JIMMA UNIVERSITY

INSTITUTE
OF
TECHNOLOGY

Global trend group assignment

Group Assignment

By ;
NAME ID
1. NABON GIRMA RU 0127/14
2. NAOL LEGESSE RU 4750/14
3. KITESSA FIKADU RU 1640/14
4. BETHELHEM TADEGE RU 0457/14
5. EYOB BIRHANU RU 0039/14
6. SIKAR YOSEF RU 0161/14
7. YEABSIRA FEKADU RU 4737/14

3rd YEAR, 1ND SEM

SUMMITED TO
MR AMANUEL
NOV 19, 2023 JIMMA

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 REGIONAL INTEGRATION FOR DEVELOPING
COUNTRIES

1.1 Definition and Conceptualization

Regional Integration: Is where two or more countries decide to cooperate in order to achieve
cross-border trade, investment, peace, economic growth, prosperity, and stability for their
economic region. The countries surrounding a region share their resources for economic
development, political stability, growth, security, and peace within the region, with a possibility
of economic and financial integration with a common institution. OR Regional integration is a
multifaceted process, whereby sovereign nation-states establish common political, legal,
economic, and social institutions for collective governance. So, when it comes to the developing
countries regional integration leads them to higher economic growth and development by
promotes trade and investment among member countries
Regional integration can offer significant advantages for developing countries, particularly
in areas like:

Economic Advantages:
1. Expanded Markets and Economies of Scale:

Larger Market: By removing trade barriers and fostering cooperation, regional integration
creates a larger market for member countries' goods and services. This expanded market size
attracts foreign investment, increases competition, and leads to lower prices for consumers.

Economies of Scale: With a larger production base, businesses can achieve economies of
scale, producing goods and services at a lower cost per unit. This makes them more
competitive in the global market and frees up resources for innovation and expansion.

2. Enhanced Trade and Investment:

Trade Facilitation: Regional integration agreements often include measures to simplify

customs procedures, harmonize trade regulations, and improve infrastructure, making cross-
border trade faster and cheaper. This boosts regional trade and attracts foreign direct
investment.

Foreign Direct Investment (FDI): A larger, integrated market and improved investment
climate entice foreign companies to invest in the region. This brings in much-needed capital,
technology, and expertise, creating jobs and stimulating economic growth.

3. Diversification and Specialization:

Reduced Dependence on Primary Commodities: Many developing countries rely heavily on

exporting primary commodities, which are vulnerable to price fluctuations. Regional
integration encourages diversification into manufacturing and services, making economies
more resilient to external shocks.

Specialization and Competitiveness: With a larger regional market, countries can specialize in
areas where they have a comparative advantage. This leads to increased efficiency, higher
productivity, and a stronger overall regional economy.

4. Improved Infrastructure and Connectivity:

Joint Infrastructure Projects: Regional integration often involves joint investments in

infrastructure projects like roads, railways, ports, and power grids. This improves connectivity
within the region, reduces transportation costs, and facilitates trade and movement of people.

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Knowledge Sharing and Technology Transfer: Collaboration on infrastructure projects
facilitates knowledge sharing and technology transfer between member countries, leading to
improved construction techniques and maintenance practices.

5. Collective Bargaining Power and Regional Influence:

Stronger Voice in Global Trade: By speaking with a unified voice, developing countries can
exert greater influence in international trade negotiations and secure better deals for their
exports. This translates into improved terms of trade and increased economic benefits.

Enhanced Regional Cooperation: Regional integration fosters cooperation on other issues like
security, environmental protection, and disaster management. This strengthens regional
stability and creates a more favorable environment for economic development.

Political Advantages:

Beyond economic benefits, regional integration offers developing countries a bouquet of

political advantages, strengthening their global presence and fostering internal stability.

1. Enhanced Security and Stability:

Conflict Resolution: Regional cooperation mechanisms can provide platforms for peaceful
resolution of disputes and border conflicts, preventing bloodshed and instability. Imagine
neighboring countries setting up a joint commission to manage water resources, avoiding
potential tensions over this vital resource.

Combating Transnational Threats: Collaboration in areas like terrorism, organized crime,

and piracy strengthens security for all member countries. Think of a regional coast guard
patrolling shared waters, deterring illegal activities and protecting maritime trade.

Improved Governance: Regional integration often incentivizes democratic reforms and

promotes transparency and accountability in member governments. Stronger regional
institutions can act as pressure points, encouraging good governance practices across the
board.

2. Increased Global Influence and Bargaining Power:

Unified Voice on International Issues: By speaking with one voice on the global stage,
developing countries can amplify their concerns and exert greater influence in international
organizations and trade agreements. Think of a regional bloc advocating for fairer trade terms
for developing nations at the World Trade Organization.

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Increased Foreign Policy Leverage: Regional integration enhances negotiating power in
foreign policy matters. Imagine a united African Union presenting a stronger stance on
security concerns in the continent.

Attracting International Investment and Aid: A stable and well-integrated region with a
large market becomes more attractive to international investment and development assistance.
This can provide developing countries with much-needed resources for infrastructure
development and social programs.

3. Promoting Peace and Cooperation:

Cultural Exchange and Understanding: Regional integration fosters cultural exchange and
understanding between neighboring countries, breaking down stereotypes and promoting
tolerance. Imagine cultural festivals showcasing the diverse artistic traditions of member
nations, building bridges between communities.

Shared Identity and Regional Consciousness: A sense of shared regional identity can
emerge through integration, promoting cooperation and solidarity among member countries.
This can be particularly beneficial in overcoming historical rivalries or ethnic tensions.

Human Rights and Democracy: Regional integration can be a catalyst for upholding human
rights standards and promoting democratic values across member countries. This can lead to
more accountable governance and improved living standards for all citizens.

As with economic benefits, political advantages require careful navigation. Issues like power
imbalances between member states, concerns over national sovereignty, and potential political
manipulation within regional institutions need to be addressed. Transparency, inclusivity, and
strong democratic principles are crucial for maximizing the political benefits of regional
integration.

By strategically leveraging the political advantages of regional integration, developing

countries can rise as more influential actors on the global stage, foster internal stability, and
pave the way for a more peaceful and prosperous future for their citizens.

Social Advantages

1. Enhanced Human Development:

Improved Education and Healthcare: Regional cooperation can facilitate knowledge

sharing and joint programs to improve access to quality education and healthcare services
across member countries. Imagine medical professionals from across West Africa sharing best
practices on infectious disease control, leading to better healthcare outcomes for all.

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Poverty Reduction and Social Mobility: Economic growth spurred by integration can
translate into poverty reduction and increased opportunities for social mobility. This can lead
to a more equitable distribution of wealth and improved living standards for the most
vulnerable communities.

Gender Equality and Women's Empowerment: Collaboration on gender equality initiatives

can promote women's participation in the workforce, leadership positions, and access to
education and healthcare. Think of a regional campaign educating communities about the
importance of girls' education.

2. Cultural Exchange and Understanding:

Preserving and Celebrating Cultural Heritage: Regional integration creates platforms for
exchanging cultural practices, languages, and traditions. This can lead to a richer
understanding and appreciation of diversity, boosting social cohesion and national identity.
Imagine a regional music festival showcasing the diverse musical traditions of East African
countries.

Promoting Peace and Conflict Resolution: By fostering social and cultural connections,
integration can reduce inter-group tensions and pave the way for peaceful conflict resolution.
Imagine youth exchange programs between historically conflicting groups, building bridges
of understanding and friendship.

Combating Social Issues: Collaborative efforts can address regional social issues like human
trafficking, child labor, and environmental degradation. Imagine a regional task force tackling
environmental pollution in shared waterways, safeguarding the health of communities across
borders.

3. Increased Mobility and Labor Opportunities:

Free Movement of Labor: Some integration agreements allow for the free movement of
skilled and unskilled labor within the region. This opens up greater opportunities for
employment, skill development, and earning higher wages for citizens. Imagine Kenyan
nurses being able to work in hospitals across East Africa, sharing their expertise and
improving healthcare access.

Brain Drain Reduction: Increased opportunities within the region can incentivize skilled
professionals to stay and contribute to their home countries, reducing brain drain and
promoting national development. Think of regional research collaborations retaining talented
scientists and engineers within Africa

Typology/Types of Regional Integration

There are various types of regional integration, which include:

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 1. Free Trade Area (FTA): involves the removal of barriers to trade among member states,
but each country retains its own external trade policies.

2. Common Market: involves the free movement of goods, services, capital, and people, in
addition to common external trade policies.
3. Economic Union: involves the full integration of economic policies, including the
establishment of a common currency and a single market for goods and services
4. Customs Union: involves the removal of internal barriers to trade and the establishment
of a common external trade policy.

Challenges and Solutions

Developing countries face several challenges in regional integration, including:
Unequal Starting Points: Development disparities among member countries can lead to uneven
distribution of benefits. Stronger economies attract more investment and flourish, while weaker
ones may struggle to adapt and face marginalization.
Institutional Deficiencies: Weak legal frameworks, corruption, and inadequate administrative
capacity can hinder effective implementation of integration agreements, creating loopholes and
inefficiencies.
Loss of Sovereignty: Deeper integration often involves ceding control over certain policy areas,
raising concerns about national autonomy and democratic decision-making. This can spark
political resistance and hamper progress.
Infrastructure Gaps: Developing countries often lack adequate infrastructure like roads,
railways, and communication networks, impeding the free flow of goods, services, and people,
undermining the benefits of integration.
Political Instability: Internal conflicts, regional tensions, and lack of trust between governments
can create an unstable environment and impede effective cooperation and joint decision-making.
Trade and Investment Barriers: Non-tariff barriers like complex regulations, cumbersome
customs procedures, and discriminatory practices can hamper trade even within an integrated
region, limiting the potential for economic growth.

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Tackling the Challenges:

Focus on Equity and Inclusivity: Design integration agreements that address disparities and
provide targeted support to weaker economies. Build capacity through technical assistance and
knowledge sharing.
Strengthen Institutions: Invest in legal reforms, combat corruption, and improve administrative
efficiency to create a transparent and accountable environment for implementing integration
measures.
Balance Sovereignty and Cooperation: Clearly define areas of cooperation and shared
decision-making while respecting national autonomy on critical issues. Foster political dialogue
and consensus building.
Prioritize Infrastructure Development: Jointly invest in infrastructure projects to connect
markets, facilitate trade, and improve access to essential services across the region.

Promote Regional Peace and Stability: Address common security threats, encourage dialogue
and conflict resolution, and foster trust and cooperation between member states.

Harmonize Trade and Investment Policies: Eliminate non-tariff barriers, simplify customs
procedures, and establish common standards for regulatory frameworks to create a smooth and
fair regional market.

Engage Civil Society and Stakeholders: Consult with businesses, communities, and NGOs to
ensure their concerns are addressed and integration benefits reach all levels of society.

Regional integration can bring many benefits to developing countries, including increased trade,
investment, and economic growth. However, it is important to address the challenges that come
with regional integration to ensure that it is successful and sustainable in the long term.

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 The Establishment of the Economic Community of West
African States (ECOWAS)
Established in 1975, ECOWAS is a regional political and economic union of 16 countries in
West Africa. Its mission is to promote economic cooperation and integration among member
states, with the ultimate goal of improving living standards for all West Africans.
Since the day formed it played vital role in different areas. we will see some of them.

 IT has successfully implemented a Common External Tariff (CET), reduced trade

barriers and increasing intra-regional trade significantly. Studies have shown that
ECOWAS leading to economic growth and job creation. And several ECOWAS
countries have seen positive economic growth since its establishment, suggesting the
benefits of regional cooperation.
 The ECOWAS passport allows citizens to travel freely within member states for
business, tourism, and work, This promotes cultural exchange and facilitates
collaboration among individuals.
 It has played a crucial role in developing regional infrastructure projects such as
highways, power grids, and telecommunications networks. These projects improve
connectivity, boost economic activity, and enhance access to essential services.
 It has established a military intervention force, ECOMOG, to address regional conflicts
and maintain peace and security. ECOMOG has intervened in several conflicts,
contributing to stability and preventing humanitarian crises.
 It serves as a platform for member states to cooperate on various issues, from agriculture
and environment to education and health. This collective approach provides a stronger
voice for the region on the international stage.
 It success has inspired similar initiatives in other parts of Africa, such as the Southern
African Development Community (SADC) and the East African Community (EAC).
 ECOWAS remains a significant milestone in African regional integration. Its
achievements in boosting trade, promoting cooperation, and improving living standards
serve as a model for other developing countries seeking to benefit from regional
collaboration.

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Reference: world bank regional integrity story from the field

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