MARKET RESEARCH ARTICLE REVIEW ON SPATIAL ECONOMICS: THE DECLINING COST OF DISTANCE BY BAIN AND COMPANY (2016)

SPATIAL ECONOMICS: THE DECLINING COST OF DISTANCE

SPATIAL ECONOMIC 

Producers and buyers are dispersed in space, and overcoming the distances between them can be costly. Much commercial activity is concerned with “space bridging,” and much entrepreneurship aimed at making good use of locational opportunities and cutting the costs of transport and communication. Spatial economics is the study of how space (distance) affects economic behaviour. Throughout history, transport costs have hampered specialization, and improvements in transport and communications have been among the main driving forces of economic progress. In medieval Europe and China, most ordinary people never moved farther than twenty miles from their birthplaces, and before the advent of book printing, most people knew very little about what happened beyond those narrow horizons. Firms that depended on heavy inputs, such as steel makers, used to locate near the source of major inputs—coal mines, in particular. By contrast, firms that interacted intensively and frequently with customers tended to locate near the demand. Thus, gasoline stations are still found near busy intersections.

Spatial economics deals with what is where, and why. The “what” refers to every type of economic entity, i.e., production establishments, other kinds of businesses, households, and public and private institutions. “Where” refers basically to location in relation to other economic activity, i.e., to questions of proximity, concentration, dispersion, and similarity or disparity of spatial patterns. The “where” can be defined in broad terms such as regions or metropolitan areas, or in micro-geographic terms such as zones, neighbourhoods, or sites. The “why” refers to explanations within the somewhat elastic limits of the economist‘s competence. Location theory describes this kind of analysis when the emphasis is upon alternative locations for specified kinds of activities, such as industry. Regional analysis is concerned with groupings of interrelated economic activities in proximity, within specified areas or types of areas; and the theory of interregional trade refers to the economic relationships between such areas. 

The cost of distance is highly impacting both business and personal decisions. For example, it is one of the considerations companies are taking into account when deciding on the location of their production site(s). According to Bain research, the cost of distance will decrease sharply within the next decades whereas the majority of the companies have not yet thought about the implications for their business. On the other hand, it is also an important factor for families deciding where to live (e.g. proximity of the company they work for). The article gives a very clear overview on the main catalysts driving the drop in cost of distance and can be summarized as follows: 

 1) High-speed connectivity will increase productivity of working at a distance (think about the cloud-based collaboration) 

 2) The cost of physical transport will drop. New technologies, such as autonomous vehicles and drones will improve transportation efficiency 

 3) Increasing efficiency in small-scale production. Increased automation in the production process (robotics, 3-D printing,..) will decrease labor cost, lowering the number of households to be served to break even 

URBAN PLANNING THEORY AND SPATIAL ECONOMIC 

Many urban planners believe that population densities can be fixed by design as cities expand. Many urban development plans aim at compact cities growth. However, compact cities are possible only with very high land prices produced by constraints on land supply. My view that the spatial distribution of land prices and densities are closely correlated and that they follow a predictable pattern produced by market forces. By using models developed by economists, planners could better understand both the pattern of densities in existing cities and how these densities are likely to respond to changes in size of population, households’ income, and transportation speed and cost. 

Concerns for an over-consumption of land by cities are best addressed by identifying possible distortions in the land market caused by an abusive use of eminent domain that under-prices agricultural land. Setting arbitrary spatial barriers to urban expansion, such as green belts and urban growth boundaries, results in higher land and housing prices. Land prices and population densities are closely related and are produced by market forces. We have also seen that there is no optimum density for urban development and that within the same city densities may vary by order of magnitude from the centre to the periphery. The population density in a particular neighbourhood is determined by trade-offs between households’ desire to consume more land and floor space and the commuting cost in time and money. 

Households with different preferences and incomes make different trade-offs. Some low-income households prefer to reduce drastically their land and floor space consumption in order to reduce commuting costs. Other households with similar income may make different trade-offs. Planners cannot possibly know the reasons that households may have in selecting a specific housing location and land consumption. Therefore, planners should abstain from arbitrarily fixing densities through regulations. Neither should they try to distribute population according to a designed spatial pattern no matter how clever the geometric arrangement appears to be. Planners should use the standard urban model to better understand how markets work in the city they are managing. They can use the model to anticipate the effect of regulations and infrastructure on land prices and rents.

They can plan, finance and build the infrastructure that would increase the supply of land and therefore decrease housing cost. They can design transport systems that decrease commuting time and cost, another way of increasing the supply of land and increasing mobility. They should design transport systems that are consistent with the densities set by the land markets rather than design densities that would make a preselected transport system feasible. In general, fixing minimum consumption for land and floor space through regulations such as minimum plot size, maximum floor area ratio, and maximum number of dwelling unit per hectare introduces rigidities in the market that have negative impacts on poorer households for whom these regulations are binding. Urban planner should therefore, abstain from using these regulatory constraints on minimum land and housing consumption as they hurt the poor the most and trigger the growth of informal markets.

Only after they have a good understanding of how local real estate markets function can planners anticipate future land market values to plan infrastructure networks that will be consistent with anticipated densities. Constant monitoring of land prices and rent could provide planners with feedback that could help them amend their infrastructure plans if their projection appears to diverge from reality. Unaffordable housing is a plague affecting many large cities. Monitoring the ratio between median income and median housing price allows us to constantly measure housing affordability. When the price to income ratio becomes higher than 4, planners should take immediate action. This action could be to increase land supply through new infrastructure development or to audit land use regulations and building permit practices that may make developed land and housing prices abnormally high.  

Urban planners should be held responsible for unaffordable high price/income ratios in the same way that public health officials are held responsible for infectious disease epidemics, or police are held responsible for high crime. The standard urban model is a very crude instrument that provides an understanding of the basic movement of land prices and rent when income, transport costs, and land supply change over time. Planners could design more complex models to anticipate price movements or commuting patterns in cities with specific constraints, in particular topographical constraints like bodies of water or steep mountains. However, no infrastructure or regulatory design decision should be taken without accounting for its impact on the land market.

POSITIONING KUALA LUMPUR CITY REGION IN THE GLOBAL CITIES NETWORK: ANALYSING MALAYSIAN URBAN GOVERNANCE STRATEGIES IN THE MILLENNIUM ERA

In the age of globalization, it was argued that major cities in the region should be positioned in the global city system, in order for these cities and their immediate regions are effectively developed. As the urban and regional economic prospects increase reliance on the participation in the fast moving international and global economy, cities that are unable to adapt to these globalchanges and requirements would be marginalized. The marginalisation of major cities from the mainstream of global development will affect their progress and in most cases be determined by exogenous forces. At the same time, the emergence of new global economic and informational societies has created a new form of spatial development, the global cities. Such status was achieved only when a city and its region becomes a major center of international finance, transnational corporate headquarters, related high-level and specialized services, information processing and advanced telecommunications, a city with an international command and control functions (Sassen, 1991).

To what extend the above criteria and indicators really described the position of cities in underdeveloped and developing economies? It is the intention of the paper to deal with such a question, with particular reference to the city of Kuala Lumpur. Although Kuala Lumpur has substantially part of the international economy for the past three decades, it was argued that the city exercises little of the global or even regional control functions that world cities proposes. For this reason, the authors argued that Kuala Lumpur and possibly other cities in the rapidly developing economies be positioned in a different setting, and with different criteria and indicators, as compared to the existing global cities. Regional disparity has long been recognized in Malaysian development scenario, particularly between the more-developed western region and the less-developed eastern and northern regions in Peninsular Malaysia.

All the Five Year Malaysia Plans, starting from the Third Malaysia Plan (1976-1980) have placed special emphasis on the objectives and strategies of regional development. However in the decade of nineties, in conjunction with globalisation era, the direction of Malaysian development plans have been changed, towards becoming more competitive in the global economy. To some extend after 30 years, the issue of regional disparity is remains unsolved, and yet new emphasis on global competition has been dominated in development strategies and plans. However, analysing from the current achievement of national development, the position of Kuala Lumpur in the global cities network still unsignificant, reflecting the uneffectiveness of the strategies toward strengthening Malaysian competitivenes in global era.

Malaysian's Development Vision, particularly toward achieving the status of developed country in the year 2020. Affirmative action as a policy response to ethnic riots is a fairly unusual, indeed unfashionable, policy response, partly because inequality and conflict have a complex and much debated relationship. General vertical income inequality, measured as the gap between poor and rich, has not been found to have a statistically significant relationship with the onset of civil unrest or conflict (Collier & Hoeffler, 2000; Fearon & Laitin, 2003). And yet, an accumulating body of evidence suggests that horizontal inequality, inequalities between identity or ascriptive groups on the multiple and inter-related planes of the political, the socio-economic, and the cultural, may be politically explosive (Stewart, 2001).

These links between ethnicity, inequality and conflict among ethnic groups using a multidimensional approach, with a view to identifying those policies which might work in other situations of ethnic conflict. Taking Malaysia as the model for my research, I investigate and measure to what extent inequalities between ascriptive groups have fallen in that country between 1970 and 2000, a period during which various affirmative action policies were applied in fields ranging from education and government employment to business. Horizontal inequality in the key indicator of income is re-assessed. In addition, changes in access by ethnic group to educational opportunities; the distribution of employment by sector and by occupation; urbanisation and housing distribuition; ownership of household assets such as houses and cars; and infant, toddler and maternal mortality rates are all considered individually, while a multi-dimensional index of socio-economic inequality is subsequently constructed for comparison purposes.

GLOBALIZATION MODULE : FINANCIAL GLOBALIZATION BY DR JON CLOKE

The aim of this lecture is to account for the rapid globalization of the financial service sector in the modern world economy. The lecture has four specific objectives: (i) to present an adequate definition of the financial service sector; (ii) to account for the rapid ascendancy of service industries in the world economy; (iii) to present a case study of producer financial service growth; and (iv) to introduce the major commentators who have written on the globalization of the financial service sector in the world economy.

Processes of financialization are claimed to manifest at a number of scales, ranging from higher levels of instability within the economy as a whole, through pressure exerted on corporations by capital markets, to the equity effects of the financial system on individuals and households.. In seeking to explain the change within contemporary society financialization has to date been relatively underplayed, particularly when compared to similar and related concepts such as neoliberalization. While the concept of financialization has the potential to unite researchers across cognate social science fields, thereby building critical mass and recognition within social studies of money and finance, we argue that to date research has been insufficiently attentive to the role of space and place, both in terms of its processes and its effects.There are 6 sessions in this module such as:

Session 1 - Banking and the Financial Services Sector - 24 November 2009

Session 2 - The Service Sector, the WTO and GATS - 27 November 2009

Session 3 - Asian, Russia, the World : Considering Financial Crises - 1 December 2009

Session 4 - Globalization, Financial Services and the Environment - 4 December 2009

Session 5 - Financial Services and the Role of Corruption - 8 December 2009

Session 6 - Chaos and Kondratiev Waves : Self Governance, Creative Destruction or Free Market - 11 December 2009

ASSIGNMENTS DATELINE

I have gave a chance to do a few assignments under module 09GYP005 which related to my research. The lenght of the assignments are 6 pages. The content and format presentation are related to the high impact journal format. It's must be analytical and synthesis about the literature reviews and focus the question.

Block 1 : An Introduction to Key Debates and Issues in Globalization by Dr Ed Brown

Assignment : The idea of globalization is too broad to be of much use in forming our understanding of the development challenges facing Southern countries in the 21 st century. To what extend do you agree with is assertion? Your answer should combine a general discussion of the utility of the ideas of globalization with a detailed case study of one particular country.

Dateline : Friday 13th November, 12 noon

Block 2 : Imperial Geopolitics in a Globalizing World by Prof Dr David Slater

Assignment : Discuss the key feastures of imperial politics in today's globalizing world

Dateline : Friday 27th November 2009, 12 noon

Block 3 : Regions and Cities in Globalization

Part A : In What Sense a Regional World? By Dr John Harrison

Assignment : Regions are the fundamental building blocks of an increasingly post-national and globally interconnected modern world. Discuss

Dateline : Friday 11th December 2009, 12 noon

Part B : Cities and Globalization by Prof Dr Peter Taylor

Assignment : Consider in which ways Janes Jacobs' ideas on moral syndromes might enhance the thesis advanced in Global City-Regions and Cities in a World Economy

Dateline : Friday 11th December 2009, 12 noon

Block 4 : Financial Globalization by Dr Jonathan Cloke

Assignment : Are economic crises inevitable?

Dateline : Friday 15th January 2010, 12 noon

09GYP005 GLOBALIZATION: KEY DEBATES AND ISSUES WITH DR JOHN HARRION - REGIONAL WORLD

Beginning 9 November 2009, Dr John Harrison will take over the globalization module on the topic REGIONAL WORLD. The objective of this section is to assess the role of regions in globalization. Against the backdrop of accounts heralding the transition to a ‘borderless’ world made up of transnational flows of knowledge and capital, a body of literature known as ‘the new regionalism’ appropriates how in globalization regions have become more, not less, important in a global era. This section will look at the distinction between ‘new regional spaces’ and ‘new spaces of regionalism’. This will be done through reading-centred seminars.

As well as specific readings for each session, there is one key reading for the block which is:

· Jones, M and MacLeod, G (2004) ‘Regional spaces, spaces of regionalism: territory, insurgent politics, and the English question’ Transactions of the Institute of British Geographers 29, 433–452.

Session One: New regional spaces

This session will focus on the importance of regional economies in the global era. The readings to be discussed in the session are:

· Storper, M (1997) The Regional World – Territorial Development in a Global Economy. Guildford: New York [Chapter 1 – The resurgence of regional economies, 10 years later (pp. 3-25)]

· Jones, M and MacLeod, G (2007) ‘Territorial, scalar, networked, connected: ‘In what sense a ‘regional world’?’ Regional Studies, 41, 1177-91.

Session Two: New spaces of regionalism

This session will focus on the notion of ‘region building’ in the global era. The reading to be discussed in the session is:

· Paasi, A (2001) 'Europe as a social process and discourse - Considerations of place, boundaries and identity.' European Urban and Regional Studies, 8, 7-28.

Dr John Harrison has done put together some questions which should help us to focus on what we need to take away from the readings. Try to answer the questions as best we can (some are easier than others and he has tried to put page numbers so we can see where in the article the answer lies). We will be using these papers, and in particular the questions/answers to guide discussion/debate in the seminar next week, so it is important that have read them and attempted to answer the questions.

ASSIGNMENT PRESENTATION - 09GYP005 30 OCTOBER 2009

In Loughborough University, every student before submitting their assignment they have to do their presentation on the preliminary finding of their research. They only give 5 minutes presentation with simple slides presentation. Here are my slides presentation.

3rd WEEK IN LOUGHBOROUGH UNIVERSITY - CLASS 09GYB210

After 4 weeks in Department of Geography, Loughborough University, I attended 4 classes under module Globalization, Citizens, and the State for class of 09GYB210 - Globalization by Dr John Harrison. The summary of 4 lectures stated below:

NEW STATES SPACES AND URBAN GOVERNANCE

While some scholars have focused on the creation of new modes of global governance, others have brought attention to transformations of governance within nation-states. This lecture examine the ‘re-scaling’ of political power in cities and city-regions in the Global North.

• How have urban policies changed in response to the imperatives of global capitalism?
• How have urban politics contributed to new forms of territoriality?
• In what ways does the re-scaling of states intersect with neo-liberal ideologies?

THE TRANSFORMATION OF CITIZENSHIP – THE WELFARE STATE

Transformations of governance have been accompanied by changing relationships between states and their citizens. Some argue that state devolution and the dominance of neo-liberal ideologies threatens the ability for marginalized groups to participate fully in society. Indeed, Western states seem more inclined to roll back social services and to curtail social rights, as seen with ‘workfare-ism’

THE TRANSFORMATION OF CITIZENSHIP – THE WORKFARE STATE

To explore the changing relationship between the state and its citizens under globalization

• Why do we now talk about a workfare state?
• What is workfare?
• Where is it?
• What has happened to the welfare state?
• We still have an NHS don’t we?
• What affect does this have on the relationship between the state and its citizens

THE TRANSFORMATION OF CITIZENSHIP – POST-NATIONALISM AND COSMOPOLITANISM

If for some, changing modes of governance signal the erosion of social rights, for others, it offers new possibilities for enhanced political and human rights. Some scholars, for instance, speak of the emergence of ‘post-national citizenship’, a concept that relates in particular to the expansion of the rights and privileges enjoyed by immigrants in the global North. Others have commented on the proliferation of dual citizenship arrangements and the ability for people to participate in politics across national borders. To what extent are notions of ‘human rights’ integrated into national systems? To what extent have notions of citizenship been de-linked from membership in a ‘nation’? To what extent are individuals able to access rights and to effect political change outside the framework of national citizenship? Can we fathom the emergence of ‘cosmopolitan citizenship’?

CONTEMPORARY SOCIAL MOVEMENTS

Following on from the previous lecture on post-national citizenship, we explore the ways in which ordinary people mobilize themselves politically in a globalized context. The period of state restructuring in the global North has witnessed a decline of labour unions and class-based social movements. But is has also seen the rise of new forms of social action and political consciousness. We begin with a discussion of the ‘new social movements’, a label given to the environmentalist, feminist and peace movements that gained momentum in the 1980s. We will then turn to other social movements that have emerged in recent decades, including the anti-capitalist and anti-globalization movements. We will examine how these various movements have mobilized both particular cultural identities and universal conceptions of human rights, and how that have harnessed information technologies to operate locally and globally. Finally, we will evaluate whether these movements represent a fracturing of broad-based political communities or an opportunity to build global alliances and networks to deal with global problems.

CLASS 09GYP005 : GLOBALIZATION : DEBATES AND ISSUES

Last Tuesday and Friday, I attended second lecture but this time with Dr Ed Brown. The lecture module called GLOBALIZATION : DEBATES AND ISSUES. The subject is ntroducing students to debates surrounding the concept of globalization and to show how this concept has been invoked in a variety of geographical scholarship on the nature of space, place and territory.Outline the contributions of geographers to the understanding of globalization in the context of wider debates about processes of globalization across the social sciences. The module will be divided into a number of blocks, each block will considera particular theme, or set of themes, concerning key debates and issues in globalization. Specific themes may include:

(a) An introduction to key issues in globalzation;

(b) The importance of identity and difference in the construction and representation of geographical knowledges in relation to globalization;

(c) The place of politics and the political in the analysis of globalization;

(d) Geography and globalization;

(e) Imperialism, globalization and North-South relations.

Students will be able to show knowledge and understanding of:

(i) the contested definitions of globalization as process and epoch;

(ii) how the relational geographies of nation, region and locality are transforming under the auspices of globalization;

(iii) the changing importance of key concepts of space, place, and territory in a global era;

(iv) how connectivity and cuts, flows and fixities, speed and scale, borders and breaks, nodes and networks are producing new spatial orders at a global level;

(v) the challenges involved in undertaking geographical research and data collection to study contemporary globalization;

(vi) the distinctive contribution that geography can make to policy debates under conditions of contemporary globalization.

CLASS 09GYB210 - GLOBALIZATION

Last Monday and Tuesday, I attended Dr John Harrison's lecture on Globalization. He has listed below some questions to help guide me reading of Neil Brenner’s book ‘New State Spaces’ (NSS), but also other material relevant to this block of lectures. I will see that most of it is not asking me to understand every line/paragraph/page of the book, more where the ideas come from and key terms/concepts to explain what is going on:

1. What 2 word concept does Bob Jessop use to explain the rescaling of state power?

2. In which 3 directions has state power been rescaled? example 2 are obvious but what is the 3rd?

3. What 3 terms does Bob Jessop attach to the 3 directions that state power has been rescaled?

4. Have Bob Jessop and Neil Brenner's paths crossed? (look at their biographies - webpage’s online!) Have they collaborated, and if so, who else has been involved and what have they done?

5. Who do Bob Jessop and Neil Brenner draw their main inspiration from? You are looking for one person in Neil's case and two in Bob's; example could this explain their slightly different take on the same topic?

6. Where did Neil Brenner visit to get inspiration for NSS? (see intro/preface to NSS) nb most of it is based on studying one part of the world. Why do you think this area of the world was a good place to study? What was going on during the late 1980s through the 1990s when Neil was there?

7. Which major geographical debate of the last decade has Neil Brenner been involved in? Does this link into any of the concepts/debates covered in this block of lectures?

8. Why do they both talk about 'governance' and not 'government'? What is the difference - how does it fit into what you know from lectures? Think pre-1970 and post-1970.

ATTACHMENT PROGRAMME AT LOUGHBOROUGH UNIVERSITY

I have opportunity to pursue my PhD research at Globalization and Global City Network (GaWC) , Department of Geography, Loughborough University United Kingdom from 23 September 2009 until 23 December 2009. I would like to thank Department of Public Services for sponsoring my study in United Kingdom.

THE ROLE OF CORPORATE GOVERNANCE IN THE CURRENT GLOBAL ECONOMIC

The current global economic challenges have put MNC and TNC in the front and centre of attention. They are under the microscope, their past actions are being scrutinized and their behaviour and actions going forward are being closely watched. They are expected to rise to the challenge and steer their organizations and corporations out of troubled waters that the world economy is now in. The business world is witnessing massive upheaval and scandalous revelations. The crisis calls for a re-examination of the corporate culture and the way business has been done. In some of the scandalous revelations in the US, it has proven that business as usual is not an option any more. That model has been broken. A new way needs to be found. It calls for active, innovative, aggressive corporate governance and bold decisions. In view of this, effective corporate governance has never been more important.

Periods of economic stress test the ability and capability of MNC and TNC and demands that they rise to the challenges. Crisis tests an individual’s abilities more than the good times ever do. Undoubtedly, most leaders will be tested by a few minor and major crises during their tenure. How the individual steers through such troubled times will show the mettle he or she is made of. The MNC and TNC of today are being tested on several levels, both internally and externally. While they may have some control over their internal environment, they certainly do not know what awaits them externally in the current volatile business environment. Loyal and hardworking employees are the best asset of any organization, and yes, even in the high tech era and in the computerized age. It is important to retain talent and more so during difficult times. Strengthen and retain what you have.

Pull your talent together and take decisive decisions. Do not let good talent get away. It will be more difficult to find them when the recovery comes, which will come, just as the sun will rise again tomorrow. Today, the MNC and TNC is expected to be pro-active in contingency planning, to anticipate and prepare responses. Expediency in the appropriate response can negate losses. As the Chinese word for crisis, Wei ji, is composed of two characters signifying “Opportunity” and “Danger”, the current crisis with its many downsides also offers opportunities. It is necessary for business leaders and MNC and TNC to seek out the possibilities in these challenging times. You must do this to remain relevant, sustainable and competitive. Corporate governance is a demanding role even during times of relative calm. It calls for balancing of internal and inter-business relationships and more so during a crisis, when courage and desire to lead well and effectively are put to the test.

Businesses are downsizing, retrenching and reducing the number of work days. Many of the institutions that were household names around the world have disappeared and the workings of their internal corporate culture has been shaken to the core. The faith and confidence of their employees, shareholders and customers has been shattered and it will be an uphill task to regain their trust and rebuild the company’s reputation. In the fast paced world of business, MNC and TNC must not only multi-task and cater to the varied and different demands on their time from the multitude of constituents; but they must be ahead of the business cycle in ensuring the continued survival of their businesses. While the bottom line and the financial performance of a company is important, there is more to running a corporation than just bottom lines. The continued survival of the company and that of the MNC and TNC will depend on the corporate governance and skills demonstrated in enhancing competitiveness and efficiency of the corporation; retaining and building confidence of their employees, maintaining trust of shareholders and retaining loyalty of customers.

In the current difficult environment MNC and TNC are required to deliver far more than they have done so in the past. A lot rests on your shoulders as business leaders – shareholders, employees, customers and the community at large demand total commitment from business leaders to deliver on your promise to provide the best service and quality products with honesty and integrity. They will accept nothing less.

THE OPPORTUNITIES AND IMPLICATIONS PRIVATISATION IN MALAYSIA

Upon gaining independence, the Government, inevitably had to take the leading role in developing the country, in view of the limited capacity of the local private sector at that time in terms of entrepreneurial, managerial and financial resources. The kind of egalitarian principles which influenced many developed countries to nationalise or even to become communist also affected Malaysia with its many imbalances and disparities. From the provision of utilities such as roads, water, electricity, telephone, postal services, etc., the Malaysian Government moved swiftly into purely economic activities. Within a very short period hundreds of Government owned companies were formed to do, among other things, housing development, trade, run hotels, estates, mines, shipping, airlines, construction and manufacturing. By the 1980`s some 10 billion ringgit was directly invested in about 1,000 companies.

Guarantees total 25 billion ringgit. While some succeeded admirably, most failed. Even those which are monopolistic are not able to pay their way, much less make a profit. The pendulum had obviously swung too far. While we cannot say the policy is a total failure, for much experience had been gained from it, we cannot continue to pay this very high price.Given this scenario, the Government at the beginning of this decade, decided upon privatisation as a way out. At that time privatisation was not the world trend that it is now. But the many failures and the high cost of Government involvement left us with no choice but to try this unproven approach. Besides, the country now has the infrastructure in place and the private sector is better equipped with man, money and skills to make privatisation feasible. In Japan, while the private railways make profits, the Japan National Railways (JNR) when it was owned by the Government, lost money constantly.

Now the JNR has been privatised and in its first year of operation the companies have made profits. Apart from the new owners and probably some key executives the people manning the JNR are the same. Yet the performance is different. The assumption must be that the management input is different. Management is not one of Malaysia`s strong points. In the first instant we do not have enough managers. Of the ones that we have, a good number are unfortunately mediocre. Some we have seen are downright dishonest. If privatisation is going to remedy the ills of nationalisation then we must have good managers. The Government cannot afford to have too many failures in the privatised companies. We do not want to be forced to take them back. We do not want to involve ourselves in business again. While the Government will exercise every care to ensure that Government enterprises will not fall into the wrong hands, we hope that responsible institutions in the private sector such as merchant banks, business consultants and intending entrepreneurs will study very carefully the ability of the companies taking over Government services or enterprises.

There are many good examples in other countries. We must learn from them. If necessary, we should use their expertise, their direct involvement even. Let us admit that we do not know everything. There is so much we can learn from others with their experience. If the Government happens to award the enterprise to companies that are partly owned by foreigners, it is not because the Government is not patriotic or un-Malaysian. We want to save the nation from disasterous mistakes. But that does not mean that capable locals cannot on their own succeed in taking over the services we wish to privatise. The fear of price increases is greatly felt with privatisation of monopolies where prices may be determined by the need to earn super normal profits. It is the function of the Government therefore to prevent such a move by the private sector through the establishment and enforcement of an effective regulatory mechanism.

Such a mechanism will not only have to regulate prices of services but also its quality and geographical coverage. In the licence to Syarikat Telekom Malaysia for example, the company is bound to continue with the unprofitable services to the rural areas. But we would like to assure interested parties that the Government does not wish to regulate unless the situation compels it to do so.Fears of strategic industries falling into the hands of foreigners can be easily circumvented through specific provisions in the instruments enabling the industry to be privatised. Fears of the privatised entity undertaking actions which are injurious to national interests can also be overcome through this means. Hence, although it is admitted that there are dangers attached to the policy, safeguards can be built-in to circumvent such dangers. As we can see, privatisation does not mean that the Government will be absolved of its social responsibilities.

The Government will still maintain its role as the guardian of public welfare. This will be done through minimal regulatory measures rather than through direct participation in the production of goods and services. Where subsidies are unavoidable these will continue to be provided but on a more selective basis and to deserving cases. The Government will remain accountable to the public and must therefore be responsible for ensuring that privatisation will be beneficial to all concerned. The Government truly believes that privatisation will on the whole be beneficial to the nation and hence it is fully committed to it.

STRATEGY FOR GROWTH: TOWARDS A MORE COMPETITIVE ECONOMY

Over the past year, many conferences, seminars, dialogues and panel discussions have been organised to extract ideas and views from across a wide cross-section of the population on what is needed to put the Malaysian economy back on track. In an increasingly unstable international trading environment, fresh ideas and new approaches have not been easy to come by. For a commodity- dependent country, like Malaysia, how should we respond when writers like Peter Drucker see no future for raw material producing countries because they have come "uncoupled" from the industrial economies? Likewise, since we are looking towards industrialisation to help solve our unemployment problem, the same message is repeated - namely, industrial production has also come "uncoupled" from employment, the argument being that the more competitive industries today are those that are technology and knowledge-driven, such as electronics, genetic engineering, pharmaceuticals and telecommunications.

And, of course, the impact of recent events in the world`s stock exchanges bear testimony to the sad observation that economic performance these days is becoming less dependent on underlying macro-economic fundamentals, and more on financial transactions based on rapid and massive capital movements, which are strongly linked to the vicissitudes of market sentiments. So far, the Government`s strategy for the private sector had been directed mainly at the provision of adequate incentives, including reducing the rates on corporate tax, electricity and communication charges, liberalising the guidelines governing equity participation in export-oriented industries, and deregulation to reduce cumbersome rules and procedures. If the economy is allowed simply to grow on its own momentum over the medium term, depending mainly on the fortunes of the international trading environment.

The present sitution calls for daring, innovative and imaginative entrepreneurs. The lessons of history tell us that the take-off to sustained growth in any society requires the existence, initiative and reasonable skill of some group which is prepared to take risks and venture into new enterprises. Indeed, the real remedies lie deep in human attitudes and behaviour. Granted, it cannot change overnight. But, as the current values and behaviour must have developed from a more primitive beginning, so can the process of value changes take of from the present ones. It remains for us to cultivate the right kind of changes. Our nation is blessed with abundant natural resources, which need either to be exploited raw or with varying degree of added value in order to yield handsome returns. Businessmen have been turning more and more to the financial markets with its promise of quick and substantial returns.

A financial market is only real and viable if it is backed by sound economic activity with growth of assets and dividends. Capital gains without real economic growth is like a growing skyscraper without foundation. Sooner or later it is going to crash down. As we are aware it has crashed on a worldwide unprecedented scale. Instead of waiting for the market to recover, businessmen should go back to doing business, to producing goods and services and marketing them at a profit. The stock market should be used to raise capital for these enterprises. If you must speculate, do so on a reasonable scale. There must be some relationship between prices and the performance of the enterprises. Computers should not totally displace humans in the buying and selling of shares. The old study and probe into the basic foundations of the companies must return as the basis for decisions to sell or buy. If there must be speculation, it should be sane and healthy.

Workers wages in this country are relatively higher than among our major competitors in the region. Since it is neither wise nor possible for wages to be reduced in order to bring down unit cost, the only thing that can be done is to increase productivity. While hard conscientious work by workers can definitely improve productivity, managers must also look into the system of working and the use of aids in order to improve productivity. Unnecessary and careless spending is another cause of high unit cost. In other words while workers play a role in determining the level of productivity, managers and other executives cannot be completely excused for poor productivity in any enterprise. It is imperative that Malaysian managers look critically at themselves as much as at their workers.

GLOBAL KNOWLEDGE ENHANCE QUALITY OF LIFE

All of you are well aware of the impact that the information revolution is already making on our social and economic institutions, on public and private sector bureaucracies, and on the man in the streets.....changing the way we do everything. While it holds the promise of a better life for everyone, it also threatens to create a huge disparity between the information-haves and the information-have-nots, the knowledge-rich and the knowledge-poor. This growing digital divide was the single driving concern of the first Global Knowledge Conference where more than 2000 people representing governments, international agencies, non-profit organisations, private sector corporations and NGOs, met in Toronto, Canada in 1997. It became obvious that the countries which were either unaware of, or did not have the means to harness the new tools of the information age, would be powerless to improve the quality of life of their peoples.

The first Global Knowledge (GK) Conference recognised that knowledge and information are critical for sustainable, and equitable development. Out of the conference there evolved an informal but powerful partnership of organisations now known as the Global Knowledge Partnership. It currently has 55 members. They are all committed to sharing information, experiences and resources to help people acquire the knowledge and technology they need in order to shape their lives. GKll is part of this ongoing process of sharing and learning. Dialogues and discussion at national and regional levels on issues of access, empowerment and governance - the three themes of the GKII - have already begun and will continue after March 2000. Access to ideas and information from around the world are already empowering people to improve their lives.

There are some dramatic examples of how the power of information can not just improve lives but also help save them. We know of how the Pan American Health Organisation conducted a hemisphere-wide teleconference to present new methods of diagnosing and preventing the spread of AIDS. Yet in countries in Latin America, Africa and Asia where the spread of AIDS is threatening a whole generation of young people, these support networks are not yet in place. With GKll and the Global Knowledge Partnership, we have a tremendous opportunity to draft an agenda for action that will give developing countries a fair and equitable share in the new knowledge economy. The whole event is being specially designed to ensure that the four days of discussion, debate, sharing of information, experiences, best practices and even failures, will result in a strategic plan of action to help us build knowledge societies.

Represented here today are members of the diplomatic corps, the corporate sector, NGOs, government agencies, the media and the community. Each of you has a very important role to play in the success of GKII. Malaysia active involvement at national, regional and global levels is critical to the success of this conference. Let us jointly contribute our resources to leverage this strategic opportunity to shape our future. Malaysia has set her own agenda for transformation into a knowledge-based economy by the year 2020. GKII will help us identify and address issues critical to the realisation of this vision. We can share our own experiences and highlight some of our achievements with regard to the implementation of the National IT Agenda and the Multimedia Super Corridor initiative. Perhaps our greatest challenge is to open people's minds to the tremendous possibilities offered by shared information and knowledge.

Ideally, every Malaysian should know about GKII, the Global Knowledge Partnership and the power of the new communications tools. We are hoping for your support, particularly the media, in publicising the issues and challenges for knowledge development, and the objectives and activities of GKII and the Global Knowledge Partnership

EFFICIENT GOVERNANCE: GEARING TOWARDS BEING WORLD CLASS

The effectiveness and efficiency of the public service as well as its facilitating role has helped the country's economic development. This we have accomplished through the introduction of numerous administrative measures which are designed to provide high quality services to the private sector and the society at large. To be world class, and at par with the best, we have to continue the quality revolution in the public service. In fact I would suggest we think of two Qs: Quality and Quickness. One of the important attributes of quality is to be responsive to customer needs and this means Quickness of Response. Members of the public want speedy approvals of their house plans, certificates of fitness for occupation of their newly-built houses, quick service at the immigration counters, at hospital dispensaries etc. The business community want quick approvals for company incorporation, trade licences, manufacturing licences, duty drawbacks, patent rights, approval of industrial premises, crucial market information on their products and services, etc.

If speed is the essence in doing business, then systems and procedures, particularly those that ensure accuracy, reliability, consistency and simplicity will have to be put in place. The public service will be implementing ISO 9000 very soon. Malaysia will be the first country that will adopt ISO 9000 in its entire public service. Gearing ourselves to world class means that we will gear ourselves to implementing ISO 9000. Training of public servants should emphasise the sharpening of core competencies covering the three broad areas of conceptual, technical and interpersonal skills. However, the emphasis will vary depending on whether the officer is in the upper, middle or lower levels of management. The conceptual skills are skills related to `higher order activity' more relevant to the upper level management where the need is to see issues, recognise problems, strategise, and think systems.

The middle level management needs a balance of both the conceptual and the technical skills as they act as the interface between the top level management and the lower level of management. However, across all levels of management is the requirement for interpersonal skills. No one works alone in any organization; people will have to network and build relationships at all levels of management vertically as well as horizontally. As such, training programs in public sector training institutions particularly INTAN will have to take into consideration these aspects of skills development focussing on core competency areas. World class also means the ability to command resources and operate beyond borders. In this regard, our public service should have the ability to support our private sector to effectively operate beyond our shores. There are many ways in which this can be done.

Firstly, in business, the question of integrity and image are very critical elements. In this connection, besides facilitating the business sector through enhancing the administrative processes, the public service must see itself as the custodian of Malaysia's good image overseas, and assist in the conduct of business with good ethics, to see that our businessmen conduct dealings with reputable partners overseas; secondly, the public service has to focus on establishing connections and networking; examine investment opportunities and facilitate the entry of Malaysian products and services to new markets. The country should never be allowed to suffer from a deep crisis of faith in the public service; the people must not criticise us as a faceless bureaucracy that is unable to accurately meet personalized services; the people must not be allowed to spend their precious time finding answers to their questions, after being bounced from department to department. The new information technology appears to be the key enabler of public service transformation.

LOCAL AUTHORITY AND WORLD BUSINESS COMPETITIVENESS

The current global economic challenges have put Local Authority in the front and centre of attention. They are under the microscope, their past actions are being scrutinized and their behaviour and actions going forward are being closely watched. They are expected to rise to the challenge and steer their organizations and corporations out of troubled waters that the world economy is now in. The business world is witnessing massive upheaval and scandalous revelations. The crisis calls for a re-examination of the corporate culture and the way business has been done. In some of the scandalous revelations in the US, it has proven that business as usual is not an option any more. That model has been broken. A new way needs to be found. It calls for active, innovative, aggressive leadership and bold decisions.

In view of this, effective leadership has never been more important. Periods of economic stress test the ability and capability of Local Authority and demands that they rise to the challenges. Crisis tests an individual’s abilities more than the good times ever do. Undoubtedly, most leaders will be tested by a few minor and major crises during their tenure. How the individual steers through such troubled times will show the mettle he or she is made of. The Local Authority of today are being tested on several levels, both internally and externally. While they may have some control over their internal environment, they certainly do not know what awaits them externally in the current volatile business environment.

Loyal and hardworking employees are the best asset of any organization, and yes, even in the high tech era and in the computerized age. It is important to retain talent and more so during difficult times. Strengthen and retain what them have. Pull Local Authority talent together and take decisive decisions. Do not let good talent get away. It will be more difficult to find them when the recovery comes, which will come, just as the sun will rise again tomorrow. Local Authority must train and equip staff with the appropriate knowledge and skills to enhance efficiency and improve competitiveness. R & D is important to develop new products, improve current product quality, improve production processes and technological capabilities. These cannot be ignored even during difficult times. And as businesses become more complex, decentralized and globally dispersed, the need for real time integrated information system is essential for improved communication, better analysis and for making quick and informed decisions for any corrective action that might be needed.

Today, the Local Authority is expected to be pro-active in contingency planning, to anticipate and prepare responses. Expediency in the appropriate response can negate losses. As the Chinese word for crisis, Wei ji, is composed of two characters signifying “Opportunity” and “Danger”, the current crisis with its many downsides also offers opportunities. It is necessary for business leaders and Local Authority to seek out the possibilities in these challenging times. Them must do this to remain relevant, sustainable and competitive. Leadership is a demanding role even during times of relative calm. It calls for balancing of internal and inter-business relationships and more so during a crisis, when courage and desire to lead well and effectively are put to the test.

GLOBALISATION: CHALLENGES AND IMPACT ON ASIA AND MALAYSIA

Globalisation is a word which seems to describe the coming together of all the countries of the globe into one entity. It is coined by rich countries apparently in response to technological advances and the speed and ease of travel. But the emphasis is on free flows of capital and trade in goods and services. People and other things may not flow so freely.Free means free of Governmental regulations, laws and policies. International institutions would take over, enact rules and enforce them. Looked at from the point of view of weak countries, rules, laws and policies still exist but they would have no say in the determination or enforcement. For most of them globalisation means not more freedom but less freedom from rules, regulations laws and policies. Worse still, these uniform rules etc, disregard their particular weaknesses and problems.

But they are being told that being poor they will benefit from capital flowing into their countries. In fact for many of the East Asian countries capital inflows have brought about unprecedented economic growth. Even their stock markets have benefited from foreign investments. But what they are not told is that the same capital can flow out and when it does their countries can be bankrupted. It is unfortunate that they learnt about this through experience and they now know how terrible the damage is and how difficult it is to recover. The East Asian financial crisis was precipitated by the free exit of capital. It started of course by the manipulative devaluation of the currencies of East Asian countries. Devaluation caused foreign investment to lose value. To avoid losses from further devaluation foreign capital was pulled out. The market collapsed resulting in rapid increase of non-performing loans, deprivation from bank funding of business operations, numerous bankruptcies and failure of the banking system in the end.

With the economy in tatters the Government had to borrow from the IMF. Loans would only be given if the Government surrenders economic management to the IMF and allow foreign white knights to pick up the devalued local banks and businesses. We are seeing many countries floundering about because the money they borrowed from the IMF had to be used to pay off foreign creditors. Nothing is left for the locals. Of course they still have to pay the IMF money they had borrowed. East Asian countries are actually luckier for some have made a fair degree of recovery. But Argentina is not so lucky. Sovereign loans are not so safe after all as countries can go bankrupt when IMF imposes its policies. Is what happened to the East Asian countries a manifestation of Globalisation or not? Clearly it is. Trading in currencies is only possible if Government abdicates as the authority to determine the value of currency and leaves it to so-called international market forces.

The market is interested only in making profits and cares nothing for the well-being of society. The challenge for Asia is not how to manage the present concept of globalisation, to make it work, to benefit from it. The challenge for Asia is to influence the thinking on globalisation, to reshape it, to reduce the chances of it going awry and destroying economies and countries. There is nothing sacred about the present concept of globalisation that it cannot be changed, radically if necessary, so that it will pose less danger to those accepting and practising it. Free trade is not synonymous with globalisation. If we have to regulate trade in order to benefit from globalisation, why not? People who play golf know that there will never come a time when handicaps will be abolished. In business too, fair competition can only be between entities of fairly equal strength. Level playing fields are not enough. The contestants must be evenly matched. If we cannot match them then give them handicaps.

Prior to 1997 the Asian countries were growing miraculously. Malaysia grew at 8% plus per annum for ten consecutive years. Today everyone of the miracle economies are but shadows of their former selves. The impact of globalisation involving the free flow of capital and the straightjacketing of business has been disastrous. For years now the attempts to resuscitate the economies have not been very successful. There will be permanent scars. And the impact will not be any better, for as long as the present interpretation of globalisation is forced upon Asia. In fact the world is likely to fail to recover if, instead of focusing on resuscitating the economy following Sept 11, we continue to force the globalisation of capital flows on the world.

GOVERNANCE FOR A NEW ERA

In the world today there is no trust or little trust and governance, world governance that is, is not good. We have in fact made a mess of the world. Two millennium of experience and mountains of knowledge have not made us much more capable at managing our affairs than stone age people.We now live in fear, every one of us. We fear the terrorists and the terrorists, their supporters or alledged supporters fear us. We fear flying, we fear travelling to certain countries, we fear night-clubs, we fear letters, parcels and cargo containers, we fear white powder, shoes, Muslims, pen knives, metal cutlery, etc etc. They, the other side, fear sanctions, starvation, shortage of medicine. They fear military invasion, being bombed and rocketed, being captured and detained. People who are neutral, not involved, innocent - they too live in fear. They are the collaterals. Just as the Afghans and the Iraqi civilians are collaterals the passengers on the hijacked planes and those people working in the World Trade Towers are also collaterals.

Actually we are in the midst of the Third World War, not the war against terrorists but the war between terrorists and the peace loving anti-terrorists alliance, the war between the Axis of Evil and Satan. Both sides are convinced that they are right, that theirs is the fight against evil. Evil and Satan must be destroyed. Frightened, the world is taking measures to secure and defend at tremendous cost. But the main result is not security or freedom from terror attacks. The main result is to disrupt life, undermine investments and business, and generally to adversely affect economic growth world wide. It is going to be a long war because hatred, anger, bitterness rules our hearts. We both want revenge. We both will retaliate. You kill our people, we will kill your people. And so it will go on and on. Sanity has deserted both sides. The world has become small. It is said to be a village.

But we have not made much progress in the management of our world despite its diminished size. Just as in the stone age the man with the biggest club rules, in our modern and sophisticated global village the country with the biggest killing power rules. When the Cold War ended we thought that the world would see peace and prosperity. After all the people who believe in peace and universal justice won. The evil Empire has been overthrown. But the loss of a counter balance has resulted in the great exponent of justice and fair play to become unbalanced. While the Communists were there the Capitalists curbed their greed and avarice. They showed a friendly face. The exploitation of the world by the greedy, the double standards and the hypocrisy about human rights and respect for human lives, the oppressions of the weak by the strong, the disregard for human sufferings; the expropriation of other peoples' land and the expulsion of the people, all these have been aggravated by the ending of the Cold War and the victory of the righteous over the evil.

The worm finally turned. The weak have now hit back in the only way they can. Groping for the enemy, the strong hits out blindly in every direction, in every part of the world. No one is free. Fear rules the world. With the onset of this third World War, the world is in a state of turmoil. We now live in fear, even the rich are not as prosperous any more, while the poor are actually poorer. We have not made such a good job managing this Global Village of ours. There is no trust and no good governance. So how do we create trust and good governance in the new era? I don't think it can be done by seeking for a military defeat of the enemy and forcing them to submit. The forces against the Axis of Evil are not going to win because the target is wrong. All that can happen if they are defeated is to create more anger and a call for more revenge and retaliation by the people who are incensed by the injustice they believe they are experiencing.

On the other hand the other side are not going to win either. The enemy is just too big and too powerful. The only solution is through compromise. Trust must be built. The initiation must come from the good people. They must recognise that people do not tie bombs to their bodies or crash their planes for the fun of it. They must have a reason for it. We have to remove the reasons. Out terrorising the terrorists will not work. But removing the causes for terrorism will. Good governance is simple if we curb the greedy and forget about self-regulating markets. Governments are not yet anachronistic. They have a role to play. We need a paradigm shift, we need a new mind-set if we are going to put an end to this Third World War. We need victory for both, a victory where both sides will benefit. The world is big enough and rich enough for everyone. There is no need to take everything for ourselves. A win-win solution is possible. If we can overcome our anger and hatred, our craving for revenge, our unlimited greed, we can manage the world and achieve trust and eventually good governance.

MALAYSIA COMPETING IN THE GLOBALISED WORLD:BECOMING A WORLD - CLASS PLAYER

Competition is endemic in human society throughout history. There is the competition between individuals, between societies, between cities and states, between nations and races. The original Olympic Games personifies this competition. It was between the Greek cities as represented by their athletes. But the essence of competition is that the competitors possess certain qualifying qualities. Cities do not compete with villages, nor adult athletes with children. To compete fairly the competitors must belong to distinct categories. In a globalised world we have to compete in order to succeed. But according to present rules of competing, there are no distinct categories. The smallest and poorest nations must compete with the biggest and the richest nations. The smallest local businesses must compete with the multi-national giants. The technologically backward must compete with the technologically advanced.

In the competition, rules and regulations are practically disallowed. The only rule is that there should be no rules, no rules about qualifying categories, no rules about the methods used by the competitors. But this is not completely true. While Governments may not restrict and protect, Governments must uphold the rights of the rich and the powerful to literally strangle the poor and the weak. It does not take a genius to see that the dice is loaded against the weak and the poor. They must rely on whatever little competitive advantage that they may have just to survive. But mostly they would lose the competition and they would go under. In Malaysia unions and workers understand that high pay is meaningless if the cost of living rises with the pay increase. In some developing countries all workers are millionaires but the money they earn cannot give them a decent living because all goods are priced in tens or hundreds of thousand of the currency unit. Higher wages are only worthwhile if there is no resulting inflation.

This can happen when productivity rises higher than wage increases. Besides we are competing against low wage countries with good productivity levels. Any increase in wages without productivity increase will reduce investments, not only by foreign investors but also local investors. With no new jobs being created there will be more unemployment. And a large unemployed population will force wages down. So we must always ensure that wage rises will not make us uncompetitive, raise the cost of living and drive away job-creating investments. Businesses should endeavour to bring down costs. If they examine carefully their cost of production or service they are bound to find cost items which can be reduced. Targeting a definite percentage for reduction of costs is very effective. Technology is a problem. The rich with their greater expenditure on research and development are bound to be ahead.

Buying technology from them would increase costs. But much of the technology is probably non-essential. Motor vehicles of today are over- engineered. We have to find a niche where basic needs are met by our products. In some cases the value can be enhanced without too much increase in costs. This high quality products will fetch prices higher than the cost involved in upgrading quality. The old Asian belief in cheap poor quality products as a way to penetrate markets should be forgotten. Good durable products are more likely to establish a permanent market. World class does not mean top class all the time. There are products which will be so high in quality that they will establish a class by themselves. But they are not for the main market, the big number of average consumers. For the biggest main consumer market competitive pricing for reasonable world class quality would be sufficient. While we try to compete in this unfair trading environment, we must continue to fight for a fairer global trade. It is going to be difficult but that is how life is. We have to resign ourselves to this, work hard and make use of whatever competitive advantage that we may have.

POSITIONING THE CITY OF KUALA LUMPUR IN THE GLOBAL CITY SYSTEM

In the age of globalization, it was argued that major cities in the region should be positioned in the global city system, in order for these cities and their immediate regions are effectively developed. As the urban and regional economic prospects increase reliance on the participation in the fast moving international and global economy, cities that are unable to adapt to these globalchanges and requirements would be marginalized. The marginalisation of major cities from the mainstream of global development will affect their progress and in most cases be determined by exogenous forces. At the same time, the emergence of new global economic and informational societies has created a new form of spatial development, the global cities. Such status was achieved only when a city and its region becomes a major center of international finance, transnational corporate headquarters, related high-level and specialized services, information processing and advanced telecommunications, a city with an international command and control functions (Sassen, 1991). To what extend the above criteria and indicators really described the position of cities in underdeveloped and developing economies? It is the intention of the paper to deal with such a question, with particular reference to the city of Kuala Lumpur. Although Kuala Lumpur has substantially part of the international economy for the past three decades, it was argued that the city exercises little of the global or even regional control functions that world cities proposes. For this reason, the authors argued that Kuala Lumpur and possibly other cities in the rapidly developing economies be positioned in a different setting, and with different criteria and indicators, as compared to the existing global cities.