Asia's cooperation insufficient

Globalization, trade liberalization, supply chains and production networks. Combined, these factors have transformed Asia over the recent decades. Breaking down barriers to doing business across borders in Asia - economic integration - continues to deepen on its own. The problem is that economic cooperation between governments has struggled to keep up. Without it, market failures in one sector can lead to economic crisis, and a crisis in one country can easily spread to its neighbors, the region and the world.

In Asia, there was a great surge in economic cooperation in trade, investment and finance following the 1997/98 Asian financial crisis. The momentum continues, but among policymakers, there is a sense that the shine is fading.

Regional cooperation and integration in Asia moves on two main fronts - from the bottom up and from the top down. The first involves actual physical connectivity - roads, railways, communications and ports (both sea and air) - that attracts investments. But for this to work seamlessly, the second is needed. Regulatory frameworks, supervision, and macroeconomic policies - from banking and markets to financial safety nets, exchange rate stability and fiscal monitoring - need synchronization across borders as well.