The willingness expressed by Asia's financial ministers to
establish a reserve pooling is surely a necessary, albeit
long-overdue, response to the financial crisis that swept across
the continent a decade ago.
Last Saturday, the finance chiefs of the Association of
Southeast Asian Nations (ASEAN), as well as those of China, Japan
and the Republic of Korea, unanimously agreed in principle to build
a self-managed reserve pooling to protect Asia's fast-growing
economy from possible currency upheavals.
The memory of the 1997 Asian financial crisis remains vivid and
bitter for many Asian countries, although they have by now managed
to recover from it. So, the 10th anniversary of the crisis
naturally reminds the region of the necessity to prepare for rainy
days in the future.
In a sense, the past fears have served as a driving force behind
the region's efforts to deepen financial cooperation.
By tapping into the ballooning foreign exchange reserves of many
Asian countries, the region as a whole will be much better
positioned to fight speculative attacks on local currencies.
Yet, the more important message that the prospective arrangement
as an appropriate form of the multilateralization of the Chiang Mai
Initiative has signaled is the rising common aspiration of Asian
countries to facilitate regional integration.
A deeply integrated Asia is far from a reality, given the huge
differences between Asian countries. And there is no lack of sober
understanding of the difficulties to overcome.
However, the idea of a peaceful, prosperous and united Asia has
become increasingly attractive to Asian countries, as the region,
particularly developing Asia, took the lead of global economic
growth.
The Asian financial ministers' reiterated commitments about
their desire to accelerate and deepen structural reforms would
support the region's sustainable growth. A broadly supportive
external environment for regional economic expansion in coming
years is likely to offer another cause for optimism.
But there will always be challenges on the horizon. These
include possible spillover effects from potential slowdowns in
major world economies, large global imbalances, greater financial
market volatilities and recurrent rises in oil prices.
Establishment of a reserve pooling to stabilize intra-regional
currency fluctuations is a tangible but small step to meet these
challenges. The current sound economic conditions provide an
opportunity for Asian countries to make bigger strides on regional
integration.
(China Daily May 9, 2007)
