Nexus - 1604 - New Times Magazine-pages

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In 2001, an Asia Times Online article discussed a "Most successful new currencies have been started speech given by economist Robert A. Mundell a on the back of an existing currency, establishing Bangkok's Chulalongkorn University: "The ‘Asean plus confidence in its convertibility, thus linking the old three’ (the 10 members of the Association o with the new." Southeast Asian Nations plus China, Japan, and The report concluded: "...exchange rate stabilization Korea) ‘should look to the European Union as a mode and monetary integration are unlikely in the near for closer integration of monetary policy, trade and erm. Nevertheless, East Asia is integrating through eventually, currency integration,’ said Mundell." rade, even without an emphasis on formal trade On 6 May 2005, the website of the Association o iberalization agreements. Moreover, there is evidence Southeast Asian Nations announced: "China, Japan, of growing financial cooperation in the region, South Korea and the 10 members of the Association o including the development of regional arrangements Southeast Asian Nations (ASEAN) have agreed to or providing liquidity during crises through bilateral expand their network of bilateral currency swaps into oreign exchange swaps, regional economic what could become a virtual Asian Monetary Fund... surveillance discussions, and the development of Finance officials of the 13 nations, who met in the — regional bond markets." Finally, it stated: "East Asia sidelines of the Asian Development Bank (ADB) might also proceed along the same path [as Europe], annual conference in Istanbul, appeared determined irst with loose agreements to stabilize currencies, to turn their various bilateral agreements into some ollowed later by tighter agreements, and culminating sort of multilateral accord, ultimately in adoption of a although none of the officials common anchor—and, after would directly call it an Asian " : that, maybe an East Asia dollar." Monetary Fund."” East Asia does not In 2007, AFP reported that In August 2005, the Federal appear to have an obvious "Asia may need to establish its Reserve Bank of San Francisco : . own monetary fund if it is to published a report'® on the candidate for an internal cope with future financial prospects of an East Asian anchor currency fora shocks similar to that which Monetary Union, stating that Q rocked the region 10 years ago" East Asia satisfies the criteria cooperative exchange rate and that "“[fJurther Asian or joining a monetary union. arrangement..." financial integration is the best However, it stated that, antidote for Asian future compared to the European financial crises”."” initiative, "[t]he implication is In September 2007, Forbes hat achieving any monetary arrangement, including a reported: "An East Asian monetary union anchored by common currency, is much more difficult in East Asia”. apan is feasible but the region lacks the political wil t further stated that "[iJn Europe, a monetary union o do it, the Asian Development Bank [ADB] said." was achievable primarily because it was part of the Pradumna Rana, an ADB economist, said that "i arger process of political integration". However, it appears feasible to establish a currency union in Eas also stated: "There is no apparent desire for political | Asia—particularly among Indonesia, Japan, (South integration in East Asia, partly because of the great orea, Malaysia, Philippines, Singapore and Thailand". differences among those countries in terms of political © Another study by ADB's Ganeshan Wignaraja and systems, culture, and shared history. As a result of | Michael Plummer of Johns Hopkins University claimed their own particular histories, East Asian countries hat "[t]he economic potential for monetary remain particularly jealous of their sovereignty.” integration in Asia is strong, even though the politica Another major problem, as presented by the San underpinnings of such an accord are not yet in place". Francisco Fed, is that "East Asian governments appear n addition, they said that the real integration at the much more suspicious of strong supranational rade levels “will actually reinforce the economic case institutions" and thus, "in East Asia, sovereignty or monetary union in Asia, in a similar way that real- concerns have left governments reluctant to delegate sector integration did so in Europe". According to the significant authority to supranational bodies, at least report, "Rana said the road to an Asian monetary so far". It explains that as opposed to the steps taken —_ union could proceed on a ‘multi-track, multi-speed to create a monetary union in Europe, "no broad free basis with a seamless Asian free trade area the goal on trade agreements have been achieved among the he trade side"."* largest countries in the region, Japan, Korea, Taiwan, In April 2008, Xinhua reported that "ASEAN bank and China". Another problem is: "East Asia does not deputy governors and financial deputy ministers have appear to have an obvious candidate for an internal met in Vietnam's central Da Nang city, discussing anchor currency for a cooperative exchange rate issues on the financial and monetary integration and arrangement. cooperation in the region".”” anchor currency for a cooperative exchange rate arrandaement..." arrangement. 14 ¢ NEXUS JUNE — JULY 2009 "East Asia does not appear to have an obvious candidate for an internal arrangement..." www.nexusmagazine.com