Economic Integration Meaning
In our childhood we all have read that story where it is easier to break one piece of wood but when there are multiple pieces of woods attached than it is very difficult to break them. In case of economics similar concept is there which is called economic integration where many countries of the same region come together by eliminating trade barriers between the countries and aligning their monetary and foreign policies to benefit the whole region. In order to have a better idea about this concept, one should look at the advantages and disadvantages of economic integration –
Advantages of Economic Integration
Efficient use of Resources
The first and foremost benefit of economic integration is that it leads to efficient use of resources because when many countries are involved it leads to economies of scale not only in production side but also on the administration side which in turn leads to saving of money, energy and time of all the member nations of the group.
Employment Opportunities
Another advantage of this integration is that it creates employment opportunities because due to the easing of trade control and opening of the economy for member nation’s skilled labor can look for work not only in his or her home nation but also in other nations. In simple words, economic integration in a way eliminates borders between nations and ensures that people have widespread job opportunities across the member countries.
Good for Producers as well as Consumers
It is good for producers as well as consumers because producers can sell their products without worrying about trade barriers besides due to the market getting expanded producers can benefit by selling their produce to a larger number of consumers. As far as consumers are concerned they too benefit because producers, in order to cater to a large market, expand their production which in turn leads to economies of scale and eventually it is the consumers who benefit as they get the product at cheaper rates.
Disadvantages of Economic Integration
Non Members Countries are Sidelined
The biggest disadvantage of this integration is that countries which are not part of the group are sidelined as member countries trade between themselves and ignores the other nations which in a way is an injustice to those nations.
Ignoring of Profitable Opportunities
Due to economic integrations countries sometimes are forced to produce and sell for member nations only even if it is less profitable for them which in an economic sense is not a good thing as far as companies are concerned because their prime motive is to earn highest possible profits which in case of this integration is not possible. Hence for example, if companies are getting cheap labor from non-members countries or they are getting a higher price for their product if they sell to non-members countries than they will not be able to do it because of economic integration.
Bullying Risk
In case of economic integration, not all countries are the same and due to this chances of bullying of weaker or smaller countries by strong or big countries are there which puts smaller or weaker nations at disadvantage. In simple words, this integration may put some countries to disadvantage due to their size of the economy and due to it, these countries may find terms of economic integration to be harsh to them leading to dissatisfaction among the government of the country as well as citizens of the country.
As one can see from the above pros and cons of economic integration that it is a very complex system and that is the reason why in real life there are only a few examples of successful economic integration as this type of integration requires strong political will as well as teamwork which we all know that not many nations can do.