A WORLD OF

REGIONS
GROUP 2
REGIN AMIEL TABAMO
CHRISTINA ESCOTO
CINDIE PARAS
DONNABEL ESGUERRA
SOPHIA NICOLE GANIA
LYNNIE LYNN SAURA
ROSE ANN PINGOL
CIANAYA JANE FLORES
MARKETS AND GLOBALIZATION: THE LATIN AMERICAN EXPERIENCE
Why does Financial Development matter?
The empirical evidence clearly shows that more developed countries have deeper and more efficient
financial system, including several markets. Financial development can boost growth through several channels:
a. Financial Intermediaries
b. Risk Amelioration through diversification
c. Improving Corporate Governance
Evolution and Globalization of Capital Markets
a. Main Developments in International Capital Markets
b. Developing countries and Globalization Process
Main Developments in the Domestic Capital Markets
While capital markets in many developed countries have witnesses a boom in the last decades, the
picture is more mixed when focusing on developing countries, with wide heterogeneity across nations.

Factors behind the Development and Internationalization of Capital Markets

a. It is useful to analyze cross-country, time series evidence to understand the role of
macroeconomic and institutional factors.
b. We study how capital markets have responded to the wide array of reforms that governments
undertook during the past two decades.
c. We analyze the fundamentals that drive stock markets’ internationalization process.
d. We analyze whether Latin American counties have responded differently than countries in other
regions to economic fundamentals and reforms

ASIAN REGIONALISM

REGIONALISM
It is the process of dividing an area into smaller segments called regions.
e.g. Division of nation into states or provinces
Business also uses regionalization as management tool.

GLOBALIZATION
It is the process of international integration arising from the interchange of world views, products, ideas and
other aspects such as technology
DIFFERENCE BETWEEN REGIONALISM AND GLOBALIZATION
NATURE
GLOBALIZATION REGIONALIZATION
NATURE
• PROMOTES THE INTEGRATION OF ECONOMIES • PRECISELY THE OPPOSITE BECAUSE IT IS
ACROSS STATE BORDERS ALL AROUND THE DIVIDING AN AREA INTO SMALLER SEGMENTS.
WORLD.
MARKET
• IN REGIONALIZED SYSTEM, MONOPOLIES ARE
• ALLOWS MANY COUNTRIES TO TRADE
MORE LIKELY TO DEVELOP.
INTERNATIONAL LEVEL SO IT ALLOWS FREE
MARKET.

CULTURAL AND SOCIETAL

RELATIONS .
• ACCELERATION TO MULTICULTURALISM BY • DOES NOT SUPPORT THIS.
FREE AND INEXPENSIVE MOVEMENT OF
PEOPLE.
AID
• GLOBALIZED INTERNATIONAL COMMUNITY IS • REGIONALIZED SYSTEM DO NOT GET
ALSO MORE WILLING TO COME TO THE AID OF INVOLVED IN THE AFFAIRS OF OTHER AREAS.
A COUNTRY STRICKEN BY A NATURAL
DISASTER.
TECHNOLOGICAL ADVANCES
• HAS DRIVEN GREAT ADVANCES IN • IN REGIONALIZED SYSTEM, ADVANCED
TECHNOLOGY. TECHNOLOGY IS RARELY AVAILABLE.

FACTORS LEADING TO A GREATER INTEGRATION OF THE ASIAN REGION

 MUTUAL BENEFIT

WHEN IT COMES TO TRADE, THESE NATIONS CAN READILY SUPPLY EACH OTHER’S NEEDS.

 MUTUAL GOALS

 SIMILAR CULTURE

THE PEOPLE OF THIS REGION ARE GENERALLY ALIKE IN APPEARANCE, TEMPERAMENT WHICH
IS SEEMINGLY PEACEFUL. THEY TEND TO GET ALONG QUITE WELL EVEN ON AN INDIVIDUAL LEVEL.

 SIMILAR SECURITY NEEDS

ASIDE FROM SMALL LOCALIZED REBELS, THIS ASSOCIATION NEEDS ONLY TO CONTEND WITH
FOREIGN-SUPPORTED TERRORIST GROUPS WHICH ARE USUALLY HANDLED WELL.

THE ASIAN REGION EXTENDS BEYOND THE TERRITORIES OF THE ASEAN MEMBER NATIONS.
THE NORTHERN ASIAN COUNTRIES LIKE JAPAN, TAIWAN, NORTH KOREA, AND SOUTH KOREA DO NOT
GET ALONG AND APPEARS TO DISTRUST EACH OTHER. OF COURSE THE INVISIBLE WALLS BETWEEN
THESE NATIONS WILL FALL SOMEDAY AND HOPEFULLY, THEY WILL REALIZE THE BENEFIT OF
INTEGRATION WITH REGIONAL AUTONOMY.

SOUTH ASIA AND REGIONAL INTEGRATION

South Asia is one of the most dynamic regions in the world, with a population of 1.67 billion people and
economic growth of 7.1 percent over the last decade. But despite recent shifts, historical political tensions, trust
deficit, cross-border conflicts and security concerns contribute to a low-level equilibrium.

At present, South Asia is one of the least integrated regions. Intra-regional trade accounts for only 5
percent of South Asia’s total trade, compared to 25 percent in ASEAN. Intra-regional investment is smaller than
1 percent of overall investment.

Due to limited transport connectivity, onerous logistics and regulatory impediments and lack of trust, it
costs more to trade within South Asia and world’s other regions.

Greater cooperation and regional economic integration can bring about gains in these areas and help tap
into the proximity and demographic dividend, South Asian countries enjoy. But there are several factors
restraining Regional Integration.

Factors restraining regional integration

• High trade costs and investment restrictions

• Insufficient policy-relevant analytical work on gains of Regional Integration in both trade and
investment, to make informed policy decisions

• Skeptical mindset from previous failures in regional cooperation, misinformation and lack of vocal
champions for regional cooperation

• Relative asymmetry in size among the South Asian countries

• Historical political tensions, mistrust, cross-border conflicts and security concerns

• Limited transport connectivity, logistics and regulatory impediments

HOW DO DIFFERENT ASIAN STATES CONFRONT THE CHALLENGES OF

GLOBALIZATION AND REGIONALIZATION
WHAT ARE THE CHANGES THAT IS GLOBALIZATION AND REGIONALIZATION IS BRINGING
ABOUT IN ASIA?

 On-going transformation in the composition of production and trade

Example:

The shift of labour intensive manufacturing out of Hong Kong into mainland China

 Continued growth in net private capital inflows to the region

 Example:
In Hong Kong, Malaysia, and Singapore stock market capitalization as share of GDP
exceeds that of France, Germany, and Italy

However, a number of countries in the region face some important policy challenges
because of:
 First, as these countries develop, their comparative advantages will continue to change.

 Second, as the trade and financial links within Asia intensify, development in one economy will have
larger impact to others.

AREAS TO PUT INTO CONSIDERATION IN DEALING WITH THE CHALLENGES

Trade
Much of Asia’s dynamism can be traced to the openness of its economies, and to the competitiveness and transfer
of technology that this openness has encouraged. Countries that have yet to open their economies significantly should do
so, so that they too can reap these benefits. By the same token, countries that have already benefited from trade
liberalization must ensure that the openness that has served them so well in the past is extended to the new trade frontiers,
notably services. At the same time, it will be important to increase transparency and the free flow of information on which
the service and financial sectors—and, indeed, the modern economy—depend. And as production shifts to higher value-
added products, countries will need to develop effective "exit" policies for non-competitive industries.

Financial Area

At the domestic policy level, there is no substitute for stable macroeconomic policies—policies that give
confidence to financial markets and attract private savings. Likewise, transparent and predictable regulatory policies, and
a reliable legal framework are essential ingredients in creating a favourable investment climate.

Regional

Policy Coordination- With countries becoming more closely integrated, each country has an increasing stake in the
sound policies of the others. Accordingly, countries of the region can play a constructive role in encouraging each other to
maintain sound policies. The swap arrangements among a number of Asian central banks are a good example of
constructive cooperation to maintain regional stability. Certainly, it would be worthwhile exploring how such initiatives
can be further developed. Moreover, the effectiveness of bank supervision will be enhanced by greater cooperation
between national supervisors in the region, as part of the development of a more global approach to such issues.

OTHER CHALLENGES

Increasing trade and financial sector integration-Developing countries of Asia still heavily rely on London and New
York

Environmental Damage- Asia has become the world’s largest source of greenhouse gas emissions

Income Inequality- Unequal access to opportunity