Money Matters: An IMF Exhibit -- The Importance of Global Cooperation

Debt and Transition (1981-1989)

Part 5 of 7


Conflict &
(1871 - 1944)

Destruction &
(1945 - 1958)
The System
In Crisis

(1959 - 1971)
the System
(1972 - 1981)
Debt &
(1981 - 1989)
Globalization and Integration
(1989 - 1999)

Regional Economic Integration




Although regional trading blocs are not new, the enormous increase in trade alliances among neighboring countries have resulted in higher tariffs and trade restrictions for countries outside the group. Such regional protectionist measures during the 1930s prolonged the economic malaise of the Great Depression. Hence, region blocs had been initially regarded with suspicion.

Since 1948, over 150 regional trading associations have been formed. Over 65 of those came into existence during the 1980s and 1990s.

Why the rapid rise in the number of trade alliances? What benefits are there for individual member countries? Will the increase in these alliances improve or threaten the growth of world trade?


Regional Trading Associations

The purpose of a regional trade association is to protect and expand trade among neighboring countries through agreements that range from reducing trade barriers to harmonizing internal policies. Overall world trade will also benefit if regional trading associations help members grow without instituting protectionist policies that inhibit trade with outside countries.

Although not all regional trade associations have had positive outcomes, some have certainly thrived. These successes encourage confidence that regional associations will promote trade - both internally, among members, and externally, throughout the world.

The 1980s witnessed huge advances in the most ambitious of all regional integration efforts–the European Community. In the following decade this progress would result in the formation of an economic union that would rival the economic and political might of the United States.

The longest-lived example of a monetary union is Africa’s fourteen member CFA franc zone, which has used a common currency pegged to the French franc since 1948. The zone helped to support Africa’s most successful market integration.


The Asian Tigers

During the 1980s the so-called "Four Tigers" - Hong Kong, South Korea, Singapore, and Taiwan Province of China - achieved astonishing economic growth. In addition, Japan, which already boasted the world's second largest capitalist economy by the 1970s, continued its impressive economic expansion.

Although all are located in East Asia, these areas have acted independently and never formed a regional trading bloc.


Taipei, Taiwan


factory worker in Republic of Korea



Countries Don't
Go Bankrupt
Time Bomb Explodes Solving the Problem Attempted Rescue
Regional Economic Integration The Power of Private Capital Thaw in the East