How Does Globalization Affect Malaysia

Influence of Globalization in Malaysia

Introduction
This paper focuses on how globalization affects Malaysia. Some of the main issues that will be highlighted are: the influence of globalization on International Business Trade for Malaysia, the roles of ASEAN Free Trade Agreement (AFTA) policies for ASEAN trade collaboration and competition, the macro environmental factors that international business should focus upon before launching market expansion, the roles of government in supporting international trade such as Foreign Direct Investment, how government should assist their businesses in competing in global arena: by protectionism or subsidizing, why has International Franchising strategy work and what are the industries that have utilized

All products and services are strongly linked to each other. For example, different parts of computer can be manufactured in different locations of the world and assembled in China to save cost. Both developed and developing countries such as Malaysia are cautious of its benefits not only socioeconomically but also geopolitically. Realizing this, Malaysia has started to take initiative in the globalization approach in the 21st century. For example, the export of Thai rice and sugar to Malaysia, telecommunication equipment to Vietnam, rice and vehicles including spare parts to the Philippines and electrical equipment, machinery, fruits and vegetables to Indonesia. Malaysia sustained a robust broad based growth in 2003, driven by strong domestic demand and sturdy export performance as a result of the influence of globalization. As stated in Economic Report of Malaysia (n.d), ‘Electrical and electronic continued to be Malaysia’s largest exporter earner, netting receipts amounting to RM194.8 billion (US$51.3 billion) or 50.9 percent of the country’s total export revenue’. As a result, this shows that Malaysia has always supported the idea of globalization within the country. This can be further supported by the statement made by H. E Ambassador Cheah Sam Kip (n.d). ‘Malaysia has always been an open economy; is committed to the market mechanism; and supports the trend towards globalization and

It has been gaining significant interest in international business. It has been known as a verified way of expansion to overseas markets without large capital for franchisors. As stated in Southeast Asia’s Largest Franchising Exhibition (n.d), ‘Franchising is also a good way of assuring full dedication in the businesses’. It is also a good way to invest in a business because the franchisee does not have to spend much money and invest on precious man hour time promoting the business as franchising saves entrepreneurs’ time, effort and money from advertising and promotions. Franchising is so successful in Malaysia because government promoting the development of franchising by forming Malaysian Franchise Association in 1994. Stated in the website of Malaysian Franchise Association (n.d), ‘Both current and prospective franchisors and franchisees will be catering to Malaysian Franchise Association as a resource center’. Likewise, the government has been supporting franchising in Malaysia for several years after realizing the importance of it in