Term Paper Example ( Part 2: Argumentation )
Essay Preview: Term Paper Example ( Part 2: Argumentation )
Report this essay
Part 2
Argumentation
Although some authors share common concept of economic integration, their view on objectives of regional economic integration is subjective due to differences in their area of focus. Several authors argued that one of the most important objectives behind the establishment of regional economic integration is to promote economic growth of member states (Molle, 2006; Gauangsheng, 2006; Okabe and Urata, 2013; and Ravenhill, 2007). Okabe and Urata argued in their research paper that ASEAN economic integration was established to meet three objectives in which the first primary one is to promote output growth and productive efficiency in domestic market of member states through increasing export and import (Okabe and Urata, 2013).
A famous economist Peter Robson underlined necessity of regional economic integration that experience of many countries in the world (including tiny countries) proves that although membership in an economic community is not a necessary premise for economic success, it does not include the possibility that those who have been successful without participation in integration are likely to be more successful if they become a member of a suitable community ( cited in Guangsheong, 2006, vol 44, p.44).
Besides the purpose to promote economic growth of member states, Molle an economist whose area of study lies in “European Economic Integration” argued that regional economic integration aimed to achieve three other main objectives. To him, economic integration aims, first, to accelerate economic growth and development among member countries; second, to secure regional peace and security though economic prosperity; third, to promote practice of democracy in member country; and lastly, to encourage member countries to promote and protect human rights. Molle tended to focus on economic, political, and social aspects of economic integration objectives; however, this thesis will mainly focus on only economic effects of economic integration. Thus, Molle’s objective of regional economic integration which is to promote peace and security, democracy, and human rights will not be taken into further study in this paper.
Another motive behind creation of regional economic integration is the rising threat from global and regional forces (Okabe and Urata, 2013). They took ASEAN economic integration as the case study. They argued that global challenges such as the rise of establishment of RTA and FTA impose a thread to ASEAN countries that their products will be discriminated in global market. More importantly, ASEAN’s export growth and flow of FDI were threatened by the rise of china; hence, ASEAN countries had to integrate into a single market and production platform (Okabe and Urata, 2013; United States International Trade Commission, 2010). However, the view that ASEAN initiated regional economic integration due to rising threat of China was letter opposed by Plummer and Cheong. China has imposed no negative impact on FDI inflow into ASEAN (Plummer and Cheong, 2008). Plummer and Cheong continued that while effectively absorbing very much FDI inflow, China as a regional superpower also helps attract FDI inflow into ASEAN because FDI attracted by China is a kind of complementary FDI.
Ravenhill (2007) also share his own perspectives on economic motivations for regional economic integration. He tried to convince that in addition to promoting economic development of member states through enhancing export growth and attracting FDI inflow, deeper integration with other members and domestic competitiveness of each member are also conductive to the creation of regional economic integration. His study on the motivations for economic integration seems to focus much on interests of individual states rather than regional interests.
Guangsheong (2006) clearly divided objectives of ASEAN economic integration into 3 main aspects. First, he claimed that economic integration has function to serve interests of member countries by accelerating economic growth and development; second, to bring development to ASEAN intra-region market through increasing trade and promoting FDI; and third, to enhance regional and international competitiveness of ASEAN (Guangsheong, 2006; AECB).
Association of Southeast Asia (ASEAN) was established on August 8th, 1967 through the Bangkok Declaration. The five founding fathers were Indonesia, Malaysia, Philippines, Singapore, and Thailand. Later on, Brunei, Vietnam, Laos, Myanmar, and Cambodia joint ASEAN in 1986, 1995, 1997, 1997, and 1999 respectively. Main purposes of the establishment of ASEAN were believed as promotion of regional peace and security, economic prosperity, and