Economic Integration in Remote Resource-Rich Regions

Apr 2009 | 22

Authors: Anthony Venables

What are the effects of regional integration and other trade policy measures in regions such as Central Asia or the Great Lakes Region of Africa where countries are remote with poor access to the outside world and where foreign exchange earnings come largely from natural resource based exports? We show that if countries have unequal natural resource endowments, then the gains from nonpreferential trade liberalisation accrue largely to the more resourcerich economies, while the opposite is true for regional integration. Regional integration is a powerful way to spread the benefits of resource wealth more widely, but may also be an obstacle to external trade liberalisation.

JEL Codes: E60, F34, F35, F43, H21, H63, O11, Q33

Keywords: regional integration, natural resources, landlocked, Central Asia

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