The Cooperation Effect Creation Scheme (CEC-Scheme)
Asia-Pacific Development Journal, Vol. 12, No. 1, June 2005
21 Pages Posted: 17 Feb 2009 Last revised: 2 Mar 2015
Date Written: June 2005
The objective of this research paper is to present a suitable scheme of regional integration which can be applied between developing countries and less developed countries (LDC's). This new scheme is called the Cooperation Effect Creation Scheme (CEC-Scheme). The CEC-Scheme demonstrates the basic condition to succeed in any case of regionalism – whether open regionalism (Free Trade Areas – FTA) or closed regionalism (Customs Union – CU) – between developing countries and less developed countries. This paper proposes that the implementation of the CEC-Scheme facilitate the fulfillment of successful regionalism between developing and less developed countries.
The CEC-Scheme will generate the cooperative creating-effect in the same regional bloc. In turns, the cooperative creating effect will generate the intra-regional trade-creating effect (short run) and inter-regional trade-creating effect (medium run), which helps in regionalism between developing countries and less developed countries (See diagram 7). The cooperative-creating effect may originate from global development cooperative advantage that each country in the same region presents.
Keywords: cooperative advantage, regional integration, Intra-regional Direct Investment (IDI), Foreign Direct Investment (FDI), Developing countries, Less Developed Countries (LDC's)
JEL Classification: F02, F15, O21
Suggested Citation: Suggested Citation