|Project Rationale and Linkage to Country/Regional Strategy
Regional economic integration plays a vital role in improving productivity, accelerating economic growth, and reducing poverty. It is thus a welcome development that regional cooperation and integration has gained momentum in Asia and the Pacific. In 2010, intraregional trade comprised 59.3% of the region's total trade flow, from 54.9% in 2000. As of August 2011, 123 Free Trade Agreements (FTAs) had been concluded, up from 45 in 2000. The region's share of its total foreign asset holdings also rose from 15% in 2001 to 27.9% in 2009.
There remains a need, however, to promote greater awareness and understanding of the benefits of RCI. This can be achieved by providing reliable, timely, and accurate information on and analyses of various RCI initiatives in the region. Indeed, a prime opportunity for doing so is presented by the increased uncertainty and financial sector volatility that currently hang over the world economy. The growing tension in the eurozone also highlights the Achilles heel of regional integration--contagion. These are key risk factors and important concerns for the region, which need to be tracked, their regional implications need to be considered, and measures to mitigate their effects need to be identified. And ARIC is in a unique position to assist in this function having gained expertise in disseminating RCI knowledge and information widely, efficiently, and inexpensively.
Over the years, the ARIC TA has contributed to the increased capacity of key stakeholders in the region to respond to various regional challenges. During the 1998/99 Asian Financial Crisis, the Asia Recovery Information Center provided reliable, timely, and accurate crisis-related information, which was vital for restoring confidence and facilitating economic recovery in the region. In March 2004, it was renamed the Asia Regional Information Center in recognition of its key role of disseminating useful knowledge and information on regional initiatives. During this period, the Asia Regional Information Center continued to provide information on recovery efforts in Indonesia, the Republic of Korea, Malaysia, the Philippines, and Thailand, which was later extended to cover the People's Republic of China, Singapore, and Viet Nam. In 2006, it was renamed the Asia Regional Integration Center and given a new mandate to serve as the knowledge and information portal on various RCI initiatives in the region. Its website was restructured to focus on four pillars: Cross-Border Infrastructure and Software, Trade and Investment, Money and Finance, and Regional Public Goods.
To date, the ARIC website has established itself as a reliable and leading source of RCI knowledge and information. It provides updated information on: (a) news, opinions, and editorials on a daily basis as well as RCI-related studies; (b) useful databases such as trade integration and FTAs; investment, macroeconomic, monetary, and financial indicators; tax incentives; and climate change action plans and commitments, among others; (c) calendars of economic data releases and RCI events; and (d) early warning system indicators. It supports the publication of the Asia Economic Monitor (AEM), the RCI Working Papers, and other ADB flagship studies. ARIC also assists in the preparation of the Economic Prospects and Policy Issues for ASEAN+3 (Confidential Notes), which are ADB's contribution to the biannual ASEAN+3 Finance Deputies' Meetings.
ARIC's information architecture, database systems, and state-of-the-art technology have been used as a benchmark by the ASEAN Statistics Unit. ARIC also assisted the development of the Aid for Trade, the Global Reserve System, and ADB Finance Community of Practice websites. The Secretariat for the Common Market for Eastern and Southern Africa consulted ARIC on its plan to establish a regional integration surveillance mechanism. In 2009, the ARIC website was included by the Center for Comparative Regional Integration Studies at United Nations University in its best-practice analysis of online resources dealing with regional integration studies. The ARIC website's FTA section is currently linked to the Asia-Pacific trade and investment agreements database, which is maintained by the United Nations Economic and Social Commission for Asia and the Pacific. The website generates an average of 7,650 unique visitors and 50,100 downloads monthly.
Following these achievements, this TA will serve as the fourth phase of ARIC, which is timely given two important developments in the region. First, as a consequence of the global financial crisis, there is a growing need to re-balance growth in favor of strengthening economic ties within Asia and the Pacific, not only so that the region would have new growth drivers, but also to make regional economies less vulnerable to external shocks. Second, due to the heightened global uncertainty and increasing financial volatility, regional economic cooperation and economic surveillance have gained heightened significance.
In this regard, the ARIC Phase IV will aim to improve RCI monitoring by developing an RCI indicator system, which will track the progress of regional integration in the region. To be developed in collaboration with ADB's RCI Community of Practice and in consultation with the rest of the Bank, the RCI indicator system will aim to order and combine existing regional integration indicators so as to gain a multi-dimensional perspective of RCI trends. The aggregation of indicators will provide a holistic view of the progress of RCI. In addition, the RCI indicator system will include the perception of key stakeholders regarding the progress of and impediments to RCI in the region. It could also include other regional indicators from ADB's results-based framework.