Transcript Global integration vs regional integration

European Economy Topic 1
Global integration vs regional
integration
World map considering GDP/capita
World map considering population
density
World map of transport lanes
World map considering the distribution
of McDonald's restaurants
Global integration – Globalization
• Definitions :
A historical process, developed as a result of human
progress and innovation that refers to the continuous
integration of world wide economies throughout trade and
financial flows”. (FMI, 2000).
» ” Globalization refers above all to a dynamic and
multidimensional process of economic integration
whereby national resources become more and more
internationally mobile while national economies become
increasingly interdependent”. (OECD, 2005).
» ”The intensification of crossnational cultural, economic,
political, social and technological interactions that lead to
the establishment of transnational structures”. Martens and
Zywietz (2004, 2006).
» ”Creating networks of connections among actors at multicontinental distances, mediated through a variety of flows
including people, information and ideas, capital, and
good”. (Dreher 2005).
» ”
Globalization – Old or new?
Important similarities between Important differences between
globalization today and 100 years globalization today and 100 years
ago include:
ago include:
– Free trade.
– Free capital markets.
– Migration of labor.
- Dominant world power.
– Behavior of the dominant world
power.
– Currency.
– Foreign direct investment
– Institutions
Global integration
• Emerging markets begin to play an active role in this
movement since the early 1980s by initiating a
gradual process of market liberalization activities
• In recent years emerging markets have accounted for
about 50% of the world's economic growth
Benefits
Better risks
diversification
Technological
progress
More efficient
allocation of capital
Accelerating
economic growth
Costs
An increase in financial
vulnerability due to
external shocks
Disparities in
commercial exchanges
Global integration
• Indicators that directly influence the
global integration process: TRADE TO
GDP RATIO.
• Indicators that indirectly influence the
global integration process: the analysis of
custom duties changes, establishing
some credibility indicators.
Global integration indicators
Country/Indicator
European Union
Romania
Degree of openess of the
economy (2008-2010)
29.8%
73.8 %
Exported goods (mil.USD)
1 788 075
62 000
Imported goods (mil.USD)
1 990 884
23 240
% in total exported goods
15.06 %
0. 41%
% in total imported goods
16.54 %
0. 15%
% in total exported goods
/ main destinations
SUA 18%
China 8.4 %
Switzerland 7.9%
Russia 6,4%
Japan 22.4%
Coreea 13.9%
India 7.7%
European Union 6.1%
% in total exported goods
/categories of goods
Agricultural products 7.2%
Fuels and mining products
8.2%
Manufactured goods 81.1%
Agricultural products 0.1 %
Fuels and mining products
84.9 %
Manufactured goods 5.4%
Global integration- regional
integration interconnection
• Regional integration – definition – the
process that enables the development of
interstate groups considering regional basis.
• Causes of regional integration: the increase of
the degree of openness of the economies.
• Effects: Increased competiveness on external
markets due to the mobilization of common
efforts.
Global integration - regional
integration interconnection
• Global integration
Integration (Asia).
• Regional integration
Integration (Latin America).
Regional
Global
Regional integration
• Forms:
»Economic cooperation
»Free trade area (NAFTA, AELS,
CEFTA, MERCOSUR, ASEAN)
»Custom union
»Common market (CAER).
»Single market
»Economic and Monetary Union
»Total economic integration
Regional integration
Integration Form
Members
Free trade area
AELS
Iceland, Liechtenstein, Norway and
Switzerland.
NAFTA
U.S.A, Canada and Mexico
CEFTA
Croatia, Macedonia, Bosnia and
Herzegovina, Moldova, Serbia,
Montenegro, Albania, Kosovo
MERCOSUR
Argentina, Brazil, Uruguay, Paraguay,
Venezuela.
ASEAN
Brunei, Cambodia, Indonesia, Vietnam,
Laos, Malaysia, Myanmar, Philippines,
Singapore, Thailand.
Common market
CAER
Romania was a member
Benefits of regional globalisation
• Social
and
economic
policies
coordination.
• Harmonization of external connections.
• Creating some supra-national institutions
that would facilitate the governing
process.