ADB: More than just the economy

03/05/2010 | Anthony Rowley

Regional integration lies as the heart of ADB president Haruhiko Kuroda’s vision

If Haruhiko Kuroda has brought improved management to the ADB since he became president in November 2004, he has also advanced his own strong vision of an economically – and one day, politically – more integrated Asia region. Kuroda hopes to move a step further towards realizing his vision during this year’s annual meeting.

One of the themes for discussion by governors will be what the ADB sees as the need for more formal institutions to be set up to accelerate cooperation among Asian nations. Kuroda says building a network of institutions across a region so scattered, ethnically diverse and economically divergent as Asia will not be easy, but he wants to get the issue on the table for discussion.

“There could be various levels of regional and sub-regional institutions,” he tells Emerging Markets. “If you look at Europe, there is the European Commission, the European Parliament and the European Court. They also have the European Investment Bank – so many well established, concrete institutions while in Asia we have very few.”

Outside the ADB and the UN Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, there is almost nothing by way of formal institutions for regional cooperation, he says. Sub-regional cooperation initiatives such as SARC (South Asian Association for Regional Cooperation) and CAREC (Central Asia Regional Economic Cooperation) have some form of secretariat, but at a wider level even the Asean+3 group has no formal secretariat and relies on the tiny Asean secretariat in Jakarta for support.

The Chiang Mai Initiative, a kind of Asian Monetary Fund in the making, also needs to rely on the Asean Secretariat, although Kuroda says that Asean+3 finance ministers are likely to “push for further institutionalization” of their cooperation process during their meeting in Tashkent.

“Integration is well underway in Asia without formal institutions,” says Kuroda, citing multiple bilateral and sub-regional free trade or economic cooperation agreements that have proliferated across the region. “But certainly clear treaty agreements for free trade would be better and could further facilitate regional integration,” he says, while arguing in favour of an Asean+3-wide free trade area or even wider.

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