Rationales, anatomy and recent development, impact and

advantages, problem and challengges and opportunity of halal

economy for moslem community and economic development by af
prof eng. marc deschamps and Dr nasser Al Ziyada

Regional integration is a process in which neighboring states

enter into an agreement in order to upgrade cooperation through common
institutions and rules. The objectives of the agreement could range from
economic to political to environmental, although it has typically taken the
form of a political economy initiative where commercial interests are the
focus for achieving broader socio-political and security objectives, as defined
by national governments. Regional integration has been organized either
via supranational institutional

structures

or

through

intergovernmental decision-making, or a combination of both.

Past efforts at regional integration have often focused on removing barriers
to free

trade in

the

people, labour, goods,

region,

increasing

the

and capitalacross national

free

movement

borders,

reducing

of
the

possibility of regional armed conflict (for example, through Confidence and

Security-Building Measures), and adopting cohesive regional stances on
policy issues, such as the environment, climate change and migration.
Intra-regional

trade refers

to trade which

focuses

oneconomic exchange primarily between countries of the same region or

economic zone. In recent years countries within economic-trade regimes
such as ASEAN inSoutheast Asia for example have increased the level of
trade and commodity

exchange between themselves

which

reduces

the inflation and tariff barriers associated with foreign markets resulting in
growing prosperity.

Regional integration has been defined as the process through which national
states "voluntarily mingle, merge and mix with their neighbors so as to lose
the factual attributes of sovereignty while acquiring new techniques for
resolving conflicts among themselves."[1] De Lombaerde and Van Langenhove
describe it as a worldwide phenomenon of territorial systems that increases
the

interactions

between

their

components

and

creates

new

forms

of organisation, co-existing with traditional forms of state-led organisation at

the national level.[2] Some scholars see regional integration simply as the
process by which states within a particular region increase their level of
interaction with regard to economic, security, political, or social and cultural
issues.[3]
In short, regional integration is the joining of individual states within a region
into a larger whole. The degree of integration depends upon the willingness
and commitment of independent sovereign states to share their sovereignty.
Deep integration that focuses on regulating the business environment in a
more general sense is faced with many difficulties.[4]
Regional integration initiatives, according to Van Langenhove,
should fulfil at least eight important functions:

the strengthening of trade integration in the region

the creation of an appropriate enabling environment for private

sector development

the development of infrastructure programmes in support of economic

growth and regional integration

the

development

governance;

of

strong public

sector institutions

and good

the

reduction

of social

exclusion and

the

development

of

an

inclusive civil society

contribution to peace and security in the region

the building of environment programmes at the regional level

the strengthening of the regions interaction with other regions of the

world.[5]
The crisis of the post-war order led to the emergence of a new

global political structure. This new global political structure made obsolete
the classical Westphalian concept of a system of sovereign states to
conceptualise world politics.[citation

needed]

The concept of sovereignty became

looser and the old legal definitions of the ultimate and fully autonomous
power of a nation-state are no longer meaningful.[citation

needed]

Sovereignty,

which gained meaning as an affirmation of cultural identity, has lost meaning

as power over the economy.[citation needed] All regional integration projects during
the Cold War were built on the Westphalian state system and were designed
to serve economic growth as well as security motives in their assistance to
state building goals.[citation

needed]

Regional integration andglobalisation are two

phenomena that have challenged the pre-existing global order based upon
sovereign states since the beginning of the twenty-first century. The two
processes deeply affect the stability of the Westphalian state system, thus
contributing to both disorder and a new global order.[citation needed]
Closer integration of neighbouring economies has often been seen by
governments

as

first

step

in

creating

larger

regional market for trade and investment. This is claimed to spur greater
efficiency, productivity gain andcompetitiveness, not just by lowering border
barriers, but by reducing other costs and risks of trade and investment.
Bilateral and sub-regional trading arrangements have been advocated by

governments as economic development tools, as they been designed to

promote economic deregulation. Such agreements have also aimed to
reduce the risk of reversion towards protectionism, locking in reforms already
made and encouraging further structural adjustment.
Some claim the desire for closer integration is usually related to a larger
desire for opening nation states to the outside world, or that regional
economic cooperation is pursued as a means of promoting development
through greater efficiency, rather than as a means of disadvantaging others.
[citation needed]

It is also claimed that the members of these arrangements hope

that they will succeed as building blocks for progress with a growing range of
partners and towards a generally freer and open global environment for
trade and investment[citation

needed]

and that integration is not an end in itself,

but a process to support economic growth strategies, greater social

equality anddemocratisation.[6] However, regional integration strategies as
pursued by economic and national interests, particularly in the last 30 years,
have also been highly contested across civil society. There is no conclusive
evidence to suggest that the strategies of economic deregulation or
increased investor protection implemented as forms of regional integration
have succeeded in contributing to "progress" in sustainable economic
growth, as the number of economic crises around the world have increased
in frequency and intensity over the past decades. Also, there is increasing
evidence that the forms of regional integration employed by nation states
have actually worsened social inequality and diminished democratic
accountability.[citation

needed]

As a result of the persisting contradiction between

the old promises of regional integration and real world experience, the
demand from across global civil society for alternative forms of regional
integration has grown.[7]
Regional integration arrangements are a part and parcel of the present
global economic order and this trend is now an acknowledged future of the

international scene. It has achieved a new meaning and new significance.

Regional integration arrangements are mainly the outcome of necessity felt
by nation-states to integrate their economies in order to achieve rapid
economic development, decrease conflict, and build mutual trusts between
the integrated units.[citation needed] The nation-state system, which has been the
predominant pattern of international relations since the Peace of Westphalia
in 1648 is evolving towards a system in which regional groupings of states is
becoming increasingly important vis-a-vis sovereign states. Some have
argued that the idea of the state and its sovereignty has been made
irrelevant by processes that are taking place at both the global and local
level. Walter Lippmann believes that, "the true constituent members of the
international order of the future are communities of states." [8] E.H. Carr
shares

Lippmann

view

about

the

rise

of

regionalism

and

regional

arrangements and commented that, "the concept of sovereignty is likely to

become in the future even more blurred and indistinct than it is at present." [9]
Regional Integration Agreements
Regional integration agreements (RIAs) have led to major developments in
international relations between and among many countries, specifically
increases in international trade and investment and in the formation of
regional trading blocs. As fundamental to the multi-faceted process of
globalization, regional integration has been a major development in the
international relations of recent years. As such, Regional Integration
Agreements has gained high importance. Not only are almost all the
industrial nations part of such agreements, but also a huge number of
developing nations too are a part of at least one, and in cases, more than
one such agreement.
The amount of trade that takes place within the scope of such agreements is
about 35%, which accounts to more than one-third of the trade in the world.
[citation needed]

The main objective of these agreements is to reduce trade barriers

among those nations concerned, but the structure may vary from one
agreement to another. The removal of the trade barriers or liberalization of
many economies has had multiple impacts, in some cases increasing Gross
domestic product (GDP), but also resulting in greater global inequality,
concentration of wealth and an increasing frequency and intensity of
economic crises.
The number of agreements agreed under the rules of the GATT and the WTO
and signed in each year has dramatically increased since the 1990s. There
were 194 agreements ratified in 1999 and it contained 94 agreements form
the early 1990s.[10]
The last few years have experienced huge qualitative as well as quantitative
changes in the agreements related to the Regional Integration Scheme. The
top three major changes were:

Deep Integration Recognition

Closed regionalism to open model

Advent of trade blocs

Deep Integration Recognition

Deep

Integration

Recognition analyses

the

aspect

that

effective

integration is a much broader aspect, surpassing the idea that reducing

tariffs, quotas and barriers will provide effective solutions. Rather, it
recognizes the concept that additional barriers tend to segment the markets.
This in turn impedes the free flow of goods and services, along with ideas
and investments. Hence, it is now recognized that the current framework of
traditional trade policies are not adequate enough to tackle these barriers.
Such deep-integration was first implemented in the Single Market Program in

the European Union. However, in the light of the modern context, this debate
is being propounded into the clauses of different regional integration
agreements arising out of increase in international trade.[10] (EU).

Closed regionalism to Open Model

The change from a system of Closed regionalism to a more Open
Model had arisen out of the fact that the section of trading blocs that were
created among the developing countries during the 1960s and 1970s were
based on certain specific models such as those of import substitution as well
as regional agreements coupled with the prevalence generally high external
trade barriers. The positive aspects of such shifting is that there has been
some restructuring of certain old agreements. These agreements tend to be
more forward in their outward approach as well as show commitment in
trying to advance international trade and commerce instead to trying to put
a cap on it by way of strict control.[10]

Advent of Trade Blocs

The Advent of Trade Blocs tend to draw in some parity between highincome industrial countries and developing countries with a much lower
income base in that they tend to serve as equal partners under such a
system. The concept of equal partners grew out of the concept of providing
reinforcement to the economies to all the member countries. Under these
section the various countries agree upon the fact that they will help
economies to maintain the balance of trade between and prohibit the entry
of other countries in their trade process.
An important example of this would be the North American Free Trade
Area (NAFTA),

formed

in

1994

when

theCanada - U.

S. Free

Trade

Agreement was extended to Mexico. Another vibrant example would entail as

to how EUhas formed linkages incorporating the transition economies
of Eastern Europe through the Europe Agreements. It has signed agreements
with the majority of Mediterranean countries by highly developing the EUTurkey customs union and a Mediterranean policy.[10]
Recent Regional Integration
Regional integration in Europe was consolidated in the Treaty on the
European Union (the Maastricht Treaty), which came into force in November
1993

and

established

the European

Union.

The European

Free

Trade

Association is a free trade bloc of four countries (Iceland, Liechtenstein,

Switzerland and Norway) which operates in parallel - and linked into - the
European

Union.

In

January

1994,

the North

American

Free

Trade

Agreement was formed when Mexico acceded to a prior-existing bilateral free

trade agreement between the US and Canada. In The Pacific there was
the ASEAN Free Trade Area (AFTA) in 1993 which looked into reducing the
tariffs. The AFTA started in full swing in 2000.
Alternative Regional Integration
In the last decade regional integration has accelerated and deepened around
the world, in Latin America and North America, Europe, Africa, and Asia, with
the formation of new alliances and trading blocks. However, critics of the
forms this integration have consistently pointed out that the forms of
regional integration promoted have often been neoliberal in character, in line
with

the

motives

and

values

of

the World

Trade

Organization,

the International Monetary Fund and the World Bank - promoting financial
deregulation, the removal of barriers to capital and global corporations, their
owners and investors; focusing on industrialisation, boosting global trade
volumes and increasingGDP. This has been accompanied by a stark increase
in global inequality, growing environmental problems as a result of industrial

development, the displacement of formerly rural communities, everexpanding urban slums, rising unemployment and the dismantling of social
and environmental protections. Global financial deregulation has also
contributed to the increasing frequency and severity of economic crises,
while Governments have increasingly lost the sovereignty to take action to
protect and foster weakened economies, as they are held to the rules of free
tradeimplemented by the WTO and IMF.
Advocates of alternative regional integration argue strongly that the
solutions to global crises (financial, economic, environmental, climate,
energy, health, food, social, etc.) must involve regional solutions and
regional integration, since they transcend national borders and territories,
and require the cooperation of different peoples across geography. However,
they propose alternatives to the dominant forms of neoliberal integration,
which attends primarily to the needs of transnational corporations and
investors. Renowned economist, Harvard professor, former senior vice
president and chief economist of the World Bank, Joseph Stiglitz has also
argued strongly against neoliberal globalisation (see Neoliberalism). Stiglitz
argues that the deregulation, free trade, and social spending cuts or
austerity policies of neoliberal economics have actually created and
worsened global crises. In his 2002 book Globalization and Its Discontents he
explains how the industrialized economies of the US, Europe, Japan, South
Korea and Taiwan developed not with the neoliberal policies promoted in
developing countries and the global South by the WTO, IMF and World Bank,
but rather with a careful mix of protection, regulation, social support and
intervention from national governments in the market.

The Peoples Agenda for Alternative Regionalisms

The Peoples Agenda for Alternative Regionalisms (http://www.alternativeregionalisms.org/?page_id=2) is a network of civil society, social movement
and community-based organisations from around the world, calling for
alternative forms of regional integration. PAAR strives to "promote crossfertilisation of experiences on regional alternatives among social movements
and civil society organisations from Asia, Africa, South America and Europe."
Further "[i]t aims to contribute to the understanding of alternative regional
integration as a key strategy to struggle against neoliberal globalisation and
to broaden the base among key social actors for political debate and action
around regional integration" and is thus committed to expanding and
deepening global democracy.
PAAR aims to "build trans-regional processes to develop the concept of
peoples integration, articulate the development of new analyses and
insights on key regional issues, expose the problems of neoliberal regional
integration and the limits of the export-led integration model, share and
develop joint tactics and strategies for critical engagement with regional
integration processes as well as the development of peoples alternatives." It
draws on and extends the work of such, Southern African Peoples Solidarity
Network- SAPSN (Southern Africa).
The PAAR initiative aims to develop these networks and support their efforts
to reclaim democracy in the regions, recreate processes of regional
integration and advance people-centred regional alternatives. In the video
Global

Crises,

Regional

Solutions

the

network

argues

that

regional

integration and cooperation is essential for tackling the many dimensions of

the current global crises and that no country can face these crises alone. The
video also calls for countries to break their dependency on the global
markets, as well as the dominant development model that has failed to
address increasing global hunger, poverty and environmental destruction,

resulting instead in greater inequality and social unrest. Regional integration,

the video argues, should be much more than macro-economic cooperation
between states and corporations; it should protect shared ecological
resources and should promote human development - health, wellbeing and
democracy - as the base of economic development.
References
1.

Jump up^ Haas, Ernst B. (1971) The Study of Regional

Integration: Reflections on the Joy and Anguish of Pretheorizing, pp. 344 in Leon N. Lindberg and Stuart A. Scheingold (eds.), Regional
Integration: Theory and Research. Cambridge, MA: Harvard University
Press.

2.

Jump up^ De Lombaerde, P. and Van Langenhove, L: "Regional

Integration, Poverty and Social Policy." Global Social Policy 7 (3): 377383, 2007.

3.

Jump up^ Van Ginkel, H. and Van Langenhove, L: "Introduction

and Context" in Hans van Ginkel, Julius Court and Luk Van Langenhove
(Eds.), Integrating Africa : Perspectives on Regional Integration and
Development, UNU Press, 1-9, 2003.

2.

De Lombaerde and Van Langenhove 2007, pp. 377-383.

3.

Jump up^ Thongkholal Haokip (2012), "Recent Trends in Regional Integration

and the Indian Experience", International Area Studies Review, Vol. 15, No. 4,
December 2012, pp. 377-392.

4.

Jump up^ People's Agenda for Alternative Regionalisms. "About PAAR. What is
the Initiative Peoples Agenda for Alternative Regionalisms?

5.

Jump up^ Source Needed

6.

Jump up^ Carr, E.H. The Twenty Years Crisis, 1919-1939.Macmillan, 1978: 230231.

8.

https://en.wikipedia.org/wiki/Regional_integration