Southeast asian regional integration and globalization : an overview

Abstract

The process of economic development in Southeast Asia has been characterized by two major features: outward orientation and market friendliness. These two strategies have significantly contributed to a greater economic integration in the region by increasing trade, capital and labor flows. The openness of the economy in combination with less regulation has resulted in large inflows of foreign direct investment. Gradual liberalization of the economy has led to greater efficiency in the allocation of resources. Export promotion, coupled with good macroeconomic management, led to rapid industrialization. Southeast Asian rapidly changing economic structures are evolving into an intricate and complex set of interdependencies feeding upon both cooperation and competition. Pacific Asia is now an important market for itself not because of any one specific institutional arrangement but simply as the result of market forces and the shifting of comparative advantage through the region. Furthermore, increases in trade and capital flows stretch far beyond the region contributing to global integration.