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Wednesday, May 10, 2006

Asian Currency Unit (ACU): Great Expectations but Paradise lost?

In the last 2 weeks, there have been a number of reports, articles and interviews in the Asian Media about the creation of Asian currency unit (ACU), a single Asian currency. By going through these articles, I could understand one thing that ACU will not take place anytime soon, not even in the next 5 years- the earliest time I see is 2015. ASEAN+3 group of countries are behind the idea of ACU and soon these countries are going to start a research project about ACU.

Well, I am not in favor of calling it as 'Asian Currency Unit' as it is mainly limited to some East Asian countries and all the countries of South Asia, Central Asia, Middle East and West Asia are left out in it. However, the same goes for Euro too as most of the European countries are still not included.

Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, Japan, South Korea and China belong to ASEAN+3. I do not know why they are leaving the rest of Asia behind. No doubt, that Japan. Korea, Malaysia and Singapore have the best economies in Asia and China is now a huge economic giant. So, this may be one reason of leaving alone the rest of Asia as most of the countries in the rest of Asia do not have modern economic system. Well, on the other hand, Laos, Myanmar and Cambodia have weak economies.

The road to ACU will be surely of an economic reforms and adjustment for these 13 countries. The European countries who took the initiative of forming a single currency (Euro) had more or less similar backgrounds- they were rich industrial countries that followed free market economic system. On the other hand, in AEAN+3 group of countries, Japan and Korea are rich industrial countries. Malaysia can be included in this category and even now China is here. But courtiers like Myanmar, Cambodia and Laos have hardly any significant industry and they have still agriculture based economy. The economic prosperity of Brunei is based on its selling of gas to Japan.

More than economic diversity, political diversity is the major cause of concern. During the Second World War, Japan occupied many of the countries in this region and war time memories still create very bitter passion in China and Korea about Japanese occupation during the Second World War. So, I really like to see how these countries can adjust to a common currency. And, I also like to observe the political leaders and common people about the tough adjustments they have to make for ACU. Especially, the tragic memories the 1997 financial crisis are still fresh in the mind of the people.

It seems that too much expectation is in the air among ASEAN+3 countries about ACU. However, the ground reality is completely different and there is hardly anything now to feel optimistic about the creation of ACU in near future.
(By Razib Ahmed)

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