Regional Economic Cooperation | Economic & Social Issues | RBI Grade-B Main

Regional economic cooperation is a way of moving towards a global economy. It provides a model that attracts technology and investment. In the contemporary scenario, regional economic cooperation is considered as the means for enhancing economic development and providing economic security within a specific geographical region.

There are many regional organizations that work together, with their member countries to ensure holistic development within their geographical region. We’ve discussed some of them below. Students are advised to carefully go through each of these organizations, their functions, date of establishment, and member countries.

But before all that, let us first understand the need for regional economic cooperation and the guidelines for promoting it.

Understanding the Need for Regional Economic Cooperation

Regional economic cooperation makes it possible to bring a large part of the population out from poverty. Thus, it is a means to enhance economic development; and to improve the living conditions of people.

The benefits of economic cooperation among nations are many. It can lead to transport, trade, and new opportunities for investment. It allows the participant countries to overcome their small size of domestic markets; and achieve economies of scale. Additionally, it increases the competitiveness of the firms; and leads to the formation of new supply chains. A broad market allows developing countries to expand their current industries and promote new ones.

Guidelines for Promoting Regional Economic Cooperation

Every nation attempts to promote regional economic cooperation; but there are specific guidelines that should be followed.

  • First and foremost, cooperation should be based on equity, equality, as well as mutual benefit. These three factors should be taken into account, in addition to social disparity and differences in the level of development among countries in specific regions.
  • Cooperation should be based on deliberation, consultation, as well as consensus on all economic issues.
  • It should involve commitment towards common goals of all the participating countries; and there should be equal respect for one another.
  • Cooperation should also be based on the models of economic openness, as well as interdependence. It should be consistent with the principles of multilateral trading system, which was established by the erstwhile GATT.
  • Cooperation should aim to complement; and be built on current bilateral and other types of arrangements among member countries.

Important Regional Organizations

Organization Head (As of April 2020) Headquarters Members
Association of South-East Nations (ASEAN) Lim Jock Hoi Jakarta, Indonesia Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar, Lao PDR, Cambodia, Vietnam
Asia-Pacific Economic Cooperation (APEC) Mahathir Bin Mohamad Queenstown, Singapore Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea,
Malaysia, Mexico, New Zealand, Papua New Guinea, Peru,   Philippines, Russia, Singapore, Chinese Taipei, Thailand, USA, Vietnam
Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) H E Mohammad Shahidul Islam Dhaka, Bangladesh Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, Thailand
South Asian Association for Regional Cooperation (SAARC) H E Esala Ruwan Weerakoon Kathmandu, Nepal Afghanistan, Bhutan, Pakistan, Bangladesh, India, Nepal, Maldives, Pakistan, Sri Lanka
Indian Ocean Rim Association (IORA) Dr. Nomvuyo N Nokwe Ebene, Mauritius India, South Africa, Mozambique, Tanzania, Kenya, Madagascar, Comoros, Mauritius,
Seychelles, Iran, Oman, UAE, Yemen, Sri Lanka, Bangladesh, Malaysia, Indonesia, Singapore, Thailand, Australia, and Somalia.
Shanghai Cooperation Organisation Vladimir Norov Beijing, China China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, India, Pakistan

Let’s discuss some of the important ones in detail:

Association of Southeast Asian Nations (ASEAN)

Headquartered in Jakarta, Indonesia, ASEAN is a 10-member group that was founded on August 8, 1967. It promotes intergovernmental cooperation and facilitates economic, political, educational, security, military, and sociocultural integration among its member nations.

In 2010, India signed a free trade agreement with ASEAN under the Look East Policy. It is an effort to cultivate extensive economic and strategic relations with the nations of Southeast Asia to strengthen its standing as a regional power.

Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)

Founded on June 6, 1997, BIMSTEC is an association of seven countries. The main objective of BIMSTEC is economic and technological cooperation among its member countries. The leadership is rotated in alphabetical order of names of the member countries.

This was a brief overview of some of the regional organizations that ensure regional economic cooperation. You should study each one of these in detail; especially, the headquarters and names of the head of each of these organizations should be at your fingertips. Questions related to the host-country of the latest summit of these organizations are also asked in General Awareness. Keep a tab on current affairs to cover these areas.

To read more such informative articles, check the academic articles section on our main website.

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