----- Original Message ----- From: "sidqy suyitno" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Friday, May 13, 2005 6:29 PM Subject: [marketing_leadership-club] One Asian currency? (Michael Vatikiotis)
> > One Asian currency? > > Michael Vatikiotis International Herald Tribune http://www.iht.com/articles/2005/05/12/opinion/edvatik.php > > FRIDAY, MAY 13, 2005 > > > > ISTANBUL Asian finance ministers took another step toward creating an Asian monetary fund on the fringes of this year's annual meeting of the Asian Development Bank in Istanbul in the first week of May. > > Appropriately, they were meeting on the edge of Europe, for it is a kind of European-style financial union that proponents of closer cooperation in Asia are striving for. > > However, while the channel that divides Asia from Europe in this ancient city is narrow, the gulf that Asia needs to bridge before establishing anything like a European-style financial union is dauntingly wide. > > Common wisdom has it that Asia is dreaming if it thinks economies as diverse and as far-flung as China, Japan, South Korea, the countries of the Association of South East Asian Nations and now India can emulate Europe. > > For one thing, Europe has settled the question of hegemony; Asia has not. "There is no hegemon in Europe," argues Norbert Walter, chief economist for Deutsche Bank. "There are three in Asia: China, Japan and India." > > Yet the move toward common financial arrangements is a confidence-building mechanism among Asia's rising powers. Although President Hu Jintao of China and Prime Minister Junichiro Koizumi of Japan could barely conceal their discomfort when they met in Jakarta at the end of April, it was all smiles and warm handshakes when Hu met with Haruhiko Kuroda, president of the Asian Development Bank in Manila a few days later. > > The reason is that both China and Japan support the development of common financial and trading mechanisms, and Kuroda, formerly an influential official in Tokyo, is leading the charge from his new perch at the ADB. > > Kuroda's election in February to head the ADB has lent momentum to economic integration in Asia. Laying down a key marker for his tenure, Kuroda has set up a new department of regional integration, which will be headed by a University of Tokyo economist, Masahiro Kawai. > > Kawai points out that trade and investment among the Asean states, China and Japan is leading the way and in trade terms the region is actually coming together at a more rapid rate than Europe ever experienced. > > At the Istanbul meeting, finance ministers from 13 Asian nations agreed to enhance a modest mechanism that allows countries to swap their foreign reserves to ease liquidity problems on a bilateral basis first set up in the Thai city of Chiang Mai in 2000. > > The idea is to transform this bilateral arrangement into a single multilateral process by increasing the size of the swaps and developing a surveillance mechanism similar to that currently applied by the International Monetary Fund. > > Kawai argues that this regional approach fills a gap left open by the IMF, which is country-focused. "The Asian Financial Crisis in 1997 told us that this country-focused approach doesn't work because of contagion. The regional approach is important, and the IMF has not been strong on that," says Kawai. > > The first attempt by Japan in 1997 to set up a multilateral fund in Asia met fierce resistance from the United States and was hurriedly shelved. But in Istanbul, Japan's finance minister, Sadakazu Tanigaki, gave a ringing endorsement of moves toward an Asian Monetary Fund, saying that Japan was "committed to promoting cooperation for the further prosperity of the region." > > If you believe Masahiro Kawai, it won't be too long before the Asean countries, China, Japan and South Korea set up a mechanism for exchange-rate stability, shadowing the European Exchange Rate Mechanism that was a precursor for a common currency. > > Of course, this isn't all about safeguarding financial stability in Asia. Japan is in a hurry to cement its role as a pivot of these financial mechanisms before China becomes too dominant - and perhaps before the yen is overshadowed by the yuan. > > China is quietly supportive because Beijing sees itself as inheriting an Asian financial system sealed off from too much outside scrutiny. There are shades too of the kind of Asian hubris evident before the Asian financial crisis. "The case for a single Asian currency is overwhelming," declared Hong Kong's chief executive, Donald Tsang, at a conference in China in April. > > But many financial experts working on integration are wary of moving too fast. "Asia is not like Europe," argues Jin Liqun, a former vice finance minister of China who is now an ADB vice president. "We don't have the social and political homogeneity." > > If indeed these moves toward integration are more about hegemony than homogeny then it would be prudent for less powerful Asian nations to ensure that they are not being lured into a greater China or greater Japan. > > (Michael Vatikiotis is a visiting research fellow at the Institute of Southeast Asian Studies in Singapore.) > > > > --------------------------------- > Yahoo! Mail Mobile > Take Yahoo! Mail with you! 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