“Increasing integration among Asian economies offers a new platform to promote growth, and that is good for Asia and rest of the world,” says Jong-Wha Lee, Head of ADB’s Office of Regional Economic Integration.
The ADB discussed the study last Monday in Vancouver in a seminar hosted by the Asia-Pacific Foundation of Canada (APFC) and has co-organized today with the APFC and the University of Ottawa a seminar at the Rideau Club in Ottawa, attended by International Trade Deputy Minister Ms. Marie-Lucie Morin.
"Deeper regional economic integration in Asia will have an impact not only on global production, but also on international economic and financial architecture. Canada stands to benefit from the shift in economic power towards Asia, but Ottawa must pursue a policy of vigorous diplomatic and commercial relations with the region," said Mr. Yuen Pau Woo, President and Co-CEO of APFC.
While Asian economic integration is led by the market, to take full advantage from increased regional interdependence, Asian economies need to boost their ties through closer dialogue and policy coordination.
To foster financial stability and economic prosperity, they also need to improve regional macroeconomic surveillance and work toward the creation of new regional institutions such as an Asian Financial Stability Forum and an Asian Secretariat for Economic Cooperation, the study says, adding that Asian regionalism can be a stabilizing factor when shocks arise.
The study highlights that Asia is less integrated in finance than in trade but financial markets are now larger, deeper, and more sophisticated than they were a decade ago. With the growth of trade and financial ties, Asia’s macroeconomic interdependence has also increased. The region faces a challenging period ahead as global payment imbalances appear increasingly unsustainable as the financial turmoil unfolds and global economic slowdown deepens.
“The challenge to Asian policy makers is to closely monitor global and regional developments, and to be ready to act together if region-wide responses are appropriate,” the study says. It also says the region needs to cooperate to make development sustainable by protecting regional health and environment.
Mr. Lee said Canada should capitalize on the good image and reputation it enjoys in Asia to increase its active presence in the region through trade and foreign direct investment.
“Given Canada’s keen interest in Asia and its receptiveness of developments occurring on the other side of the Pacific, we have chosen Ottawa as the first capital to disseminate the findings of our study,” says Mr. Lee.
