Pros And Cons Of Regional Economic Intervention

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QUESTION 3 Introduction “Governments can drive competitive changes by opening their domestic markets to participation or closing them to protect domestic companies.” (Thompson, Strickland and Gamble, 2010: 84) According to Hill (Hill, 2011: 205) there are two types of government arguments, political which focusses on protecting the welfare of particular groups at the expense of other groups and economic arguments which focusses on improving the general economy of a state. Political Arguments for Government’s Intervention There are various different types of political arguments that that focus on different areas in order to deal with various different issues discussed below. Protecting Jobs and Industries This is probably a crucial argument…show more content…
Regional trade agreements are designed to promote free trade but instead the world may be moving toward a situation in which a number of regional trade blocks compete against each other (Hill, 2011:276). Shenkar & Luo (Shenkar and Luo, 2004: 299) support this definition and assert that “economic integration is concerned with the removal of trade barriers or impediments between at least two participating nations and the establishment of cooperation and coordination between them”. The case refers to elimination of cross border tariffs in many sectors as well as reduction of trade barriers. According to the case study this region has really made efforts to ensure Regional Economic Integration. In light of these references amongst others the different levels of Regional Economic Integration will be discussed in relation to Great Lakes Region and if it is applicable and will work or not. 5.2 Levels of Regional Economic Integration Hill (2011) identifies the following five levels of economic integration from the least integrated (free trade area) to the most integrated (political…show more content…
Threat to national sovereignty and painful adjustments in certain segments of the economy Regional trade agreements are only beneficially if the amount of trade it creates sufficiently exceeds the amount of trade it diverts (Hill, 2011: 280) In this region however regional trade are non-beneficial as a result of poor domestic resource mobilisation, poor governance and corruption, small individual country market sizes, primary commodities export and a negative perception of the continent 5.5 Conclusion Due to the regional conflicts and the trade barriers between countries in the Central African Region, this regions expansion into the Global Markets is clearly affected by the lack of regional economic integration. It was quite evident when the different levels of regional economic integration where discussed above that this region is not fully integrated on most of the levels. This region can presently survive in these markets by using local materials and focusing on local demand but this survival may not be long loved or adequate to become a Global

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