Why are regional and economic groupings formed?

With the objective of understanding various means and strategies to strengthen the economies, different nations of the world are motivated to form regional and global economic groups like SAARC, European Union, ASEAN, etc. The formation of such regional and economic groups helps the member countries to know the development strategies and measures adopted by other member countries. This enables them to analyse their strength and weakness and, thereby, formulate policies to accelerate social progress and cultural development among its member countries. Secondly, another important purpose behind setting up of these groups is maintenance of peace and stability of the member countries. In addition to this, these groups provide a common platform to raise their voice in a unified manner on common issues to safeguard their common interests.

One of the significant developments that has taken place in the economic scenario of the world has been the emergence of regional economic groupings. Regional economic grouping is one of the major instrument of promoting international trade activities among countries. It focuses on creation of larger economic unit from smaller national economies. The main aim is to accelerate the development process and improve the quality of life of the residents of the region by providing them with greater choice both as producers and as consumers. Regional and economic groupings such as the SAARC, European Union, ASEAN, G-8, G-20, BRIC, etc. are formed to increase economic co-operation among nations in the neighbourhood or those sharing common economic Interests. This is particularly considered essential by developing countries as they all facing competition not only from developed nations but also amongst themselves in the comparatively restricted economic space enjoyed by the developing world. All major familiar economic activities in the region have an impact on overall human development in a common environment.

Regional economic grouping is one of the major instrument of promoting international trade activities among countries. It focusses on creation of larger economic unit Rom smaller national economies.

Regional and economic groupings such as the SAARC, European Union, ASEAN, G – 8, G – 20, BRIGS etc are formed to increase economic cooperation among nations in the neighbourhood or those sharing common economic Interests.

This is particularly considered essential by developing countries as they all facing competition not only from developed national but also amongst themselves in the relatively limited economic space enjoyed by the developing world.

Besides, cooperation with other economies in our neighbourhood is also required, as all major common economic activities in the region have an impact on overall human development in a shared environment.