Problem

International economic fragmentation


Experimental visualization of narrower problems
Other Names:
Distrusted economic co-operation
Non-cooperative economic relations
Lack of international economic coordination
Lack of economic cooperation
Economic schism
Divided economic community
Nature:
The EEC/EU, EFTA, the Nordic Council, CMEA and other regional organizations outside Europe; and the groupings of nations in the OECD, OPEC and various commodity cartels - all these fragment the world economic system into a drastic play of forces that are beyond any one group of nations to control. Rivalry forces the entire global network of trade and finance to drive upwards and downwards unpredictably with consequent hardships, usually falling more heavily on the smaller nations.
Claim:
For most developing countries except the largest, a new era of economic growth depends, in the short-term, on effective and coordinated management among major industrial countries in order to facilitate expansion, reduce real interest rates, and halt the tendency to protectionism. In the longer term, major changes are also required to make consumption and production patterns sustainable in a context of higher global growth. International economic cooperation to achieve the former is embryonic, and to achieve the latter is negligible.
Counter Claim:
Integration schemes tend to favour the more advanced members of a grouping, who benefit from the liberalization of trade and the expansion of their markets; while the less advanced members of a grouping tend to gain less, unless the scheme provides for structural changes in the latter countries. Special problems facing the less advanced countries include not only the smallness of their markets, but more particularly the absence of supplies exportable to the other partners of their grouping.
Problem Type:
C: Cross-sectoral problems
Date of last update
23.04.2000 – 00:00 CEST