Why are regional and economic groupings formed?
Regional and economic groupings are formed because nations are primarily trying to adopt various means to strengthen their own domestic economies. To this effect, countries form groupings such as SAARC, European Union, and ASEAN to navigate the economic transformation taking place due to globalisation.
Additionally, there is an eagerness to understand the developmental processes pursued by neighboring nations. This allows countries to comprehend their own strengths and weaknesses vis-à-vis their neighbours. It is particularly essential for developing countries to face competition in the relatively limited economic space and to ensure that common economic activities lead to overall human development in a shared environment.
Explanation
The answer is derived directly from the textbook context which states that nations are forming these groupings to strengthen domestic economies and understand developmental processes. The context highlights that in a globalised world, developing countries face competition from developed nations and among themselves, making these groupings essential for analyzing strengths and weaknesses. It also mentions the importance of understanding neighboring economies for human development in a shared environment.