J. Basic. Appl. Sci. Res., 2(1)663-671, 2012 © 2012, TextRoad Publication ISSN 2090-4304 Journal of Basic and Applied Scientific Research www.textroad.com *Correspondence Author: Abdalla Ab Sinusi Saiah, Faculty of Technology Management, Business and Entrepreneurship University Tun Hussein Onn Malaysia 86400 Parit Raja, Batu Pahat, Johor, Malaysia. Tel: 60-177275512, 14-7190017/ E-mail: saih2008s@yahoo.com The Future Direction for the Globalization of Financial Markets and the Impact of that of Financial Markets in the Arab Developing Countries Abdalla Ab Sinusi Saiah , Abdulkader Omer Abdulsamad Ali, Abdul Talib Bin Bon and Wan Fauziah Wan Yusoff Faculty of Technology Management, Business and Entrepreneurship University Tun Hussein Onn Malaysia 86400 Parit Raja, Batu Pahat, Johor, Malaysia ABSTRACT The financial globalization process inevitable imposes its acceptance to the existing conditions and mechanisms. There is no doubt that financial globalization has several advantages but at the same time a lot of risks and implications for all economies of the world, including developing countries. The implications of the financial and communication revolution are today a greater danger to the developing world." Financial globalization comes with a number of risks and negative effects on macroeconomic variables and economic stability, especially in case of sudden movements in short-term capital, as it is the banking system which has to undergo severe crisis due to the entry of dirty money, crazy speculations, flight of national funds as well as reduce national sovereignty in the application of monetary and financial policy, and perhaps the best example of what happened by the impact of financial globalization, and what the risks caused are by the experience of the Asian tigers. And reflecting on the impact that financial globalization can be said that for developing countries, it cannot take financial globalization in full or to leave them as a whole, as it must to look for possible alternatives for dealing with it. It is the right of each state to choose alternatives that fit their circumstances and their own problems, and so the objective of the adoption of financial globalization and maximize the benefits of risk reduction. The effect of development can be seen to have reflected positively on the macroeconomic variables, such as increased in investment rates and in productivity as well as the reduction of unemployment and the volume of external debt and also the increase in the rates of economic growth. It may also be appropriate for developing countries to relatively slow down and not to abstain fully in the adoption of procedures for financial liberalization, as it should take a number of appropriate actions (such as achieving economic stability, development of local financial institutions, to contain the external debt crisis and to control, create sufficient and appropriate reserves to take a number of supervisory policies and procedures) that qualify to meet the challenges of financial globalization, which work to embody the thesis that the main centers of today are centers of tomorrow. KEY WORDS: financial globalization, the nature of contemporary financial globalization, Factors of globalization of financial markets, Arab developing countries. INTRODUCTION The ninth decade of the twentieth century was dominated by the term globalization on international relations, declaring that civilization will be the culture of globalization and according to their goals and their perceptions of their own in order to control and dominate the world and to all fields and from the area of financial markets through the globalization of financial activity and the integration of capital markets. The globalization has led to increasing mutual overlaps among various countries of the world's financial markets, and through which the exchange and trading of debt, cash and financial assets. As the financial markets have become a global tool for more connectivity among the countries of the world due to the type of operations that are included in each of the currency markets, stocks and bonds as well as loans and securities. And increased globalization of financial markets in recent years largely led to the term "financial global village" or "money market universe," John, author of "false dawn" that there is now a global market in the capital on a scale not known before, and others believe that the globalization of financial markets have reflected the reality of financial revolution in terms of both market size and vulnerability, and new financial instruments, or from where it made a significant correlation between these markets, which could put an end to the so-called "end of the geographical boundaries" . Moreover it has witnessed the financial sector in the world a number of ongoing and rapid developments, and the successive changes led to the growing role of financial institutions, the emergence of a huge amount and variety of financial services that they provide, economic funds and what helped access to that increasing use of modern financial techniques. However the increase of financial globalization and the increasing movement of financial flows to developing countries have disproportionately led to the creation of a number of negative effects that have affected the overall stability and development within these countries. 663