by Shehzad Ghias

Created on: February 22, 2009

We live in a highly globalized world; decisions made on Wall Street have bearings on countries throughout the world. The extent of globalization can be seen from the current unprecedented global recession. Through trade and exchange national boundaries have diminished and gradually inter dependence has increased severely. Asia is a very large market for foreign suppliers but at the same time it is a huge supplier of goods to developed countries as well. The large mass of land that encompasses Asia can be broadly divided into three major areas, East Asia, West Asia and South Asia. East Asia comprises of countries like China, Japan, North Korea, South Korea, Malaysia, Singapore, Indonesia and Thailand whereas South Asia comprises of countries like Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka and West Asia consists of the Arabian Peninsula and countries bordering Europe.

In order to understand the global, economic and cultural factors affecting these regions we need to put things in context. South Asia is dominated by India, which is an extremely diverse country politically and economically. Relationships in the region are tense due to the tension between India and Pakistan as well as India and China. Allegiances in East Asia are largely uncertain post cold war. The underlying tensions between South Korea and North Korea still exist. The economic situation in these countries is uncertain as well; after the Baht was devalued in Thailand on 2 July 1977 a financial crisis was sparked in East Asia affecting these countries adversely. Asia's index in the International Finance Corporation emerging stock market index dropped by 53%, since the countries have been a road to recovery and have emerged as countries with great potential. However, the recent global crisis has hit these countries as well. Before embarking on a financial analysis of the region, let us first look at issues and challenges faced by Asia individually.

Most Asian countries are scarred by security issues and political instability. The advent of terrorism has made the situation for these countries much worse than it ever was. Afghanistan and Iraq are recuperating from the effects of war whereas Pakistan and India are suffering the consequences as well with security issues in their own countries. Sri Lanka is faced with constant threat from the Tamil population. The tensions in between the countries give rise to more cross border terrorism. Kashmir is pressing issue between the countries

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