Theme: Contents and forms of International Economic Relations Xodjamqulov Shahboz. Mm-54i Questions: Introduction

International Integration.


Phenomenon of economic integration, understood as compilation and joining, appears along with a progress of commodity – monetary economy. At the beginning, integration got a form of joining different branches of economic activity in some regions. The next stage was joining regions – that is how, integrated national economies started.Then, economies of different countries – by creation thicker and thicker net of economic relations – begin to merge, and create, this way, the world economy. In the modern world economy, the economic integration has a form of creation different kinds of international, economic groupings, including groups of countries, which have a target of mutual integration of their economies.
Integration became this factor, which has an essential meaning, to make economic decisions for national economies, as well as, for international ones. A majority of countries join integrative processes with liberalization of commerce, not ignoring, an important globalization process.
In an analysis of an economic aspect of integration, there are two tendencies: traditional modern one. The traditional analysis of economic integration, is based on classical and neoclassical theories of international exchange. The the theory of Ricardian’s law of comparative advantage. It is based on advantages from specialization.This theory is based on different production equipment factors and different level of activity of two countries.
A modern attitude to the economic integration, shows fully changes, which were made in the theory of international trade. Economists, not only stress a need to eliminate various barriers in trade exchange, but also say about necessity to assure a free flow of production factors between a group of countries.
For initiation and a right course of process of international economic integration, it is necessary to fulfill a few basic conditions .
The most important condition is a real, or at least potential complementarity of economic structures of countries heading for the economic integration. Z. Nowak thinks that economic complementarity of different countries, compared to each other, shows a level, in which work division between them makes easier the economic progress each of them. According to it, countries with a similar structure of production, are little complimentary.
There are two kinds of targets of the economic integration: economic and political ones. The main economic target is: progress of economic effectiveness, and in a consequence, economic development, which a synthetic factor is an increase of the national product and income. While, to the more analytical targets, we can count:

• 
  Modernization of economy, by leading structural changes in production zone;
  
• 
  Free flow of goods, services, labor force and production factors, easy access to outside production factors, that means natural sources and technical knowledge;
  
• 
  Free access to foreign markets,
  
• 
  Reaching profitable prices in import and export,
  
• 
  Progress of specialization and cooperation in production,
  
• 
  Lower costs of technical progress and its higher dynamics
  

The main economic target of integration, is maximization of profits from foreign trade and other forms of international cooperation, in frames of integrative grouping. In a short time, member countries increase their share in the internal trade of grouping and terms of trade are getting better. It is possible, thanks to elimination of tariffs, para tariffs and extra tariffs barriers. At the same time,access to markets of other member countries of grouping, is getting better. In a longer time, we can observe profitable changes in economy of member countr ies of the integration grouping.
Thanks to a cheaper specialization of production and division of work, there is a limitation or abandon of production and investments with relatively lower effectiveness, and concentration investments in the most effective branches. It enables of series of made goods, increase a production range, and then – increase of profits, connected with lower costs. Integrative processes make easier countries, which take part in it, access to outside production factors, especially to raw materials, labour sources and technical knowledge. It enables a limitation or elimination of national barriers of economic development, so also acceleration of a speed of national income increase.
In the literature of the subject, two methods of economic integration are presented – functional method (liberal, free market) and institutional one.
The first of them, is a result of objective necessity and a natural outcome of development of manufacturing forces, while, in institutional method, usually predominate political motives.Supporters of the first of mentioned methods – functional one– think, that, a right process of integration should come from working of market mechanism and competition, While, a role of international institutions,which come into being in the process of integration and the state, should be limited to elimination all obstacles in flow of goods and production factors.According to this method, countries taking part in the integration process, should not create close regional groupings, and the market mechanism should lead to integration of the world economy, in free market conditions, and at the same time, to increase complementarity between individual countries.
The second method of integration – institutional one – has more numerous group of supporters. By this method, the economic integration is coordination and then unification of economic politics of integrating countries. In practice, it means, that these countries give a part of their functions and competence in economic politics, to a common international integrative institutions.
Presented methods of integration, are theoretical solutions and none of them exists in practice, in a pure form. Real processes of integration go according to a method, which uses, in different level elements, typical for both functional and institutional method.
Speaking about methods of integration, it is worth to remind of basic models of international economic integration. The model of integration is a total shape of integrative grouping, containing its main charts, especially a division of competitiveness, between international and over national organs and governments of member countries. In the literature of the subject, there are presented two models of integration in the market economy: model of international integration and, the model of over national integration.
In the model of international economic integration ( also called liberal no regulated model ), all decisions, concerning ties of a group of countries, are made only by national institutions, whereas, an international centre has only coordinative functions. Recommendations of international integrative bodies, are prepositions and suggestions, towards member countries, and the latter ones can, but do not have to submit them.
The model of over national economic integration (also called the model of regulated or institutional integration) characterizes a fact, that over national centre of integration, on the base of information, passed by national integration centers, makes decisions obligatory to economic subjects in member countries – enterprises and national integration centers.
Unfortunately, despite numerous positive aspects of integration for developing countries, real integration processes, meet many difficulties and go very slowly. The results lie in a low leve of economic development of these countries and a lack of complementarity of their economy .