integration into the world’s security and diplomatic frameworks. Similarly, South Korea’s economy has grown dramatically over the last two decades, buoyed by inward foreign investment into emerging high technology sectors, such as defence, aerospace and electronics. The process has been assisted by Seoul’s policy-emphasis on raising research and development (R&D) expenditure in local science and technology endeavours, and its capacity to develop high quality technologies to penetrate foreign markets. Finally, China’s dynamic entry onto the world’s economic stage has begun to change the tide of economic history. Dispensing with the economic dead-hand of Karl Marx has transformed China into a land of serial entrepreneurs, catapulting its economy from nowhere into becoming the world’s fourth biggest in 2006. Significantly, China, as with the other two principal economies of Northeast Asia, is a member of the WTO, subscribing to the capitalist ethic of profitmaximization and possessing the intangible but critically important ingredients of cohesiveness and commitment, vital for the creation of a national identity.
