Regional Cooperation in Asia: Long-term Progress, Recent Retrogression, and the Way Forward
Enhanced regional cooperation is needed to reduce region's vulnerability to internal and external shocks. This paper recommends to have a program to strengthen the regional financial infrastructure and establish an “Asian Reserve Bank.”
Despite soft and fragmented regionalism, intraregional flows of trade, labor, and capital grew rapidly in Asia over the last few decades. However, in recent years, there has been retrogression in all the three areas basically associated with the slowdown in growth and departure from the East Asian model in these economies. Major Asian economies are now going through a prolonged slump and suffering from a massive misallocation of its resources, both labor and capital.
There is now an urgent need for enhanced institutional efforts for regional cooperation in all the three dimensions mentioned above. The process of liberalization in trade, investment, finance, and labor movements needs to continue at the national as well as international level. However, considerable progress has been made in the area of liberalization in merchandise trade in the region and easy gains have already been made. What is urgently needed now is a program for strengthening the regional financial infrastructure, which would involve a vastly increased role for ADB in resource transfer within the region and establishment of an "Asian Reserve Bank" for greater stability in exchange rates, greater financial security, and greater resource mobilization in the region.
- Introduction and Overview
- Institutional Arrangements for Regional Cooperation
- Long-term Progress and Recent Retrogression on Regional Integration
- The Great Economic Slump in East Asia
- The Way Forward
- Institutional Reforms: Establishment of an Asian Reserve Bank and Strengthening of ADB
- Overcoming Impediments to Regional Cooperation