Regional Economic Regional Economic Cooperation: Cooperation:

Lessons for Central Lessons for Central AsiaAsia

Johannes Linn Johannes Linn CAREC and Wolfensohn Center for Development at CAREC and Wolfensohn Center for Development at

BrookingsBrookingsBrussels, March 2-3, 2009Brussels, March 2-3, 2009

A review of experienceA review of experienceAssessment of available informationAssessment of available information

Typology of regional economic Typology of regional economic organizationsorganizations

Experience with regional cooperation world-Experience with regional cooperation world-wide (with more detail for Central Asia, wide (with more detail for Central Asia, Asia, Latin America and Europe)Asia, Latin America and Europe)

LessonsLessons

Implications for CARECImplications for CAREC

Source: J. Linn and O. Pidufala, “The Experience with Source: J. Linn and O. Pidufala, “The Experience with Regional Economic Cooperation Organizations”, Working Regional Economic Cooperation Organizations”, Working Paper No 4, Wolfensohn Center for Development at Paper No 4, Wolfensohn Center for Development at Brookings, Washington, DC, October 2008 Brookings, Washington, DC, October 2008 (www.brookings.edu/wolfensohncenter)(www.brookings.edu/wolfensohncenter)

The literatureThe literature

Few systematic evaluations of specific Few systematic evaluations of specific organizationsorganizations

GMS in progress by ADB OEDGMS in progress by ADB OEDSPECA by its governing councilSPECA by its governing council

Few cross-cutting evaluationsFew cross-cutting evaluationsWB IEG review of support for regional WB IEG review of support for regional cooperationcooperationReviews of selected regional casesReviews of selected regional casesNo comprehensive overviewNo comprehensive overview

We pieced together from the evidence what We pieced together from the evidence what can be gleaned; more systematic evaluations can be gleaned; more systematic evaluations of individual agencies and or cross-cutting of individual agencies and or cross-cutting experience desirableexperience desirable

Typology of regional Typology of regional organizationsorganizations

Focus Focus – Regional integrationRegional integration– OtherOther

MembershipMembership FunctionFunction

– SecuritySecurity– PoliticalPolitical– TradeTrade– InfrastructureInfrastructure– Socio-economicSocio-economic– ComprehensiveComprehensive

Form of organizationForm of organization– Formal, treaty basedFormal, treaty based

v. informal programv. informal program– Financial institutionFinancial institution– Summit, ministerial or Summit, ministerial or

senior official levelsenior official level ModalitiesModalities

– AdvisoryAdvisory– RegulatoryRegulatory– FinancingFinancing– Arbitration/Arbitration/

enforcementenforcement

Central Asian regional Central Asian regional organizationsorganizations

Country membership of Country membership of Central Asian regional Central Asian regional

organizationsorganizations

Other regional Other regional organizations organizations

Summary evaluation of Summary evaluation of regional organizationsregional organizations

Central Central AsiaAsia

SCOSCOEurasECEurasECECOECOSPECASPECACARECCAREC

OtherOtherEUEUStability Stability PactPactGMSGMSIIRSAIIRSACAFCAFMERCOSURMERCOSUR

Lessons 1, 2 and Lessons 1, 2 and 33

Lesson 1: Regional cooperation is not Lesson 1: Regional cooperation is not easy and implementation of stated easy and implementation of stated intentions is frequently weak. intentions is frequently weak.

Lesson 2: Effective regional cooperation Lesson 2: Effective regional cooperation and integration take time to develop, and integration take time to develop, and require incremental, gradual and and require incremental, gradual and flexible implementation with visible flexible implementation with visible payoffs. payoffs.

Lesson 3: Successful cooperation Lesson 3: Successful cooperation requires leadership.requires leadership.

Lessons 4, 5 and Lessons 4, 5 and 66

Lesson 4: Keep the membership of Lesson 4: Keep the membership of the regional organization the regional organization manageable, based on shared manageable, based on shared geography and common regional geography and common regional interests.interests.

Lesson 5: Avoid the “spaghetti bowl” Lesson 5: Avoid the “spaghetti bowl” effect, where possible.effect, where possible.

Lesson 6: Ensure financial resources Lesson 6: Ensure financial resources are available to support regional are available to support regional investments and cooperationinvestments and cooperation

Lessons 7, 8 and Lessons 7, 8 and 99

Lesson 7: For trade and transport, develop Lesson 7: For trade and transport, develop priority corridors and link transport investment priority corridors and link transport investment with transport and trade facilitation.with transport and trade facilitation.

Lesson 8. Development of regional water and Lesson 8. Development of regional water and energy resources can be one of the most energy resources can be one of the most difficult areas in to make progress, while also difficult areas in to make progress, while also creating great opportunities for win-win creating great opportunities for win-win outcomes and the sharing of benefits among outcomes and the sharing of benefits among all parties.all parties.

Lesson 9: External actors should assist Lesson 9: External actors should assist wherever possible.wherever possible.

Implications for CARECImplications for CAREC

CAREC’s CAREC’s StrengthsStrengths

FoFocuscusFlexibilityFlexibilityCountry Country engagementengagementIFI engagement IFI engagement and coordinationand coordinationAction PlanAction PlanSector strategiesSector strategiesMonitoring of Monitoring of progressprogress

CAREC’s CAREC’s ChallengesChallenges

No formal basisNo formal basisWeak organizational Weak organizational capacitycapacityNot at summit levelNot at summit levelLimited recognitionLimited recognitionLimited country Limited country ownershipownershipWeak links with Weak links with other regionalother regional organizationsorganizationsMissing playersMissing players

The way forward for The way forward for CARECCAREC

Work in progressWork in progressStrong sector Strong sector strategies and action strategies and action plansplans

Monitoring of resultsMonitoring of results

Strong secretariatStrong secretariat

CAREC InstituteCAREC Institute

Stronger links with Stronger links with other regional other regional organizationsorganizations

CAREC Partners’ CAREC Partners’ ForumForum

Food for thoughtFood for thoughtFocus now on Focus now on regional compound regional compound crisis?crisis?

Summit (or PM) level Summit (or PM) level meeting?meeting?

Formal link with Formal link with SCO?SCO?

Add 1 or 2 key Add 1 or 2 key sectoral areas sectoral areas (water, disaster (water, disaster preparedness)preparedness)

Thank you!Thank you!