The Road to ASEAN Financial Integration
Summary assessment of the ASEAN on the state of financial integration in the region, with inputs from an ADB regional technical assistance project.
In January 2007, leaders of the Association of Southeast Asian Nations (ASEAN) affirmed their commitment to the creation of the ASEAN Economic Community (AEC) by 2015 and 'to transform ASEAN into a region with free movement of goods, services, investment, skilled labor, and freer flow of capital.'
This paper provides a summary assessment of the ASEAN on the state of financial integration in the region, with inputs from the Asian Development Bank (ADB) regional technical assistance project Combined Studies on Assessing the Financial Landscape and Formulating Milestones for Monetary and Financial Integration in ASEAN.
Information on the financial integration milestones blueprint that will lay out a comprehensive program to achieve ASEAN financial integration by 2015, as well as the recommended institutional and policy reforms to be implemented to 2020 are discussed here.
The report reflects the views of ASEAN on the state of financial integration in the region, with inputs from the respective studies drafted by a team of consultants led by Prof. Yung Chul Park and was funded and supported by the ADB under the regional technical assistance on Assessing the Financial Landscape and Formulating Milestones for Monetary and Financial Integration in ASEAN, Phase 2.
The process of integration and consolidation will continue to be an inescapable reality as long as member states wish to remain part of the global economy. In this environment, small economies must specialize in a few things they do best to survive. They cannot expect to offer all services to all people in all market segments. Indeed, this is the very reason the ASEAN leaders have embarked on the process of creating a single market and production base as a means of joining forces together.
So as not to be left out, the ASEAN member states must commit anew to creating a single market and production base. Full and complete capital account and financial services liberalization is ultimately key to the success of the AEC.
Though a gradual and judicious approach is the only pragmatic and feasible option at the present, this must be considered as a step toward the eventual elimination of all restrictions on crossborder capital flows and financial services. To make this safe and possible, the ASEAN member states must start creating and strengthening the requisite regional institutions.
- Introduction: Imperatives of Financial Integration
- Where the Region Stands
- The ASEAN Vision
- Preconditions for ASEAN Integration
- Financial Services Liberalization: Milestones, Risks, and Challenges
- Capital Account Liberalization
- Financial Infrastructure Building
- ASEAN Payment and Settlement System
- Capital Market Development
- Beyond Integration: What Is Next for the ASEAN Community?