Is Asia going to have its own common market and currency?

In fact, it was rather a follow-up of earlier action taken by the ADB which had circulated its proposed plan of action for a common Asian goal in a circular letter sent to seven SAARC (South Asian Association for Regional Cooperation) countries and some other Asian nations. The finance ministers of Asian countries are scheduled to meet in Manila sometime this month (July) to discuss the pros and cons of the ADB scheme and suggest ways and means to achieve their goal. Of course, it would be a time-consuming process as it needs a lot of deliberations, particularly because it would involve the question of sacrificing their sovereignty to some extent while agreeing to be under a single currency and market with a common trade and financial purpose, rather than each country having its own way of doing things as they are accustomed to. But the ultimate success of the ADB plan for promoting the common goal of the whole Asian region, which comprises, on one hand, economic giants like Japan, China and India, and on the other, more than fifty least developed countries (LDCs) including Bangladesh, would largely depend on the 'political will' and spirit of give-and-take on the part of Asian governments, big and small, rich and poor. That is why it has been rightly stressed also by the ADB chief while disclosing his plan in Dhaka.

Earlier mooting

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The idea of having an Asian common market and currency regime, however, is not a new one. It can be recalled here that the subject was mooted at a finance ministers' conference of the ASEM (Asia Europe Meeting), held in Kobe, Japan, in 2001. The two-day Kobe conference also made a number of suggestions for further consideration by the EU member countries and ten Asian countries (ASEAN members, plus Japan, China, and South Korea); notably the SAARC countries were excluded. The ADB plan, however, includes SAARC countries, besides other Asian nations.

The ASEM conference made a thorough study of the 'hidden dangers' and 'pitfalls' that actually led the Asian economy to a big catastrophe in 1997, focussing on the mighty US dollar to which most of the Asian currencies were pegged. As they say, "never put all your eggs in one basket", the Asian countries did that perhaps in good faith. So when the basket fell, all their 'eggs' (read currencies) also fell and crashed, except, of course, some honourable exceptions, like Malaysia, which was cautious enough to avoid the basket. Malaysia led by former Prime Minister Mahathir, was perhaps the only Asian country that boldly refused to tow the line, prescribed by US-dominated financial agencies, like IMF (International Monetary Fund), and could escape the great Asian financial crash.

However, some people made windfall gains by timely fishing in the troubled Asian waters and that well-known US 'financial wizard' George Ross, Chairman of the Soros Fund Management was one of such lucky fellows who siphoned off billions of US dollar from the Asian financial markets, hastening the 1997 economic crash. Hence the Asian countries, while making their move towards evolving a common market and common currency, should tread the way very cautiously. That is why the ASEM conference had also advised that the Asian economies "should tread carefully" in adopting a common currency regime to replace the existing dollar-dominated one. "No single arrangement is necessarily right for all countries all the time," the ASEM meeting warned.

The question of choice

The most important question, therefore, before the Asian nations now is: what kind of currency system or what shape of the future common currency should be most suitable for them? Undoubtedly, this would be a controversial issue and would naturally take a good deal of time to thrash out one that would be acceptable to all Asian countries. It may be mentioned, in this context, that France and Japan had suggested at the Kobe conference that both the EU currency 'euro' and Japanese 'yen' should be included in the new future common Asian currency. However, the idea was opposed by Indonesia and Malaysia as they wanted to keep their currencies independent from "a basket of trading units dominated by yen." So that's a big signal for those who want to be guided by it.

EU example

But there is nothing to lose heart of before a confident and positive beginning is made at the up-coming ADB meeting in Manila to be attended by all Asian countries. "Art is long but time is short," as the poet says. But once the journey begins the much-cherished goal also starts advancing. We should not forget that the post-WWII Europe had to move literally with a shattered and tottering economy, to traverse boldly a long way, against heavy odds, during the last five decades or so, to reach its present stable and envious position. Undoubtedly, they had to make well calculated moves stage by stage avoiding unfriendly situations and discarding the odds that blocked their way. So what they achieved in 50 years, Asia can, undoubtedly, achieve in much shorter a time, taking cues and lessons from them. The European countries, with their different languages, cultures, different types of governments and ideologies, reached a historic stage of understanding, when they could establish their first European organisation, known as the European Economic Community (EEC) in 1957. And this was first solid step that led them later to the establishment of the European Union (EU), which had ultimately evolved its own common currency, 'euro', now known as the "number one key-currency vying with dollar," as complimented by a Japanese insurance company spokesman.

So let the Asian Finance Ministers make a bold start at the forthcoming ADB meeting in Manila. As indicated earlier, they would have to be prepared to make some sacrifices (surrendering bit their sovereignty) for establishing a common Asian currency, to carry on all their trade transactions, particularly, on a global level, in future. "If the European countries could surrender their sovereignty to an extent for a greater common growth, then why would not the Asian nations?", Finance Minister Saifur Rahman posed the question before the newsmen after his meeting with the visiting ADB Chief, adding, "our economy as well as others' will get a significant boost if we join the ADB bandwagon". If the rest of the Asian Finance Ministers, who would assemble in Manila, think the same way, then there would be no question of any road-block.

Kobe Research Project

These is another hopeful sign which is likely to serve as a milestone on the road leading to the adoption of a common Asian market and currency regime. It was the announcement by Japan at the Kobe conference of its decision to establish a research centre, to be known as Kobe Research Project with the task of linking 'think tanks' in Asia and Europe in their studies of what sort of common currency regime would be best suited to and most acceptable by the Asian nations for their economic growth. So in one sense, a good and constructive ground work is already in progress. In other words, the 'seeds' had already been sown.

However, the ultimate success of the ADB programme for establishing a common Asian market and currency would largely depend on the political will of the Asian leaders who are now at the helm of affairs of their countries. It is they who can make it or mar it, if they like. As they say, where there is a will, there is a way. And where there is a 'political will" there must be a 'political way' too.

AMM Shahabuddin is a retired UN official.