Lei Lei Song, Principal Economist in ADB's Office of Regional Economic Integration, says volatility in global financial markets is leading to greater regional cooperation.
Title: Economic Volatility Spurs Asia to Greater Cooperation
Description: Lei Lei Song, Principal Economist in ADB's Office of Regional Economic Integration, says volatility in global financial markets is leading to greater regional cooperation.
Lei Lei Song
Asian Development Bank
Q: How is the recent global economic and market volatility addecting cooperation and integration in Asia?
A: Recently, we have seen financial market is very volatile because of uncertainties. Those uncertainties usually are related to micro policy, monetary policy, and fiscal policy in advanced economies as well as structure adjustment in some major emerging economies such as India and China. So, those uncertainties has affected market volatility. And we know volatility is not good for the world economy because volatility would deter people to invest and to consume, and regional economic integration would also be affected.
Q: How has regional integration been affected?
A: Trade flows in the region within the region is slowing down, possibly because volatility affects finance first, capital flows becomes very volatile and intraregional capital flows has been decreasing a little bit because the capital all flows from many countries. And finance would affect the world economy and trade flows would also be affected. We have seen some early signs but probably they’ll be more affected in the future coming years.
Q: Do you see the region working together more or less in the future?
A: They have already been working more. You see ASEAN have been talking a lot among themselves, and we have seen APEC Summit just finished recently, and East Asia Summit, and ASEAN +3 project. So, all those regional forums have been stepping up efforts to cooperate and reason is because the global economy is quite uncertain and major advanced economies, they are recovering but very slow and weak. So, emerging economies particularly in those in Asia should cooperate.