Asia's Increasing Interdependence

In an increasingly globalized world, Asian regionalism could—and should—be a partnership for regionally and globally shared prosperity

The challenge for a more prosperous and interdependent Asia is how to strengthen and spread the benefits of regional cooperation and integration while playing a substantial and constructive role in global economic leadership, says a new publication from the Asian Development Bank (ADB), Emerging Asian Regionalism: A Partnership for Shared Prosperity.

As Asia’s economies have grown larger and more complex, they also have become more integrated—through trade, financial flows, direct investment, and other forms of economic and social exchange. Today, Asia trades about as much with itself as Europe and North America do with themselves.

This landmark study, led by a team of ADB staff, scholars, and advisers to regional policy makers, analyzes the nature of Asia’s emerging regionalism as well as the opportunities and challenges that it poses. The study found that six measures of interdependence tracked for 16 major Asian economies have increased markedly since the 1997/98 Asian financial crisis. And a survey conducted for the study found that the region’s opinion leaders welcome this interdependence and place a high priority on regional cooperation and integration.

“The dynamic and outward-looking style of Asian regionalism can have a significant impact in an increasingly globalized world. Regionalism can be a stabilizing factor when shocks arise, whether region-based or externally imposed,” said ADB President Haruhiko Kuroda in the book’s foreword. “Being pragmatic and flexible does not mean taking a laissez faire outlook. Regionalism carries the responsibility of proper management, effective communication, and (when required) policy coordination or the creation of common regional institutions. Regionalism can also be an effective policy tool to help markets adjust and adapt when a crisis looms.”

The study highlights what is at stake and lays the ground for further discussion on how to move forward. The study’s key message is that in an increasingly globalized world, Asian regionalism could—and should—be a partnership for regionally and globally shared prosperity. •

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