EMERGING ASIAN REGION

Farizatul AQMA
Sena SUH
Youngsik KIM
Sumi KWON
Yeoul KANG
Youngbm CHO
Contents

I. Definition of Regionalism

II. Executive Summary

III. Why Asian Regionalism?

Regionalism DEFINITION

Regional

Cooperation + Integration

Political & Economic

 PRODUCTION
1. Drivers
• Interconnectivity
• Endowment
• Low trade barriers
• Transport and communication links

2. Challenges
• Production network integration
• Open global system of trade &
investment

3. Options
• Consolidating FTAs
• Cross border infrastructure
 FINANCIAL MARKET
1. Drivers
• Improvements in financial markets

2. Challenges
• Monitor financial markets
• Harmonization of financial
regulations
• Minimum standards
• ABMI & ABF
• Regional infrastructure
• Efficient financial systems
 Integrating financial markets

Improvement in the region’s

financial system

Greater New
investment products
Virtuous cycle in regional and
market services

Deeper financial integration

 FINANCIAL MARKET
1. Drivers
• Improvements in financial markets

2. Challenges
• Monitor financial markets
• Harmonization of financial
regulations
• Minimum standards
• ABMI & ABF
• Regional infrastructure
• Efficient financial systems

3. Options
• Expand ABMI & ABF
• New institution
 MACROECONOMIC
1. Drivers
• Stable microeconomics

2. Challenges
• Global payments imbalances
- Exchange rate adjustments
- Chiang Mai Initiatives
• Monitor global and regional
developments

3. Options
• Asian Secretariat for Economic
Cooperation
• Economic Review & Policy Dialogue
 GROWTH
1. Drivers
• Reducing poverty
• Boosting economic growth
• Pro-poor policies

2. Challenges
• Connect the poor
• Social protection systems
• Labor migration supervision

3. Options
• World class system
• Common regional effort
 ARCHITECTURE OF
COOPERATION
ASEAN
• Offer capabilities in addressing issues
• Framework for regional cooperation
• Match challenges and diversity
• Creates healthy competition

ASEAN+3 & East Asian Summit

• Remain flexible
• Physical connectivity

Single Market
• Unification of regulations and currency
• Workers mobility
• Long term and pragmatic initiatives
Why Asian regionalism?

Rapid growth of Asia Demand for sustainable Regional

Economy, Population, economic growth,
Output, Play a larger role in global
economic
Economic growth rates economic leadership cooperation

“Integrating Asia”
• 16 economies including ASEAN, China, Hong Kong, India, Ja
pan, Korea and Taipei
• 87% of the region’s population
• 96% of its output
• More than half of its trade
Integrating Asia: basic indicator 2007
Integrating Asia / Asian regionalism
 Main characteristics
 Dynamic
 Open
 Pragmatic
 Diverse
 Outward-looking
 Vibrant

 Asian economies
 Connected through market
 Focused on finding new and flexible forms of cooperation
 Complement global relationships
 Build bridge that connect Asian economies and the world
Integrating Asia / Asian regionalism
 Benefit of Asian regionalism
Not just to Asia, but to the world
 Sustainable growth of the region
 Stability
 Equality
 Immense intellectual and economic resources
 Power and stabilize the global economy by boosting produc
tivity, raising living standards and reducing poverty

 Everyone’s interest (cohesive, stable and productive Asia)

 How regionalism can benefit Asia
• Link competitive strengths of its diverse economies
• Connect the region’s capital markets
• Cooperate in setting exchange rate and macroeconomic policies
• Pool the region’s foreign exchange reserves
• Exercise leadership in global decision making
• Build connected infrastructure
• Create regional mechanisms

 Cooperation requires trust, innovation, compromise and time

 Benefits extend to developing Asian economies that are not
yet part of the region’s integrating core
How regionalism can benefit the world
Incentives and the leverage to play a bigger role
• Generate productivity gains, new ideas and competition
• Contribute to the stability of global financial markets
• Diversify sources of global demand
• Provide leadership to help sustain open global trade and financial
systems
• Create regional mechanism to manage health, safety and
environmental issues

 Help to sustain global economic progress

The economics of regionalism
 History of the economics of regionalism

GATT
Preferential trade blocs, Collapse of
Discriminatory currency international trade and post-war global
financial flows economic system
blocs in 1930s
(nondiscrimination)

• Regionalism must NOT lead to protectionist blocs

• No more “fortress Asia”
The economics of regionalism
Important priorities for regional collective action

• Provide public goods

• Manage the spillover effects of economic activity
• Coordinate regional policy approaches to projects
• Liberalize trade and investment
• Add value to national policy making

Regional cooperation is not a goal to be pursued for its

own sake; it is a means for achieving more fundamental
objectives
The challenge of cooperation

 Trade and Investment

 Financial integration

 Macroeconomic policy

 Social and environmental policy

The challenge of cooperation-Asia’s complexity

 The loss of cooperation

 National sovereignty &narrow policy option
 Ex) Unable to issue own currency
 Cooperation is likely to evolve gradually
 Using frameworks and forum
 Characteristics of Asian Regionalism
 Pragmatic & cautious
 The public appears to have positive expectations
to regionalism
Perceptions of economic interdepence in
Asia

Source: Gartner
Comparison with EU

 Advantages of European Union

-Similar economic status
-Christianity
-Roman Alphabet
-Open minded
-Closer cooperation in policy making
-Euro currency
The challenge of cooperation -Risk

 Global demand & financial stability

 Falling dollar, rising energy, food and other comm
odity
 Environmental Damage
 Social instability
 The unexpected factor
 Asian Financial crisis
 Regional cooperation is a form of insurance