MADRID, SPAIN - Asian nations must boost economic ties through closer consultation and policy coordination, and improve financial market surveillance to foster financial stability and economic prosperity, says a new book released by the Asian Development Bank (ADB).
"Emerging Asian regionalism offers a new platform for economic development that is good for individual economies, good for Asia, and good for the world," says ADB President Haruhiko Kuroda, who unveiled the book "Emerging Asian Regionalism - A Partnership for Shared Prosperity" at the Bank's 41st Annual Meeting.
"The dynamic and outward-looking style of Asian regionalism will have a significant impact in our increasingly globalized economy," says Mr. Kuroda.
Asian regionalism can be a stabilizing factor when shocks arise, whether they come from within the region or outside, said speakers at a panel discussion on the book.
They said the financial crisis of 1997/98 underscored Asia's interdependence and shared interests, and gave a strong impetus to emerging Asian regionalism. The region is being increasingly interconnected through trade, finance and macroeconomic links.
"Our experience suggests that regional and global economic integration and cooperation helps build stronger and more resilient economies, and this excellent study explores a number of ways we can achieve this," says Anggito Abimanyu, Deputy Finance Minister of Indonesia.
While continued growth will reinforce the region's market-led integration, official cooperation will need to intensify based on sound economic principles.
The book 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. The ADB Study urges policymakers to strengthen supervision, surveillance and dialogue on financial markets through creation of a new, high-level "Asian Financial Stability Dialogue."
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 credit turmoil unfolds and global economic slowdown deepens.
"The challenge to Asian policy makers is to monitor global and regional developments closely, and to be prepared to act together if region-wide responses are appropriate," the book says.
It says Asia will benefit from strengthening its mechanisms for monitoring and potentially coordinating exchange rate and macroeconomic policies. It suggested setting up an "Asian Secretariat for Economic Cooperation." The region also needs to cooperate to make development sustainable by protecting regional health and environment.