You can often hear the word “integration” in informational feeds or news programs, usually in the context of an economic or political event or situation. It entered our vocabulary quite tightly, but not everyone understands its meaning. This article will help answer the question of what integration is. In addition, you can fill in the gaps in knowledge and better understand what is happening at the political and economic Olympus.
What is integration?
The Latin word "integration" means the process of combining different parts into a single whole. Moreover, depending on the context of application of this term, the definition is specified and supplemented. In the economic context, integration is the process of active rapprochement, merging and mutual adaptation of national economic systems. They are prone to self-regulation and self-development on the basis of political and economic agreements agreed between states.
International level
International economic integration consists in a number of criteria that ultimately determine its essence:
- It is likely only between countries that are close to each other in social and ideological ways, have political systems compatibility and comparability in terms of economic development level.
- International economic integration is effective and all the more successful only at an equally high level of development of productive forces, that is, it is possible between developed countries.
- It has its own internal logical sequence of events, as the various integration components have a close relationship and interdependence.
- It is managed and directed at the highest level - interstate and intergovernmental.
European option
European integration has a fairly long history, where for several decades now, the search for the optimal path of development and the formation of a united Europe has been carried out. So far, it has not yet been found, since countries trying to unite have very heterogeneous processes, which makes integration difficult. Consider what European integration is.
The longest, on a large scale and with global processes integration began in Western Europe as early as 1958. The formation of the European Economic Community (EEC) marked the beginning of the creation of the European Union (EU), whose goal was the formation of a single economic, financial market. And in 2002, European integration continued with the creation of a single union currency, which led to a more complex level of integration - political.
Signs of integration
There are a number of signs by which it is possible to classify the changes taking place in the country as prerequisites for integration or the direct beginning of this process:
- Mutual interweaving and penetration into other areas of production processes.
- Profound changes in the economic structure of countries participating in integration.
- Necessary and targeted management of merger processes.
- The appearance of various structures at the interstate level in connection with this factor.
Forms of integration
Forms (or stages) of integration have several levels. First of all, as a rule, a free trade market is formed, aimed at a gradual reduction and further rejection of customs duties and payments between member countries in terms of mutual trade in various goods.The second stage is the creation of a customs union, involving mutual duty-free trade relations and a single foreign trade tariff in relations with countries not united by integration.
The third stage is the creation of a single market. This means free trade and production processes within the integration countries, as well as the creation of a centralized governing body. The goal is a single market as one state where there is free and unhindered movement of goods, services, labor and capital. At the fourth stage, an economic union is created, then - monetary. A single policy is being pursued in relation to the economy, finance, the currency of the integration participants, as well as citizenship.
Integration Terms
There are a number of conditions under which integration can be not only possible, but also successful:
- The economies of the unifying countries should be at approximately the same level.
- All countries of the union should be at the stage of growth: economic, political, cultural and so on.
- Policy decisions are needed at the level of the governments of the participating countries.
- Close proximity of powers, common borders are desirable.
- It is necessary to determine the state leader in the association.
Development
There are a number of factors that influence the development and acceleration of integration processes. These include:
- openness and transparency of national economies of countries seeking integration;
- division of labor at the international level;
- dynamic development of the global infrastructure and market;
- the output of production beyond the borders of their country and its optimization at the global level;
- strengthening and redistribution of financial flows;
- labor migration flows;
- international development of the scientific and technical sector;
- creation and development of international transport, communication and information management systems.
All of the above factors stimulate the merger and contribute to the transition of the association to a fundamentally new level in quality. Integration and development together increase competition, lead to an increase in the scale, progression of specialization and cooperation of production, which, in turn, contribute to economic growth.
Advantages and disadvantages
Despite the fact that the integration processes carry a lot of positive factors for the national economies of the uniting member countries, there are also negative points. The most common integration issues are:
- The processes of rapprochement and mergers are being restrained due to incomplete and weak additions to the economies of the participating countries.
- Infrastructure is developing non-uniformly.
- There is a difference in economic levels and, accordingly, in potentials for further development.
- Political system instability is possible in at least one participating country.
Faced with such obstacles on the integration path, countries drag out the unification processes for many years, which cannot positively affect their economies and lead to negative consequences. What is integration for countries with less developed economic sectors? It leads to the outflow of various resources and their redistribution towards more stable coalition members. In addition, the increase in production within the framework of the integration association carries the delayed effect of losses from the increase in scale. There is a risk of collusion between the participating countries on a certain segment of the goods market, which will undoubtedly lead to an increase in their prices.
The advantages of integration processes include an increase in the size of the market for free trade, which, in turn, leads to competition between countries. This gives an impetus to provide better conditions for trade, as a result of which there is an improvement in infrastructure and the latest world technologies are also actively spreading.
Integration Examples
There are a lot of them in the world. Here is an example of the largest, most famous and most successful associations:
- The European Union is the largest example of international economic integration, numbering at the beginning of 2016 28 states and several more candidate countries. Within the EU there is a common market, which was created through standardization of the system of laws. A single currency has been introduced - the euro, uniting the EU member states, but not yet the entire eurozone. The governing bodies have been created and are functioning: general court, accounting chamber, commission, bank, parliament, which is re-elected by EU citizens every 5 years. EU representatives and diplomatic missions are open and operate in many countries of the world. Since the European Union has the status of a subject of public international law, this gives rise to its authority to participate in the conclusion of international treaties and in international relations.
- NAFTA or the North American Free Trade Agreement, signed between the United States, Mexico and Canada, and entered into force since 1994.
- The largest APEC association is the Asia-Pacific Economic Cooperation, which began in 1989 at the initiative of the governments of New Zealand and Australia. Today, APEC includes 21 states, including Russia, which became a member of this association in 1998.
- MERCOSUR, established in 1991 as a common market between the countries of South America. Today, the organization includes Argentina, Brazil, Uruguay, Venezuela. Paraguay was a member of Mercosur until June 2012, after which membership was suspended.
- SADC or Southern African Development Community - The South African Economic Union, created in 1992. Initially, it included 11 powers, at the moment the association has 15 participating countries. According to the head of the Central Bank of South Africa, one of the most developed countries on the continent, already in 2016 a new single currency may appear in SADC.
- ZAEVS, or West African Economic and Monetary Union - created in 1994, the trade and economic union of West Africa. Today it has 8 states. The association has its own currency - the African financial community franc.
