MBA - International Business - Regional Economic Integration
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The South Asian Association for Regional Cooperation (SAARC) was established in 1985 between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka to promote economic and social progress within South Asia. Over the years, SAARC has pursued various initiatives to increase regional economic integration such as establishing preferential trade agreements and reducing trade barriers. While economic coordination and integration have increased in some areas, SAARC still faces challenges in fully realizing its economic goals due to issues such as political tensions between members. Going forward, further expansion of economic cooperation, especially in areas like tourism, infrastructure development, and trade liberalization, may help SAARC to achieve its full potential for regional economic growth.
![• Rizwanulhassan, M & Shafiqurrehman. (2015). Economic Integration: An Analysis of Major SAARC Countries. Available:
http://pu.edu.pk/images/journal/csas/PDF/7%20Rizwan%20ul%20Hassan_30_1.pdf.Last accessed 22nd January 2017.
• O'Rourke, B. (2007). Afghanistan Joins SAARC, World's Largest Regional Grouping. Available: http://www.payvand.com/news/07/apr/1019.html. Last
accessed 22nd January 2017.
• saarc-sec.org. (2014). KATHMANDU DECLARATION. Available: http://www.saarc-sec.org/userfiles/Summit%20Declarations/Kathmandu-18thSummit26-
27Nov2013.pdf. Last accessed 22nd January 2017.
• Bhattacharyay, B.N. (2014). PROSPECTS AND CHALLENGES OF INTEGRATING SOUTH AND SOUTHEAST ASIA . Available:
http://www.ijdc.org.in/uploads/1/7/5/7/17570463/article_3.pdf. Last accessed 22nd January 2017.
• Amadeo, K. (2016). Free Trade Agreement Pros and Cons. Available: https://www.thebalance.com/free-trade-agreement-pros-and-cons-3305845. Last
accessed 22nd January 2017.
• Sengupta, J. (2015). SAARC and Its Future. Available: http://www.jayshreesengupta.org/indian-economy/saarc-and-its-future/. Last accessed 22nd Jan
2017.
• Centre for Indian Development Studies. (2011). "SAARC as a trading block: achievements and future scenario..". Available:
https://www.thefreelibrary.com/SAARC+as+a+trading+block%3A+achievements+and+future+scenario.-a0278402846. Last accessed 22nd Jan 2017.
• Singh, I. (2016). [DIPLOMACY] 20th SAARC Summit, Bangalore.. Available:
https://www.reddit.com/r/GlobalPowers/comments/39gyw4/diplomacy_20th_saarc_summit_bangalore/. Last accessed 21nd Jan 2017.
References](https://image.slidesharecdn.com/ibgroupassignmentpresentation-170726202757/85/MBA-International-Business-Regional-Economic-Integration-15-320.jpg)
![• Bhattarai, K., 2014. Economic Growth and Development in India and. [Online] Availableat: https://hydra.hull.ac.uk/assets/hull:13361/content [Accessed
24 01 2017].
• Saxena, S. C. & Baig, M. . A., 2004. Monetary Cooperation in South Asia:. [Online] Availableat:
http://www.ris.org.in/sites/default/files/pdf/dp71_pap.pdf[Accessed 17 01 2017].
• Chowdhury, M. B., 2005. TRADE REFORMS AND ECONOMIC INTEGRATIONIN. [Online] Availableat: http://www.usc.es/economet/reviews/aeid542.pdf
[Accessed 24 01 2017].
• PTI. (2016). ISRO To Launch SAARC Satellite . Available: https://thewire.in/78874/saarc-satellite-launched-march-next-year-isro/. Last accessed 22nd Jan
2017.
• ET Bureau. (2016). Intra-SAARC group releases operation plans 2025 Available: http://economictimes.indiatimes.com/news/economy/foreign-
trade/intra-saarc-group-releases-operation-plans-
2025/articleshow/54537173.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst. Last accessed 21nd Jan 2017.
References](https://image.slidesharecdn.com/ibgroupassignmentpresentation-170726202757/85/MBA-International-Business-Regional-Economic-Integration-16-320.jpg)
MBA - International Business - Regional Economic Integration
- 1. Regional Economic Integration South Asian Association for Regional Cooperation (SAARC) By: Umesha Gunasinghe Dilanka Abeysinghe Sammani Dasanayaka Chethiya Kodagoda Thangavel Sasiruban
- 2. South Asian Association for Regional Cooperation : SAARC • Established on 8 December 1985 • Between the government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka • For the promotion of economic and social progress, cultural development within the South Asia region and also for friendship and co-operation with other developing countries. (Bharti, S. ,2014) (Ghai, K.K. , 2016)
- 3. SAARC : Inception • The idea first raised by Bangladesh President Ziaur Rahman in May 1980. • President Rahman addressed letters to the Heads of Government of the countries of South Asia • The Foreign Secretaries of seven countries in South Asia met for the first time in Colombo in April 1981 • A series of meetings followed in Nepal (Kathmandu/November 1981), Pakistan (Islamabad/August, 1982), Bangladesh, India (Delhi/July 1983) to enhance regional cooperation. • Foreign Ministers met in New Delhi in 1983 and adopted the Declaration on South Asian Regional Cooperation (SARC). • First SAARC Summit held on 7-8 December in 1985 in Dhaka where they adopted the Charter formally establishing the South Asian Association for Regional Cooperation (SAARC). (en.bnpbangladesh.com, n.d). (dailynews.lk. ,2008) Ziaur Rahman
- 4. SAARC : Evolution over the years ● Established in 1985 (nti.org.,2011) 19 SAARC summits so far (1985-2016) ● South Asian Treaty banning nuclear weapons - disagreement 1987(nti.org.,2011) ● 1988 - SAARC year against drug abuse (saarc-sec.org. ,1988) ● 1990 - SAARC Year of the Girl Child(saarc- sec.org. ,1988) ● 1991 -2000 SAARC Decade of the Girl Child (saarc-sec.org. ,1990) ● 1993 - South Asian Preferential Trading Agreement (SAPTA) (Rizwanulhassan, M & Shafiqurrehman. ,2015) ● 2004 - South Asian Free Trade Area (SAFTA) - complete free trade area by 2016 (Rizwanulhassan, M & Shafiqurrehman. ,2015) ● 2007 - Afghanistan joined SAARC (O'Rourke, B., 2007) Areas of Cooperation Agricultural and Rural, Biotechnology, Culture, Economic and Trade, Education, Energy, Environment, Finance, Funding Mechanism,Information, Communication and Media ,People to people contacts, Poverty Alleviation,Science and Technology, Security Aspects, Social Development, Tourism (Department of South Asian, Middle East, African Affairs . , 2013) ● 2014 - Deeper Integration for Peace and Prosperity (saarc- sec.org. ,2014) ● 2010 -2020 Decade of Intra - regional connectivity (Bharti, S. ,2014)
- 5. Elimination of Trade Barriers • Introducing Trading Agreements - SAPTA, SAFTA, free trade arrangement between India and Sri Lanka & agreement between Pakistan and Sri Lanka, India-Pakistan Trade Liberalization, Afghan- Pakistan Transit Trade Agreement - focusing on the intra-regional economic cooperation & on the intra-regional preferential trading arrangements in terms of greater product coverage and deeper tariff cuts. (Chowdhury, 2005)
- 6. Coordination of Monetary and Fiscal Policies • SAARC economies experience the smallest supply disturbances compared to the other regions. ( Saxena & Baig, 2004) • After decades the average growth rates of South Asian countries have increased. ( Bhattarai, 2014) • The inflation rates are very low comparing to 1990s. ( Saxena & Baig, 2004)
- 7. Levels of Economic Integration and Prerequisite Economic Integration – Levels Desirable Prerequisite •Geographical proximity •Cultural, historical and ideological similarities •Competitive or complementary economic linkages, •Common language among the Partner States (Mwasha,O. ,2015) & (en.wikipedia.org. ,2016) Preferential Trade Agreement ( PTA) Free Trade Areas Custom Unions Common Market economic and monetary unions (Mr.brackrog. ,2016)
- 8. Evolvement of the economic Integration Table 01:Evolvement of the economic integration (en.wikipedia.org. ,2016) World Evolve from industrial organization – Used from 1930’s (Ombeni N. Mwasha. (2015)) Political Stability Contemporary theory – Second Best Identification of comparative advantage Economies of scale Trade Creation and Tr adeDiversification SAARC Creating a Trade Bloc Security Situation Agriculture, Rural Development, Telecommunication, Meteorology, Health & Population Activities (www.saarc-sec.org. (2016))
- 9. Emerging trends - Rest of the world and SAARC •Currency union - SAARC has not initiated a discussion of common currency • Social Market Economy (SME) – Yet to determine a need for a Social Market Economy •Competitive Labor Market – Only provided Visa Exemption Scheme for 24 listed categories (www.saarc-sec.org.,2016) •Economic Analysis and Policy Advise – SAARC is currently focusing on achieving economic stability within member countries •Macro Financial Assistance to external parties – Not extended their support externally. (ec.europa.eu. ,2014)
- 10. Advantages of SAARC to its Member Countries • Foreign Direct Investments (Amadeo, K. ,2016) • To reduce poverty and increase standards of living. (Bhattacharyay, B.N., 2014) • Local businesses can expand beyond boundaries.(Bhattacharyay, B.N., 2014) • Government can be more focused on development projects. (Amadeo, K. ,2016) • Expertise, Innovation and new technology is distributed among the region (Amadeo, K. ,2016)
- 11. Disadvantages of SAARC to its Member Countries • A country will be exposed to foreign culture and behavior. (Amadeo, K. ,2016) • Competition among the member countries. • Dangerous and illegal goods may enter a country.(Amadeo, K. ,2016) • Cheap labor will be freely available within the region. (Bhattacharyay, B.N., 2014) • Removal of tariffs will bring the developments to a halt. (Bhattacharyay, B.N., 2014) • Environment will be at risk when multinationals set up plants and offices.
- 12. Future outlook for the regional integration • An expansion will be taken in tourism (Sengupta, J. ,2015) • Establish a Food and a Seed bank for the each and every region (Sengupta, J. ,2015) • All the countries is needed to bring about gender equality and a balanced sex ratio. (Sengupta, J. ,2015) • By 2020 export will be US$ 20293 million, imports will be US$22500 (Centre for Indian Development Studies. ,2011) • Removal of import barriers such tariffs and quotas, and promote intra-SAARC trade. (Centre for Indian Development Studies. ,2011)
- 13. Future outlook for the regional integration cont’d. • Removing travel bans. (Singh, I. ,2016) • High Speed Railway, connecting all the SAARC member nation. (Singh, I. ,2016) • Launching of a SAARC satellite. (PTI. ,2016) • 200 potential transport, trade facilitation and energy projects worth $120 billion in investments. (ET Bureau. ,2016) • Reduction of customs duties on all traded goods to zero by 2017. (Sengupta, J. ,2015)
- 14. References • Ghai, K.K. (2016). SAARC: Main Objectives of SAARC. Available: http://www.yourarticlelibrary.com/economics/trade-economics/saarc-main-objectives- of-saarc/40408/. Last accessed 22nd January 2017. • Bharti, S. (2014). An Analysis : SAARC (South Asian Association for Regional Cooperation) and its Relevance !!. Available: http://www.sociocosmo.com/2014/12/SAARC-South-Asian-Association-for-Regional-Cooperation.html. Last accessed 22nd January 2017. • en.bnpbangladesh.com. (n.d). SHAHID PRESIDENT ZIAUR RAHMAN. Available: http://en.bnpbangladesh.com/picture-gallery/. Last accessed 22nd January 2017. • dailynews.lk. (2008). History and mission of SAARC. Available:http://archives.dailynews.lk/2008/08/01/saarc02.asp. Last accessed 22nd January 2017. • Department of South Asian, Middle East, African Affairs . (2013). South Asian Association for Regional Cooperation (SAARC). Available: http://sameaf.mfa.go.th/en/organization/detail.php?ID=4491. Last accessed 22nd January 2017. • nti.org. (2011). SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION (SAARC). Available: http://www.nti.org/learn/treaties-and-regimes/south- asian-association-regional-cooperation-saarc/. Last accessed 22nd January 2017. • saarc-sec.org. (1988). Islamabad Declaration. Available: http://www.saarc-sec.org/userfiles/04-Islamabad-4thSummit1988.pdf. Last accessed 22nd January 2017. • saarc-sec.org. (1990). MALÉ DECLARATION. Available: http://www.saarc-sec.org/userfiles/05-Maldives-5thSummit1990.pdf. Last accessed 22nd January 2017.
- 15. • Rizwanulhassan, M & Shafiqurrehman. (2015). Economic Integration: An Analysis of Major SAARC Countries. Available: http://pu.edu.pk/images/journal/csas/PDF/7%20Rizwan%20ul%20Hassan_30_1.pdf.Last accessed 22nd January 2017. • O'Rourke, B. (2007). Afghanistan Joins SAARC, World's Largest Regional Grouping. Available: http://www.payvand.com/news/07/apr/1019.html. Last accessed 22nd January 2017. • saarc-sec.org. (2014). KATHMANDU DECLARATION. Available: http://www.saarc-sec.org/userfiles/Summit%20Declarations/Kathmandu-18thSummit26- 27Nov2013.pdf. Last accessed 22nd January 2017. • Bhattacharyay, B.N. (2014). PROSPECTS AND CHALLENGES OF INTEGRATING SOUTH AND SOUTHEAST ASIA . Available: http://www.ijdc.org.in/uploads/1/7/5/7/17570463/article_3.pdf. Last accessed 22nd January 2017. • Amadeo, K. (2016). Free Trade Agreement Pros and Cons. Available: https://www.thebalance.com/free-trade-agreement-pros-and-cons-3305845. Last accessed 22nd January 2017. • Sengupta, J. (2015). SAARC and Its Future. Available: http://www.jayshreesengupta.org/indian-economy/saarc-and-its-future/. Last accessed 22nd Jan 2017. • Centre for Indian Development Studies. (2011). "SAARC as a trading block: achievements and future scenario..". Available: https://www.thefreelibrary.com/SAARC+as+a+trading+block%3A+achievements+and+future+scenario.-a0278402846. Last accessed 22nd Jan 2017. • Singh, I. (2016). [DIPLOMACY] 20th SAARC Summit, Bangalore.. Available: https://www.reddit.com/r/GlobalPowers/comments/39gyw4/diplomacy_20th_saarc_summit_bangalore/. Last accessed 21nd Jan 2017. References
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- 17. • Mr.brackrog. (2016). What is economic integration. Available: https://mrbrackrog.wordpress.com/economics/grade-12-economics/economic-intergration/. Last accessed 23rd Jan 2017. • Mwasha,O. (2015). The Benefits of Regional Economic Integration for Developing Countries in Africa: A Case of East African Community (EAC)*. Available: http://gsis.korea.ac.kr/wp-content/uploads/2015/04/11-1-05-Ombeni-N.-Mwasha.pdf.Last accessed 23rd Jan 2017. • en.wikipedia.org.(2016). EconomicIntegration.Available:https://en.wikipedia.org/wiki/Economic_integration.Last accessed 23rd Jan 2017. • ec.europa.eu. (2014). ECONOMIC AND FINANCIAL AFFAIRS.Available: http://ec.europa.eu/economy_finance/international/index_en.htm. Last accessed 23rd Jan 2017. • www.saarc-sec.org. (2016). SAARC Visa Exemption Scheme. Available: http://www.saarc-sec.org/SAARC-Visa-Exemption-Scheme/100/. Last accessed 23rd Jan 2017. References
- 18. Thank You!