Along with increasing liberalization of trade and investment, economic globalization has been making rapid progress in Asia. Goods, capital, technology, and management resources are moving briskly across national borders. At the same time, the domestic markets of individual Asian nations have been increasingly integrating with the world market.
Globalization had brought about rapid growth in most East Asian countries in about two decades before 1997, but it had also generated a financial crisis, followed by years of economic recession.
The East Asian experience has shown not only that globalization can enhance the efficient utilization of the factors of production, but also that it can destabilize national economies. Given that globalization will move even further ahead in the coming years, Asian countries should effectively utilize this trend but at the same time must endeavor to prevent or overcome any instability that could result.
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