Asian Economic Cooperation and Integration: Progress, Prospects and Challenges

Abstract

Asian Economic Cooperation and Integration: Progress, Prospects and Challenges. By Asian Development Bank. Philippines: Asian Development Bank, 2005. Pp. 388. This publication is based on papers presented at the High-Level Conference on Asia's Economic Cooperation and Integration held on 1-2 July 2004, organized by the Asian Development Bank. It is aimed at promoting understanding of the different aspects of regional co-operation in Asia. Divided into five parts, Parts 1 and 2 provide a broad overview of Asia's standing in the world economy and an introduction into growing regional co-operation in the fields of trade, investment, and monetary and financial integration. Part 3 delves into a series of issues relating to trade and investment regional co-operation, while Part 4 covers a range of monetary and financial cooperation topics. Part 5 concludes with issues relating to infrastructure development and prospects for regional co-operation in that area. This publication is a welcome addition to the growing literature on economic co-operation in Asia. Overall, it is a recommended read for practitioners and novices alike, not least due to the comprehensive coverage it provides on the myriad initiatives and developments on keys fronts of Asian economic co-operation. Up-to-date statistics are also sprinkled throughout the book thus making discussions current with implications for policy-making. In particular, the inclusion of an oft-neglected issue of infrastructure co-operation makes a good attempt to address and highlight a pressing issue in many parts of Asia, without which further developments on the trade and investment fronts would be hampered. The opening chapter embarks on a rather commendable attempt to introduce and link the remaining chapters. Detailed background of ASEAN economic linkages, ASEAN ties with China and India, as well as financial integration and monetary co-operation in the region in the wake of the 1997 crisis are particularly helpful for readers who are not well acquainted already with the region. The identifying of nuances in the various waves of regionalism, the section on developments of the Asian Bond Market, as well as the discussion on prospects for deeper integration are some highlights of the chapter. Part 2 of the book spanning Chapters 2 to 4, focuses proper on regional co-operation and prospects with particular attention paid to Asia's position in the world economy. Interesting ideas can be gleaned from Chapter 3 including a suggestion of an FTA involving Japan, ASEAN, China, India, Korea (JACIK), the expansion of the existing Asia swap facility, setting up of a Reserve Bank of Asia, as well as that of an Asian strategic petroleum reserve (SPR) to safeguard against rising oil prices from the Organization of Petroleum Exporting Countries (OPEC). Given the growing presence of the Indian economy as well as large foreign reserves accumulation in China, India, Japan, and Singapore, to name a few, these are ideas worth mulling over. Chapter 4 follows closely with a relevant discussion on the appropriate sequencing with regards to trade, monetary and financial integration. The debate on the use of the optimum currency area (OCA) criteria to judge monetary integration is again brought on board. Here, the author provides a broad survey of the literature as well as empirical results that would prove useful in considering this complex issue. Part 3 of the book spanning Chapters 5 to 7, goes in-depth into the topics most persistently discussed; that of trade and investment. Possible pitfalls of the current regionalism drive is a recurrent concern, with Chapter 6 focusing on issues of free trade agreements (FTAs) in relation to the rules of origin (ROO), the scarcity of resources, and the stumbling block impact on multilateralism. case studies of ASEAN's trade with India and China also provide insights into economic relations of Southeast Asia with the growing economic powerhouses in the region. …