ADB Says Indonesia Can Play Major Role in Regional Integration

JAKARTA, INDONESIA - Asia’s increasingly integrated economies are benefiting the region and the world, and Indonesia can play a major role in accelerating this trend, Asian Development Bank President Haruhiko Kuroda said.

He was speaking in Jakarta at a conference on regional integration in which he presented key findings from a new ADB flagship study - ‘Emerging Asian Regionalism: A Partnership for Shared Prosperity.’

President Kuroda held bilateral talks with Indonesian officials including State Minister for National Development Planning and Chairman of Bappenas, Paskah Suzetta, and Central Bank Boediono, during which he discussed issues ranging from climate change and food prices, to local and global economic conditions. Indonesia is set to host the 42nd Annual Meeting of ADB on the island of Bali next year.

In his speech, President Kuroda said that Asia’s contribution to the global economy is growing faster than any other region in the world, driven by increasingly interlinked trade, investment, financial and services ties. “Asian integration is good for the countries involved, the region as a whole, and the world at large,” he said.

At the heart of the push for closer ties is the Association of Southeast Nations (ASEAN) whose 10 member economies have a population of over half a billion people with a combined gross domestic product of almost $1.3 trillion in 2007.

Indonesia as a founding member of ASEAN, with the largest economy in the bloc, and its divergent cultures, religions and political systems can play a major role in the integration process, President Kuroda said. Jakarta is home to the ASEAN Secretariat.

For its part, ADB has established a funding facility for projects that support regional integration, and by 2020 it expects total lending for regional projects to account for at least 30% of its total operations. “ADB has been and will continue to be a trusted partner in the Asian integration process,” President Kuroda said.

In its ‘Emerging Asian Regionalism’ study, ADB sets out goals that Asia should aim to achieve by 2020. These include an integrated market free of restrictions on flows of goods, services and capital; deep and liquid financial markets; effective frameworks for coordinating macroeconomic and exchange rate policies; collective efforts to address social issues; the development of a consistent ‘Asian voice’ in global policy forums, and institutions to provide analytical and logistical support.

The study notes that integration is market-led, and looking ahead it will require greater policy cooperation among governments around the region, and the development of a stronger institutional framework.

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