The share of the region’s population living in extreme poverty (defined as an income level of less than US$ 1.90 per day) could fall from 11.8 per cent in 2017 to 7 per cent by 2025. Given the diversity of the Indian Ocean economies, it is perhaps inevitable that the quest for Indian Ocean economic regionalism is likely to remain ‘institution light’ for the foreseeable future. Lean Library can solve it. Regional Integration is a process in which neighboring countries enter into an agreement in order to upgrade cooperation through common institutions and rules. COMESA and SADC: Prospects and Challenges for Regional Trade Integration Prepared by Padamja Khandelwal1 Authorized for distribution by Hans Peter Lankes December 2004 Abstract This Working Paper should not be reported as representing the views of the IMF. Stages of economic integration . Continuing the pre-crisis trend, the region’s trade and growth have expanded rapidly. In grappling with the challenges facing regional integration efforts in Africa, advocates of greater unity have identified a number of other requirements for success: The second is how to ensure that building complementarity among economies does not reproduce the old, unequal division of labor between stronger and weaker economies. Source: LKI calculations based on UNCTAD (2017). Bangkok 10330, THAILAND This includes the ASEAN, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the South Asian Association for Regional Cooperation (SAARC), the Gulf Cooperation Council (GCC), and the Southern African Development Community (SADC). They range from the GCC’s customs union, which removes all internal tariff barriers and imposes a common external tariff, to the South Asian Free Trade Agreement between SAARC members, which originally only covered goods and allowed members states to maintain large negative lists that exclude products from tariff reductions (UNESCAP, 2017, p. 6). of the world’s total land area, extends a distance of 10,000 kilometres from Southern Africa to Western Australia. This paper therefore, examines the current African integration efforts in the age of globalisation in a bid to show the current development and future challenges. Today, the Indian Ocean hosts 23 of the world’s top 100 container ports.33According to the 2017 Lloyd’s List Top 100 Container Ports Rankings. Council on the important role that regional integration and free trade agreements can play “in the establishment of a more equitable world trade system” and therefore fully support and encourage regional integration among developing countries (European Parliament, 2002, p.14). In relation to customs, the ‘trading across borders’ indicator compiled by the World Bank gives an idea of how many hours, on average a country takes for border compliance. These are (a) port and customs quality, (b) barriers to trade and investment, (c) development gaps, and (d) nascent regional economic governance. Let me mention some of these challenges to contemporary regionalism in Latin America and other parts of the South. Moreover, improved political cooperation due to regional economic integration is also vital for handling the economic and social challenges linked to globalization. Those challenges include socio-economic inequality within the country and the region, and the lack of policy coordination and national capacity in implementing regional projects. Similarly, the Indian Ocean economy’s share of global GDP (at purchasing power parity [PPP] exchange rates) is expected to rise from 18.5 per cent to 22.1 per cent between 2017 and 2025. challenges to regional integration in africa: the case of the revived east africa community 2000-2012 gichohi marvin muhammad r50/69883/2011 a thesis submitted in partial fulfillment for the degree of master of arts in international studies.institute of diplomacy and international studies, university of … 4th Floor Wisit Prachuabmoh Building It is for this reason that the organizers of this conference decided to hold it in Asuncion, bringing in activists and government officials from Asia and Africa to interact with people in this region to discuss the lessons that developments here have for the rest of the world. The sixth, related to the previous point, is how to move away from a statist process and institutionalize civil society participation in all key areas of economic decision making. Goods and services trade links within the region and beyond have deepened to an unprecedented extent. Table 2 provides some indicators to compare trade-related infrastructure and trade barriers in the Indian Ocean economy against the OECD.44Policy benchmarking is increasingly used in studies of regional integration. Regional cooperation can take different forms which depend on the objectives of the states that are involved. As such, there is scope to reassess the situation. A., Alam, M. K. (, Mohanty, S. K., Dash, P., Gupta, A., Gaur, P. (, Pandya, A., Hebert-Burns, R., Kobayashi, J. View or download all content the institution has subscribed to. The discrimination is something which depends on community and country discrimination as well. (, Hussain, M. G., Failler, P., Karim, A. April 1, 2011, Harri Daniel, 1 Comment. A growing international relations and security studies literature proceeds along three lines: (a) the geo-political risks that threaten the Indian Ocean’s security and its economic prosperity (Cordesman & Toukan, 2014; Cordner, 2010), (b) the concept of the ‘blue economy’ and the sustainability of natural resources (Mohanty, Dash, Gupta, & Gaur, 2015), and (c) the role of regional institutions in fostering regional cooperation (Dabee & Reddy, 2000; Kelegama, 2002). For more information view the SAGE Journals Sharing page. Gradually reducing barriers to trade and investment would support trade-led growth in the Indian Ocean. While other regions have successfully used their integration mechanisms to improve their economic Trade volumes in the Indian Ocean grew by an annual average of 9.4 per cent from 2000 to 2008, though growth settled at a slower average of 4.8 per cent from 2011 to 2017 after the global financial crisis. For example, the share of South Asia’s trade with the rest of the Indian Ocean has increased from 18.1 per cent in 2000 to 21 per cent in 2017. 4Policy benchmarking is increasingly used in studies of regional integration. Benefits Of Regional Economic Integration. In March 2018, The UN classified 10 regional economies across the three sub-regions as LDC including Bangladesh, Cambodia Comoros, Madagascar, Mozambique, Myanmar, Somalia, Tanzania, Timor-Leste and Yemen.99https://www.un.org/development/desa/dpad/least-developed-country-category/ldcs-at-a-glance.html LDCs face significant structural impediments to sustainable development and typically have lower per capita incomes than other regional economies. Meanwhile, China accounted for 28.4 per cent of global container shipping, the USA for 6.8 per cent, Japan for 2.9 per cent and Germany for 2.8 per cent. The third is how to promote a development process that does not reproduce social inequalities at the regional and national levels in the name of capital accumulation. The Indian Ocean economy grew by an annual average of 5.6 per cent per year during 2000–2008 and slowed slightly to an average of 5.1 per cent in 2011–2017, led by a strong performance in South Asia (see Figure 4). 2. The emerging collection of mega-regional infrastructure initiatives—such as China’s Belt and Road Initiative, Japan’s Partnership for Quality Infrastructure, the Africa–Asia Growth Corridor, the EU Investment Plan and Association of South-East Asian Nations’ (ASEAN) Master Plan for Connectivity—and international financial institutions can also facilitate investment in ports and trade facilitation. If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. See, ADB (2010) and Wignaraja (2014). For example, IORA’s secretariat has less than 20 staff members working on six priority areas, of which promoting trade and investment is just one (Waidyatilake, 2017) while the ASEAN’s secretariat has approximately 300 staff working on three pillars of the ASEAN community.1313ASEAN Political-Security Community, ASEAN, Economic Community and ASEAN Socio-Cultural Community. Asian Development Bank, Asian Economic Integration Report 2018 Toward Optimal Provision of Regi... UNESCAP and UNCTAD, Asia-Pacific Trade and Investment Report 2019: Navigating Non-tariff Measur... Ecosystem-based fisheries management and the precautionary approach in... Asian Development Bank (ADB) & Asian Development Bank Institute (ADBI) . The EAC seems to be the most vibrant Regional Economic Community (REC) in the Southern hemisphere and is tremendously advancing in its integration process: however, crucial … Variations between the sub-regions seem likely. While the IMF, the World Bank, and United Nations (UN) provide regular country and regional macroeconomic analysis, this has been confined to more traditional geographic groupings typically based on shared land borders. Mohanty et al. Another is the subsidization of the oil needs of 14 Caribbean countries by Venezuela, which sells fuel to them at 40 per cent off the world price. While their stated objectives all make some reference to pursuing economic prosperity, in practice have differing emphasis on promoting regional economic integration. It argues that the less than satisfactory progress in regional integration is due to a combination of factors that include poor economic and political governance, nationalist rivalry, mono-cultural agro-based economies, debt and dependency on the West, lack of financial … South Asia, led by India has the brightest outlook for trade volume growth in the short term. Symposium. This includes the 21 members of the Indian Ocean Rim Association (IORA), plus Brunei, Cambodia, the Maldives, Myanmar, Pakistan, Timor-Leste and Vietnam. However, some of the more prominent ones have either not moved beyond a primitive stage, as in the case of SAARC in South Asia, or have been based on neoliberal principles, like ASEAN in Southeast Asia. This trend … There is a renewed impetus to establish closer economic and political ties among the continent’s numerous countries, based on a heightened appreciation of the need for regional integration and a clearer understanding of the past failures. However, to benefit from liberalisation, factors of production need to be reallocated between and within sectors. This is the most basic form of economic cooperation. Aavailable online: http://rtais.wto.org and the scope and ambition of these agreements vary significantly. Asia’s mega-regional trade agreement—the Regional Comprehensive Economic Partnership (RCEP)—seems a reasonable candidate (Wignaraja, 2018). This will place it in the league of other major players such as China, the USA and the EU. Despite the numerous efforts by African states to form regional trading blocs, existing Regional Economic Communities (RECs) in Africa have not been successful achieving their intended objectives of poverty reduction and economic development. These measures include limits on the share of a local company that a foreign entity can own, screening requirements for foreign investment or restrictions on foreign employment. As Figure 7 shows, weighted tariffs are higher in South Asia than in the other two sub-regions. The rest of the world is not discriminated 6. Furthermore, the share of population in poverty is likely to halve to 7 per cent by 2025. Among the most outstanding features of the current processes of regional economic integration are: 1. Source: LKI calculations based on IMF (2018c). Emphasis is placed on opening markets, eliminating trade barriers a… Intra-Indian Ocean trade also appears to have expanded, increasing modestly from 24.7 per cent of the region’s total trade in 2000 to 27.2 per cent in 2017. Setting these near-term risks aside and assuming the continuation of the positive economic trends seen since 2000, the Indian Ocean economy is likely to play a notable role in the world economy by 2025 with improved prosperity. West Africa: Ecowas - the Challenges of Regional Integration. The data suggests that the average quality of ports in the Indian Ocean economy (4.2) typically lags behind that of the OECD (5.0). The first is how to build regional blocs that go beyond trade to include industrial policy, a shared agricultural... 2. However, the continued rise and economic dynamism of the Indian Ocean economy is not guaranteed. R50/82648/2015 A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR AWARD OF MASTERS OF ARTS DEGREE IN INTERNATIONAL STUDIES October 2016. ii . In reality the question of regional integration is also related to an extraordinary … 1 States may want to come together for economic reasons or even further to form a political alliance or union. The Challenges and Prospects for Regional and Economic Integration in West Africa. Institutional strengthening and free functioning of market rules. Another step would be to encourage linking the various sub-regional and bilateral FTAs in the region to a mega-regional trade agreement with common trade rules and standards. In Africa in particular, there has been a clamor and trend towards integration with numerous regional blocs being formed in various regions of the continent. Box MP167 Mount Pleasant Harare, Zimbabwe. Finally, the last I would mention is how to undertake a process of regional integration that transcends the logic of capitalism, to borrow the words of Hugo Chavez. As a result, African governments have concluded a very large number of regional integration arrangements, several of which have Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas. While there is no agreed definition of this concept (Doyle, 2018, p. 1), environmental sustainability is a central focus. Fishing fleets from Russia, Japan, South Korea, and Taiwan also exploit the Indian Ocean, mainly for shrimp and tuna. These divisions are a constraint to economic growth, especially in developing countries. It includes small island states, such as the Comoros and the Maldives, as well as some of the world’s most populated economies such as India and Indonesia. Furthermore, RCEP addresses the special needs of less-developed ASEAN economies through early elimination of tariffs on products of interest to them and through the provision of development assistance to narrow development gaps. One step would be to undertake the appointment of an Eminent Persons Group (EPG) from member states tasked with developing a plan to strengthen IORA’s role in regional economic governance. partnership agreements with the European Union and the global economic crisis, regional integration is ‘signifi cantly challenged’ as an approach to the sustainable development of economies. In East Asia and the Pacific, the share of total trade with other Indian Ocean sub-regions has increased from 3.5 per cent to 6.1 per cent during the same period, while in Africa and the Middle East, it has increased from 15 per cent to 18.8 per cent. History shows that many states across the globe enter into regional agreements for economic purposes. However, the average effective tariff rate is generally below 10 per cent across the board. These experiences are at an early stage and yet they already contain lessons for other parts of the world. The European Union has a series of languages that it deems to be the official languages of the EU government. About 35 per cent of the world’s total population live in the Indian Ocean economy, with the majority living the South Asian sub-region (20.9 per cent). Source: LKI calculations based on Ad Valorem (2016), UNCTAD (2018), World Bank (2018c). 11 February 2009. Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors. Thank you. Trades in different countries have certain restrictions as well as some tariffs, which can be issued in a very discriminatory manner for sure. Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors. REGIONAL INTEGRATION IN AFRICA: THE CHALLENGES AND ACHIEVEMENTS OF INTERGOVERNMENTAL AUTHORITY ON DEVELOPMENT (IGAD) Ipinmoye Ayodele Olu* & Saleh Dauda** Department of Political Science and International Relations, University of Abuja, Abuja Abstract: This paper examines the concept of regional integration as a process in which Sign in here to access free tools such as favourites and alerts, or to access personal subscriptions, If you have access to journal content via a university, library or employer, sign in here, Research off-campus without worrying about access issues. Political motives, geography, and the uneven distribution of gains trumped the traditional efficiency gains across Africa’s Regional Economic Communities (RECs). That said, there has been a renewed interest in IORA more recently, with the organisations first heads of government meeting being held in March 2017 (Waidyatilake, 2017), though this has not been accompanied by additional research assessing the emerging challenges that regional cooperation in the Indian Ocean faces today. After a literature review in the second section, this article undertakes three related empirical tasks on the period since 2000. 15Based on UNCTAD’s international investment agreement database. Significant economic progress notwithstanding, development disparities and capacity gaps also remain and regional economic governance is at a nascent stage compared to those in the Americas or Europe. This site uses cookies. Amidst fiscal constraints, many Indian Ocean economies need to undertake public investment in port development and customs modernisation. More developed regional economies—such as Singapore, UAE, Malaysia, Australia and South Africa—have better ports than less developed countries (LDC), particularly in Africa. The RCEP is the only agreement to include three economies which are among the seven biggest economies of the world—China, Japan and India. Some MICs also lack the requisite technical knowledge to build institutions for fostering trade-led growth such as world class ports and bodies for negotiating comprehensive free trade agreements (FTAs). One item that fascinates us is the use of barter as a key method of trade, for instance, the exchange of Venezuelan oil for Bolivian soybeans or of Venezuelan oil for medical services rendered by Cuban volunteers. Regional economic integration refers to the agreement amongst countries within a certain geographic area for reducing and ultimately removing tariff barriers, making sure there is better flow of services or goods through the respective nations. No. The EAC seems to be the most vibrant Regional Economic Community (REC) in the Southern hemisphere and is tremendously advancing in its integration process: however, crucial issues remains to be addressed. Another response, complementary to this, has been to build regional associations or regional blocs. (2018) link the blue economy to maritime security in the Indian Ocean by pointing to a peaceful ocean as both an enabler of a prosperous blue economy and a potential source of economic development and growth. Source: Created by the Lakshman Kadirgamar Institute (LKI) using mapchart.net. 13ASEAN Political-Security Community, ASEAN, Economic Community and ASEAN Socio-Cultural Community. *Akbayan Representative Walden Bello is a member of the House of Representatives of the Republic of the Philippines, president of the Freedom from Debt Coalition, and senior analyst at the Bangkok-based institute Focus on the Global South. 8OECD, FDI Restrictiveness Index. But in terms of trade-led growth and the potential for greater regional economic integration, four challenges appear most pressing. The international research project “Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space” focuses on plausible futures of economic cooperation in the Greater Eurasian space and interplay between different integration processes in the region. Early work by Walker (2008) provides a broad overview of the changing geo-political and economic landscape of the Indian Ocean. Defining Regional Integration. Africa and the Middle East (23 days) is the worst performing sub-region. The Indian Ocean is an increasingly important component of the world economy. Key actions would include (a) investing in port development and customs modernisation through national and mega-regional initiatives, (b) gradually reducing barriers to trade and investment, (c) setting up an IODF to support LDC participation in trade-led growth and to facilitate knowledge transfers to MICs, and (d) strengthening regional economic governance through appointing an EPG on IORA and linking sub-regional and bilateral FTAs to RCEP. 3According to the 2017 Lloyd’s List Top 100 Container Ports Rankings. This ‘business as usual’ scenario is based on projections of several key indicators for the Indian Ocean economy (see Figure 5). Further research by think tanks seems warranted on the feasibility and terms of reference of the IODF. These inter-governmental institutions have limited powers delegated by members, lack formal rules or legal structures, have inadequate financial resources and lack permanent secretariats. Sequencing Significant economic progress over recent decades notwithstanding, development disparities and capacity gaps remain between Indian Ocean economies (see Figure 10). These regulatory barriers also deter FDI, and add to a range of additional statutory restrictions on FDI in the Indian Ocean economies. The first is how to build regional blocs that go beyond trade to include industrial policy, a shared agricultural policy, macroeconomic coordination, and technology sharing. Cordner (2010, p. 69) highlights the importance of the Indian Ocean for the energy security of many major economies as more than half the world’s oil passes through the region, and Alden (2009) considers the governance implications of China’s growing interests in Africa’s natural resources. Addis Ababa, Ethiopia, 2006, report, 95% of members, are member to another REC. For example, the World Bank (2017, p. 6) has defined it as the ‘range of economic sectors and related polices that together determine whether the use of oceanic resources is sustainable’, and Smith-Godfrey (2016, p. 3) suggested an even broader definition where the ‘“Blue Economy” is the sustainable industrialisation of the oceans to the benefit of all.’ In practice, it has generally been measured by combining all sectors of the economy that rely on the ocean directly or indirectly, including the use of ocean resources such as fish and minerals as well as trade and tourism. Please read and accept the terms and conditions and check the box to generate a sharing link. Total foreign aid to Indian Ocean economies as a group, doubled from US$ 12.4 billion to US$ 25.1 billion between 2000 and 2016.1010This accounted for 15.9 per cent of world ODA flows in 2016, but is less than US$ 10 per person. The region is on course to account for around 20 per cent of world GDP in 2025 and its per capita incomes may double to US$ 6,150 between 2017 and 2025. Note: Data not available for Comoros, Iran, Somalia and the Maldives. At a sub-regional level, the quality of ports in South Asia (4.2) and Africa and the Middle East (4.2) are slightly ahead that of East Asia and the Pacific (4.1). As Figure 6 shows, there is considerable variation between Indian Ocean economies in this area too. Somalia, Yemen. LKI calculations based on UNCTAD (2018); World Bank (2018c). … The article reviews the economic effects of such agreements on member countries and on the world trading system. The pace of the region’s container traffic and its goods and services trade have slowed since the crisis. Gamage (2016) and Hussain, Failler, Karim, and Alam (2017) explore the use of this idea in Southeast Asia and Bangladesh, respectively. But for a variety of reasons, it is very difficult to build affordable housing in higher-opportunity neighborhoods. Creates trade Member countries in a regional economic integration agreement have a wider choice of services and goods that were previously unavailable. It carries a particularly heavy traffic of petroleum and petroleum products from the oilfields of the Persian Gulf and Indonesia. However, this research seems relatively dated. Members of _ can log in with their society credentials below, Ganeshan Wignaraja, Adam Collins, and Pabasara Kannangara. The near-term outlook for the Indian Ocean economy also appears more favourable than the for the world economy as a whole. A classic hub and spoke network of some 11 regional institutions and FTAs are involved in governing the Indian Ocean economy and furthering regional economic integration. The challenges of regional integration in Southern Africa Mark Chingono* and Steve Nakana University of Zimbabwe, P. O. A conscious effort to expand economic and political space as well as the needed instrument to strengthen integration in Africa. This agreement is currently under negotiation among 16 Asia-Pacific economies including important Indian Ocean economies such as Australia, Cambodia, India, Indonesia, Malaysia, Singapore and Vietnam. The details of the activities of these organisations suggest that this network of regional institutions covering the Indian Ocean is at a nascent stage of institutional development compared to those in the Americas or Europe.1111A full assessment of regional organisations in the Indian Ocean is available in Wignaraja Collins, and Kannangara (2018). Regional integration has a final non-economic disadvantage. While we should be careful not to expect significant social mixing, the real economic and health benefits from living in higher-opportunity locations are sufficient to justify policies that promote integration. 11A full assessment of regional organisations in the Indian Ocean is available in Wignaraja Collins, and Kannangara (2018). Introduction Regional integration as a strategy of the collective economic survival of nations around the world has gained prominence in recent times. The global financial crisis has stimulated a broad reassessment of economic integration policies in developed and developing countries alike. It focuses on the strategic risks that threaten the economy’s security and, therefore, could ultimately undermine its economic prosperity. Find out about Lean Library here, If you have access to journal via a society or associations, read the instructions below. The sixth section concludes with policy implications. These countries could find themselves stuck in the ‘missing middle’ of development finance, when total resources available fall as the country moves from low until well into middle-income status (Wignaraja et al., 2018). Most of the sub-regional economic integration arrangements mentioned above have the aim to establish a customs union and a common market through the abolition of obstacles to the free movement of goods, persons, services and capital. The Regional Comprehensive Economic Partnership (RCEP) aims to achieve greater integration between the ASEAN region and its six free trade agreement (FTA) partners (India, China, Japan, Australia, New Zealand and Korea). The World Bank Group helps its client countries to promote regional integration through common physical and institutional infrastructure. Bellish (2013) estimated that Somali piracy cost the global economy US$ 5.7–6.1 billion in 2012 due to the additional cost of items such as security, insurance and re-rerouting of ships. The challenges of regional integration in Africa • page 1 Paper 145 • June 2007 Introduction It is widely acknowledged that Africa’s integration efforts have thus far failed to bear satisfactory fruit. Meanwhile, the importance of trade within sub-regions has remained largely static. By continuing to browse These include escalating trade conflicts between major economies, rising interest rates driven by the tightening of monetary policy in advanced economies, rising oil prices and waning investor confidence in emerging markets. Table 2 provides one such evaluation from the World Economic Forum’s Global Competitiveness report based on a survey of global business leaders’ perceptions and available hard data on ports. And while analysis has tended to point to substantial potential for regional cooperation in the Indian Ocean (Dabee & Reddy, 2000), it has also highlighted the major challenges of progressing a regional agenda due to the diversity of the region’s littoral states. In the third section, it surveys the region’s recent economic performance and regional integration. While the diversity of the region presents an opportunity for mutually beneficial trade based on each country’s comparative advantage, development gaps impede LDCs from fully engaging in trade-led growth. Regional Integration and Challenges of Africa’s Development 7 V. Regional Economic Communities - The Capacity Challenges 8 VI. Free trade area. The multiple spokes include several mostly smaller sub-regional institutions that count Indian Ocean economies among their membership. This is due to the importance of its maritime trading and communications routes, as well as the rich natural resources of many of its littoral states. 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