Evaluation of the Dynamic International Economic-Political Benefits of the Formation of the D8 Economic Cooperation Organization (D8)

Nearly three decades have passed since the formation of the D8 Economic Cooperation Organization. Now the question is, what economic and political benefits has this formation brought to the organization and each member country? In response, the research hypothesis is that the formation of the D8 has brought dynamic economic and political benefits to the organization and each member country in the long term, although the level of dynamic benefits for each member has not been the same. To this end, within the framework of the theory of economic integration and regional convergence, this article has addressed the dynamic economic benefits of the formation of the D8 in terms of national competitiveness, economies of scale, foreign investment flows, and factor mobility in the long term. The research method is a long-term retrospective comparative study of international economic and political variables of the 8 member countries of the D8 from 2000 to 2023. The research results indicate that the D8 has been promoted to a distinguished position at the global level in global competitiveness, economies of scale, and foreign investment flows over the long term. Given the improvement in the global competitiveness of some D8 countries, the group's share of global foreign investment flows has increased from less than 0.5% in the initial period of formation to 3.86% and 6.72% in the last two years of the period. It has also experienced economies of scale between countries, increasing the size of the economy from 2.85% to 4.57% during the period. Not all of these dynamic welfare benefits have been solely due to the formation of the D8, but this formation has not been ineffective in creating these benefits. In addition, not all 8 members have benefited from these benefits to the same extent, so that the highest benefits, in terms of increasing share coupled with accelerated growth, have been those of Indonesia and Bangladesh. In addition, Iran has not benefited from these dynamic benefits, and Iran's share of these dynamic benefits is insignificant; Therefore, the strong recommendation of this study is to seriously pursue a fundamental transformation in global competition, economies of scale, investment, trade, and the mobility of production factors, centered on the Iranian labor market, to promote the country's dynamic economic and welfare benefits.





































Introduction





































Today, countries are using new tools to exploit regional, trans-regional, and international resources in order to achieve the desired level of development and national prosperity. Among the major issues facing countries is how to prepare a structure that benefits from global and regional resources. Therefore, the Organization of Economic Cooperation of 8 Developing Muslim Countries, or D8, has also been formed to improve the position of its members in the global economy, transform and create new opportunities in trade relations, increase participation in international decision-making, and improve living standards. Developing cooperation between countries is one of the reasons for the formation of regional blocs, which is also proposed in the agreement of the members of the Group of 8. The goal of this group is to achieve an appropriate and growing share in world trade. Given the differences in the level and depth of regionalism among its members, the D8 has not yet reached the first stages of regionalism - a free trade agreement (a form of tariff preferences). It is important to consider the dynamic economic and political benefits that the formation of this group has brought to the organization and to each of its member states. To this end, this article examines the dynamic economic benefits of the formation of the D8 Economic Cooperation Organization in terms of national competitiveness, economies of scale, foreign investment flows, trade benefits, and factor mobility in the long-term period from 2000 to 2023.

Theoretical Framework

The perspective of regionalism after the Cold War has expanded significantly from both political and theoretical perspectives among international relations analysts and international political economy researchers. Explaining the reasons for paying attention to regionalism was also one of the main reasons for the formation of the D8 group. Today, the emergence of powerful blocs and their overall increase in importance in the international political economy has created important discussions about the true nature of these blocs and how they affect the international order and shape the framework of the international system. In the theoretical framework of this article, regionalism from the theoretical aspect of international relations is also discussed in the context of regionalism with the aspect of international economics. Economic integration is a type of trade policy that reduces or eliminates discriminatory trade restrictions between members. In a (complete) economic union, member countries use the same monetary and fiscal policies in order to achieve trade growth and full factor mobility in this type of linkage. Because some economists believe that regional blocs accelerate trade liberalization. Others believe that regional blocs slow down multilateral trade liberalization and thus lead to potential conflicts within the trading bloc. A better world could probably be seen in two cases: if trading blocs strive to eliminate external trade restrictions as much as they do within the bloc, and at the same time readily admit new members.

Methodology

Today, various trading arrangements are operating in the world, and their levels of efficiency vary. The simplest indicator that can be used as a measure of the feasibility of integration between a group of countries is the gross domestic product (economic size) of the countries. When countries are closer together in terms of economic size and per capita income, the possibility of trade between them increases. In fact, countries are closer together in terms of economic size and import more diverse products. Its empirical results are confirmed by the Organization for Economic Cooperation and Development. The methodology of this article is based on a retrospective and long-term comparative study of international political-economic variables of the 8 member countries of the D8 group from 2000 to 2023. In this study, first, the key international economic indicators of the D8 and its member countries are evaluated. Second, the dynamic benefits of regionalism in enhancing the competitiveness of the national economy of the member country on a global and regional scale are analyzed. Third, one of the effects of the successful formation of this union is the encouragement of investments. Fourth, in the D8 group, economies of scale are evident, which arise from the enlargement of markets therein. Fifth, statistical data information on intra-regional and extra-regional trading partners is collected and obtained from the annual report on world trade statistics. International statistical data for this study are collected, processed, analyzed, and evaluated from international institutions, including the World Bank and the United Nations Conference on Trade and Development (UNCTAD); the annual analysis is limited to the years 2001 to 2023, which, of course, seems sufficient for this article.

Results & Discussion

The dynamic benefits of economic integration were examined in terms of the possibility of increased competition, economies of scale, investment incentives, and more favorable use of economic resources for the D8 group as a whole and the distribution of benefits by member countries. In line with this research, the possibility of increasing the level of competition, which increases the incentive to use new technology and therefore promotes growth and development. Ultimately, all activities lead to reduced production costs and consumer benefits. With the successful formation of the D8, it is evident that economies of scale arise from the enlargement of markets. So, it is worth remembering that even a small country outside economic integration can overcome the smallness of its domestic market and achieve economies of scale in production by exporting goods to other countries. Another advantage of the successful formation of the D8 is in encouraging investments with the motive of gaining profits from large and competitive markets. Economic integration, despite multiple conditions, is more likely to lead to trade creation and increased prosperity in D8.

Conclusions & Suggestions

The D8 group has been promoted to a prominent position in global competition, economies of scale and foreign investment flows over the long-term study period, so that many D8 countries have been promoted in global competition, the organization's share of world foreign investment flows has increased from less than 0.5 percent at the beginning of the period to 3.86 and 6.72 percent in the last two years of the period, and also the economies of scale between countries have increased from 2.85 percent to 4.57 percent at the end of the period with the introduction of the size of the economy. Certainly, all these dynamic welfare benefits have not resulted from the formation of the D8, but its formation has not been without influence either. Undoubtedly, the rapid growth and development of D8 members, including Indonesia and Bangladesh, over the long term has been influenced by the development of trade and foreign investment inflows and the stability of the macroeconomic environment (low inflation rate). In addition, not all 8 members have benefited from these benefits to the same extent, with the highest benefits in terms of increased share coupled with accelerated growth coming from Indonesia and Bangladesh. This is in a situation where the aforementioned dynamic welfare effects and benefits for Iran have been insignificant, and therefore the study strongly recommends that serious efforts and fundamental measures be taken to enhance the dynamic economic welfare benefits of D8 members, especially Iran, in the dimensions of global competition, economies of scale, trade benefits, foreign investment, and factor mobility with a focus on the labor market.
Ethical Considerations
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Funding
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Conflict of interest
The authors declare no conflict of interest