REGIONALIZATION AND GLOBALIZATION

Globalization and regionalization are contradictory units because their goal in

several cases may be the same while they may vary in others. These processes form
new institutions in the global economic space that determine the behavior of the
macroeconomy. Thus, transplantation of institutions occurs in most developed
countries, which causes a solid socioeconomic dependence on recipient countries,
hindering their development, enhancing the technical-economic underdevelopment,
reducing welfare, and increasing economic and political risks. Hirata et al. (2011) cited
that the relentless forces of globalization and regionalization have reshaped the world
economic landscape over the past quarter-century. During this time, global commerce
and financial flows have grown at an unparalleled rate (Hirata et al., 2011). Intraregional
economic linkages have also become strong with the proliferation of regional trade
agreements and common currency areas.

The definition of globalization is a complex issue because a single description of

the phenomenon is present in the works of Russian and foreign scientists (Marginean,
2015). On the one hand, the most significant emerging phenomenon in international
growth is the process of globalization. On the other hand, the practice of national
integration is on the rise. Globalization and regionalization are controversial terms.
Globalization is meant to be something general, complete, and universal. Most authors
interpret and apply the concept of globalization exactly to this meaning. Phenomena,
factors, tendencies, and processes are referred to as "global" ones that have become
valid for the world community in general and affect the interests of all peoples,
countries, and cultures.

The concept of regionalization was generally used in geography and

systematization within several years to reveal various regional-level features (Fujita,
Krugman & Venables, 1999). However, after the Second "Cold War," the
"regionalization" concept was beyond this framework. The term was caught up by
political scientists, specialists in international relations, and economists attempting to
understand world development tendencies. Thus, regionalism, by nature, is inseparably
linked with political goals, cultural values, and historical aspects. Currently, the term
"regionalization" is used to investigate the nature of regional cooperation as a response
to globalization trends (the growing awareness of regional interests in the face of global
influences) and a pit break on the route to complete globalization (regional blocks
formation as the first step in common political and economic system formation).

Thompson (1998) explained regionalization as a process that draws states and

groups together based on their proximity because of economic advantages, security,
environment, and other issues with a region-wide impact. Regionalization is more of a
social-driven and bottom-up process. Oman (2008) defined globalization as the
movement of two or more economies or two or more societies toward greater
integration with one another. Regionalization can also be driven by economic forces that
drive globalization or political forces with underlying motivations, such as mutual
security, development, etc. Oman provided the basic institutional factors required for
nation-states to pursue regionalization. These factors are as follows:

1. Participating governments use additional economic powers to decrease

impediments to intraregional economic activities, such as removing or reducing
tariffs and ease of mobility for citizens of each regional member state.
2. Governments' movement to pool their policy sovereignty generally aims to
strengthen sovereignty about the global market.

Globalization is the continuation of internationalization processes. According to

Shishkov (2001), globalization represents a new, advanced development stage of the
well-known internationalization process or the transnationalization of various aspects of
public life, that is, economic, political, cultural, confessional, etc. Zagladin (2002) had a
similar view, that is, “by globalization, we should understand a new stage of world
development which is characterized by sharp internationalization rates acceleration in
all public life spheres (economic, social, political, spiritual).” According to Osadchaya
(2002), globalization is the next stage of internationalization based on the development
of information technology. Internationalization is generally the process that assumes
“action combination of several subjects of the world economy and the policy of the
general tasks, purposes, activities.” Internationalization as a phenomenon should
appear early in history while forming social and territorial structures (cities, constitutional
states, etc.). Its main function is to provide stable international relations in the real world
(Kosolapov, 2001). Now, the term "globalization" is used to characterize planetary-scale
processes in the fields of economics, politics, culture, ecology, and other spheres of the
world community that have a common nature; according to the content, it affects the
interests of all world communities (Baburina, 2008).

However, Pirnuta (2016) claimed that regionalization constitutes a result, that is, a
means of protection against globalization. Regionalization becomes a tool that can be
used to overcome the difficulties due to national states' small size.

ASIAN REGIONALISM

Regionalism is seen as a venue where the state is weakened or strengthened. It

can serve as a barrier or a bridge to greater cooperation, coordination, and
interdependence. Given that most Asian countries, including those in the Southeast
region, belong to the Global South, we should study how culturally diverse but
economically similar nation-states are affected by regionalization.

Latin American regionalism echoes the same experiences and aims of Asian
countries. However, Asian regionalism differs significantly from Latin American
regionalism regarding its member states' ethnolinguistic background. With regard to
ASEAN, we should assess how a highly diverse group of nation-states can effectively
merge into a close regional grouping. In 1968, ASEAN was born with five original
founding members: Thailand, the Philippines, Malaysia, Indonesia, and Singapore. In
1984, Brunei joined ASEAN after its independence from Britain. Vietnam joined in 1995,
Laos and Burma in 1997, and Cambodia in 1999. East Timor's application for
membership in ASEAN is still being processed. Still, it can participate in ASEAN
activities as an observer. At the time of ASEAN's founding, security was the mutual
concern of these countries.

The relationship between the five founding members was not without tension.
Before ASEAN was formed, each country accused the other of supporting secessionist
movements and destabilization efforts against the other. The unproductivity of interstate
conflicts and the refocus of each government's effort to build unified nation-states that
are deeply divided by religious, ethnic, linguistic, and cultural differences led to the
formation of ASEAN. ASEAN is considered the antecedent of other regionalization
efforts in Asia.

Factors that are Leading the Asian Region into Greater Integration

Regionalism in Asia is emerging against the backdrop of a remarkable half-

century of economic development. From 1956 to 1996, the standard of living in East
Asia, as measured by actual (inflation-adjusted) output per person, increased at a rate
faster than has ever been sustained anywhere else (Asian Development Bank, 2008).

Source: https://aric.adb.org/emergingasianregionalism/pdfs/Final_ear_chapters/
chapter%202.pdf

According to the Asian Development Bank (2008), out of the ten (10) economies
that recorded an average increase of 4.5% a year or more during that period, eight were
in East Asia, with four exceeding 5.0%. Other Asian economies are in the upper tiers of
the ranking in the world's growth distribution. Over the four decades, the living
standards in the 16 integrating Asian economies examined in this study increased at an
average of 5.0% a year, while the world averaged only 1.9%. Even though many other
countries have experienced rapid growth over several years (Hausmann, Rodrik, and
Pritchett 2004; Jones and Olken 2005 cited in Asian Development Bank 2008), this
cluster of sustained, consistent outperformance is unprecedented.

In studying the trade integration of fifteen Asian and Oceanic economies, we

identified a common factor driving the degree of trade integration of the selected
economies. The estimated common trade integration factor displays deterministic
seasonal patterns. It is also affected by the economic activity and the trade barriers
between the selected economies. We also documented the presence of an ASEAN
group factor that affected the degree of trade integration of the five ASEAN economies
in our sample.

Several factors that are leading the Asian Region into greater integration:

1. Trade – The world economy is intertwined and interdependent with each other.
Global trade facilitates and harmonizes the exchanges of goods and services
between countries in the world.
2. Similar culture – The cultures of Asia are diverse, but they share many
similarities. This phenomenon makes integrations an easier fit during times of
negotiations.
3. Shared goals – The Asian region recognizes the mutual benefit of slow
integration. The territories involved have common interests and are close to each
other. The workforce of its population can serve as a powerful negotiating block
against those from other parts of the world.

How the Different Asian States Confront the Challenges of Globalization and
Regionalization?

The challenge for regional cooperation is twofold, that is, to support the
integration of Asia's production networks and sustain an open, rules-based global
system of trade and investment. This argues for using the region's influence vigorously
to ensure the global trading system's continued development. However, with the World
Trade Organization's Doha round deadlocked, many Asian economies have also turned
to negotiating bilateral and plurilateral free trade agreements (FTAs). Substantial gains
can be realized from consolidating the many FTAs into a single, region-wide one and
adopting best values and practices to guide future regional and subregional FTAs
(Asian Development Bank 2008).

In practice, regionalism and regional problem-solving are neither simple nor

straightforward. Acting regionally, particularly forging the agreements, powers, and tools
to do so, is difficult. Regionalism inevitably confronts four formidable challenges, as
follows (Foster 2001):
 1. Philosophical Challenge. Regionalism faces ideological differences and
contradictions, like the classic dilemma of a diverse and democratic society: how
to realize the common good while safeguarding individual freedoms. Some states
do not conform to the international standard of human rights and democracy,
while others advocate its widespread.
2. Political Challenge. Regionalism is infused with political struggle. Sometimes,
regional interests are contrary to local or national interests, thereby creating
winners and losers and conflict. A region typically needs more loyal constituents
than their localities or other communities of interest. Even among regionalists,
people have differing views over the core values and strategies of regional
action.
3. Governance Challenge. Even if a region can determine a common ground and
align on political approaches, most regions in the United States lack a polity. This
multipurpose entity is authorized and empowered to function and represent the
metropolitan public good. There is no executive, no legislature, no constitution,
no by-laws, no public hearings, and no place for the buck to stop, unlike states,
cities, and towns in regional organizations.
4. Empirical Challenge. Regardless of high hopes and bold claims, the impacts of
regionalism are still uncertain. Societies are understandably cautious about
abandoning the status quo for the unproven or insufficient benefits of a new
regionalist order. Until regionalism impacts become universally known, the
appropriate regional path will remain uncertain.

ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)

The ASEAN is a 10-membered regional organization that promotes cooperation

and facilitates cultural, educational, security, political, and economic integration among
Southeast Asian member states. It regularly engages in vital international affairs and
other states outside its immediate sphere of influence. Its combined population is nearly
640 million people, with a combined gross domestic product of $2.57 trillion.

ASEAN was an overtly security-focused regional group during its initial stages.
The United States of America was also involved in forming this regional group. As a
“bulwark against a further communist advance in the region,” It was also considered a
venue for reconciliation for nation-states embroiled in conflict with their neighbors, such
as Indonesia and Malaysia’s Konfrontasi. Moreover, it held its first summit in 1976 in
Bali, Indonesia, to discuss the ramifications of the communist victory in Vietnam. In this
summit, the founding members agreed to prioritize regional economic cooperation on
the ASEAN agenda. In 1977, the economic ministers of the ASEAN members adopted
the Preferential Trading Arrangement, ASEAN Industrial Projects, and the ASEAN
Industrial Joint Venture.

Perhaps the most significant treaty ratified by ASEAN states was the Treaty of
Amity and Cooperation, which stipulated that signatory members must not use violence
against other signatory members. Shortly afterward, the present-day ASEAN members
were accepted by the regional group. In 1992, the ASEAN Free Trade Arena proposal
was presented at a summit held in Singapore; it was planned to be created within 15
years. In 1995, all member states signed the Treaty on the Southeast Asia Nuclear-
Weapon-Free Zone. In 2001, the members signed the Hanoi Declaration, which
intended to narrow the development gap for closer economic integration in Southeast
Asia. It would become the basis for the Initiative for ASEAN Integration.

Security concerns remain among the top priorities within ASEAN. In 2001 and
2002, ASEAN signed the Declaration on Joint Action to Counter Terrorism, the ASEAN-
China Agreement on the Spratly Islands, and the ASEAN-US Joint Declaration for
Cooperation to Combat International Terrorism. Other societal issues, such as
transnational criminality, immigration, and environmental issues (e.g., forest fire haze),
continue to be the central concerns tackled by ASEAN. Today, this organization is
among the most successful regionalist projects conducted in the Asian region, ushering
in harmony, interconnectedness, and barrier-less formal and informal interactions of its
governments, economies, and people.

The ASEAN Way: All-Embracing ASEAN

Initially, ASEAN sought to mend the tumultuous relationship of its founding

member states. ASEAN's initial plan to merge Southeast Asia's ideologically compatible
states, the original founding members, positively impacted the Southeast Asian region.
It resulted in the cessation of conflicts and hostilities. Southeast Asian states could then
focus on their shared history of external interventions and colonialism. Leading
Southeast Asian figures saw that outside powers were deeply interested in keeping
Southeast Asian countries fragmented, divided, and weak. ASEAN member states
recognized the need for national and regional resilience amidst the continuing
interventionism. The resulting division and isolation of Southeast Asian countries made
them susceptible to tremendous pressure and antagonism from the dominant states. If
this fragmentation persists, then it will result in insecurity for each Southeast Asian
state. Allowing ideological differences to divide the Southeast Asian region leaves it
prone to intervention. Thus, from a limited circle of states with compatible ideologies,
ASEAN welcomed other Southeast Asian countries whose ideologies differed from
those of the original anticommunist founding states. ASEAN welcomed the membership
of Cambodia, Vietnam, Malaysia, Brunei, and Laos, following this principle.

The principles that ASEAN operates on institutionalize this shared all-embracing

mindset of its member states. Such principles are consensus, consultation,
noninterference in internal affairs, and peaceful resolution of conflicts. For a group of
developing countries, these principles enable an open and inclusive relationship among
its members.

ASEAN Plus

ASEAN's efforts at establishing cooperation and linkages with states and groups
outside its grouping manifest in its attempts to engage neighboring Asian states. In
1997, ASEAN involved Japan, China, and South Korea to exchange points and
dialogue regarding solutions to the Asian financial crisis. This initiative positively
evolved into the East Asian cooperation movement that is popularly known as ASEAN
Plus Three, followed by the East Asian Summit (EAS). Afterward, the EAS included
ASEAN Plus Three, with India, New Zealand, and Australia. In 2006, ASEAN was given
an observer status at the UN General Assembly. It was reciprocated by awarding the
UN a "dialogue partner" status. The organization would develop into ASEAN Plus Six
with India, New Zealand, and Australia as dialogue partners. A proposed free-trade
agreement involving the 16 countries that are members of ASEAN Plus Six formalized
these relations by developing the Regional Comprehensive Economic Partnership.

ideological