Think tanks suggest institutional cooperation in select areas among 16 Asian countries
Saturday, 24 November 2007
Nagesh Kumar
Asia becoming the most dynamic economic region in the world, with China and India as its growth engines, Japan's recovery from a decade of recession and the emergence of the continent's middle class as consumers were among the striking developments of last 10 years.
The extent of the transformation of the economic geography is clear from the way the performance of the U.S. economy affected economic prospects in the rest of the world. One may recall how the slow down of the US economy, at the beginning of the decade, created widespread fears of a global impact.
The IMF's latest World Economic Outlook is predicting that the global economy will come out of the US sub-prime crisis with a minor scar, thanks to the emergence of China and India.
Asian countries have begun to exploit the potential of regionalism for their development. Besides expediting its own sub-regional economic integration, the ASEAN took the initiative to bring together other major Asian economies as dialogue partners. A virtual economic community is emerging out of a complex web of FTAs linking ASEAN and its six dialogue partners.
However, these FTAs remain sub-optimal as they fail to provide a seamless regional market, important for a fuller exploitation of synergies for mutual benefit. There is now a consensus that a broader regional architecture is needed to complement these initiatives.
Asia's lack of a forum for pursuing broader regional cooperation, led the ASEAN to bring its dialogue partners together. ASEAN +3 cooperation largely remained limited to the Chiang-Mai Initiative, designed to assist them in dealing with liquidity problems.
In that context, the evolution of the EAS(East Asia Summit) as an annual forum for dialogue on regional issues in Kuala Lumpur in December 2005 bringing together ten ASEAN countries and their six dialogue partners, Japan, China, India, Korea, Australia and New Zealand, is an important initiative.
At the second EAS held in Cebu, the Philippines, on Jan. 15, 2007, the leaders decided to move forward on the regional cooperation agenda in five select sectors, namely, education, energy, natural disaster mitigation, avian flu, and finance. They also launched a track-II feasibility study of a Comprehensive Economic Partnership Arrangement of East Asia (CEPEA) bringing together the 16 member countries of EAS and endorsed establishment of a regional economic think-tank called Economic Research Institute of ASEAN and East Asia.
A conference of heads of prominent think-tanks held in New Delhi earlier this month discussed the issues and challenges for Asian economic integration in the context of forthcoming EAS.
Findings of some of the studies, presented at the conference, highlighted the potential of economic integration in EAS framework to bring about economic gains to the participating countries as well as the rest of the world.
The participants felt that instead of diffusing the agenda to cover diverse issues, EAS could concentrate on taking some visible concrete steps towards economic integration. The conference suggested some key priorities for the EAS process to create an institutional framework for promoting regional cooperation in select areas.
It would be important, felt some participants, to create CEPEA as a framework agreement aiming to soften tariff and non-tariff barriers to intra-regional trade in goods and services as well as investments, in a phased manner, by 2020. They suggested for a simultaneous improvement in connectivity and trade facilitation to cut trade costs, and increase economic cooperation to narrow the development gaps. The ultimate objective of CEPEA could be creating a "seamless market" combining all the EAS participating countries.
As trade liberalisation can affect certain vulnerable sections adversely, it calls for provisions for safeguard for sensitive products, and livelihood security. Countries at different levels of development would need special and differential treatment, in a manner, that makes CEPEA a role model of economic integration by balancing the objectives of "efficiency and equity". A track-II study on CEPEA, being conducted under the Cebu mandate by experts of the 16 countries, is likely to be completed in mid-2008.
The conference found a case for creating an Asian monetary and financial architecture of EAS countries by building on the Chiang-Mai Initiative and expanding it to cover all the EAS participants. There was a consensus on the need for institutional intermediation between growing foreign exchange reserves of Asian countries and their widening infrastructure deficiencies for funding the cross-country infrastructure.
Among other suggested avenues for financial and monetary cooperation were, creation of an Asian Currency Unit to facilitate intra-regional trade and exchange rate stability within the EAS region, strengthening and development of Asian Bond Markets and creation of an apex body of Asian Exim Banks. EAS could also create a virtual EAS secretariat and an EAS Caucus for coordinating their positions at the global institutions.
For facilitating regional financial cooperation, EAS could consider creating an annual forum of EAS Finance Ministers and central bank governors alongside the Economic Ministers' Meetings. EAS has already identified finance as an area of cooperation at Cebu Summit.
The conference participants supported cooperation and coordination among Asian think-tanks. They agreed that intellectual cooperation among Asian institutions and experts was the need of the hour for promoting broader Asian regional cooperation. Asian minds need to meet before the economies can. The initiatives of regional cooperation need to be effectively supported by networks of think-tanks of EAS countries.
Finally, the participants made a case for regional institution-building for large scale educational, cultural and media exchanges to promote an Asian identity and mutual understanding. It was emphasised that social, cultural and strategic dimensions are equally important as economic ones if not more for the successful regionalism while supporting the EAS dialogue on energy and climate change related issues.
(The writer is director-general of Research and Information Systems for Developing Countries, a New Delhi-based policy think-tank.)
— The Jakarta Post
Asia becoming the most dynamic economic region in the world, with China and India as its growth engines, Japan's recovery from a decade of recession and the emergence of the continent's middle class as consumers were among the striking developments of last 10 years.
The extent of the transformation of the economic geography is clear from the way the performance of the U.S. economy affected economic prospects in the rest of the world. One may recall how the slow down of the US economy, at the beginning of the decade, created widespread fears of a global impact.
The IMF's latest World Economic Outlook is predicting that the global economy will come out of the US sub-prime crisis with a minor scar, thanks to the emergence of China and India.
Asian countries have begun to exploit the potential of regionalism for their development. Besides expediting its own sub-regional economic integration, the ASEAN took the initiative to bring together other major Asian economies as dialogue partners. A virtual economic community is emerging out of a complex web of FTAs linking ASEAN and its six dialogue partners.
However, these FTAs remain sub-optimal as they fail to provide a seamless regional market, important for a fuller exploitation of synergies for mutual benefit. There is now a consensus that a broader regional architecture is needed to complement these initiatives.
Asia's lack of a forum for pursuing broader regional cooperation, led the ASEAN to bring its dialogue partners together. ASEAN +3 cooperation largely remained limited to the Chiang-Mai Initiative, designed to assist them in dealing with liquidity problems.
In that context, the evolution of the EAS(East Asia Summit) as an annual forum for dialogue on regional issues in Kuala Lumpur in December 2005 bringing together ten ASEAN countries and their six dialogue partners, Japan, China, India, Korea, Australia and New Zealand, is an important initiative.
At the second EAS held in Cebu, the Philippines, on Jan. 15, 2007, the leaders decided to move forward on the regional cooperation agenda in five select sectors, namely, education, energy, natural disaster mitigation, avian flu, and finance. They also launched a track-II feasibility study of a Comprehensive Economic Partnership Arrangement of East Asia (CEPEA) bringing together the 16 member countries of EAS and endorsed establishment of a regional economic think-tank called Economic Research Institute of ASEAN and East Asia.
A conference of heads of prominent think-tanks held in New Delhi earlier this month discussed the issues and challenges for Asian economic integration in the context of forthcoming EAS.
Findings of some of the studies, presented at the conference, highlighted the potential of economic integration in EAS framework to bring about economic gains to the participating countries as well as the rest of the world.
The participants felt that instead of diffusing the agenda to cover diverse issues, EAS could concentrate on taking some visible concrete steps towards economic integration. The conference suggested some key priorities for the EAS process to create an institutional framework for promoting regional cooperation in select areas.
It would be important, felt some participants, to create CEPEA as a framework agreement aiming to soften tariff and non-tariff barriers to intra-regional trade in goods and services as well as investments, in a phased manner, by 2020. They suggested for a simultaneous improvement in connectivity and trade facilitation to cut trade costs, and increase economic cooperation to narrow the development gaps. The ultimate objective of CEPEA could be creating a "seamless market" combining all the EAS participating countries.
As trade liberalisation can affect certain vulnerable sections adversely, it calls for provisions for safeguard for sensitive products, and livelihood security. Countries at different levels of development would need special and differential treatment, in a manner, that makes CEPEA a role model of economic integration by balancing the objectives of "efficiency and equity". A track-II study on CEPEA, being conducted under the Cebu mandate by experts of the 16 countries, is likely to be completed in mid-2008.
The conference found a case for creating an Asian monetary and financial architecture of EAS countries by building on the Chiang-Mai Initiative and expanding it to cover all the EAS participants. There was a consensus on the need for institutional intermediation between growing foreign exchange reserves of Asian countries and their widening infrastructure deficiencies for funding the cross-country infrastructure.
Among other suggested avenues for financial and monetary cooperation were, creation of an Asian Currency Unit to facilitate intra-regional trade and exchange rate stability within the EAS region, strengthening and development of Asian Bond Markets and creation of an apex body of Asian Exim Banks. EAS could also create a virtual EAS secretariat and an EAS Caucus for coordinating their positions at the global institutions.
For facilitating regional financial cooperation, EAS could consider creating an annual forum of EAS Finance Ministers and central bank governors alongside the Economic Ministers' Meetings. EAS has already identified finance as an area of cooperation at Cebu Summit.
The conference participants supported cooperation and coordination among Asian think-tanks. They agreed that intellectual cooperation among Asian institutions and experts was the need of the hour for promoting broader Asian regional cooperation. Asian minds need to meet before the economies can. The initiatives of regional cooperation need to be effectively supported by networks of think-tanks of EAS countries.
Finally, the participants made a case for regional institution-building for large scale educational, cultural and media exchanges to promote an Asian identity and mutual understanding. It was emphasised that social, cultural and strategic dimensions are equally important as economic ones if not more for the successful regionalism while supporting the EAS dialogue on energy and climate change related issues.
(The writer is director-general of Research and Information Systems for Developing Countries, a New Delhi-based policy think-tank.)
— The Jakarta Post