chapter4

• Globalization changed the relationships

  and interactions of countries all over the world.
• Just like the opening of the Suez Canal in the 19th century, globalization also opened many opportunities and possibilities.
• Surugiu and Surugiu (2015) defined

  economic interdependence as relationships

  between countries in which each country is

  dependent on another for necessary goods

  or services.
• According to Davis (study.com), companies

  become part of the trading network, when

  they depend on other companies to supply

  the products that they cannot produce

  themselves.
• In the latter 1980s and the early 1990s,

  loan in the United States had a boom.
• This boom in the lending industry and the improvements in communication technology made lending in different parts of the world possible
• Developing countries want a piece of this new money too because it promises improvement in the quality of the people’s lives.
• The promise of good profit and influence made the global financial community happy to lend to these developing countries (Dave, 2007).
• The Electric Herd- as a group made up of all the faceless stock, bond, and currency traders sitting behind a computer screens all over the globe
• Friedman (2000) referred to it as the electronic herd
• The Golden Straitjacket- According to Dave (2007), the herd is powerful because it has lots of money that it is willing to lend to others
• Once invested, it has the ability to sell off its investments if conditions in the country are no longer favorable for them

  To get her money, you have to make yourself look attractive to it.
• To fit into the Golden Straitjacket, a

  country must either adapt or be seen as

  moving toward
• golden ticket no 1. making the private sector the primary engine of its economic growth
• golden ticket no2 maintaining a low rate of inflation and price stability
• golden ticket no3 shrinking the size of its state bureaucracy
• golden ticket 4 maintaining as close to a balanced budget as possible, if not a surplus
• golden ticket no5 eliminating and lowering tariffs on imported goods
• golden ticket no6 . removing restrictions on foreign investment
• golden ticket no7 getting rid of quotas and domestic monopolies
• golden ticket no 8 . increasing exports
• golden ticket no 9 privatizing state-owned industries and utilities
• golden ticket 10 deregulating capital markets\
• golden ticket 11 making its currency convertible
• golden ticket 12 opening its industries, stock, and bond markets to direct foreign ownership and investment
• golden ticket 13 deregulating its economy to promote as much domestic competition as possible
• golden ticket 14 eliminating government corruption
• golden ticket 15 subsidies and kickbacks as much as possible
• golden ticket 16 opening its banking and telecommunications systems to private ownership and competition
• golden ticket 17 allowing its citizens to choose from an array of competing pension options and foreign-run pension

  and mutual funds
• Friedman (2000) said that the Golden Straitjacket is pretty much “one size fits all.” So it pinches certain groups, squeezes others, and keeps a society under pressure to constantly streamline its economic institutions and upgrade its performance.
• But on the political front, the Golden Straitjacket narrows the political and economic policy choices of

  those in power to relatively tight parameters (Friedman, 2000).
• Madeira (2014) explained regional integration as a process of increasing political and economic cooperation among states in close geographic proximity to each other
• Scholars often conceptualize. conceptualize regional integration as two broadly conceived processes: economic integration and

  political integration
• Economic integration is a more informal, societal-driven process that removes trade and investment barriers. This type of integration has been occurring at significant levels around the world.
• Political integration is a more top-down, state driven process of institutional creation at the regional level
• Political integration, including the creation of regional political institutions, is a process that has developed much more slowly outside of Europe
• It is a policy project motivated by interests by identity and adeological factors
• The Association of Southeast Asian Nation, or ASEAN was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration)
• by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam (1984), Vietnam (1995) Lao PDR and Myanmar on (1997), and Cambodia (1999) makes up what is today the 10 member-states of ASEAN (asean.org).