The reasons to engage in regional integration are diverse and often driven by the larger countries in a region. These encounter different challenges along the way. For Russia, trade imbalances are a major impediment to pursuing a regional economic union. India has already taken steps towards strengthening its position in the region with preferential and free trade agreements. South Africa struggles to promote intraregional trade. The question arises, how emerging economies can effectively drive regional integration processes. Building on German experiences in Europe can be helpful, while the European integration path is not necessarily the proposed trajectory for all regions.
In this Policy Initiative , think tanks from Brazil, China, Germany, Russia and South Africa jointly develop research papers and policy recommendations on the priority issues indicated above. The Policy Initiative is coordinated by the South African think tank SAIIA in close cooperation with the Russian Academy of Sciences.
EPF News & Activities
EPF Seminar on Regional Integration and Value Chains at the BRICS Academic Forum 2015
In the run-up of the 7th BRICS Academic Forum in Moscow, members of the Economic Policy Forum (EPF) met on 21 May 2015 at the National Research University Higher School of Economics, to discuss and finalize the first round of publications on current challenges of regional economic integration and the creation of sustainable global value chains. The event was co-organized and hosted by the South African Institute for International Affairs (SAIIA) and the Higher School of Economics (HSE). In the first half of the seminar, the discussion revolved around the analysis and evaluation of current – contradictory – frameworks and trends, i.e. the ongoing but continually deadlocked multilateral negotiations within the WTO vs. the simultaneous proliferation of regional / free trade and mega trade agreements such as TTIP and TPP. New forms of integration may be needed and more effective, as in the case of Latin America, where FGV and IPEA currently conduct research seeking to develop regional value chains around specific sectors such as renewable energy. Markets could be created around products and technologies that are significant for all partners involved, without overburdening the process by FTAs and ambitious standards and norms, but instead through exploitation of regional complementarities. Such efforts also stand a good chance to benefit from global pressures for sustainable solutions that favour regional over global value chains (GVCs), since distance – even in today’s interconnected world – still matters. In the discussion, it was debated, however, if and how this Latin American approach was transferable to other countries and regions. Russia, for example, preferably engages in FTAs with individual – often weaker – partners as a way to bolster its security concerns, spanning two continents with opportunities and challenges to the East and West. Other countries are also cautious to engage in GVCs, wary of the huge competitive and development disparities that exist and a lack of workable policy solutions to address these effectively. Participants agreed that the WTO as the legitimate body to balance out different interests in multilateral negotiations need to be fought for and revived – as this guarantees also smaller and weaker countries a voice. In how far current FTAs and RTAs are a complementary or thwarting force for a revival of multilateralism was actively debated. In the second half of the workshops, analyses from China (on enhancing corporate drivers for a stronger integration specifically within ASEAN), South Africa (on regional investment trends and effects) and Brazil (on its role as a hub for regional integration) were examined. In the Russian context, the regional dimension of Russia's foreign direct investment was examined and the Southern African energy industry was considered as a potential driver of regional integration. The report "Drivers of Regional Integration: Value Chains, Investment, and New Forms of Co-operation", was published in February 2016. © Copyright Seminar Note by SAIIA
EPF meets in Cape Town to discuss Regional Integration and Sustainable Investment Strategies
Cape Town, 24 – 27 November 2014 [caption id="attachment_2103" align="alignleft" width="260"] Photo: SAIIA[/caption] Following discussions earlier this year in Rio de Janeiro, EPF members met for their second roundtable on “Drivers of Regional Integration” in Cape Town, South Africa. The 2-day workshop was organized and hosted by EPF founding member, the South African Institute of International Affairs (SAIIA), supported by the EPF secretariat in Berlin at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The meeting was held in parallel and in parts jointly with a workshop of representatives from different Regional Economic Communities (RECs), and followed by exchange visits to the Cape Town Port Authority TRANSNET and the South African Revenue Service (SARS). Renato Galvão Flôres Jr. from Fundação Getulio Vargas (FGV) initiated the workshop with a talk followed by lively interactions on the changing landscape of regional and international economic integration patterns by complex and fast-changing global value chains. Flôres’ illustrated why traditional forms and institutions for economic integration (such as FTAs, Customs Unions) are often no longer suited to shape and govern the current complex and highly volatile production, trade and investment patterns; he argued that any country and any economic actor today needs to find new, innovative approaches – and has to identify and tap into many new opportunities – to participate and profit from regional and global value chains. [caption id="attachment_2106" align="alignright" width="231"] Photo: SAIIA[/caption] Against this backdrop, the roundtable then discussed more specifically challenges of infrastructure development and finance in the Asian and South African context. The experts’ round generally found a great lack of regionally integrated and connecting infrastructure, both physical as well as soft. Lack of finance and investment seems to be a symptom rather than the cause of this problem, the reason being deep persisting political distrust and tensions that are hard to overcome. Furthermore, as Jaya Josie from the Human Science Research Council (HSRC) specifically pointed out for South Africa, the dilemma of having to try to maintain a comparative advantage as a provider of resources to the EU, China etc. – a vital source of income at least in the short-term – often restricts simultaneous efforts to build up new, regional value chains and comparative advantages in other sectors (manufacturing, services etc.). Esen Çağlar from the Economic Policy Research Foundation of Turkey (TEPAV), also highlighted that deeper regional economic integration is hard to come about as regional disparities may be deepened and thus constitute a challenge for integration efforts. In a subsequent session, discussions revolved around current trade mega-deals such as TPP and TTIP and their repercussions particularly for emerging economies. Based on the presentation by Benedikt Heid from the University of Bayreuth (formerly IFO Institute Munich), of a stylized model that allows an approximation of economic gains and losses for these countries, the participants discussed in how far the mega-deals in question are in fact only political rhetoric, given very practical downsides even to the signatory economies. However, there was a common understanding that the BRICS as big regional emerging economies have a lot to gain from becoming more active in their own neighbourhoods, as regional integration agreements do undoubtedly bring greater prosperity and welfare, with market size and distance still being dominating factors. A BRICS initiative on common standards and norms would, furthermore, significantly facilitate trade amongst these big five. [caption id="attachment_2112" align="alignleft" width="237"] Photo: SAIIA[/caption] The final two sessions of the roundtable focused on the corporate sector as well as specific investment strategies as drivers of integration processes. Pointing out specific examples and experiences from South Africa, Catherine Grant (Independent Associate of SAIIA), highlighted the dilemma of small and medium-sized entrepreneurs, who although often “romanticized” as economic drivers, are often still too insignificant to have any measurable impact in the generation of employment, growth or regional integrated value chains, and consequently have neither a lobby nor access to policy debates and processes, which in turn reinforces their marginal role. On the other hand, big multinationals as well as state-owned-enterprises are at the forefront of economic growth, employment and diplomacy, but follow hardly any given “strategy” – regional or other – and still operate in a rather uncompetitive environment in South Africa. Esen Çağlar shared a contrasting experience from Turkey, which through specific border investment zones as well as special business incentives is testing various ways of creating new space for the development of regional value chains, investment and business opportunities in a difficult geostrategic regional setting that affects economic opportunities. [caption id="attachment_2116" align="alignright" width="240"] Photo: SAIIA[/caption] At the end of two very interesting days of paper presentations and discussions, the roundtable participants agreed on conducting further joint Research and the following policy paper releases: 1) A comparative analysis of effects of regional and global trade deals, 2) A study on the development of intra-BRICS standards and norms, 3) Recommendations on increases intra-BRICS cooperation within the WTO, 4) Recommendations on the creation of transparent regional markets, 5) Recommendations on strengthening the development of financial markets within BRICS, 6) An analysis of the potentials for the creation of regional value chains in Latin America and Asia, 7) A comparative analysis of regional integration approaches from China, Russia, Nigeria, South Africa, India and Brazil. Conference Papers Regional Investment Strategies by Prof. Dr. Heribert Dieter Conference Documents List of Participants Think Tank Profiles Programme Conference Report EPF Cape Town Roundtable Report Follow-up Meeting in Moscow As a follow-up to the roundtable in Cape Town, members of the Economic Policy Forum (EPF) will meet in Moscow on 21 May 2015 to discuss and finalize the first round of publications on current challenges of regional economic integration and the creation of sustainable global value chains. More information: EPF Seminar on Regional Integration and Value Chains at the BRICS Academic Forum 2015
EPF cooperates with BRICS Academic Forum on Inclusive Regional Economic Relations
12-14 March 2014, Rio de Janeiro, Brasil On March 13-14, the Economic Policy Forum (EPF) met in Rio de Janeiro to formally launch its third Policy Initiative around issues of regional economic integration. The workshop was hosted by the Instituto de Pesquisa Econômica Aplicada (Ipea), and supported by the Fundação Getulio Vargas (FGV) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). Senior experts and policy analysts from Chile, Brazil, India, China, Nigeria, Mexico, Russia, South Africa and the European Union gathered in a roundtable to outline concrete strands for future joint research. In a focused discussion, they analysed the domestic approaches to economic integration in their respective regions as well as among BRICS, the trade-offs and benefits of bilateral and multilateral trade agreements that are currently under negotiation, as well as the prospects for strong local trading currencies to hedge against global financial volatilities. Participants agreed to deepen joint research and develop concrete policy recommendations in three priority areas, under the coordination and guidance of the South African Institute for International Affairs (SAIIA), the Observer Research Foundation (ORF) and the Instituto de Pesquisa Econômica Aplicada (Ipea) respectively. As a first priority, EPF members will jointly develop new domestic strategies to drive regional integration, specifically also with a view to the role of state-owned enterprises and the private sector. Secondly, they will aim to jointly formulate more effective responses to changes in the international trade and investment landscape. And thirdly, new veins for a fruitful South-South Cooperation will be created under the EPF framework. A full report and the papers presented during the workshop will be available on the EPF site for Regional Economic Integration shortly. The EPF workshop took place in the run-up to the BRICS Academic Forum, which is convened by the BRICS Think Tank Council to engage in track-II exchanges on important topics of the official intra-BRICS dialogue. The BRICS Think Tank Council invited EPF to submit concrete proposals for collaboration, and welcomed the engagement of its members with the EPF network to strengthen future ties.
ODI I Bricks and dollars: 10 lessons on improving public investment in infrastructure
The 2015 CAPE Conference presented a multitude of perspectives on how governments can avoid the mistakes of the past and effectively deliver greater investment in infrastructure. This note sets out 10 key lessons that government officials (particularly in finance and planning ministries) and international actors looking to strengthen investment in infrastructure in developing countries can draw from the conference. ODI I Bricks and dollars: 10 lessons on improving public investment in infrastructure
Brookings | Expanding African Trade: Creating a Comparative Advantage and Strengthening Regional Partnerships
In this chapter of the Brookings Institution's Foresight Africa report, Joshua P. Meltzer explores the impacts on Africa of the changing global trade environment. In particular, the Trans-Pacific Partnership Agreement will transform global trade architecture, likely to the disadvantage of Africa. However, our viewpoint contributors believe that, if African countries can successfully leverage regional integration and better utilize the African Growth and Opportunity Act, they might be able to maintain global competitiveness. Brookings | Foresight Africa
ADB | Asian Economic Integration Report 2015: How Can Special Economic Zones Catalyze Economic Development?
Economic zones have played a key role in economic development in many Asian economies. Special economic zones (SEZs) can play a catalytic role in economic development, provided the right business environment and policies are put in place. In Asia, SEZs can facilitate trade, investment, and policy reform at a time the region is experiencing a slowdown in trade and economic growth. The Asian Economic Integration Report is an annual review of Asia’s regional economic cooperation and integration. It covers the 48 regional members of the Asian Development Bank. This issue includes Special Chapter: How Can Special Economic Zones Catalyze Economic Development? ADB | Asian Economic Integration Report 2015: How Can Special Economic Zones Catalyze Economic Development?
IDB | Financing Infrastructure in Latin America and the Caribbean
This report by the Inter-American Development Bank (IDB) addresses the infrastructure investment gap in Latin America and the Caribbean (LAC). The report examines the underinvestment in infrastructure and analyses patterns of public and private investments. The authors highlight the need to make infrastructure more appealing and further gives recommendations how to fill the investment gap. IDB: Financing Infrastructure in Latin America and the Caribbean
ILO | Guidelines for Value Chain Creation
This joint publication by the International Labour Organisation (ILO) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), among others, provides guidelines on the evaluation and prioritization of value chain selection for practitioners working in value chain development. The guidelines contain stakeholder engagement concepts, instructions for value chain assessment and selection, including relevant assessment tools as well as practical considerations. The comprehensive guidance covers economic, environmental, social and institutional dimensions. ILO: Guidelines for Value Chain Creation
- No upcoming Global Events. Global Event Archive.