ASEAN KEY DESTINATIONS
Moving faster on Asean Economic Community with a common currency?
By David Swartzentruber
To those of us who follow the 10-member Asean community, it seemed that the four years until the Asean Economic Community (AEC) fell into place was a reasonable time frame for the full force of the community to take effect given the wide range of dissimilarities between the 10 countries.
Now, like a bolt of lightning, Indonesia has proposed at the start of the Asean Summit kicking off in Hanoi that the AEC be put on a fast-track and consideration of a common currency be accelerated. How fast the fast-track should be was not stated but media and others have several thoughts on the matter.
Currency concerns are uppermost in the minds of Asean leaders as capital inflows continue to flow into the individual countries, appreciating their currencies. The common currency concept is that with the backing of 10 central banks rather than one for each country, a common currency could withstand the ups and downs of world finances better.
Indonesia, Thailand, Malaysia and Philippines are all concerned about the rise in their currencies and notably, Thailand has taken a step to curb capital inflows, with limited success. Another concern is the aggressive stance the Chinese have taken in the South China Sea to assert their territorial rights. However, there are several Asean countries , Vietnam, Indonesia, Malaysia, and Philippines that also have claims in the sea.
China would prefer unilateral talks with each country to resolve disputes, however, the Asean countries want multilateral talks. If these countries draw ever closer under the Asean banner, it will be more difficult for China to get its way on unilateral negotiations.
It will be of interest to see if the Indonesian fast-track and common currency initiatives get traction with the other Asean members in the coming days or weeks.
The bold Indonesian move should be applauded, “no guts, no glory.”
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