With regional integration, individual countries are not able to control the supply of their currency to meet their economic conditions. Regional integration in Africa has been an aspiration that a majority of countries have been working towards for the last few years, most notably after their liberation from colonisation. INTRODUCTION Regional economic integration has a fairly long history in virtually all parts of Sub-Saharan Africa (SSA). Some regional integration treaties, such as the European Union, create a common currency, and this leads to fiscal crises. What Does George Soros' Open Society Foundations Network Fund? The study used the East African Community (EAC) as the case study of RIA in Africa. There are … Free trade area. This is part 1 of a video giving information on Regional Integration, under the topic Challenges and Opportunities of Regional Integration . In Southern Africa in particular, with its comparatively small economies, r egional integration was meant to play a crucial role in pursuing common stratgic … Among the most outstanding features of the current processes of regional economic integration are: 1. Trading blocs are a type of economic integration that is world trade patterns. 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. However, vertical integration has its disadvantages, including the significant amounts of capital investment required. If participation in a regional economic integration agreement leads to decreased trade and investment with less-expensive markets outside the region while encouraging trade with more-expensive markets inside the region, it can result in higher costs to consumers. The rest of the world is not discriminated 6. World Bank. within that region. This is a video giving information on The Benefits of Regional Integration , under the topic Challenges and Opportunities of Regional Integration. List of the Disadvantages of Vertical Integration 1. Regional integration has been considered an important and successful tool of economic growth and development. While these treaties are intended to promote increased trade within the region, they can have the unintended effect of reducing trade with nations outside the agreement, since those nations must pay tariffs and deal with other trade barriers while the member states don't. Foreign investors from outside the region may see a country that is a member of such an agreement as a less-attractive place to invest due to the higher burden of tariffs and regulations. Select a region and choose a trading bloc (NAFTA, EU, ASEAN, etc.) However, they can have disadvantages, too. RESUMEN: Este artículo de investigación está dedicado a la Comunidad Económica de ASEAN y sus problemas de integración regional. Regional Integration Chris Fischbach University of Phoenix MGT 448 Global Business Strategies January 25, 2012 John O’Brien, MBA “ Describe the advantages and disadvantages of regional integration and relate the stage of economic development of the economically integrated region to potential business opportunities.” Deepening of democratic government systems. Another advantage of regional integration is that the effect of a large market will increase global competitiveness. Advances and Challenges in Regional Integration Jointly organized by Hitotsubashi University and the IMF Regional Office for Asia and the Pacific. Regional integration is growing as a means for economic growth for many countries. What Are Disadvantages of Regional Integration. When a more powerful entity controls that currency, such as the euro, individual countries give up the power to control their currency, and this weakens their economy. Copyright 2021 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. For instance, the European Union only considers a few languages as official means of communication, leaving out languages used by remote communities in Europe, such as Breton, Welsh and Frisian. Rhetorically the advantages of regional integration in Africa were recognised even before the creation of the OAU in 1963. When regional integration treaties are formed, member countries are required to give up some powers over key policies, such as fiscal, trade and monetary policies. Keywords: ASEAN, AEC, integration, problems. Advantages And Disadvantages Of Regional Trading Blocs 1785 Words | 8 Pages. Write two 350- to 500-word articles, one article in favor of regional integration and another article against regional integration. By Staff Writer Last Updated Mar 25, 2020 8:23:05 PM ET The disadvantages of regional integration include limited fiscal capabilities, cultural centralization, creation of trading blocs, diversion of trade and surrendering some degree of sovereignty. Infrastructure, Regional Integration and Growth in Sub-Saharan Africa: Dealing with the disadvantages of Geography and Sovereign Fragmentation Benno J. Ndulu. A decade ago, there was much discussion about when Asia might achieve full economic integration, including the establishment of a monetary union. Even the ASEAN and AEC regional integration was already established and generated growth and opportunities to the region, competitiveness of the region has been strengthened. Google Scholar. The aim of this essay is to critically analyse regional integration, demonstrating advantages, disadvantages and the effect it has on member states involved. Throughout this paper we will discuss the promoting of regional integration into the Northern South America region. There are four main types of regional economic integration. What are the pros and cons of regional integration? Benefits: Creation of trade and more jobs. Regional integration is, in essence, a double-edged sword, or a bitter-sweet solution for economic growth and prosperity, with its advantages and disadvantages; it is a risk that many countries are willing to take. Regional integration is when a group of countries get together and develop a formal agreement regarding how they will conduct trade with each other. First of all, economic integration has its costs, and involves painful adjustments. The Southern African Customs Union (SACU) is the oldest customs union in the world but has relatively little to show for its longevity. Countries switch to tariff free imports of same goods, but the tariffs on goods from the outside remain. 4. The road to success was not always smooth, and although regional integration presents many benefits, there are several disadvantages to that approach. As a result, the regional economic integration treaty can lead to a net loss in foreign investment. Secondly, regional integration implies the lowering of barriers to trade, thus benefiting the economy and increasing the well-being of the member states’ citizens. Some examples of regional integration treaties include the Association of Southeast Asian Nations treaty, the European Union, the North American Free Trade Agreement and the Organization of Petroleum Exporting Countries. 5. As a result economists notice a less efficient use of … Select a region approved by your instructor and choose a trading bloc (NAFTA, EU, ASEAN, etc.) Regional Integration Chris Fischbach University of Phoenix MGT 448 Global Business Strategies January 25, 2012 John O’Brien, MBA “ Describe the advantages and disadvantages of regional integration and relate the stage of economic development of the economically integrated region to potential business opportunities.” The healthy effects of such a regional economic integration are presumed to be as follows: 1. within that region. Emphasis is placed on opening markets, eliminating trade barriers a… Institutional strengthening and free functioning of market rules. Companies must have a lot of capital available to invest in vertical integration processes. If disruptions within the supply chain occur, then the entire operation is put at-risk until the supply chain can be restored. Especially strong integration -- like the European Union -- can lead to the loss of unique minority cultures within a region. Regional Integration Chris Fischbach University of Phoenix MGT 448 Global Business Strategies January 25, 2012 John O’Brien, MBA “ Describe the advantages and disadvantages of regional integration and relate the stage of economic development of the economically integrated region to potential business opportunities.” March 3-4, 2016. Throughout this paper we will discuss the promoting of regional integration into the Northern South America region. other Regional Integration Arrangements (RIA) of the world and especially on European Un-ion (EU), the Association of Southeast East Asia Nations (ASEAN), the North America Free Trade Area (NAFTA), among others. Regional economic integration treaties are usually signed between nations with relatively small economies and a lack of foreign trade and investment. Furthermore this essay will explain FTAs in further detail with examples. For instance, a member country stops trading with a nonmember country manufacturing goods at a cheaper price and opts for a member country manufacturing the same goods at a higher cost. Write two articles; One article in favor of regional integration and another article against regional integration. As with every aspect there are several disadvantages to regional and economical integration. In addition, describe the advantages and disadvantages of regional integration and relate the stage of economic development of the economically integrated region to potential business opportunities Select a region approved by your instructor and choose a trading bloc (NAFTA, EU, ASEAN, etc.) Benno J. Ndulu 1. The European Union has a series of languages that it deems to be the official languages of the EU government. 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