Asia has integrated better over the past decade, but will face more
difficulties in future cooperation, said a report recently released by
the Asian Development Bank (ADB).
According to the
Asian Economic Integration Monitor (AEIM) report, when economic and
financial crisis force countries to collaborate, the recovery runs
smoother and crisis prevention is strengthened.
The 2008-09
global and eurozone debt crisis triggered further cooperation in Asia,
helping build resilience to future shocks, it said.
As Asia’s policymakers digest the ongoing eurozone debt crisis and
costs of contagion, they may have a reduced appetite for deeper
cooperation. Therefore, work on future cooperation will likely become
more challenging as well.
The report further stated
that regional economic integration has progressed rapidly in Asia,
with easy and more straightforward benefits from regional cooperation
and integration having been realised. The remaining areas of cooperation
and integration – and deepening existing ones – are much more complex.
The biennial AEIM pointed out that the Integration
Index, based on five indicators including foreign direct investment,
capital markets, output correlations, trade and tourism, shows that
Asia’s integration increased from a base level of 100 points in 2001 to
233.27 points in 2010 and slightly decreased to 192.22 points in 2011
due to the impacts of the Europe debt crisis.
Boosting physical connectivity across the region is now a major
priority, the report said, citing that ASEAN+3 (including China, the
Republic of Korea and Japan) also expanded their regional financial
safety net, established an independent surveillance unit, and continued
work on deepening local currency bond markets across the region.
India has offered to finance a financial safety net for South
Asia, while several countries have expanded bilateral currency swap
arrangements to step up financial cooperation and promote trade
settlement in local currencies. All these initiatives bolster Asia
economic integration, it said.-VNA