Economic cooperation among developing countries

Current world economic conditions under score the need for greater economic coopera tion among the developing countries. Econo mic cooperation among developing countries (ECDC) aims at forging links among the countries of the Third World for more fully exploiting their potential for economic and social development and for strengthening their collective bargaining capability in inter national economic relations. Expansion of bilateral trade has been an important aspect of ECDC. Since the 1960's a large number of regional and sub-regional integration schemes among the developing countries of Asia, Africa and Latin America-such as LAFTA, CACM, ECOWAS, ASEAN, SAARC and GCC have come into existence to expand the inter and intra-regional trade among them selves. In order to measure bilateral trade flows, the Gravity Model approach is em ployed in this study. The basic purpose of the Gravity Model is to determine the normal or standard pattern of international trade that would prevail in the absence of discriminating trade impediments. The empirical analysis of the Gravity Model has been attempted for the countries belonging to the SAARC and the ASEAN regions which indicates that greater potential of effective economic integra tion exists in the SAARC because of the former region being more immune to the external factors than the latter.