The major strategic risks they identify are: the possibility of disruption to energy exports from the Arabian Gulf and Iran to the rest of the world, the risk of an open conflict between India and Pakistan, security threats to the key shipping lanes that pass through the Indian Ocean, and the possibility of military confrontation between major powers in the Indian Ocean. The policy of economic integration is purely commercial, and it takes place in order to make sure that certain trade barriers are reduced in the best way so that some nations can be unified together. The global financial crisis has stimulated a broad reassessment of economic integration policies in developed and ... and enforcement mechanism that comes with it helped keep protectionism low during the crisis. Available at: http://www.oecd.org/investment/fdiindex.htm, accessed on July 2018.—is only available for a few Indian Ocean economies. But for a variety of reasons, it is very difficult to build affordable housing in higher-opportunity neighborhoods. These are (a) port and customs quality, (b) barriers to trade and investment, (c) development gaps, and (d) nascent regional economic governance. The Indian Ocean has also become of substantial interest to major powers beyond the region and has increasingly become a theatre in which global geo-political rivalries play out. Furthermore, with the exception of some major economies (such as India, Indonesia and Singapore), most Indian Ocean economies are absent from a medium-term economic perspective studies (see Asian Development Bank [ADB] & Asian Development Bank Institute [ADBI], 2014; Kearney, 2015). Create a link to share a read only version of this article with your colleagues and friends. An estimated 40 per cent of the world’s offshore oil production comes from the Indian Ocean. This would increase market access, reduce trade barriers and facilitate regulatory coherence. of the world’s total land area, extends a distance of 10,000 kilometres from Southern Africa to Western Australia. The Indian Ocean Economy’s per capita GDP (current US$) is likely to almost double from US$ 3,200 to US$ 6,150 between 2017 and 2025. Source: Compiled by LKI based on World Economic Forum (2018). The period 1960-1980, however, witnessed the emergence of the major regional integration schemes that pushed forward the Continent’s economic integration agenda. A particular specific aim of the project is to discuss, analyze, and critically evaluate diverse issues related to economic … 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. Accordingly, there have been high-level political calls by Sri Lanka’s Prime Minister for the establishment of an Indian Ocean Development Fund (IODF) to enhance economic development in regional economies (Wickremesinghe, 2016). But in terms of trade-led growth and the potential for greater regional economic integration, four challenges appear most pressing. 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 … The economic integration in Europe has already quite some history. Globalization has ended in massive failure. 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). 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. The fifth section explores various policy challenges to deeper economic integration. Financial constraints in LDCs restrict national investments in port and logistics infrastructure that improve their quality and reduce trade costs. It focuses on the strategic risks that threaten the economy’s security and, therefore, could ultimately undermine its economic prosperity. Sequencing 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. 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). These regulatory barriers also deter FDI, and add to a range of additional statutory restrictions on FDI in the Indian Ocean economies. Login failed. The Indian Ocean region’s economy—henceforth the ‘Indian Ocean economy’—is in the international spotlight. Creates trade Member countries in a regional economic integration agreement have a wider choice of services and goods that were previously unavailable. We are intrigued by the comment of President Hugo Chavez during the World Social Forum in Caracas in 2006 that these practices “go beyond the logic of capitalism.” Yet we cannot romanticize these efforts. 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. By continuing to browse View or download all content the institution has subscribed to. 2Authors calculations based on data from the Food and Agriculture Organization. LDCs are thought to be vulnerable to economic and environmental shocks and have low levels of human development. A large amount of research in this area is focused on the growing strategic and economic rivalry between India, the largest Indian Ocean littoral state and China (Bastos, 2014; Brewster, 2014; Chaudhury & Basu, 2016), though Mohan (2017) and Mendis (2012) have also considered the strategic importance of the Indian Ocean for Europe and the United States, respectively. A. Cumbers, in International Encyclopedia of Human Geography, 2009. Fostering public-private partnerships for port development and better targeting to countries with rising inequality and fragile situations are essential to more effectively utilise scarce external assistance. Designed by Elegant Themes | Powered by WordPress, Why Obama will read the riot act to Arroyo, #RiceNotBullets: Denial of food and Shooting of Farmers are Both Forms of Violence, Human Rights Violations, กลไกระงับข้อพิพาทระหว่างรัฐและนักลงทุนในข้อตกลงความร่วมมือหุ้นส่วนยุทธศาสตร์ภาคพื้นเอเชีย-แปซิฟิก (Trans-Pacific Strategic Economic Partnership Agreement: TPP), DISCLOSURE,OR DECEPTION? 9https://www.un.org/development/desa/dpad/least-developed-country-category/ldcs-at-a-glance.html. Introduction Regional integration as a strategy of the collective economic survival of nations around the world has gained prominence in recent times. Currently, regional integration processes are being adopted through market processes that are independent of the government. 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. 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. Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas. Advances and Challenges in Regional Integration Jointly organized by Hitotsubashi University and the IMF Regional Office for Asia and the Pacific March 3-4, 2016 A decade ago, there was much discussion about when Asia might achieve full economic integration, including the establishment of a … 14A full list of bilateral FTA in the Indian Ocean is available in Wignaraja Collins, and Kannangara (2018). 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. The fourth section outlines the outlook for the Indian Ocean economy to 2025. Furthermore, while IORA and regional institutions without a trade agreement, promote cooperation on trade facilitation and other forms of technical cooperation, multiple priority areas and limited resources mean the scope of these activities varies significantly. It could be affected by several policy challenges that could yet undermine the region’s prosperity. Let me mention some of these challenges to contemporary regionalism in Latin America and other parts of the South. In addition, as Table 1 shows, the 28 countries within the Indian Ocean economy are extremely diverse. 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. 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. Somalia, Yemen. Annual budgets also range from less than US$ 0.5 million for the Colombo Plan to over US$ 400 million for the African Union. For instance, the plan to build oil and gas pipelines from Venezuela to the furthermost areas of South America is probably dangerous and damaging not only to the environment but also to the indigenous peoples. However, as the blue economy concept narrowly refers to the economic importance of ocean resources and ocean-related sectors in a given economy, it excludes the full breadth of economic activity that takes place in the 28 Indian Ocean economies and could be affected by the knock-on impact of a deterioration in maritime security. As such, there is scope to reassess the situation. While this literature provides useful insights on facets of the Indian Ocean economy, it does not chart overall regional economic performance or the full extent of challenges to the region’s economic integration. 5The simple average tariff level is the unweighted average of the effectively applied tariff rates for all products. It also includes countries at all levels of development, from low-income countries, such as Mozambique and Tanzania, to high-income economies such as Australia and Singapore. The global financial crisis has marked a watershed in Indian Ocean’s performance. 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. 1. The Economic Commission for Africa (ECA) became the champion of regional integration, already in the mid-1960s proposing the division of Africa into regions for the purposes of economic development. Challenges of Integration in West Africa Asante (1999) grouped integration challenges of ECOWAS into political, financial, approach or method and the existence of multiple regional bodies in the sub-region (rationalization). Daily Trust (Abuja) opinion By Abubakar M. Sambo. The idea of the blue economy emerged at the United Nations Conference on Sustainable Development held in Rio de Janeiro in 2012 (UNCTAD, 2014, p. 2). Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas. Tel: +66 2 218 7363 Regional economic integration is characterized first and foremost by the setting up of preferential trading agreements (PTAs) between independent states. OVERVIEW OF RULES (1) Regional Integration In addition to the global economic regime based on the GATT and IMF systems, which has sustained the world economy since World War II, regionalism, through which neighbouring countries seek to strengthen their economies by entering into some form of “regional integration” has become a major trend. A combination of coherent national and regional policy measures are needed. Encouragingly, the share of aid to LDCs increased from 37.5 per cent to 50.2 per cent over the same period. While there is no agreed definition of this concept (Doyle, 2018, p. 1), environmental sustainability is a central focus. 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. Most existing research on the Indian Ocean economy has been conducted through the lens of international relations and strategic studies. Large reserves of hydrocarbons are being tapped in the offshore areas of Saudi Arabia, Iran, India, and Western Australia. The second is how to ensure that building complementarity among economies does not reproduce the old, unequal... 3. Source: Compiled using information available on official websites of these respective institutions. Note: Data not available for Comoros, Iran, Somalia and the Maldives. Benefits of Regional Economic Integration. History shows that many states across the globe enter into regional agreements for economic purposes. An example is the North American Free Trade Agreement (NAFTA). Adding to this, the tangle of regional institutions are about 10 bilateral FTAs that involve Indian Ocean economies. 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. The EPG’s review should provide a vision for IORA’s role in regional economic governance as well as delegated powers from members, formal rules and legal structures, financial resources and a permanent secretariat. Free trade area.This is the most basic form of economic cooperation. 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). Overall Indian Ocean container traffic was equivalent to 22 per cent of global container traffic in 2017. In the Indian Ocean, it takes an average of 65 hours for border compliance (see Table 2). Note: 2018–2020 data are based on the continuation of post-crisis average growth rate. Regional Integration and Challenges of Africa’s Development 7 V. Regional Economic Communities - The Capacity Challenges 8 VI. However, the average effective tariff rate is generally below 10 per cent across the board. Asia’s mega-regional trade agreement—the Regional Comprehensive Economic Partnership (RCEP)—seems a reasonable candidate (Wignaraja, 2018). An additional issue is the risk of some MICs confronting situations of rising inequality as growth has not always been pro-poor and external shocks remain problematic. Voyer et al. 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. Our projections suggest that the Indian Ocean economy is likely to play a larger role in the world economy with rising prosperity by 2025. Symposium. Assessing barriers to trade in services is more challenging than for goods. Research has also looked at the specific economic cost of non-traditional security threats in the Indian Ocean, particularly piracy off the coast of Somalia. This rise has been propelled by the strategic location it holds among global shipping lanes and the relatively low costs of shipping as a means of transporting goods internationally. The Indian Ocean is an increasingly important component of the world economy. The EPA negotiations revealed important gaps between political ambitions and economic reality in African regional integration. Source: LKI calculations based on World Bank (2018a) and IMF (2018d). Regional integration refers to the unification of nation states into a larger whole. The Challenges and Prospects for Regional and Economic Integration in West Africa. 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). 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. For more information view the SAGE Journals Article Sharing page. These are exclusively between countries in the South Asian, and East Asian and Pacific sub-regions of the Indian Ocean.1414A full list of bilateral FTA in the Indian Ocean is available in Wignaraja Collins, and Kannangara (2018). This is linked to the growing importance of trade between sub-regions in the Indian Ocean, rather than deepening integration within these sub-regions (see Figure 3). Regional economic integration agreements are treaties between member states in a particular region of the world such as Sub-Saharan Africa or the Middle East. After establishing a single market in the early 1990s, the integration culminated in 1999 with the introduction of the euro in initially 11 EU Member States, which were joined by Greece in 2001, and … Trade liberalization and export promotion 3. 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. … Source: LKI calculations based on UNCTAD (2017). The fourth is how to promote a development process that is sustainable, that is, one that is built on ecologically benign technologies and is not based on ever-rising material consumption per capita, though of course the spreading of material wealth via income redistribution is necessary to bring people out of poverty. 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Addis Ababa, Ethiopia, 2006, report, 95% of members, are member to another REC. Available online: https://www.worldatlas.com/articles/the-oceans-of-the-world-by-size.html (accessed on 26 July). You can be signed in via any or all of the methods shown below at the same time. Box MP167 Mount Pleasant Harare, Zimbabwe. This will place it in the league of other major players such as China, the USA and the EU. Regional integration has a final non-economic disadvantage. However, inter-country comparisons of the quality of port infrastructure are difficult due to measurement problems, statistical gaps and the inherently subjective nature of such evaluations. Regional economic integration occurs when countries come together to form free trade areas or customs unions, offering members preferential trade access to each others' markets. 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. See, ADB (2010) and Wignaraja (2014). South Asia’s trade with itself has only marginally increased from 3.2 per cent of its total trade in 2000 to 3.6 per cent in 2017. Note: As share in sub-region’s total trade (%). With trade playing a lesser role in economic activity than before, regional growth has also slowed. The IODF’s mandate, financing, governance, staffing and project activities should be guided by best international practices in regional development banks. In East Asia and the Pacific, intra-sub-regional has fallen slightly from 22.1 per cent to 21 per cent, though based on this indicator, it is still the most integrated sub-region in the Indian Ocean. 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 NAIROBI … April 1, 2011, Harri Daniel, 1 Comment. Except where otherwise noted, content on this site is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. This paper examines the challenges and prospects of African regional integration with the focus on Southern 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. While some economies are excluded, the World Bank’s Services Trade Restrictiveness Index suggests that services trade barriers in the Indian Ocean economy (36.7) are generally high relative the OECD (19.5), though there are variations between sub-regions and countries (see Table 2 and Figure 8). This paper examines regional economic integration challenge in Africa locating key issues within theory and practice. Views expressed in the article are authors’ own. Regional Integration is a process in which neighboring countries enter into an agreement in order to upgrade cooperation through common institutions and rules. 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. Lean Library can solve it. However, the bulk of such aid is concentrated in three LDCs—Myanmar. In reality the question of regional integration is also related to an extraordinary … The CMI hosted the fourth Rencontre Valmer to discuss the challenges of regional economic integration through the lens of the Golden Growth Report. 2. The pace of the region’s container traffic and its goods and services trade have slowed since the crisis. View or download all the content the society has access to. For instance, it is below US$ 100 per person even in Mozambique where the poverty rate is around 60 per cent. Usual disclaimers apply. 11A full assessment of regional organisations in the Indian Ocean is available in Wignaraja Collins, and Kannangara (2018). Moreover, SMEs located in LDCs lack international competitiveness and the ability to join global value chains. 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. Regional integration is viewed as a significant initiative with regard to stimulating economic growth amongst member states and enhancing intraregional trade, security initiatives, and bilateral and multilateral agreements. The sixth section concludes with policy implications. 2. Some of the disadvantages of regional economic integration include a shifting of the workforce, less efficiency in trade, creation of trade barriers to non-members and loss of sovereignty to some extent. 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). of the integration process, and the current challenges. 4. Chapter III examines the external challenges facing the region today, particularly as regards its trade relations with Europe, the United States, Canada and Latin America. This trend … Practice has shown over time that when states take comparative advantage of … 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) . An additional complication is the broader regulatory barriers affecting business and trade. 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. More fundamentally, skills deficits and difficult business environments deter export-oriented FDI that would allow LDCs to engage in trade in higher value-added sectors. Regional Economic Cooperation and Integration in Africa 3 III. Deepening of democratic government systems. The global financial crisis has stimulated a broad reassessment of economic integration policies in developed and developing countries alike. 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. The Ocean itself holds 19.5 per cent11Estimated from the World Atlas. Stages of economic integration . 3According to the 2017 Lloyd’s List Top 100 Container Ports Rankings. Focus more on South-South Trade. Forecasts suggest that the Indian Ocean economy will likely account for around a fifth of global GDP by 2025 and its GDP per capita is expected to almost double. (, Voyer, M., Schofield, C., Azmi, K., Warner, R., McIlgorm, A., Quirk, G. (, Wignaraja, G., Collins, A., Kannangara, P. (, Wignaraja, G., Tyson, J., Prizzon, A., Velde, D. W. te. In our view, this fund could usefully complement existing national and donor efforts in the sphere of trade-related development in the region’s LDCs and middle-income countries (MICs). The main regional projections are (Wignaraja, Collins, & Kannangara, 2018): The Indian Ocean economy’s share of world trade in goods and services is expected to rise from 13.1 per cent to 15.7 per cent between 2017 and 2025. Authors are grateful to an anonymous referee for comments on the article. 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. For many of us from outside Latin America, the dynamics of ALBA hold particular interest. 10 Alter, K. & Meunier, S. The Politics of International Regime Complexity. A variety of reasons, it takes an average of 4.3 per cent of global integration is a in. Social development of countries content the society has access to expand economic and political as! Rec ’ s particularly heavy traffic of petroleum and petroleum products from the ’. The research, authorship and/or publication of this article IORA, which counts littoral. Poverty is likely to impinge on the objectives of the IODF address multiple challenges at a time national in... Thus exists for external development assistance and knowledge transfer to support the transition! 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