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The Malaysian pelanduk (mouse-deer) prances amidst the stirring of India's crouching tiger and China's aroused dragon. The advent of globalisation has brought forth two of the world's fastest growing economies - China and India. Their emergence created a huge impact on the world economic frontier and an even bigger impact on the
Asian region's economic stability and prosperity. |
Caught strategically in between the lands of these two super powerhouses is Malaysia, one of the developing countries in Southeast Asia. What can and should Malaysia - with its Vision 2020 to achieve `developed nation' status - do amidst this globalisation phenomenon that has elevated the status of both China and India as the two emerging world giant powerhouses?
Globalisation
Wikipedia defines globalisation as "the worldwide phenomenon of technological, economic, political and cultural exchanges, brought about by modern communication, transportation and legal infrastructure as well as the as the political choice to consciously open cross-border links in international trade and finance".
The IMF and the World Bank have their own definitions but, in general terms, globalisation is the convergence and coming together of many peoples and countries as one global entity, as if the world has become one `global village'.
The Stirring of the Crouching Tiger and the Aroused Dragon
Globalisation's stirring of the crouching tiger, India, and the arousal of the dragon, China, has posed an increasing threat to the economy and commerce of many smaller, developing nations, particularly those in this region. It has made Malaysia relatively less competitive, reduced her ability to attract foreign direct investments (FDIs) and, quite perceptibly, slowed down our growth.
These two countries are not the only developing countries that have suddenly become more competitive than Malaysia but, giants as they are, they have the greatest potential to deprive us of our accustomed progress.
China has emerged as the factory of the world. Its abundant low-wage workers at the unskilled, semi-skilled and skilled levels, its voracious appetite for factory, equipment and knowledge jobs to keep its people employed, and its concomitant burgeoning consumer market, makes it absolutely irresistible. Since it joined the World Trade Organisation (WTO) in December 2001, American companies have
shifted their production, lock-stock-and-barrel to China. It is not out-sourcing, it is off-shoring. The same product is produced in exactly the same way and to the same standards but using cheaper labour, lower taxes, subsidised energy, and lower health-care and insurance costs.
Needless to say, the more attractive China becomes, the more competitive Malaysia has to be, whether on its own or together with ASEAN. There is now a scramble among developing nations to give companies the best tax breaks, education incentives and subsidies, on top of their cheap labour, to encourage off-shoring to their shores.
India, on the other hand is seen to be the world's leading provider of good professional and ICT services at cheaper cost because she has plentiful young, cheap and skilled workforce with good English language skills and exposure to the same kind of training and education in medicine, bio-tech, accounting and law, as someone in the UK or US.
India is now the preferred global ICT outsourcer and call centre of the world, and Indian professionals become accountants, legal and tax advisors to the world at lower costs.
One more strong point about India is her success in spawning within the Indian diaspora myriad entrepreneurial groups loosely linked together in what's known as "The Indus Entrepreneurs" (TIE) which are active around the globe and supportive of other Indians or Indian companies that wish to move offshore.
*This is the article extracted with permission from the MANAGEMENT magazine, Jul-Sep 2006, Vol. 41 No. 3. For more interesting articles, get your copy of MANAGEMENT magazine at any MPH Bookstores nationwide.
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