This week I’m travelling across Asia, soaking up the changes
and developments here.
What’s intriguing is the first debate is about the ASEAN
economies and how they are adapting to change.
The speaker is a highly respected Professor and Economist,
and he talks about how the world is changing from a US-axis focus to a
multi-geographic focus where Asia’s centrifugal point was Japan but is now
China; Europe’s is Britain, France and Germany; the North Americas is America, whilst
the South is Brazil; not forgetting an African continent dominated by South
Africa; and a Middle East focused upon Saudi oil.
I’m putting that simplistically as there are many other interdependencies,
but let’s start with that as the groundwork.
In this multiregionalised world, we are seeing the emergence
of more and more multiregional hubs.
Dubai as the central hub for the GCC; Johannesburg for the
AEC; and Singapore for ASEAN.
The GCC is the Gulf Cooperation Council. Established in Abu Dhabi in May 1981, the Council
comprises the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and
Kuwait, and is trying to emulate the European Union by moving towards a common
market with a common currency (although I have a strong feeling it's not going to work).
The AEC is the African Economic Community. The AEC was founded through the Abuja Treaty,
signed in 1991 and entered into force in 1994.
This treaty envisioned six stages of creating a pan-African Union, but so
far most stages have met with some issues and resistance. Nevertheless the timeframes are still achievable:
- Creation of regional blocs in regions where such do not yet
exist (to be completed 1999);
- Strengthening of intra-Regional Economic Community (REC)
integration and inter-REC harmonisation (to be completed 2007);
- Establishing a free trade area and customs union in each
regional bloc (to be completed in 2017);
- Establishing a continent-wide customs union and thus also a
free trade area (to be completed in 2019);
- Establishing a continent-wide African Common Market (ACM) (to
be completed in 2023); and
- Establishing a continent-wide economic and monetary union,
and thus also a currency union, and Parliament (to be completed in 2028).
The ASEAN is the Association of South East Asian Nations.
Formed in August 1967 by Indonesia,
Malaysia, the Philippines, Singapore and Thailand, it now includes Brunei,
Burma (Myanmar), Cambodia, Laos, and Vietnam.
These ten nations intend to form an Economic Community by
2015, which means:
- a single market and production base,
- a highly competitive economic region,
- a region of equitable economic development, and
- a region fully integrated into the global
There are several other important regional economic communities, such as
the Latin American Integration Association (LAIA) comprising Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico,
Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela.
What does this mean?
It means that the European Union has created the strawman
for regional integration that is being focused upon and, in some areas,
emulated to create greater economic capabilities.
Think about it.
If each nation of the world sticks with a domestic bank structure,
a domestic currency and a domestic process, then they will fail … unless they’re
China or America of course.
India and Russia might be able to claim size greater than
their counterparts too but, for nations such as Britain, France, Germany and
more, it means little being a minnow in a large pool if you want to be a tuna,
a shark or a whale.
These geopolitical movements were the theme of the final keynote
at SIBOS this year, and were also the themes of the opening of the Asia Pacific Association of Bank
Institutions conference that kicked off today in Kuala Lumpur.
For me, it means a great deal of work in the future as we have
spent over a decade talking about SEPA, the PSD and MiFID, and now we’ve gotta
do it all over again in the Middle East, Asia and Africa.
Thank the heavens for regulators, economics and commerce.