Problem

Inadequate regional integration of countries

Other Names:
Inadequate economic integration among regional groupings of countries
Fragmented regional cooperation
Nature:

The deterioration of the developing countries' economic circumstances early in the 1980s, and which has resulted in marked slowdown in their economic and social development, has also had an impact on the progress of economic cooperation amongst them (following the spectacular achievements of the 1970-1980 period). Whilst economic integration and cooperation essentially provide instruments for fostering economic growth and development, in the past decade virtually all countries rather turned all their attention to crisis management and short-term remedies. This was largely because the scale of the the problems deriving from the debt crisis and the decay in export earnings exceeded by far the scope for subregional action.

In most regional groupings, the majority of member States faced substantial debt and balance-of-payments problems stemming from their overall foreign economic relations, while on the other hand the subregional integration and cooperation mechanisms were not equipped to tackle such problems. In developing countries, where external finance and payment support were the primary constraint, joint venture investment programmes or joint production schemes in industry or agriculture within regional groupings faced the utmost difficulty in being implemented. Where action continued at all, emphasis was put on rescuing and rationalizing existing industries rather than on new investment.

Incidence:

All but one of the member countries of the Latin American Integration Association (ALADI), all the Andean Group countries three out of the five Central American countries, four of the seven West African Economic Community (CEAO) member states and 10 out of the 16 Economic Community of West African States (ECOWAS) countries, and four of the six Central African Customs and Economic Union (UDEAC) countries have been subject to debt rescheduling since the beginning of the 1980s. These countries accounted for one-half of total group imports from the world in 1985, an excessive amount considering their endogenous potential to produce such products and commodities themselves.

 

Counter Claim:

In proposing the establishment of an African Common Market and Economic Community by the year 2000, African countries were not merely engaging in a dream of fantasy. Programmes that were conceived as national programmes (like the Volta Dam in Ghana) have become a basis for multinational agreements to use the facilities more effectively. In the same way, sooner or later, the fact will have to be faced that the Inga project in Zaire will not be viable unless it becomes the basis of multinational agreements. These examples provide important lessons not only for regional cooperation in other spheres, but also in designing the relationships between the subregional groupings and their member states under the new approach to integration.

Problem Type:
C: Cross-sectoral problems
Date of last update
06.11.2017 – 17:40 CET