Regional cooperation plays a pivotal role in enhancing the state’s economic security. Economic security involves maintaining a manageable trade and fiscal deficit and achieving sustainable economic growth through sound, stable and indigenous economic solutions and policies.
It also includes fostering bilateral and multilateral economic and trade relations with regional and global partner states that are mutually benefiting. Such economic relationships, grounded in mutual respect for sovereignty, independence and shared interests, can be achieved through regional cooperation. Regional cooperation is paramount for a state to boost its economic influence, improve citizens’ living standards, develop infrastructure, elevate its international standing and augment its economic security.
The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) are true and active examples of regional cooperation that play a significant role in enhancing the economic security of countries.
The EU is a politico-economic union of 27 countries, formally established in 1993, which aims to promote regional economic cooperation and integration, ensure peace and foster shared values among its member states. Nearly three decades ago, European states reached a consensus, recognizing the importance of regional cooperation in enhancing economic security. In 1993, the Gross Domestic Product (GDP) of the EU was $6.67 trillion but today it stands at $19.4 trillion.
European Union and the ASEAN are true and active examples of regional cooperation that play a significant role in enhancing the economic security of countries.
Regional cooperation paves the way for the collective economic uplift of the member states, thereby ensuring economic security. Within the EU, regional cooperation has helped Germany become the world’s third-largest economy, with a GDP of $4.7 trillion. Regional cooperation, engagement and partnerships allow the EU to enable free movement across 29 European countries, adopt a common currency – the Euro – in 20 member states, and establish an internal market of the EU where the free movement of goods, services and capital is assured.
ASEAN was founded on 8 August 1967, in Thailand. It is an organization comprised of 10 member states with objectives that include economic growth, social progress, cultural development and active collaboration in scientific, administrative and technical fields. It is another glaring example of regional cooperation, aiming to foster commerce, economic ties and trade relationships, to enhance the economic security of its member states.
According to available IMF data, ASEAN’s GDP was nearly $245 billion in 1980. Today, it stands at $3.9 trillion, marking significant economic growth due to regional cooperation and integration. Indonesia, the largest economy in ASEAN with a GDP of $1.4 trillion, along with Vietnam, Malaysia, Thailand and the Philippines are emerging economies with an average economic volume exceeding $450 billion.
The ASEAN Economic Community (AEC) with a market size of $2.3 trillion and 600 million people, aims to establish a single integrated market through regional economic integration. This goal is exemplified by the creation of the ASEAN Free Trade Area (AFTA). It enables the free flow of goods, services, labour, capital and investments, enhancing economic security.
Akin to the EU and ASEAN, the South Asian Association for Regional Cooperation (SAARC) was established with the signing of the SAARC Charter in Dhaka on 8 December 1985. SAARC comprises eight member states: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Its areas of cooperation include human resource development, tourism, agriculture development, economics, trade and finance, poverty alleviation, culture, energy, transport, science and security.
At its inception, SAARC’s GDP stood at $323 billion, but today it has reached $4.86 trillion. Ironically, India’s GDP alone accounts for 90 percent of the total GDP of all member states. Such imbalance is not visible in either the EU or ASEAN. The underlying reason for this economic disparity lies in the longstanding, hostile relationship between India and Pakistan – nuclear-powered major players of SAARC.
SAARC has been rendered largely redundant due to decades-long issues between India and Pakistan including the Kashmir dispute, the Sir Creek issue, the Indus River water-sharing issue and cross-border terrorism.
Consequently, SAARC lacks the characteristics of regional cooperation, economic integration and free flow of goods, services and capital. Another factor contributing to SAARC’s ineffectiveness is India’s aspiration to dominate the region which involves a lack of respect for the sovereignty, political independence and territorial integrity of its neighbors. This hegemonic behaviour sabotages and undermines the essence of regional cooperation through SAARC, which aims to make the entire South Asian region economically secure and prosperous.
In conclusion, regional cooperation emerges as an essential pathway for achieving economic security, stability, and prosperity among nations. The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) exemplify how regional cooperation, built on shared values, economic integration, and mutual respect, can drive substantial economic growth, enhance global standing, and improve the quality of life for millions.
Through policy alignment and fostering the free flow of goods, services, capital, and labour, these regional alliances have transformed their respective regions into competitive and resilient economies. In contrast, the South Asian Association for Regional Cooperation (SAARC) highlights the challenges that arise when political tensions and unilateral aspirations overshadow shared regional goals. Despite the economic potential within South Asia, SAARC’s progress remains hindered by enduring hostilities and imbalances, notably between its largest members, India and Pakistan.
These issues have stifled SAARC’s efforts toward integration and cooperation, stalling opportunities for mutual growth and stability within the region. Ultimately, the success of regional cooperation hinges on a commitment to respect sovereignty, foster inclusivity and prioritize the collective welfare of member states. The achievements of the EU and ASEAN demonstrate that, when guided by these principles, regional cooperation can empower nations, enhance economic security, and pave the way for a prosperous future.
The writer is a student of Strategic Studies at National Defence University, Islamabad. He tweets @afnanwasif