What Asian economic integration needs

What Asian economic integration needs

By MALMINDERJIT SINGH

THERE should be a greater institutional presence in Asia to facilitate economic integration in the region.
This was the key message that Barry Eichengreen delivered in his public lecture on Asian Economic Integration at the Monetary Authority of Singapore (MAS) yesterday.
Professor Eichengreen, the newly appointed MAS Term Professor in Economics and Finance, explained that a more elaborate institutional presence in Asia would help cement existing gains, widen geographical coverage as well as further deepen economic integration.
He highlighted that regional integration efforts thus far have contributed to the growth of economic activity and living standards. Prof Eichengreen explained, however, that while trade shares and intensity have increased in Asia, this has happened at differing rates in different sub-regions, with East Asia experiencing greater progress in this regard as compared to South and Central Asia.
Prof Eichengreen, who is also professor of economics and political science at the University of California, Berkeley, said that going forward, institutional building in Asia should be more systemic as opposed to the ad hoc and reactive approach currently used. He suggested six areas in which institutional presence could be strengthened in the region. Firstly, he suggested making the most of current international conventions such as those from the World Trade Organization (WTO) and the 1980 United Nations Convention on Contracts for the International Sale of Goods. This would be easy to harmonise since their designs were already done.
Prof Eichengreen said that Asia should also look to develop institutions to exploit sub-regional opportunities such as enhancing transport infrastructure, exploring new economic corridors and perhaps more bilateral and sub-regional free trade agreements (FTAs). He added that there should be more opportunities for sub-regional groupings like Asean and the South Asian Association for Regional Cooperation (SAARC) to connect, perhaps through annual summits or conventions.
Prof Eichengreen recommended introducing a compliance board, made up of business and academic members, to help monitor and assess what institutions are doing and urged Asean to consider such a set-up as it would improve transparency. Further, he called for the Asean Secretariat to be given more freedom in setting the agenda and suggested that current review processes in Asean be strengthened. He pointed out that these measures would help strengthen existing groups and that governments should even consider expanding the Asean + 3 grouping, with an eventual objective of a pan-regional institution in mind.
The lecture was organised by MAS and the National University of Singapore Department of Economics.