Protectionism-fear of the West towards the East

"living in fear cripples nations"-22/3/06
"New globalisation debate threatens Asia"-12/4/06

With the rise of China and India, Asia on the whole is gaining an increasing share of world markets and trade. Many countries in the West are starting to feel that their supremacy and dominion in the world is being threatened and have started taking pre-emptive measures, particularly protectionism. Protectionism stifles growth and goes against the principle of fair competition and affects economic growth in especially Asia which has many poor nations that depend on revenue from exports. Countries implement such measures due to a rampant fear of losing jobs, brainpower and national security. Outsourcing and cross-border mergers are facing more resistance and opposition now than ever. Such measures might eventually stifle the rise of Asia and eventually, the development of the world economy and it will not bring about benefits for anybody.

Increasingly, there is a debate raging on about the benefits and wisdom of cross-border mergers and acquisitions versus the imperative of economic globalisation relentlessly pushing such restructuring in the name of productivity and cost-cutting. The Western states have started to feel pressure from Asia and have resorted to certain measures. For example, the China National Offshore Oil Corp(CNOOC) was not allowed to buy the oil company United and the purchase of US container ports by a Dubai-based organisation was busted. In my opinion, these stem from a fear of being overtaken and the increasing doubt that globalisation does not necessarily bring about benefits for everyone.However, these various moves augur bad for Asia which might find its way into the big league of multinationals blocked with obstacles. If Asia wants to continue growing rapidly so that the lives of millions can be improved, there is an urgent need to allay such fears of the West.

Also, protectionism will ultimately cause the decrease in global relations. Globalisation was intended to close the gap between nations, and even individuals all around the world. However, with increasing globalisation, there are increasing worries that the growth would only be concentrated in Asia and that the West would be increasing obsolete when they can't keep up with Asia's breakneck pace of growth. This augurs bad as a parallel can be drawn to a similar situation before World Wars I and II. There was a decrease in global relations thenwhen there was propensity to use economics as a tool of power politics, like when US tried to limit Japanese expansion in Asia by limiting Japan's energy imports. Increasing nervousness can only create more suspicion between countries and the worst possible scenario that could be happen is a war. The fear of being overtaken, the fear of national security being compromised by some Asian nation could very well create a cataclysmic mix. However, such scenarios might not happen if we take appropriate measures to allay such fears and suspicion. European nations and the US on their part could encourage more free trade without trade barriers and put more faith in cross-border acquisitions. Of course, with regard to deals that might affect national security as in the case of French telecommunications giant, Alcatel's bid fo Lucent, a US company that takes charge of intelligence-related issues, caution has to be exercised. In this case, even acquisition by a fellow Western counterpart faced opposition. Asian countries on their part, could help to improve confidence by being more transparent about their economies and also to have better human rights records.

Ultimately, we hope that globalisation can indeed deliver its promised returns.