INTEGRATING Southeast Asia’s financial markets is expected to have wide-reaching effects on the 10-nation bloc. But the impact, for now at least, will likely be less of a blitzkrieg and more of a slow march.
The Association of Southeast Asian Nations (Asean) Economic Community (AEC) officially began at the start of the year. Few expect any major immediate changes. If policymakers in individual states stay on course and deliver on commitments to the whole, the region’s people will emerge more prosperous, and income gaps narrower.
“More open financial accounts could bring important benefits for Asean countries’ growth and development. Financial inclusion could increase and real convergence in per capita incomes could accelerate,” the International Monetary Fund (IMF) said.
“An important aspect of financial integration will be that the less financially developed economies will catch up with the more developed ones,” it said.
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If done right, financial integration will play a crucial role in the success of Asean’s goal of transforming a diverse region into a single economic powerhouse—seen as possibly rivaling China’s manufacturing heft.
“The idea is that under integration, a Filipino investor would be able to take on financial instruments out of Hanoi nearly as seamlessly as investing in Manila itself,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.
