Disadvantages of Regional Integration

In: Business and Management

Submitted By agaszumi
Words 566
Pages 3
Disadvantages of Regional Integration
Southeastern Asian countries have made a significant achievement in social and economic development during the past two decades of renovations. The road to success was not always smooth, and although regional integration presents many benefits, there are several disadvantages to that approach. The below analysis will reflect on few of them to present the main challenges in developing countries integrated under the Association of Southeast Asian Nations (ASEAN).
Disadvantages of Regional Integration
Today’s business world perceives regional integration as a positive outcome for countries within geographical region. As with every aspect there are several disadvantages to regional and economical integration. Countries switch to tariff free imports of same goods, but the tariffs on goods from the outside remain. As a result economists notice a less efficient use of resources. Oftentimes, the goods produced within the region are of a much lower quality than those imported from the outside.
In political aspect, governments loose tax revenue from a tariff free trading. Significant amount of revenue comes into the country’s government from import tariffs. Removal of them causes decrease in available capital. The effect on government’s spending programs could have a further negative impact on country’s development (Openbook, 2011).
Other challenges with regional integration include: equality between members, ways to deal with economic disruptions, redistribution of resources, and political issues.
Determination of equal rights for participants proved to be a crucial step. Correct resource redistribution will permit equal control over political and economic side of the regional integration. Major economic problems have a different affect on each member of the union, one may be the recipients of help…...