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Home  Our Research Economy |
| Economy |
| The SIIA has been active in its economic analysis of the region and the world. In recent years, we have focused on the 2008 US credit crunch, as well as the 2011 sovereign debt crisis in the Eurozone. We also look at economic regionalism and new institutions in Asia, particularly the potential for economic integration in the ASEAN bloc. Our work includes special reports and commentaries written by our staff and experts. |
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| Global and Eurozone Crisis |
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The Eurozone crisis is problem that not only affects Europe alone. In 2012, the SIIA launched a seminar series featuring views from prominent European experts about Europe's future and the implications for the rest of the world. According to visiting speakers, the crisis has shown how fragile the Eurozone is. Institutional reform is needed to streamline Europe's governing mechanisms, though this is politically difficult. In addition to economic concerns, Europe also faces social problems such as widening inequality and an aging population. In this context, Eurosceptic nationalist parties are gaining political ground. Ultimately the Eurozone may survive, but the task of reworking the monetary union will be a difficult one.
That said, it is generally believed that Asian countries will continue to grow despite Europe's problems, being able to shoulder slowdowns due to their growing consumer base, flexible labour markets, and room for both monetary easing and fiscal stimulus.
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| Economic Regionalism |
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Recent years have seen a rapid proliferation in bilateral agreements, but also new architecture at the regional level. In the area of finance, ASEAN+3 has achieved significant cooperation via the Chiang Mai Initiative Multilateralisation (CMIM), a formal binding currency swap agreement that came into effect in 2010. The CMIM demonstrates the region's resolve to address future economic crises, and shows how regional efforts are acting to fill perceived gaps left by global institutions such as the International Monetary Fund (IMF).
In the area of trade, negotiations are progressing alongside the APEC forum for the formation of an expanded Trans-Pacific Partnership (TPP) trade agreement. Backed by the United States, the TPP would bring together several North American, Latin American, and Asian members of APEC. But the TPP negotiations do not include China. It is known that China prefers that ASEAN and ASEAN+3 remains its default hub for participation in regional trade integration efforts.
In 2011, ASEAN leaders endorsed a framework for the creation of a Regional Comprehensive Economic Partnership (RCEP), aiming to join ASEAN's current FTA partners - Australia, China, Japan, South Korea, India, and New Zealand - into a single free trade area, potentially comprising some 3.33 billion people. RCEP is seen as a way of addressing the “spaghetti bowl” reality that multiple overlapping agreements create in the region. But with the increasing number of regional institutions and initiatives, it debatable whether these developments are competing or complementary.
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