The Processes And Institutions That Appear To Be Challenging The Idea Of The Nation As A Sovereign Territory In The Asia Pacific Region, And The Institutions That Keep The Nation Relevant.

The processes and institutions that appear to be challenging the idea of the nation as a sovereign territory in the Asia Pacific region are predominately driven by loosening of economic policies, trade barriers and movement of capital throughout the globe. The term for the development of this integrated global economy is Globalisation. This trend towards Globalisation, as evidenced by the evolvement of organizations that link diverse countries together to allow for exchange of labour, goods and capital with ease, has been accompanied by economic links exclusively within the Asia Pacific region and its subregions. The term for such regional economic integration is Regionalism and Sub-Regional Growth Zone respectively. This essay will describe how Regionalism and Sub-Regional Growth Zones in the Asia Pacific region appear to be challenging the idea of the nation as a sovereign territory, and how the processes involved in meeting their demands are in line with those of globalisation. It will also discuss how these processes and their institutions are keeping the nation united.

Globalisation

Globalisation is the breaking down of barriers between nations to aid in more effective trade and labour markets for the production of goods. This in turn draws capital from outside of the nation in the form of foreign direct investment (FDI), which enables the formation of global financial networks. This process seems to challenge the idea of the nation as a sovereign territory and economic state. �Fundamentally, in these arrangements the �national economy’ is generally considered to be of diminished relevance’ (Ohmae 1995; Reich 1991; Harris 1986, cited in Parsonage 1998, p.248).

However, there remains a resistance to the global economy as nations tend to jockey to further their own trade and economic agendas, hence their relevance, particularly within their respective regions. �Paradoxically, globalisation has been accompanied by a regional concentration of trade and investment due to changes in the organization of production which favour regional markets’ (UNCTC 1991; Morales and Quandt 1992, cited in Parsonage 1998, p.248). These nations seek to gain competitive advantage in the region and elsewhere through economic co-operation with near or direct neighbours. This has given rise to the formation of regionally exclusive associations such as the Association of South-East Asian Nations (ASEAN), the Asia Pacific Economic Cooperation Forum (APEC) and the ASEAN Free Trade Area (AFTA) as a means of regional economic advancement. �[R]egionalism is being supported by ASEAN states due to concern over increased global competition for FDI’ Parsonage (1998, p.253).

Regionalism in the Asia Pacific

�From the outset, APEC has concentrated on facilitating inter-governmental consultation on ways and means of enhancing economic cooperation … among countries of the Asia Pacific region’ Rudner (1995, p. 411). Essentially the idea was to network an inter-dependant economic region. Again laying challenge to the nations sovereignty.

However, divisions and resistance arise when, as stated previously, associated nations push for there own agenda’s and threaten to derail such forums. The divergent nations, some disparaged, decline to participate, вЂ?ASEAN countries, led in this respect by Malaysia, were acutely sensitive to any proposals regarding APEC that might have the consequence of compromising their sovereign equality вЂ¦Ð²Ð‚™ Rudner (1995, p. 412), and seek alternative economic growth. Rudner (1995, p. 429) goes on to state, вЂ?The main threat to the вЂ?open’ concept of Asia Pacific regionalism expounded by APEC stems from the penchant of some governments for managed trade through sub-regional or bilateral arrangements’.

Sub Regional Growth Zones in the Asia Pacific Region

A Sub Regional Growth Zone (SGZ) is fundamentally a concentration of labour, capital and production on one area of a global region. In the Asia Pacific area SGZ’s have developed more readily within the ASEAN such as the Indonesia-Malaysia-Singapore growth Triangle, the Indonesia-Malaysia-Thailand Growth Triangle, the East ASEAN Growth Area and the Greater Mekong Subregion.

The strength of market forces and tariff free trade can cause deregulation of economies. That combined with the influence of foreign direct investment means state capital no longer holds the power it once had. As the market draws the foreign direct investment capital, production and labour into the specific SGZ the state appears to lose control of these, and other state controlled issues. �This dependence on FDI means many of the dynamics underlying SGZ’s are externally derived, … states can exert little leverage apart from creating a conducive national and regional investment environment’ Parsonage (1998, p.263). Thus, nations are subordinate to the regional economic forces exemplifying how SGZ’s appear to be challenging the nation as a sovereign territory in this region

In contrast, Parsonage (1998, p.251) also states that, �Apart from confirming the significance of the state, �SGZ’s embody the emergence of a new relationship between capital and the state with not only economic, but social and political consequences.’ He also states, �This has required significant levels of state involvement in creating the appropriate conditions for subregional accumulation and resolving the adverse political, social and economic consequences of increased regional interaction’ Parsonage (1998, p.267). Kessler (1998, p. 53) sees the role of the state in a similar, if not stronger, light, �The state … massively intervenes in the direction of the economy and of its social framework, and thereby shapes its own foundation. More than intervening … the state directly fashions them’

This �transformation of state intervention’ Parsonage (1998, p.251) recognises that the state has input into, and control of, what happens to the capital supplied as well as the political, social and economic consequences of SGZ’s.

The Economies in the Asia Pacific Region

As SGZ’s develop in the Asia Pacific Region, and organizations such as ASEAN, AFTA, the World Trade Organisation, the East Asian Economic Caucus and other such structures have input in the region