The Policy Initiative on Regional Integration focuses on designing inclusive and sustainable integration processes amongst countries with varying political and economic strength. The aim is to develop policy recommendations that contribute to ensuring that the integration process is attractive and beneficial for all countries in a region, whether large or small.
The reasons to engage in regional integration are diverse and often driven by the larger countries in a region. These encounter different challenges along the way. For Russia, trade imbalances are a major impediment to pursuing a regional economic union. India has already taken steps towards strengthening its position in the region with preferential and free trade agreements. In southern Africa, regional power pools offer a means for strengthening economic integration, as well as addressing climate change concerns. In South America, the creation of regional value chains runs up against physical and institutional obstacles, particularly between Brazil and its neighbours. The question arises, how emerging economies can effectively drive regional integration processes. Building on experiences in Europe can be helpful, while the European integration path is not necessarily the proposed trajectory for all regions. Therefore, EPF-Member think tanks decided to explore innovative and perhaps more effective formats to reach similar outcomes of institutional agreements such as trade agreements, tariff unions and political unions.
Beginning in March 2014, think tanks from Brazil, China, Germany, Russia and South Africa jointly developed research papers and policy recommendations on the priority issues indicated above. The Policy Initiative is coordinated by the South African Institute of International Affairs (SAIIA) in cooperation with the Institute for Applied Economic Research of Brazil (IPEA) and the Russian Higher School of Economics (HSE). Following workshops in Cape Town and Moscow, six policy papers were published in February 2016 under the title “Drivers of Regional Integration: Value Chains, Investment and New Forms of Cooperation”:
- Regional Integration and Global Value Chains: Tensions and Convergences
- Trade and Production Integration in South America: A Role for Brazil?
- Energy Industries as Drivers of Regional Integration: The Case of SADC
- Regional Dimension of Foreign Direct Investment in Russia
- Diversion and Agglomeration: Regional Dimensions of South Africa’s Investment Promotion Policies
- The Challenges of Sustaining Regional Integration in South America: The Case of Mercosur
Another policy research project by EPF, led by FGV, focuses on the potential of global value chains as new means to achieve regional integration. This is currently being investigated for the case of South American value chains of wind and solar power, with the results also feeding into the EPF Policy Initiative on Energy Policy. EPF facilitated a roundtable on the project in Berlin in September 2016 where FGV presented their pre-final policy paper.
Opportunities to tie the policy recommendations and approaches in to national and regional reform process will be developed in the final stage of the Policy Initiative.
- Launch of Policy Initiative
At the Workshop on Inclusive Regional Economic Relations , back-to-back to the BRICS Academic Forum in Rio de Janeiro, the Policy Initiative was launched with the South African Institute of International Affairs as co-ordinating member in March 2014 .
- Presentation of Draft Policy Papers
At Roundtable on Drivers of Regional Integration in Cape Town, draft working papers were presented and discussed in November 2014.
- Peer-Review and Presentation of Pre-final Policy Papers
At Seminar on Regional Integration and Value Chains back-to-back to BRICS Academic Forum in Moscow, pre-final papers were presented and peer-reviewed in May 2015.
- Publication of Policy Papers
In July 2016, the report “Drivers of Regional Integration: Value Chains, Investment and New Forms of Cooperation” was released followed by the study “Global Value Chains as a Regional Integration Tool – The Case of the Renewables in South America”.
- Discussion and Integration into National and International Reform Processes
Policy recommendations resulting from the publications have been fed into national and regional reform process at the Business Breakfast on Regional Drivers and Barriers to Business and a Roundtable with Energy Experts in Berlin. Opportunities to tie the policy recommendations in international processes will be developed.
Members of Policy Initiative:
Africa Institute of South Africa (AISA)
Getulio Vargas Foundation (FGV)
Institute for Applied Economic Research (IPEA)
School of World Economy at the National Research University – Higher School of Economics (HSE)