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UNDP Report: New Governance Trends

UNDP by Victoria Cole, July 27, 2015 Adjust font size:

2.2.3 Redefining a New World of Regions

Since the mid-1980s, a new round of regionalization conceives a "region" as a place that does not have clear boundaries and is not necessarily based on nation states. Regions can overlap, be multi-layered and have multiple actors, and are politically, socially, functionally, and culturally defined. New regional agreements tend to be sub- and supra-national, and typically include sub-regional, regional, pan-regional and cross regional levels.

Other than dialogue platforms such as the Asia-Pacific Economic Cooperation (APEC), more formal formats require a legal agreement to be settled between countries in a particular region, like the WTO Free Trade Area. The deepest regionalization processes extend to more comprehensive regional cooperation. This can include cooperation surrounding trade, monetary policy and immigration, and even political issues.

Asian integration has progressed rapidly, prompted in particular by the 1997 Asian financial crisis. The process has primarily been led by the ASEAN countries, and more recently by the ASEAN+3: China, South Korea and Japan. Though the proposed Asian Monetary Fund (AMF) was never established, the ASEAN+3 members introduced the Chiang Mai Initiative (CMI) in 2000. After the 2008-09 financial crisis, this initiative was multi-lateralized, and funds were increased to US$240 billion.

China's other recent initiatives includes its promotion of Asia as more than a trade-oriented region. China has encouraged the region to expand into more comprehensive areas, particularly infrastructure financing. The Asia Infrastructure Investment Bank (AIIB), proposed by China in 2013, aims to enhance support for regional infrastructure connectivity, and marks a step forward in Asia’s development history.

Besides inter-regional changes, the rise of China has also provoked geopolitical competition at a global level, drawing attention from the international community, especially from the U.S. Since 2010, the Obama administration has driven TPP negotiations, involving 12 countries in the Asia-Pacific region and acting as the economic arm of Obama’s strategy to Asia namely "Pivot to Asia." Another U.S. strategy includes the TTIP trade negotiations with the EU, causing the Asian region's RCEP negotiations.

Although these agreements have mainly been created to build free trade areas, they have the potential to strongly influence geopolitical stability. The world appears to be evolving around three mega-regions: the TPP, TTIP and RCEP. Furthermore, it’s important to note that China is also working on a bilateral basis to conclude important agreements with key countries.

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