INTRODUCTION:

The Asia-Pacific region has been going through a period of great dynamism and vibrancy and this has been reflected by its growing income levels of its people and enhanced social welfare levels. This could also be made possible due to their increased efforts for greater cross-border economic co-operation, as a result of which, the Asia-Pacific economies have witnessed steadily growing interdependence amongst them.

All this has led to strengthening of trade and investment linkages and growing regional integration. According to the Annual Report of the Asian Development Bank (2005), countries all across the globe have used regional cooperation as a strategy for enhancing economic growth and promoting social welfare of their people. This is so because regional cooperative efforts among countries have helped achieved poverty reduction and political stability world-wide.

Regional cooperative initiatives have been witnessed right from the starting of the 21^st century when every country was found to be making efforts to be a part of some kind of regional organization for boosting economic growth. Regional integration can assume different forms and may vary from a Preferential Trade Area (PTA) to an Economic Union. The western world also started experimenting with the idea of regional cooperation after realizing that it could be used as a means of promoting their socio-economic development. By far, the European Union (EU) and ASEAN can still be considered as some of the most developed forms of regional cooperation in the modern era.

Regional cooperation is a process which is adopted by countries in a specific geographic location or region to assess their common interests and try to achieve them, which is normally achieved through common dialogue as well as mutual discussions. Regionalism is being harnessed in addressing issues related to increasing trade and investment flows, providing food and energy security, fighting with climate change, enhancing connectivity and dealing with severe issues such as the outbreak of health epidemics². The support for promoting regionalism and integration at the international level for ensuring socio- economic development has also been committed by the International Bank for Reconstruction and Development (World Bank) and United Nations (UN)³. Two most important factors for growing regional integration have been the infrastructural developments and improved connectivity, which have laid a stable foundation for growing integration in Asia. Increased trade and investment flows, people mobility and institutional and socio-cultural developments have also acted as strong drivers for reducing poverty levels through strengthening overall regional integration.

According to Kumar (2007), “The recognition of the benefits of coordination of divergent national economic policies for achieving the common goals of economic development and benefiting the poor has given an added attention to the notion of regional economic cooperation in the modern world”⁴. Parsonage (1992) & Chen & Kwan (1997) have also mentioned about growing regionalism and multilateralism in a rapidly globalizing world. Regional cooperation happens when a group of countries, generally located within a geographic area jointly undertake some policy measures to promote growth and welfare levels to further higher levels.

The Asian Regionalism:

A report by the Asian Development Bank (2008) ‘Emerging Asian Regionalism: A Partnership for Shared Prosperity-Highlights” has stated that after the Asian financial crisis of 1997-98, regionalism has become a new leaning in Asia’s outward-oriented development strategy (ADB, 2008)⁵. As the countries move ahead for the implementation of the SDGs (Sustainable Development Goals) and the ‘UN-2030’ Agenda, regional cooperation is bound to be essential as this would be the only way to find common solutions to the problems across the international agenda.

The growing importance of regional cooperation in the developing world, mainly in the Asia-Pacific region, originated because of political reasons. Factors such as national security and strategic deliberations were responsible for the rise of regional groupings in the Asian region. Other important contributing factors are the economic liberalization policies of developing countries of Asia, which were undertaken during late 1980s and early 1990s and their joint need to develop their social and physical infrastructure. These measures essentially involved removal of licensing and monopolistic practices, permission of foreign equity participation in domestic industries, etc. In this endeavour, Sri Lanka introduced economic reforms as early as 1977.

The Asia-Pacific region has been trying to integrate the policy of regional cooperation into their main national plan because of their desire to achieve rapid growth and reduce poverty levels. It is important to note that Asian economies have always preferred multilateralism and have been rather slow in adopting regionalism. However, once the Asian countries came to recognize the hidden benefits of regional economic integration, they started taking steps to embrace it. This has been mainly due to their need to react to the growing protectionist tendencies adopted by the advanced nations, which got strengthened with the emergence of regional trade blocs such as NAFTA and the EU⁶.

Waldron (1997) states the reasons for the growing regionalism among the developing countries as the growing complexities of modern globalization era, increasing dominance of the market forces and expanding cross-border economic activities among Asian economies. This has also been due to their need to react to the growing protectionist tendencies adopted by the advanced nations, which got strengthened with the emergence of powerful regional trade blocs such as European Union, North American Free Trade Area (now known as the U.S.-Mexico-Canada Agreement) and the uncertainty concerning WTO around 1989-90. According to (Nadalutti, 2015), the most straightforward and conventional criteria of sub-regionalism involves the natural process of geographically proximate nations joining hands together to work collectively to solve some common issues for their mutual benefits.

In 2017, the Asian Economic Integration Report of the Asian Development Bank (ADB) gave a new composite index- the Asia-Pacific Regional Cooperation and Integration Index (ARCII), which take note of the regional cooperation and integration and degree to which the member countries of regional organizations make efforts towards promoting regional integration. The Index shows that over 2006-2016 there has been a growing trend in regional integration with positive growth impact, which continued in the year 2017 also.

What are Growth Triangles?

Growth Triangles⁷ of Asia are a newer version of regional cooperation, which started emerging by the end of 1980s. This new version did not necessarily involve the entire nations. Rather, it involved parts of the geographically proximate countries. Since the sub-regions were involved in this scheme of cooperation, they were called as the sub-regional growth zones. Though they were given different names but the term 'growth triangles' gradually emerged as one popularly acceptable term.

A ‘Growth Triangle’ is basically designed to exploit complementarities within the sub-region, which arise on account of differences in the factor endowments of labor, capital and natural resources and the consequent comparative advantages of different countries. The most successful of these growth triangles are the Southern China Growth Triangle, established in the year 1980 and. the SIJORI Growth Triangle in Southeast Asia, which was formed in 1989 (later renamed as the IMS Growth Triangle in 1994). This concept has gained attention because of their being market driven, peripheral oriented⁸ and private sector led growth approach, which is unlike the formal regional blocs. The popularity of the term `Growth Triangle’ also grew because the most successful two examples had three members each. However, the number of member participants in sub-regional growth initiatives grew as more growth zones came up later. See map 1.1 below.

Map 1.1: Asia's Growth Triangle

Kotler, et. al. (1997) describe about these growth triangles in the following manner⁹:

“The growth triangles, which exhibit the characteristics of micro-linkages, are geographically contiguous units that are cross border in nature but do not involve the respective national economies. Usually there are three participating members that give it the shape of a triangle but the number may even extend to four or more. In that case it may be called as a growth zone or a growth polygon”. According to Chia & Lee (1992)¹⁰, “these Growth Triangles could be defined as referring to any cooperative development initiative that involves participants from the bordering zones of two or more countries and converts them into relevant spaces for decision-making by local, regional and supranational authorities”

Though both regionalism and sub-regionalism are innovative ideas of international relations, yet, not much effort has gone into providing a proper conceptual framework for the concept of growth zones.

The rationale behind the setting up of these growth triangles is provision of various socio-economic benefits on account of the mutual sharing of resources, made possible due to increased cross-border production linkages. Several economic benefits arise on account of reduced costs, which occur because of larger economies of scale in production. Possibilities of getting access to newer sources of raw materials, increased investments higher income and employment generation, technology up-gradation and improved socio-economic infrastructural developments are added benefits.

An important feature of these growth triangles is their capability of attracting investors which helps in increasing production, infrastructural growth and tourism, by drawing on the “underlying economic complementarities and comparative advantages as well as taking advantage of the process of globalization and trade liberalization measures” (Chia & Lee, 1992). Another strong rationale is in terms of strengthening of cultural, linguistic and ethnic ties of the lesser-developed peripheral areas within the neighboring border zones, which has positive implications for peace and security in the region. There are many other benefits in terms of increased economic activity, enhance tourist flows and resultant job creation. One of the most important objective of any growth triangle is to connect the contiguous sub-regions with diverse factors endowments and comparative advantages, so as to enhance cross-border trade and investment flows within the sub-region. The objective is also to provide opportunities to the less developed peripheral areas¹¹ to grow economically and develop socially, thereby trying to help to reduce the existing development gap amongst the ASEAN economies.

Growth Triangles are not the same as the regional trade blocs such as EU, NAFTA etc. They came up in the Asia-Pacific region mainly because of market forces that led to their formation for promoting investment within the sub-region and exports outside the sub-region. This is the reason they look different from the trade blocs that are primarily designed to increase trade among the members. This happened in the case of the SIJORI-Growth Triangle where Johor and Riau Islands benefited enormously from Singapore’s hi-tech managerial and financial services, its international pro-business environment and global networks. On the other hand, this initiative helped Singapore to meet its resource challenges. It also helped the Singapore economy in alleviating its space and labor shortages by providing that extra low-cost space, where its labor-intensive and sunset industries could be relocated, thus sparing scarce land for its capital-intensive industries.

Various factors such as end of cold war, increasing market liberalization measures¹², growing FDI flows by the Japanese offshore investors, geographical proximities and presence of economic complementarities along with well-developed infrastructure and increased socio-cultural and ethnic ties have worked for the emergence of these growth triangles in 1980s. Besides these, some other important factors such as increasing globalization, worldwide formation of regional groupings and increasing efforts by the developing countries to safeguard themselves from perceived threat of growing protectionist policies of the developed world, have also been responsible for their emergence.

How relevant are the growth triangles for promoting regional cooperation and integration in Asia?

Several authors have maintained that regional and sub-regional cooperation, in the form of growth triangles, in the Asia-Pacific countries has been an effective tool for promoting growth and poverty reduction at the global levels. According to many, these sub-regional zones have been adopted by the ASEAN governments as a way of reducing the development gap that exists among its members and hence, integrating its economics into an ASEAN Economic Community (2025)¹³.

One of the most important objectives of any growth triangle is to attract direct investments into the sub-region and boost production activity with special focus on exports promotion through promoting trade and investment flows. This is based on free movement of productive factors as well as goods and services, besides boosting industrial and tourism growth. The integration of such cross-border activities has made it possible for the member participants to develop their resources jointly and resolve cross–border issues such as those related to human trafficking, illegal migrant labor and terrorism etc. Such joint development of common resources has also made it possible for the growth zones to promote the concept of "prosper-thy-neighbor-policy" as followed by ASEAN for narrowing the development gap among its members. This is so because most of these growth initiatives are in the ASEAN region.

For instance, in the Singapore-Johor-Riau growth triangle, Singapore's highly skilled human resources, managerial expertise, hi-tech capital resources and ICT infrastructure is combined with Johor's and Riau's cheaper land and labor resources with the objective to attract investments into the sub-region from ASEAN as well as non-ASEAN countries. Such investments are invited through various ways such as joint investment promotion tasks, infrastructural development projects along with coordination of the investment policies of the respective countries. It is, therefore, apparent that the growth triangle is primarily an economic concept but it is backed up by strong political motivations (Mya Than, 1999).

Popular examples of such growth initiatives in ASEAN are ‘Singapore-Johor-Riau Growth Triangle’ (SIJORI-GT)¹⁴, the ‘Indonesia-Malaysia-Thailand Growth Triangle’ (IMT-GT), the ‘Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area’ (BIMP-EAGA), the Cambodia-Lao-Vietnam Development Triangle (CLV-DT) etc. Different names were used to denote these sub-regional growth areas, but the term ‘Growth Triangle’ became the most popular and accepted term.

Thus, a growth triangle is a very appropriate example of a kind of regional cooperation between three or more geographically contiguous sub-regions, which do not have similar factor endowments and comparative advantages and the presence of such dissimilarities help them to form a sub-region of economic growth. More appropriately, these growth triangles could be viewed as examples of a move towards ‘interdependent borderlands’ as they involve a process of cross-border economic linkages among the members, with political sovereignty remaining intact. The important aspect about them is that they all signify economic cooperation being carried out on a relatively smaller scale with the purpose of attracting outside investment funds. That is the reason for Abonyi (1994) to describe them as an innovative form of economic cooperation.

Regional and Sub-regional Cooperation in the post Covid-19 pandemic.

The present ongoing Covid-19 pandemic situation has resulted in the sealed borders, disturbed supply chain, disrupted logistics and a gloomy economic situation. A closer look at the efforts being made by all countries across the globe shows that they have been acting alone when it comes to tackling the situation. However, despite aggressive and active national responses, it is very important for regional and sub-regional organisations to globally coordinate their efforts and take joint fiscal measures for boosting trade and investment flows across the borders. This has been supported by all experts and international bodies such as WHO, the United Nations, regional groupings such as the European Union etc. They all have supported for adopting coordinated approaches at the sub-regional, regional and the global levels¹⁵.

In this scenario, projects which could boost regional integration among the member countries could give a boost to the collective measures to fight coronavirus and achieve a higher degree of global solidarity and coordination.

On 30 April the first virtual meeting of the Regional Action Group for Europe and Eurasia took place with over 50 participants to mobilize cross-border and cross-regional strategy to tackle the disastrous effects of the COVID crisis in Europe and Eurasia and seek solutions to tackle post COVID-19 period from socio-economic and political perspective.

Through Video conferences ASEAN members connected with their Chinese, Japanese and South Korean counterparts under the ASEAN Plus Three framework to discuss solutions towards combating the impact of Covid-19 and suggest measures to boost trade and investment after the pandemic impact is over. Regional organisations like EU, the GCC, SAARC, MERCOSUR and the African Leaders’ jointly have all pledged to offer several packages to support their partner countries around the globe to help them face the pandemic challenges. For example, Team Europe announcing a package of more than Euro 15 billion or the joint appeal signed by the European and African leaders requesting for adopting measures that include an immediate moratorium on all debt payments, public and private, until the pandemic is over. A similar call has also been made by the finance ministers of G-20 group of major economies including China, US, India and others.

The setting up of a Covid-19 emergency fund, made up of voluntary contributions from members of SAARC with a total worth around $18.5 million and by the MERCOSUR countries to setup a structural convergence fund which is estimated at $16 million towards boosting research awareness and biotechnology related to facing the corona challenge. In this context it is also important to note that the relevance of growth triangles for promoting and boosting trade and investment flows increases as these initiatives are operating on a smaller scale and in this time of emergency, smaller cooperation at lower costs become all the more important.

SUMMARY AND CONCLUSIONS:

In recent years, the traditional forms of regional cooperation within the Asian region (ASEAN, APEC, SAARC, AFTA etc.) have certainly gained a prominent place among the policy-makers and researchers and their achievement in terms of enhanced economic cooperation and improved trade and investment relations, too, have been quite noticeable. Yet these, non-traditional forms of regional cooperation in the form of growth triangles also have made a significant mark in several parts of Asia. These are very new, with a different approach of regional integration that has arisen in the Asia-Pacific region, which significantly departs from the traditional paradigm of discriminatory trade blocs. Some have seen these growth initiatives to be crucial to the future growth efforts in the Asia-Pacific region.

ASEAN is also trying to evolve itself towards a fully integrated region. The growth triangles of ASEAN are effective in promoting open regionalism through enhanced intraregional trade and investment linkages, which has helped the region become more integrated. The sub-regional economic zones have flourished by adopting a very unique way of organizing regional growth forces that are based on factors such as geographical proximities resulting in lower transaction costs, similar language and ethnic inter-relationships, resource endowments as well as presence of economic complementarities. Realizing the benefits of the growth triangle concept at the sub-regional level would allow for prosperity to spread to the less developed areas, thereby, acknowledging the concept of "prosper-thy-neighbour-policy" and promoting the overall peace and stability in the region. Presence of factors such as comparative advantages, supportive public policy and co-ordination between the national and the local governments in the region have led to the remarkable success of these growth triangles.

Regional responses to COVID-19 via regional bodies such as ASEAN and its sub-regional growth groupings have been discussing most effective ways of battling the spread of the contagion. The impact of pandemic has been intense in the southeast nations and there have been discussion as to how to maintain peace and stability in the region amid this pandemic and how to boost the trade and investment flows and whether they can act as effective cooperation mechanism and play a vital role in the post-pandemic world while at the same time re-adjusting to probable shifts in economic inter-dependencies among countries in the region.

REFERENCES:

1. A new trade deal between US, Mexico and Canada is replacing the old NAFTA treaty with a new, revised NAFTA, which is now known as the United States-Mexico-Canada Agreement or USMCA. This new trade deal has been signed under the leadership of President Trump of United States of America on November 30, 2018.

2. Asian Development Bank, 2018. Regional Economic Outlook and Development Challenges, in “Asian Economic Integration Report: Highlights” P. 1, ADB, Manila, Philippines, accessed 19 February 2019.

3. Underlying Importance of Cooperation, Regional Partnerships can build better future by helping states implement 2030 Agenda, Secretary General says”, the UN Secretary General Ban Ki-moon’s remarks at a meeting on ‘Regionalism and The 2030 Agenda for Sustainable Development’, SG/SM/18136-ENV/DEV/

4. Nagesh Kumar, “Towards Broader Regional Cooperation in Asia”, Research and Information Systems for Developing Countries, Discussion Paper, Asia-Pacific Trade and Investment Initiative, UNDP Regional Centre in Colombo, Sri Lanka, December, 2007.

5. Asian Development Bank (2008) “Emerging Asian Regionalism: A Partnership for Shared Prosperity-Highlights”, Available at http:/aric.adb.org/, accessed 8 September 2010.

6. “Regional Cooperation For Development”, / UN/TDR/ 2007, UN Trade and Development Report, United Nations, New York and Geneva, 2007, available at http://unctad.org/, accessed March 16, 2009.

7. The term ‘growth triangle’ and ‘sub-regional cooperation’ will be used interchangeably throughout the analysis as both the terms refer to the growth initiatives taken by the member countries of the Asia-Pacific region at the sub-regional level.

8. Peripheral areas face some different kind of development challenges, as they are located far from more centrally located cities or the larger metropolitan areas. Yet, they may also possess good amount of resources and share the same potential, e.g. natural resources, unskilled and semi-skilled labour, innovative capabilities etc. which can be effectively used to the advantage of these less developed regions in these growth initiatives which may include these peripheral zones of the geographically proximate nations.

9. Kotler, P., Jatu S S. and Maesincee, S. (1997). “The Marketing of Nations: A Strategic Approach to Building National Wealth, New York: The Free Press.

10. Chia, S.Y., and Lee, T.Y (1992), “Sub-regional economic zones: A new motive force in Asia-Pacific development,” Paper presented at 20th Pacific Trade and Development Conference, Washington DC, Sep. 10-12.

11. Peripheral areas face some different kind of development challenges, as they are located far from more centrally located cities or the larger metropolitan areas. Yet, they may also possess good amount of resources and share the same potential, e.g. natural resources, unskilled and semi-skilled labor, innovative capabilities etc. which can be effectively used to the advantage of these less developed regions in these growth initiatives which may include these peripheral zones of the geographically proximate nations.

12. In 1979, The People's Republic of China decided to liberalize its economy by adopting an open-door policy to help increase its investment flows and improve its trade relations with its global partners. Four special economic zones in Southern China were set up initially for this, namely those in Shenzhen, Zhuhai, Xiamen: and Shantou. They were primarily chosen because of their geographical proximities to Hong Kong, Macau and Taiwan their vast overseas connections with the Chinese community in Thailand and Hong Kong.

13. The setting up of the ASEAN Economic Community (AEC) in 2015 is a major milestone in the regional economic integration agenda in ASEAN. In 2014, AEC was collectively the third largest economy in Asia and the seventh largest in the world Through this, the ASEAN region has provided a huge market of US$2.6 trillion and over 622 million people to the region. The AEC Blueprint 2025 has now succeeded the AEC Blueprint (2008-2015).

14. In the year 1994, its name was changed to the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT).

15. “What the world can learn from regional responses to COVID-19” , online accessed from http://www.weforum.org, accessed 20 June, 2020.

Received on 07.09.2020 Modified on 26.09.2020

Res. J. Humanities and Social Sciences. 2020; 11(4):307-312.

DOI: 10.5958/2321-5828.2020.00049.2