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The era of globalisation in
today's postmodernist context is viewed as a new phenomenon which the world in general and the business world in particular must respond to. Globalisation describes the political,
economic, social, business and cultural atmosphere of today. The insights on globalisation
seem to be attracting a great deal of attention and generating serious concerns across
many sectors. It has great repercussions on Malaysia, its companies and managers. The
implications could lead to the significant reorientation of our companies in order to
encounter this challenge. At the same time, our managers will also have to pick up new
skills to adapt to the changes brought about by globalisation. |
Definitions of globalisation
There is no single universal definition for globalisation as it means different things to different people. With globalisation, people around the world are more closely linked together than ever before. Information and money flow faster than before. Goods and services produced in one corner of the world are increasingly available in all parts of the world. International travel becomes more
frequent while international communication becomes more common.
Therefore, globalisation may be described as the coming together of all the countries in the world as one entity. It is an international system of the domestic politics and foreign relations of practically every country in the world. According to the International Economic Institute, USA, globalisation is defined as: "The increased free flow of cross- border aggregate products and market factors
through trade, emigration and capital amongst nations". However, the above definition is not comprehensive enough as the definition should also include the free flow of materials, information and services as well.
Implications of the World Trade Organisation (WTO)
WTO was set up in January 1996 as a multinational institution which polices and regulates the global trading system, resolving trade disputes between member nations. Moreover, the WTO also coordinates efforts to further decrease barriers to cross-border trade and investment.
WTO had exerted a lot of pressure on Malaysia to decrease most of its import duties in 2005. Furthermore, if WTO succeeds in introducing the Trade-Related Investment Measures (TRIM), then Malaysia will be under the obligation to offer national treatment and national status to foreign direct investments. This will erode Malaysia's national sovereignty and national integrity. This kind of
encroachment will definitely be resented and resisted.
But for how long can this be defended? The only sensible and practical approach is to fight for time and prepare for the worst. In the case of Malaysia, the problems due to WTO are even more severe because of the special circumstances of our country.
In addition, there are certain allegations that WTO does not really look after the interests of countries in the world as a whole. Some of the main concerns brought up by developing nations, including Malaysia, are listed as follows:
- WTO only looks after the interests of multinational companies;
- WTO is in actual fact wrecking the environment;
- the US adoption of WTO was undemocratic and unfair;
- WTO erodes local development and punishes the poor; and
- WTO erodes national sovereignty and power.
Challenges for Malaysia
With the process of globalisation gaining speed, there is pressing reason for Malaysia to transform itself into a knowledge-driven economy. Advances in ICT are revolutionising information exchange, trade, business, industries, the bureaucracy and even education. Nevertheless, Malaysia's approach to globalisation has been guided by the fundamental principle that the pace of globalisation in
Malaysia must be based on Malaysia's terms, circumstances and priorities. It may not always be possible but it is essential to ensure that everybody benefits - both the foreign investors and Malaysians.
A gradual approach is also vital to keep away from the excesses and problems related with all new ideas, principles or processes, including globalisation. Globalisation cannot be seen as an end in itself, but as a means to an end, which is a better living standard for the people and Malaysia's continuous freedom from foreign domination.
Therefore, the challenge for Malaysia is not how to manage globalisation but how to ensure it works for Malaysia and that Malaysia is able to benefit from it. The challenge is to influence the thinking on globalisation, to reshape it and decrease the chances of it going off-track and wrecking our economies and countries.
* Extracted with permission from MANAGEMENT magazine (April - June 2006).
You can read the rest of Professor Dr Chin's article, in MANAGEMENT magazine (April - June 2006). The MANAGEMENT magazine is available at all MPH Bookstores nationwide.
Professor Dr Chin Yew Sin a Malaysian, is a visiting professor of Zhongshan University, Guangzhou, China and CEO of Oriental Strategy Research Centre.
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