The ECO Experience: A Comparative Understanding of Regional Integration in West and Central Asia

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28 Οκτ 2013 (πριν από 4 χρόνια και 11 μέρες)

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The ECO Experience:
A Comparative
Understanding of Regional Integration in
West and Central Asia


Javad

Foronda

Heydarian
University of the
Philippines, Diliman

Outline of Presentation

I. Research Question/Theoretical Puzzle

II. Origins of the ECO

III. A comparative analysis of regional integration
economic integration (ECO as compared to
ASEAN and EU)

IV. Opportunities and Challenges

V. Conclusions



Research Questions

A.) What
are the main drivers behind regional
integration in West and Central Asia,
especially in the case of
ECO?


B.) How
does the ECO compare with the ASEAN
and EU in terms of regional economic
integration?


C.) What are
ECO’s

specific areas of institutional
strength and vulnerability?


Methodology


Qualitative analysis focusing on:

I.
Interplay of domestic and broader regional
and international forces, which influence,
shape, and drive integration

II.
I
nstitutional characteristics of identified
regional bodies

III.
The nexus between geo
-
political and
economic variables in the overall
dynamics/process of integration


Origins of the Economic Cooperation
Organization


I.
The CTO (Cold War Era)


I.
The RCD: the triangular alliance among Turkey,
Iran, and Pakistan (1964)


II.
The ECO: post
-
revolution Iran, Turkey, and
Pakistan (1985)


I.
Entry of Post
-
Soviet States (1991)





Observation


Dynamic interaction between domestic and international forces


1.) Domestically: while, the big
-
3 (B3) had individual strategic and
economic reasons to re
-
establish their triangular ‘partnership’, post
-
Soviet states were desperate to stabilize their domestic political
situation


2.) Internationally: post
-
Cold War uncertainties, and the intensification
of economic globalization in the late
-
1980s and early 1990s
(proliferation of trade blocs,
IFI’s

role, and economic restructuring in
transition
-
economies).


* Defensive Integration


3.) Despite significant changes in the domestic political system,
especially in the case of Iran, prior attempts at regional integration
have somehow created a ‘path
-
dependency’




Institutional Characteristics and Objectives: Comparative
Apparoch


I. Dimensions of Regional Organizations (Lin and
Pidufala
, 2009)



Dimensions of Regional Integration (Lin and
Pidufala
, 2009)

Institutional Objectives and
Characteristics

II. Depth of Integration (
cuyvers

2002)


a.) ECO: Planning to become an FTA or Costumes Union
(2015)


no significant
sectoral

integration yet


b
.) ASEAN: from an FTA (2002) to a Market Union (2015)


began with
sectoral

integration


c
.) EU: from Common Market to Economic Union
(potential move towards a fiscal union amidst the
sovereign debt crisis)


from
sectoral

integration to
monetary union

Institutional focus and objectives

III.
ECO’s

institutional focus (
Isik
, 2007)


a.) Trade Liberalization

b
.) Trade Facilitation

c
.) Projects and Program for regional development


* No security
-
strategic forum: unlike the ASEAN and
the EU (i.e. ARF and OSCE)

Challenges


Lack of significant progress on intra
-
regional trade (6%
in ECO vs. 25% in ASEAN and 68% in EU)



Weak macro
-
economic convergence (development gap
and divergent indicators)



Absence of necessary supranational institutions and
mechanisms to facilitate deeper integration (e.g..
Structural/cohesion funds, an independent central
bank, or empowered secretariat)



Spaghetti Bowl Effect


overlapping memberships
(Turkey, a pivotal state, is considering EU membership
too)



ECO countries macroeconomic
indicators

Strength


Facilitating geo
-
strategic cooperation among non
-
Arab
Muslim countries:


I.
Regional security

-
Strategic vacuum

-
Conflict
-
management

-
Emerging complex interdependence


I.
Energy corridors

-
geo
-
economics

-
Synergistic partnership between resource
-
rich and transit
countries

-
Emerging trans
-
continental pipeline projects






Stages of Integration:
Intergovernmentalist

approach

Implications: theoretical and practical


EU: primacy of economics; pooling of sovereignty



ASEAN: higher emphasis on economics; but no decisive
move to the third phase yet



ECO: primacy of geo
-
politics; dominance of national
interests in inter
-
state bargaining



* ‘Reversed’ Spill
-
Over effect:
instrumentalization

of
economic cooperation for strategic ends (i.e. Iran
-
Turkey
relations)



Expectation: ECO has lower probability for deep regional
integration

Conclusions


Comparatively, the ECO is at an earlier phase of integration,
but econometric models show policy
-
induced growth in
intra
-
regional trade (
Achakzai
, 2010)



Formation of an FTA or a Customs Union is the most
feasible form of economic integration in the medium to
long
-
run.



Operationally, the ECO is more of a platform for strategic
coordination and political dialogue, although its mandate is
primarily economic and cultural



Predominance of national interest calculations in absence
of empowered independent supranational bodies
(significance of domestic political players in deepening
integration efforts)