COMMENT
REGIONAL INTEGRATION: A HIGH-IMPACT STRATEGY TO TACKLE SHARED CHALLENGES
W
elcome to the OPEC Fund Quarterly. This issue’s
special feature focuses on regional integration. Many of today’s most pressing challenges transcend national boundaries. They are global in nature and require countries to work together to overcome them. Regional integration is a high-impact
strategy to tackle shared problems. It encourages investments in roads and other infrastructure, helps reduce trade barriers, creates jobs and improves productivity. Regional integration means larger markets that leverage economies of scale, and more competition to drive improvements in efficiency and quality. While the benefits of regional
integration are clear, obstacles and challenges remain, such as limited policy harmonization, and poor transport and communication infrastructure. High tariffs, trade barriers and inefficient border procedures discourage intra- regional trading, as do unskilled workers and complex currency markets. Integrated regions such as East Asia and Europe move goods and services easily across borders, and their transport links create economic corridors. They
work together to sustainably manage rivers that flow through many countries. Their borders are open so that residents may visit family or attend events. This builds trust and relationships. The COVID-19 pandemic has exposed
the fragility of international systems. Supply and demand chains have been broken; health systems have been overwhelmed. Many lessons can be learned about how regional integration must be reinforced. One of the greatest lessons is the ability of regional blocks to mobilize member states to address a common issue, explains Sara Mbago-Bhunu, Regional Director, East and Southern Africa at the International Fund for Agricultural Development (see pages 8-9). As the pandemic spread in Africa, already fragile health systems could not cope. In response, the Economic Community of West Africa States (ECOWAS) stepped up and called on its member states to dedicate 15 percent of national budgets to boost health systems. “This experience underscores the importance of harmonizing policies that address issues of public goods across borders,” says Mbago-Bhunu.
For more interviews with regional integration and development experts, see pages 6 to 17. The OPEC Fund strives to advance and sustain the development aspirations of low- and middle-income countries throughout Africa, Asia and Latin America and the Caribbean. All developing countries, apart from our own members, are eligible for our support. Many of our operations support infrastructure projects that encourage regional integration, such as our work with Suriname, which is part of an initiative to establish an electricity grid to connect the Arco Norte region (Guyana, Suriname, Brazil, and French Guiana) by harnessing the energy potential of Suriname and Guyana (see pages 10-11 for more examples). We have so far committed more than US$22 billion for operations in over 125 countries. By providing affordable development finance to countries and regions that often find funds difficult to secure, we are helping to solve market challenges in a market-supportive manner, while promoting cooperation with and among the more vulnerable parts of our world.
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