MARKET

INTEGRATION
LESSON 3
MARKET
INTEGRATION
Prices among different location or related goods
follow the same pattern over a long period of
time, then market integration exist.

When group of prices often move proportionally

to each other and when this relation is very clear
among different markets, then market is
integrated .

The market integration is an indicator how much

different markets are related to each other
 ROLE OF INTERNATIONAL FINANCIAL
INSTITUTIONS IN THE CREATION OF GLOBAL
ECONOMY (IFI)
International Financial Institutions are chartered by
more than one country and therefore are subjects to
international law

The owners or shareholders are generally national

governments, although other international institutions
and other organizations occasionally figure as
shareholder.

Most of the prominent IFI's are creations of multiple

nations, although some bilateral financial institutions
(created by two countries) exist and are technically IFIS.
THE INTERNATIONAL FINANCIAL
INSTITUTIONS (IFIS) ARE:
A. International Monetary Fund (IMF)
B. Multilateral Development Banks
(MDBs) which include:
World Bank Group
African Development Bank
Asian Development Bank
Inter-American Development Bank
European Bank for Reconstruction
and Development
Membership Composition of IFIs
Only sovereign countries are
admitted as member owner
Broad country membership to include
borrowing developing countries and
developed donor countries
Membership in regional development
banks include countries around the
world as members
It has its own independent legal and
operational states.
MAIN OBJECTIVES
IMF provides temporary financial
assistance to member countries to help
ease balance of payments adjustments.
MDBs provide financing for development to
developing countries through:

Long term loans (with maturities of up to

20 years) at interest rates way below
market rates. Funding comes from
international capital markets and relend to
borrowing government in developing
countries.
MAIN
OBJECTIVES
Very long-term loans (sometimes called
credits with maturities of 30-40 years) at
interest rates below market rates. Funding
for loans come from direct contributions by
government in the donor countries.

Grant financing by some MDBs for

technical assistance advisory service or
project preparation.
MARKET
INTEGRATION
It is a state of
affairs as a process
involving attempts to
combine national
economies into a large
economic region.
TARIFF EMBARGO
FREE
TRADE
ECONOMIC
SANCTION
ORGANIZATIONS WHO
APPLIED FREE TRADE
ORGANIZATIONS WHO
APPLIED FREE TRADE
ASSOCIATION OF SOUTHEAST
ASIAN NATIONS FREE TRADE
AREA

(BRUNEI, INDONESIA,
MALAYSIA, PHILIPPINES,
SINGAPORE, THAILAND,
VIETNAM, LAOS, MYANMAR,
CAMBODIA)
ORGANIZATIONS WHO
APPLIED FREE TRADE
SOUTHERN COMMON MARKET
(ARGENTINA, BRAZIL,
PARAGUAY, URUGUAY,
BOLIVIA, ECUADOR, PERU,
VENEZUELA, CHILE,
SURINAME, MEXICO, GUYANAO
AND NEW ZEALAND)
ORGANIZATIONS WHO
APPLIED FREE TRADE
COMMON MARKET OF EASTERN AND
SOUTHERN AFRICA (COMESA)-
(BURUNDI, MALAWI, COMOROS,
MAURITIUS, CONGO, RWANDA,
DEMOCRATIC REPUBLIC OF CONGO,
EGYPT, SEYCHELLES, ERETRIA, SUDAN,
ETHIOPIA, SWAZILAND, KENYA,
UGANDA, LIBYA, ZAMBIA, MADAGASCAR,
ZIMBABWE)
 ORGANIZATIONS WHO
APPLIED FREE TRADE
EUROPEAN UNION
ITALY, FRANCE, DENMARK, GERMANY,
GREECE, SLOVENIA, NETHERLANDS,
BELGIUM, MALTA, POLAND, SPAIN,
LATVIA, LITHUANIA, ESTONIA, FINLAND,
LUXEMBOURG, PORTUGAL, CYPRUS,
CZECH REBUBLIC, AUSTRIA, BULGARIA,
HUNGARY, SLOVAKIA, SWEDEN
 ORGANIZATIONS WHO
APPLIED FREE TRADE
TRANS-PACIFIC PARTNERSHIP

AUSTRALIA, BRUNEI, DARUSALAM,

CANADA, VIETNAM, MEXICO, CHILE,
JAPAN, MALAYSIA, PERU, NEW ZEALAND,
SINGAPORE