"Modern capitalism developed within a system of nation-states. Trade and investment between countries was important, but they were usually conducted by companies rooted in one home country. Some companies had large holdings in foreign companies in which ultimate control remained "at home". National governments controlled key economic institutions and thereby shaped their national economies.

The system of nation-based economies is rapidly evolving towards a global economy. Computer, communication and transportation technologies have lessened distance as a barrier, making possible the co-ordination of production and commerce on a global scale. Corporations are globalising not only to reduce production costs, but also to expand markets, evade taxes, acquire knowledge and resources, and protect themselves against currency fluctuations and other risks. National governments have become less and less able to control their own economies".

Globalisation has a certain set of ideas and principles behind it. These ideas are often referred to as neo-liberal.

"The neo-liberal agenda is based on the following ideas:

The market rules.
This means reduced state involvement in the economy. The state is only responsible for establishing conditions for production and for the supply of infrastructure.

Privatisation.
Sometimes called the "restructuring of state assets". The state sells some, all or parts of its enterprises through privatisation programmes.

Deregulation.
Fewer laws regulate the economy. Fewer price controls and subsidies.

Cuts in government spending.
Less money is available for welfare programes in education, health and social security. It also means job losses in these sectors.

Competition.
Private firms compete for a share in the market, workers compete with each other for jobs, and human labour competes with machines.

Outward orientation.
The economy is organised to export goods to be sold on the world market.

Trade liberalisation.
Taxes on imports are cut and domestic industries are no longer protected from outside competition.

Flexibility.
The workplace is organised flexibly to suit the needs of the market. Restructuring, rationalisation, down-sizing and right-sizing are words associated with flexibility. Workers recognise that these are often just new words for retrenchments". (adapted from South Africa in the Global Economy by the Trade Union Research Project).

Countries in Asia have also been affected by globalisation. But "some countries in the Asia-Pacific region (often called the Newly Industrialising Countries) followed economic strategies which were opposed to the market approach, which is at the core of the neo-liberal agenda. High growth rates in these countries were associated with a strategy of state assisted capitalism, which included:

• strategic economic planning managed by government

• state targeting of industries to develop and subsidise them

• reserving the domest market for local industries by maintaining tight restrictions on imports and on foreign investments.

But in trade negotiations with Korea and other Asian NICs, the United States demanded the dismantling of foreign investment restrictions, protectionist mechanisms, state enterprises, and other practices of state-assisted capitalism - in short all the mechanisms that enabled the NICs to grow and gains a significant degree of autonomy in the world economy.

To a considerable extent, the current downspin of the region’s economies should be seen as the inevitable result of the region’s closer integration into the global economy and heavy reliance on foreign capital". (Adapted from articles by Walden Bello)