has been a centre of attention due to rapid growth over the past
decades. The economic progress achieved by Asia in the fifty years
has been the fastest in human history. The Japanese example of rapid
growth in the 1960s and 1970s was followed in rapid succession by
several other Asian countries such as South Korea, Singapore, Taiwan,
Malaysia, Thailand and Indonesia and annual growth rate of around
7 per cent became a routine affair in Asia. China has been registering
an average growth rate of about 9 per cent per year since 1980.
India, once considered as a laggard in Asia, is now also displaying
tremendous growth momentum with growth rate approaching 8 per cent
in 2003/04 after growing at an average rate of about 6 per cent
over the past two decades. Catching up with the developed world
in per capita incomes that seemed as an impossible target earlier
has now been achieved by several Asian countries and is achievable
by several others. With the rise of China and India, it is now clear
that the center of gravity of the world economy will shift to Asia
in the 21st century. A recent study by Goldman Sachs shows that
China and India would emerge among the top three economies of the
world in the next 50 years.
the rapid growth, a new transformation is taking place in Asia in
terms of regional economic integration. The importance of the regional
economic cooperation was highlighted by the East Asian Crisis of
1997 that affected some of the best performing economies of the
region. As a response to the crisis, the ASEAN countries expedited
the programme of formation of ASEAN Free Trade Area (AFTA) and moved
on to further deepen the economic integration.
schemes of economic integration are currently taking shape in Asia
at a regional or bilateral level. For instance, China, Japan and
India are working with ASEAN countries on comprehensive economic
cooperation pacts covering free trade agreements to be implemented
within ten years. At the sub-regional level, South Asian countries
are moving towards a free trade agreement, SAFTA. BIMST-EC, a grouping
combining most of the South Asian countries and Thailand and Myanmar
has also adopted a framework treaty for a free trade agreement.
broader agreements are complemented by a number of bilateral free
trade or comprehensive economic cooperation agreements which are
at different levels of evolution such as Japan-Singapore, India-Thailand,
India-Singapore, Japan-Malaysia, Japan-The Philippines, Japan-Thailand,
number of proposals of cooperation in the monetary and financial
sectors are also taking shape. Although the proposal to set-up an
Asian Monetary Fund did not take off, the Chiang-Mai Initiative
involving the linking of reserves between ASEAN+3 countries for
achieving exchange rate stability has come up. The Asian Bond Fund
floated in 2003 is also taking shape.
is clear that at last Asian countries have begun to look at the
regional economic integration as a strategy for development more
seriously than ever before.
New Asia seems to be emerging from these efforts which is not only
dynamic in terms of growth but also in exploiting the synergies
between the neighbours for mutual development.
is also a growing realisation within the region on the relevance
of a broad overarching framework to consolidate the various sub-regional
and bilateral initiatives into some sort of a pan-Asian grouping
or an Asian Economic Community. It has been argued that such a framework
is necessary for exploiting the potential of regional economic integration
in the continent more fully as the complementarities are more profound
between the sub-regions rather than within them. Indeed the Asian
Economic Community could be built in a gradual manner to begin with
Japan, ASEAN, China, India and Korea (JACIK).
studies have shown that economic integration within Jacik has the
potential to create a grouping as large as EU in terms of income,
or as large as NAFTA in terms of trade. With roughly half of world’s
population and the bulk of foreign exchange reserves, JACIK has
the potential to emerge as one of the major regional economic grouping.
Simulation studies suggest substantial welfare effects resulting
from economic integration. Surveys conducted among the new Asian
leaders find support for deeper economic integration between Jacik
New Asia Forum hopes to contribute to this process of regional economic
integration and thus building of a New Asia with dissemination of
Dr. Nagesh Kumar