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Article: PUTTING GLOBAL LOGIC FIRST

1. Explain briefly the main theme of this article 'Putting Global logic First'.

The nation-state has begun to crumble. What is emerging in its place is
the region-state, which is defined by economic activity, not political
borders. The factors behind the shift are threefold:
 First, people, capital, and information can move across borders so
quickly that economic decisions are often based on the fear that
needed resources will go elsewhere. The speed and volume of
transactions in the global capital market national governments cannot
control exchange rates or protect their currencies, and political
leaders increasingly find themselves at the mercy of people and
institutions making economic choices over which they have no control.
 Second, as consumers see how other people live, they pressure their
governments to give them access to the best and cheapest products.
When the government doesnot cater to their demands, public finds a
way to vote with their pocketbooks.
 Third, as governments defer to special interests and try to provide
constituents with a civil minimum of services, they invest inefficiently
and as a result destroy wealth.

Nation-states are no longer meaningful units in which to think about
economic activity. In a borderless world, they combine things at the
wrong level of aggregation. Chinese government has worked so well
on special economic zones which involves a mix of policies allowing
for favorable terms for foreign investment, access to credit,
transshipment of goods, and so forth. Region-states are economic
units, not political ones which lie within the borders of an established
nation and their primary linkage is with the global economy. Region-
states welcome foreign investment, foreign ownership, foreign
products and also whatever will employ their people productively,
improve their quality of life, and give them access to the best and
cheapest products in the world. If a country genuinely opens itself up
to the global system, prosperity will follow. If it does not or if it does so
only halfheartedly, relying instead on the heavy, guiding hand of
central government, its progress will falter. Silicon Valley, the giant of
microelectronics industry in the US has created industry associations,
lobbied the federal government, studied competitiveness as a way to
get more federal funding for research and development, and become

Silicon Valley. This can help in giving right direction and shpe to the economic development of the country. for MNEs for their sustainable growth and profitability and for citizens of countries for their career progression.000 level. On the other hand.000. Itoh and Toshiba into Time Warner. As a result. lobbied the federal government. institutions. often called the Pearl River Delta.  The author has given a very good example of Hong Kong economy embracing first Shenzhen and then other parts of the Zhu River Delta. transshipment of goods etc. the giant of microelectronics industry in the US has created industry associations. The concept of ladder of development can be implemented in region states in order to give direction to their growth. It invited Rupert Murdoch into Twentieth Century-Fox. many countries have started their own Silicon Valley which has invited a host of newly energized and well-funded competitors for Silicon Valley in the US. This article has great relevance for a country’s or MNE’s development and for the citizens of countries for their career progression. it did not throw up protectionist barriers against foreign money. Hong Kong. studied . was the driving economic force in the lives of the people in Shenzhen. It involves a mix of policies allowing for favorable terms for foreign investment. and infrastructure in place at the right time. By the year 2000. Outline separately the relevance of this article for a country's economic development. Sony into Columbia Pictures.  The Silicon Valley example elaborates that countries shouldnot have a lot of boundaries which will hamper its economic growth. 2. and Matsushita into MCA. access to credit.695. where per capita gross national product was $12. downright protectionist. only those who can accept it and promote region-states within and across their borders will be able to provide the best quality of life for their constituents. Moving up that ladder means being able to put the right policies. C. and its radiating influence boosted per capita GNP there to $5. that cross-border region-state could raise the standard of living of some 11 million people to more than the $5. Although political leaders will resist acknowledging the demise of the nation-state. in China.  Another very bright example is the ladder of development. when Hollywood recognized that it faced a severe capital shortage.

Hong Kong economy had reached out to embrace first Shenzhen and then other parts of the Zhu River Delta. It invited Rupert Murdoch into Twentieth Century-Fox. competitiveness as a way to get more federal funding for research and development. These regions are natural economic zones because they possess the key ingredients for successful participation in the global economy. when Hollywood recognized that it faced a severe capital shortage. and Matsushita into MCA. Hong Kong.000. Explain in 10 sentences what you like the most from this path breaking article written 20 years back which you feel is relevant even till today. For example. the author has explained that for a large country to survive economically and politically. 3. When region-states prosper. in China. The author goes on to show that economic growth of a region is not dictated by the geographical boundaries or the central government in which that region lies. and its radiating influence has already boosted per capita GNP there to USD 5. where per capita gross national product was USD 12. their prosperity spills over into adjacent areas. many countries have started their own Silicon Valley which has invited a host of newly energized and well-funded competitors for Silicon Valley in the US. was the driving economic force in the lives of the people in Shenzhen. often called the Pearl River Delta. improvement of quality of life. Itoh and Toshiba into Time Warner. there are many upsides to the concept of region states since it leads to employment. it will have to allow the development of multiple autonomous region-states within its territory. it did not throw up protectionist barriers against foreign money. The same logic should be applied by the countries and MNEs around the world. provided example for the same and emphasized on its importance for economic growth in the future makes this article path breaking. and access to the best and cheapest products in the world. On the other hand. Further. Hollywood did not turn protectionist just because it faced a capital shortage. C. Explain the rationale for your answer for their sustainable growth and development.695. Sony into Columbia Pictures. The way that the author has identified the concept of region-state. Moreover. and become downright protectionist. . As a result.

4 percent from 2009. . Kashgar's annual growth rate was 17. Kashgar is close to China's border with the independent states of former Soviet Central Asia and the SEZ seeks to capitalize on international trade links between China and those states. In May 2010.The relevance of this concept can be deciphered from the following example. and Kashgar's designation has since increased tourism and real estate prices in the city. the People’s Republic of CHina designated the city of Kashgar in Xinjiang a Special Economic Zone (SEZ).