Regional economic cooperation to deepen in Asia
Source: Asian Development Bank Date: 2008-03-12
Economic cooperation and integration will deepen and be a key pillar of Asia’s development strategy as the region moves forward, the head of the Asian Development Bank (ADB), Haruhiko Kuroda, said on Monday.
In his opening remarks at a conference on “European and Asian Integration: Achievements and Challenges,” he said that while Asia lacked a grand plan for regionalism as Europe, the European Commission (EC) and ADB can work closely together to add value to economic integration and regional cooperation. Asia can learn important lessons from Europe, he continued, but it will follow its own distinct model.
The Commissioner for Economic and Monetary Affairs, Joaquín Almunia, remarked that the creation of the Economic and Monetary Union (EMU) had enabled European Member States to cope better with increasing economic competition from Asia. EMU had delivered stability over the past decade and has helped shield euro area members from external shocks, including the ongoing financial turmoil. The euro area dynamism was also demonstrated by the creation of nearly 16 million jobs over the last ten years.
This conference was the first of its type to be financed by the new instrument, the ASEM Dialogue Facility, launched in December 2007 by the Commission, to strengthen co-operation with Asian countries in the framework of the Asia-Europe Meeting (ASEM) process.
The conference was co-hosted by the EC and ADB and deliberated on results of a flagship ADBstudy on the emergence of Asian regionalism. A book based on the study will be launched at the ADB’s 41st Annual Meeting in Madrid in early May, 2008.
Mr. Kuroda said that Asia remained much more integrated in trade than in finance, and it remained more financially integrated with the global economy than with itself. Looking ahead, the continued support to developing local currency bond markets would channel the region’s savings into productive investment. He also said that the region needs to create a financial stability dialogue gathering top finance, central bank and regulatory officials.
Mr. Almunia outlined the main policy agenda for Europe for the next decade. To secure the success of EMU and to continue to reap its substantial benefits, Europe would have to redouble its efforts to improve the functioning of its markets. This would also require more effective governance of EMU, both domestically and internationally, so as to improve coordination and the decision making process.
Mr. Kuroda said Asia would be affected by a slowdown in global growth, but the region’s exports remained robust and domestic demand was on the upswing. But he warned that inflation, spurred by high energy and food prices, and continued capital inflows would limit policy options for monetary authorities.
One of Asia’s challenges is to manage its growing exposure to external shocks and create an environment in which regional linkages can continue to deepen. Asia’s emerging regionalism and dialogues, Mr. Kuroda concluded, would help prosper not only Asia but the global economy.
Mr. Almunia concluded the conference by pointing to a report he will present in early May marking the 10th anniversary of the decision to launch the euro. That report would offer analysis and reflection on the first decade of EMU and on the main challenges Europe would face in the coming years. Such analysis could also serve as a stimulus for further discussions among European and Asian leaders in the context of an ever stronger partnership.
