• Sunday, December 03, 2023
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The world economy: Nigerian perspective (2)


  In the global economy, history is changing. Regional economic unions and associations scattered all over the world increasingly play very positive role in the world economy. In all the continents of the world, we have economically-motivated associations and unions, such as the European Union (EU), African Union (AU), BRICS, Association of Southeast Asian Nations (ASEAN), Economic Community of West African States (ECOWAS), among others.

For instance, major developing economies of the world came under one umbrella called BRICS – Brazil, Russia, India, China, and South Africa (which joined last in 2010). This forum is an independent international organisation encouraging commercial, political and cultural cooperation amongst the five nations. They primarily target opportunities for trade cooperation, investment, infrastructure development and so on. Apart from Russia, the members are all developing or newly industrialised countries distinguished by their large, fast-growing economies and significant influence on regional and global affairs.

The acronym “BRIC” was first used in a Goldman Sachs report for 2003 speculating that by 2050 those nations would be wealthier than most countries in the G7 (the developed economies including the United States and Japan). Currently, the five BRICS countries are responsible for about 18 percent of the world’s Gross Domestic Product (GDP) or combined nominal GDP of $14.90 trillion and are home to 40 percent of the earth’s population (3 billion people). This group had their first formal summit in Yekaterinburg on June 16, 2009 with a focus on how to improve the global economic situation, reform the financial institutions, and cooperate better in the future. In fact, they were recently described as defenders and promoters of developing countries and a force for world peace. Their fifth summit, a two-day event, ends today, March 27, 2013 at Durban, South Africa.

In Europe, 28 member states that are primarily located within the region came together under an economic and political platform called the European Union (EU). The Maastricht Treaty established the EU under its current name and came into force on November 1, 1993. The EU’s latest constitutional amendment, the Treaty of Lisbon, came into force on December 1, 2009. The EU developed a single market through a standardised system of laws that apply in all member states. “Schengen Visa” is a unified passport control policy amongst the 22 EU and four non-EU countries, a policy (among others) aimed at ensuring free movement of people, goods, services, and capital within the Schengen area. Schengen Agreement created open borders as earlier indicated. EU policies also maintain common trade policies, agriculture, fisheries and regional development.

In 1999, the euro zone (a monetary union) was established, which is composed of 17 member states. EU has established permanent diplomatic missions around the world, and is represented at the United Nations, the World Trade Organisation (WTO), the G8 and the G-20. The Union received the 2012 Nobel Peace Prize for having “contributed to the advancement of peace and reconciliation, democracy and human rights in Europe”. In 2002, euro notes and coins replaced national currencies in 12 of the member states. The EU’s de facto capital is Brussels.

Another geo-political and economic group of global interest is the Association of Southeast Asian Nations (ASEAN). ASEAN countries are ten in number and they are located in Southeast Asia. It was formed on August 8, 1967 by Indonesia, Malaysia, Philippines, Singapore and Thailand. Later, their membership included Brunei, Myanmar (Burma), Cambodia, Laos and Vietnam. Apart from the major aim of accelerating economic growth among member states in the region, there were also other attractions for coming together: accelerating social progress, cultural development, regional peace and stability, opportunities for member countries to discuss differences peacefully. This economic bloc would have ranked as the 10th largest economy in the world if it were a single entity. The member states embarked on a programme of economic cooperation and later had a proposal for a regional free trade area.

ASEAN later made progress and experienced an increase in both membership and drive for further integration. This led to the creation of an East Asia Economic Caucus, called ASEAN Plus Three countries (ASEAN+3), with the addition of China, Japan and South Korea in 1997. This came on the heels of the establishment of the Chiang Mai Initiative for better integration between those economies after the East Asian financial crisis of that same year. Before this time, they had in 1992 embarked on a scheme signed as a schedule for phasing tariffs and a goal to increase the region’s competitive advantage as a production base geared for the world market. Known as the Common Effective Preferential Tariff (CEPT) scheme, it was to act as the framework for the ASEAN Free Trade Area. At the turn of the 21st century, issues shifted to include a regional approach to the environment. Seeing it as a critical issue, one of the environmental treaties introduced by this organisation is the Asia-Pacific Partnership on Clean Development and Climate, a response to the potential effects of climate change. Before this, they had actually included the signing of the ASEAN Agreement on Trans-boundary Haze Pollution in 2002 (an unsuccessful initiative, though) as an attempt to control haze pollution in Southeast Asia. Even currently it is observed that Beijing experiences haze and control measures of “MP2.5” are being considered.

A larger economic integration within this bloc was further sought, which brought forth (within its framework) the East Asia Summit which included the ASEAN+3 as well as India, Australia, and New Zealand. This led to the drafting of an ASEAN Charter in December 2008, for which reason ASEAN summit now holds twice in a year. ASEAN was given an observer status at the United Nations General Assembly in 2006, and was awarded the status of “dialogue partner” to the UN. On February 26-28, 2013, ASEAN member states together with the group’s six major trading partners held the first round of negotiations in Indonesia (Bali) on establishment of the Regional Comprehensive Economic Partnership.

On May 26, 2001, African states (with the exception of Morocco) established the African Union (AU) in Addis Ababa, Ethiopia, which replaced the former Organisation of African Unity (OAU) and had similar aims as the EU and co.

In sub-Saharan Africa, the Economic Community of West African States (ECOWAS) was formed in 1975, comprising 16 member states. As usual, ECOWAS member states constantly enter into rounds of negotiations to primarily liberalise trade and services with the aim of submitting increasingly higher levels of commitments and collective responsibility in enhancing regional peace, security and prosperity. Free trade among member states and regional integration policy with the principal goal of bridging the developmental divide will usher in rapid economic integration, growth and development in a market-driven regional economy.



Nwachukwu writes from Onitsha, Anambra State.

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